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Summary of the Guide for Practitioners on Public Procurement

A “Guide for practitioners in public procurement” has been launched within the Fighting Public Procurement Criminality project, coordinated by Freedom House Romania with the financial support of Prevention of and Fight Against Crime Programme of the EU - European Commission - DG Home Affairs. 900 copies of this 220-page guide have been distributed amongst Romanian magistrates and judicial police officers dealing with public procurement fraud issues. Its digitalized version is available at ghidachizitii.lfwd.io for free consultation and for supporting training and specialization activities of the Romanian public institutions. This e-book format of the guide to be constantly updated with the latest changes in legislative and judicial practice.

The current legal framework is about to be substantially modified by the end of 2015, in order to implement the new EU legislative package on public procurement. Pending the new legislation, in this English summary of the guide we focus on the current legal framework for public procurement and some of its challenges and shortcomings.

The guide will be further developed within another project - „Legislaţie, economie, competiţie şi administraţie”  - Law, Economy, Competition and Administration, which will approach the topic of public procurement fraud with an emphasis on prevention. The target group of magistrates will be supplemented by civil servants that work within the investment and procurement departments of county councils, municipalities, as well as of other contracting authorities.

 

The present basic regulatory framework regarding public procurement in Romania is represented by the Emergency Government Ordinance no. 34/2006 concerning the attribution of public acquisition contracts, of public works concession contracts and of services concession contracts. 

The purposes of the regulatory document are laid down in art.2 para (1):

- promoting competition among economic operators;
- guaranteeing equal treatment and non-discrimination of economic operators;
- ensuring the transparency and integrity of the public procurement process;
- ensuring the efficient utilization of public funds.
In applying the European norms, the Romanian legislative framework takes over seven principles for public procurement, as defined in art. 2, para (2):

- nondiscrimination;
- equal treatment;
- mutual recognition;
- transparency;
- proportionality;
- efficiency in using the funds;
- assuming responsibility.

The key actors of the public procurement system, respectively, the entities involved in organizing and verifying the public acquisition procedures, are:
- The National Authority for the Regulation and Monitoring of Public Procurement – ANRMAP, a public authority with the role to promote and implement the policy in the field of public procurement and also with attributions of monitoring the system;
- The Unit for the Coordination and Verification of Public Acquisitions – UCVAP, an entity within the Public Finance Ministry with attributions of ex-ante control;
- The National Council for the Resolution of Appeals– CNSC, which is competent in solving the appeals formulated during the procedure of attribution before signing the contract;
-  The Contracting Authorities and the Economic Operators – suppliers of products, service providers or contractors;
- The Competition Council – an autonomous body for the protection and stimulation of competition;
- The Court of Accounts – an entity with ex-post audit responsibilities;
- The National Integrity Agency, an authority which evaluates the possible conflicts of interests or incompatibilities both in the ex-ante and in the ex-post stage;

The courts, which can be referred to with complaints against the decision issued by the CNSC (in the administrative-jurisdictional procedure) or directly, in the case of a bidder who considers that the public procurement process was vitiated. Following the intimations received, the courts can intervene, both prior to and after the conclusion of the public contract.


The problem of the good conduct guarantee. Starting June 30, 2014, “with the purpose of protecting the contracting authority from the risk of a possible inappropriate conduct,” the Emergency Government Ordinance no. 51/2014 has introduced two new articles, which basically provide the following:

- an obligation whereby the objector sets up a good conduct guarantee in an amount related to the estimated value of the contract for the entire period from the date of submission of the appeal/request/complaint and to the date when the decision of the National Council of Resolution of Appeals /the court ruling remains final (art. 2711);
- an obligation of retention of the good conduct guarantee, befalling on the contracting authority, if the appeal is rejected or if the objector renounces the appeal/request/complaint (art. 2712).

The Constitutional Court has rejected the criticisms according to which the establishment of the good conduct guarantee enacted through art. 2711 restricts the right to free access to justice and violates art. 21 para. (4) of the Constitution – “the special administrative jurisdictions are optional and free.” However, the Court has ruled as unconstitutional the “unconditioned retention” of the guarantee provided by art. 2712, irrespective of the procedural conduct of the objector, without any authority proving the bad faith of the company whose appeal was rejected by the CNSC or by the court.

„As such, as in the case of the admission of the appeal/complaint/request the contracting authority must return the good conduct guarantee to the objector, in keeping with art.2712 para. (4) and (5), also in the case when the appeal/complaint/request is rejected, the guarantee must be returned if an inappropriate conduct of the objector was not retained,” reads Ruling no. 5 of the Constitutional Court of January 15, 2015. The automatic retention of the guarantee violates the right to free access to justice because, the Constitutional Court shows, the objector is discouraged from formulating an appeal or a complaint as long as any rejection of his/her request “is converted into a sanction for an inappropriate conduct.”

The good conduct guarantee introduced in 2014 is also the object of preliminary questions posed to the Court of Justice of the European Union by the Bucharest and Oradea Courts of Appeals. The national judge wishes to learn whether the provisions of art.1 para (1) – (3) of Directive 89/665/EEC, respectively, the Directive 92/13/EEC should be interpreted as opposing a regulation which conditions the access to the remedies against the decisions of the contracting authority to make the depositing in advance of the “good conduct guarantee” compulsory.


The stages of the public procurement process include :

1)      planning;
The contracting authorities make a certain forecasting of the public procurement procedures which should unfold over the short, medium and long term. The contracting authority must establish the annual public acquisitions Program (APAP). APAP is a management tool which does not compel the contracting authorities to unfold a public acquisition included in it. The public acquisition unfolds in keeping with the funds identified and with the possibilities to draw other funds, so that APAP has a variable form in time, with a first modification being compulsorily made after the approval of the own budget of each contracting authority. If the APAP changes aim to cover needs which were not initially included in the annual public acquisitions Porgram, their introduction is conditioned by securing the financing sources.

2)      drafting the attribution documentation;

The attribution documentation includes:

-        The data sheet

-        The task book

-        Data regarding the compulsory contract clauses.

During this stage, the choice of the attribution procedure plays a special role – « the lowest price » or the « most advantageous offer from an economic viewpoint » - a choice which materializes in a substantiation/justification note signed by the decision-makers of the contracting authority.

3)      the publication of the announcement/invitation of participation on SEAP (the Electronic System of Public Acquisitions) / JOUE (The Official Journal of the European Union) and of the documentation of attribution;
The Electronic System of Public Acquisitions (SEAP) is the electronic platform accessible on the internet at a dedicated address (www.e-licitatie.ro) where public institutions (and/or  economic operators who use public funds) publish their intention to buy products, services and works, and the interested economic operators bid for them.

The participation announcements cannot be published on SEAP unless they have been previously approved by ANRMAP. Starting 2011, ANRMAP has been given new tasks to evaluate the conformity of the attribution documentation with the public procurement legislation. This evaluation is finalized with the validation or rejection of the attribution documentation, ANRMAP verifies the data sheet, with the express stipulation that the evaluation is not aimed at the technical aspects of the task book.

The elements verified by ANRMAP in the ex-ante stage refer to:
- inclusion of the acquisition in the annual public procurement program,
- observance of the publicity rules,
- choice of the procedure,
- qualification and selection criteria,
- attribution criteria/evaluation factors,
- avoidance of the conflict of interests.

4)      clarifications regarding the attribution documentation;
Starting from the data made public on SEAP, any interested economic operator has the right to request clarifications about the attribution documentation. The contracting authority must answer those requests clearly, fully and without ambiguities, as a rule, within three working days at most. The answer of the authority and the clarification are administrative documents which explain the content of the attribution documentation, without being able to change the content of the latter, as it was published on SEAP.

5)      the investment of the bids evaluation commission;
The contracting authority designates persons responsible with evaluating the bids, who set up an evaluation commission with a view to attributing the contract. The commission includes specialists from the contracting authority or from the final beneficiary (another contracting authority).  Any decision of the commission must meet the vote of at least two thirds of its members.

Attributions of the evaluating commission:
- opening the bids,
- verifying the fulfillment of the qualification criteria,
- implementing the selection/pre-selection/dialogue/negotiation,
- verifying the technical proposals,
- verifying the financial proposals submitted by the bidders,
- establishing the rejected/admissible bids,
- applying the attribution criterion,
- elaborating a proposal to cancel the attribution procedure and drafting the report of the attribution procedure.

The evaluation commission can also include experts co-opted with the purpose of supporting the evaluation activities, with the justification of their participation in the procedure. The co-opted experts do not have voting rights. However, they must draft a specialty report on the verification and evaluation of the technical proposals, the analysis of the financial situation or the analysis of the legal effects deriving from elements of the bid/contract clauses proposed by the bidder.

6)      the opening of the bids;
Any bidder has the right to participate in the bid opening session. During the opening session no bid can be rejected, except for those submitted after the deadline or at another address or which are not accompanied by the participation guarantee, in the amount, form and with the validity period requested in the attribution documentation. The participation guarantee is meant to protect the contracting authority at the moment when the bid is submitted and until the public acquisition contract is concluded. This document must contain the data of the involved parties, the name of the procedure, the conditions of execution of the guarantee, the account of the contracting authority and, possibly, the identification data of the issuing bank.

7)      the evaluation of the bids;
The evaluation commission has 25 days to designate the winning bidder. The extension of the period can only be done once, based on a note regarding the justification of the extension. The evaluation commission establishes the formal or confirmation clarifications and completions needed to evaluate each bid, as well as the period of time granted for the transmission of the clarifications. Subsequently, after the answers to the requested clarifications have been received from the bidders, the evaluation commission establishes the bidders left in the competition. During this stage, the evaluation commission verifies that the technical proposals meet the minimum requirements of the task book, and if appropriate, it requests clarifications from the bidders or benefits from the specialty reports of the co-opted experts. After receiving the responses to the requested clarifications from he bidders, the commission establishes the bids left in the competition.

The commission verifies the financial proposals, from the point of view of the requirements in the attribution documentation, of complying with the funds, as well as, if appropriate, of its inclusion in the category defined by law as “apparently unusually low price,” respectively, less than 80% of the estimated value of the contract. The commission can request clarifications/completions to the financial proposals. After receiving the responses, the commission establishes the bids left in the competition.

At the end of the evaluation process, the commission establishes which bids are rejected as  unacceptable or irregular bids, and which bids are admissible.

The bids can be considered unacceptable if:
- they fall in the category of those rejected during the opening session;
- the bidder does not fulfil the qualification requirements;
- they are an alternative to the task book;
- they do not ensure the observance of the rules regarding  working conditions/labour safety;
- the price of the bid, without VAT, exceeds the estimated value (EV) and there are no supplementary funds which can be made available;
- the price, without VAT, exceeds the EV and funds might be earmarked, but the price is 10% higher than the EV or the conclusion of the contract leads to circumventing the observance of the obligations with respect to certain value thresholds;
- following the verifications, the bid has an unusually low price

The bids can be considered irregular if:
- they do not meet the requirements specified in the task book;
- they include proposals to amend the contract clauses which are disadvantageous to the authority (and the bidder does not accept to renounce the respective clauses);

 - they include process which are not the result of free competition and which cannot be justified;
- they do not make a distinction between the lots, making impossible the application of the attribution criterion for each lot or in the cases stipulated in art. 79 and art. 80 or Government Decision 925/2006.

The winning bid is established from the admissible bids, by applying the attribution criterion specified in the attribution documentation. The winning bid cannot be modified and is an integral part of the contract which will be concluded.

8)      the drafting and approval of the procedure report;
After the evaluation, the commission drafts the report of the attribution procedure, signed by all the members of the evaluation commission, including the chairman.

9)       the notification of the result to the bidders
Not later than within three days, the contracting authority must inform in writing the economic operators involved in  the procedure of attribution about the result of the attribution procedure.

10)   The period of waiting – appeals;
The contracts can be concluded only after the end of the deadlines of waiting of 11, or, depending on the estimated value of the contract, of 6 days since the date of the communication of the result of the implementation of the procedure.

11)   The conclusion of the contract and the publication of the announcement of attribution on SEAP/JOUE.

Upon conclusion of the contract, the content of the bid submitted by the contractor must be respected.  The technical and the financial proposal are integral parts of the contract, along with the task book and the technical specifications. The contracting authority shall verify the existence of the financial sources needed to fulfill the contract and shall see to it that the guarantee of good execution is constituted, concomitantly with the release of the guarantee of participation to the bidders who classified on inferior positions.


The verification exercised by UCVAP. The activity of verification of the procedures is exercised by the Ministry of Public Finances through the Unit for the Coordination and Verification of Public Acquisitions (UCVAP). The UCVAP officials are observers in the public acquisition procedures in which they participate and they check the stages of the public acquisition process unfolded after the publication of the announcement/invitation of participation and until the contract is signed.

The verification of the process of contract attribution is made selectively, based on selection criteria established at the level of secondary legislation. However, UCVAP must verify the attribution of the contracts financed from structural instruments and all the negotiating procedures without the prior publication of a participation announcement. UCVAP elaborates an activity report for each verified attribution procedure, which is sent to ANRMAP.

In the documents drafted by the contracting authority during the evaluation process, the UCVAP observers mention their observations on the unfolding of the attribution procedure concerning the observance of the legal provisions. The contracting authority, however, has the responsibility for the decisions adopted during the attribution process. Based on the recommendations of remediation written down by the UCVAP observers, the evaluation commission can remedy or not the respective noncompliances. If the UCVAP opinion is “with observations,” the representative of the contracting authority can ask for the resumption of the evaluation process with a view to remedying the respective noncompliances, or can approve the attribution procedure report.


The surveillance achieved by ANRMAP. ANRMAP undertakes an ex-ante control of the announcements of intention/participation and of the participation invitations. Subsequently,  in the ex-post stage, ANRMAP has attributions to verify the way in which the evaluation of the offers was made, as well as the communication of the result of the procedure, the conclusion of the contract and of the additional documents to the acquisition contract, other elements regarding verified public acquisitions (verifications made by UCVAP, ANRMAP, CNSC decisions, civil sentences of the judiciary courts).

The surveillance procedure exercised by the ANRMAP through ascertaining agents is finalized through the drawing of the control report. This report is part of the surveillance file, which can only be made available to the courts and to the other competent judiciary bodies. If the procedure was canceled following a decision of the contracting authority, the object of the surveillance will be only the verification of the legality of this decision. The ascertaining agents have the task to identify the possible facts which violate or circumvent the legal provisions and to apply the sanctions for those transgressions which represent an offense.

Starting with the adoption of the Emergency Government Ordinance no.35/2013, the introductory part of art.293 of the Emergency Government Ordinance no 34/2006 was amended as regards the exposure of the facts which represent offences through the addition of the syntagm: “(…) if they have not been committed in such conditions as to be considered criminal offences, in keeping with the criminal law.” The introduction of this completion is raised a series of interpretations in practice as regards the application or not of a contravention fine for the irregularities found by the ANRMAP agents, given that some of them can also vest a criminal character.

In context, the question also arises whether there should be an impossibility/limitation of sanctioning the respective deed at a criminal level, given that an administrative sanction has already been applied. On the other hand, a shirking of the ascertaining ANRMAP agents from notifying the criminal investigation bodies is quite foreseeable, with the justification that they have already applied a fine, and their legal training does not allow them a rigorous appreciation in establishing whether a certain violation of the law was made in such a manner as to make up a criminal offence. The fear about the possible repercussions prevents the finding of motivations to propose the criminal notification as a remedy measure. In a majority opinion, the lawyers present at the debates organized as part of the project thought that the application of a misdemeanor sanction is not apt to prevent the criminal investigation. In substantiating this conclusion, the fact was also taken into account that the fine is applied to the juridical person, and a possible investigation in the criminal sphere is centered on the physical person who committed a deed, so that there is no unity of parts which might prevent the continuation of research under the aspect of the perpetration of criminal offences.


The resolution of litigations on an administrative-jurisdictional way before the CNSC. In the matter of public procurement there is also a special procedural mechanism: the litigations linked to the phase of the procedure of public acquisition proper are settled in the first instance in the administrative-jurisdictional way by the National Council for the Resolution of Appeals (CNSC) and the CNSC solution can be appealed in court. The person who considers he/she has been injured can also formulate an action straight to a court, if he/she thinks that this serves best his/her interests. The appeals to the CNSC can concern the attribution documentation, the documents during the unfolding the public acquisition procedure or its final result. From the practice of the CNSC, the following are the most appealed against: the attribution documentation – task books with technical specifications or qualification criteria which favor certain competitors or raise unjustified obstacles which restrict competition, attribution criteria which allow the subjective exercising of the evaluation of the bids or answers of  the contracting authority to requests for clarifications, in which the contracting authority introduces new qualification criteria,

- the minutes drafted at the opening of the bids, the evaluation report and

- the communication whereby the bidder is announced about the result.

The resolution of the appeal by the CNSC follows a simplified procedure as compared to the procedure applicable in the courts of justice, by a CNSC panel formed of three public clerks, including persons with technical, economic and legal specialization. The CNSC panel issues a Decision whereby the document which is appealed can be revoked, fully or partially, the contracting authority can be compelled to issue a document or any other necessary step to remedy the documents which affect the attribution procedure, or the canceling of the application of the attribution procedure. The solution in the first instance must be issued by the CNSC within 20 days since the receipt of the public acquisition file from the contracting authority, or within 10 days, in the case of exceptions which prevent the analysis of substance. The deadline can be extended only once, by 10 days.

The CNSC decision can be appealed within 10 days with a complaint to a court of justice both by the contracting authority and by any other injured person (generally, the operator who appealed in the first instance to the CNSC). The competent court is the court of appeals, within the jurisdiction of which the contracting authority is headquartered. The complaint to the court of appeal is settled with utmost expediency (there are complaints which are solved even within three weeks since their submission).


The settlement of litigations in courts. For the litigations involving public procurement, except for the complaints against the CNSC decisions, the competent court of first instance is the court on whose territory the contracting authority is headquartered. The court ruling issued in first instance is exclusively appealed in the court of appeals. If the appeal is admitted, the court of appeals will retry in all the cases the litigation in first instance. The appeal does not suspend the execution.

The expediency of the judgement of the litigations in acquisitions is imposed both at the principle level (according to the law, “it will be solved with emergency and prevailingly”) and at the level of special procedural amendments which are applicable: the judge sets the first term within 20 days at most since the registration of the request; the subsequent terms cannot be longer than 10 days; the defendant must submit the contestation within three days since the communication of the summons; the cause is tried also in the absence of the summoned party.


The problem of the suspension of the execution of the contract. If there are thoroughly justified cases and in order to avoid an imminent damage, the court can ask, upon the request of the interested party, the suspension of the execution of the contract until the cause is resolved in first instance. The court must ascertain that the suspension of the contract does not lead to the emergency of severe disturbances, it must solve the request by taking into account the probable consequences of the suspension on all the interests which might be affected, including on the public interest.