The (Austrian) Public Procurement Act 2006: Basic Facts
At first glance, the Public Procurement Act 2006 may give the impression that it favours the interests of the contracting authority. However, excessive use of this advantage entails a number of risks
The new Public Procurement Act 2006 (BVergG 2006), in force since 1st February 2006, covers the procedures for the award of public contracts by central government bodies and – with only few exceptions and no transitional arrangements – also regional and local government bodies.
The new law is much more comprehensive than the BVergG 2002 which it seeks to amend (351 instead of previously 192 articles!) and includes a number of key elements to be assessed in different ways depending on the relevant point of view (contracting authority or tenderer).
The first item to be discussed relates to the often cited new procurement procedures; the only new additions here are the competitive dialogue and the dynamic purchasing system. Both procedures are of a rather finite nature in terms of their practical relevance, considering that the results to be expected from these new procedures may have been accomplished also by using the traditional tools available. The tools that may prove more relevant in the near future are the electronic auction and the framework agreement.
Both procedures were already embedded in the BVergG 2002; their scope has now been extended to tender procedures above the relevant financial thresholds. Other interesting alterations are the new provisions regarding methods for calculating the value of public contracts/threshold value and the related provisions determining the choice of procurement procedure:
Much turmoil in expert circles has been caused by the option to calculate the value of below-threshold building contracts in the form of lots. If the entire project value remains below the relevant EU threshold, the individual lots within a building project may be assessed and awarded separately.
Contracts with a value of up to € 40,000 (or € 60,000 in case of contracting entities in the utility sector) may thus be awarded directly.
Contracts below a value of € 350,000 may still be awarded in the framework of a negotiated procedure (with prior advertisement).
Special attention needs to be attributed to the reduction of the EU financial threshold from € 5,923,000 to € 5,278,000 for works contracts, and from € 236,000 to € 211,000 for supplies and services contracts.
The new rules are particularly beneficial for utility-sector entities, which may choose the procurement procedure for below-threshold contracts (except direct awards). The “creative spirit” of the legislator is also reflected in numerous other procedural provisions of a general nature:
Contracting entities no longer need to assure a uniform quality standard for below-threshold contracts selected in the framework of a best-bid procurement procedure (where the price is the sole contract award criterion).
Technical alternative bids may now be excluded without giving reasons. However, contracting entities excluding alternative bids for the purpose of reducing the burden of tender assessment lose their chance of innovative solutions! Even the introduction of changed bids (bids that only marginally deviate from the original award criteria) does not help to defuse the negative attitude towards alternative bids.
If a call for tender is announced and the tender documents are sent out by electronic means, the legally required minimum timescale for returning the tender documents may be reduced by up to 12 days. However, contracting entities should consider that short submission deadlines may negatively affect the quality of the submitted tenders.
Under the negotiated procedure, it is now possible to subsequently change the contract award criteria. The explicit ban on pure price negotiations under this procedure has been lifted. However, it is doubtful whether the legislator wants this ban lift to be construed as a permission to engage in pure price negotiations. In negotiated procedures, the contracting entity is now explicitly allowed to put candidates on a short list. For below-threshold contracts, for example, the contracting entity may reserve the right to only enter into negotiations with the best bidder on the list. Tenderers will view the changes regarding procurement-specific legal protection with somewhat mixed feelings:
A positive aspect is that there is now a wider scope of measures to appeal against revocation and direct award.
A drawback for tenderers are the new deadlines for lodging an appeal. These deadlines have been simplified yet in the essential areas also drastically shortened. For below-threshold contracts, for example, an appeal against the contracting entity’s decision must now be lodged within 7 instead of previously 14 days.
The legal and technical specifications have to comply with the existing ÖNORM standards. Deviations thereof are only feasible to a limited extent and require a factual explanation.
At first glance, the BVergG 2006 may give the impression that it favours the interests of contracting entities. Especially with regard to below-threshold contracts, the new law offers clear advantages for public-sector bodies. However, contracting entities are recommended not to “overuse” these advantages. Some provisions will possibly have to be reviewed at EU level. Other seemingly beneficial provisions may prove disadvantageous to public contracting authorities in the long term. (Source: aqua press Int. 1/2006, RA Mag. Martin Schiefer)
Contact & Information:
Heid Schiefer Rechtsanwälte GmbH RA Mag. Martin Schiefer Landstraßer Hauptstr. 88, A-1030 Wien
