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Public procurement system –

Institutional set-up and practice

Roles and responsibilities of key institutions in

public procurement

Gheorghe Cazan, Roumania

Chisinau, 9 June 2014 Leogrand Hotel

General Approach

The following features characterise a sound and efficient public procurement

system:

• National legislation in compliance with international requirements and appropriate procurement policies and rules on the effective, efficient and proper use of public resources.

• Information-gathering systems that enable the public procurement system to provide information on the state of public procurement.

• Clear strategies and policies for the allocation of responsibilities and structures for public procurement decision making, for accountability of public expenditure, for increasing efficiency, and for combating fraud and corruption.

General Approach

• Well-developed central structures and sufficient administrative capacity for the effective implementation of laws and other national policies, including the preparation and dissemination of information, and for the provision of guidance and training for stakeholders in the system.

• Review systems capable of providing rapid and effective remedies.

• Appropriate means for monitoring the effectiveness of the policy and legal framework of the system

• Professionalisation of the procurement function at all levels throughout the public sector.

Key Central

Public Procurement Functions

To make the public procurement system work at all levels, a set of functions needs to be performed at the central (or regional) level.

The Member States of the European Union generally establish central organisational structures to carry out functions related to the public procurement system as a whole.

The practical experience of recent EU Member States and EU candidate countries proves that a key challenge in the procurement reform process, along with the reform of the legal component, is the issue of how to best organise the central organisational structure for the co-ordination, implementation and monitoring of public procurement.

Key Central

Public Procurement Functions

Core functions

- regulated by national law, often in direct response to obligations connected to membership in the European Union

• Primary policy and legislative functions

Designated bodies at the government level have the task of developing fundamental procurement policies aimed at setting the overall legal framework for public procurement operations.

The most important function is to prepare and draft primary public procurement legislation.

Other tasks commonly assigned:

• to lead the working group in the drafting process;

• to organise the consultation process with the main stakeholders in the procurement system

• to take part in other legislative activity of relevance to public procurement.

Key Central

Public Procurement Functions

• Secondary policy and regulatory functions

• International co-ordination functions (EU, WTO, PPN)

• Monitoring and compliance assessment functions

• preparation of an annual report to the Government or the Parliament on the functioning of the national public procurement system;

• collection of statistical and other information;

• auditing, control, inspections, checking of legal compliance;

• initiation of proceedings for judicial review in courts of law for violations of public procurement law;

• where applicable, management of an official list of certified economic operators and/or certified procurement officers.

Key Central

Public Procurement Functions

Supplementary functions

They are not attributed as an obligation under law for EU Member States

• Advisory and operations support functions

• organisation of a help desk function to provide legal and professional support to purchasers and economic operators on a daily basis;

• development of guidance systems and operational tools for managing all phases of the procurement process, e.g. methodologies for tender evaluation;

• issuance of publications, commentaries and interpretative communications on various aspects of public procurement.

• Publication and information functions

Key Central

Public Procurement Functions

• Professionalization and capacity strengthening functions

• Development and procurement co-ordination functions

• co-ordination and support of concessions and PPP projects

• introduction of systems for performance measurement of public procurement,

• development of procurement techniques, such as performance-based technical specifications.

• establishment of electronic procurement system(s), by providing the electronic platform to be used by contracting authorities.

• inclusion of social, environmental and innovative aspects in the public procurement process

Review and Remedies System

• Review function must not be combined with other key central public procurement functions

• Main objectives of the review and remedies system:

- To enforce the practical application of public procurement legislation

- To ensure that violations of the legislation and intentional or unintentional mistakes of contracting authorities can be corrected

Review and Remedies System

• The review and remedies systems of EU Member States have to be established and developed on the basis of the specific requirements of the:

• EU Public Procurement Remedies Directives 89/665/EEC and 92/13/EEC, amended by the Remedies Directive 2007/66/EC,

• Treaty on the functioning of the European Union, and

• Case law of the Court of Justice of the European Union (CJEU).

Such a system has to provide aggrieved tenderers and candidates with remedies, which must be:

• Rapid;

• Effective;

• Transparent;

• Non-discriminatory.

Review and Remedies System

Options:

• Regular courts

• Specialised administrative bodies

• A combination of the two (e.g. complaints involving damages can be reviewed in the regular courts, while a specialised procurement review body may review complaints that do not involve damages)

Judicial Character of a Review Body

Conditions:

1. The body is established by law

The legal provisions should regulate various aspects ensuring the functionality of the body, including for example provisions concerning the:

- review body’s competences,

- appointment and dismissal of its members

- qualifications required of the review body’s members

- conflict-of-interest

- predetermined system for the distribution of cases

- procedural requirements

Judicial Character of a Review Body

2. The body is permanent

The body is not established on an ad hoc basis. Its members remain in their position for a determined number of years.

This requirement does not exclude the possibility of having several panels within the review body dealing with cases according to a predetermined distribution system.

3. The body’s jurisdiction is compulsory

Any decision made by the review body has to be enforceable.

- Impose interim measures, with the aim of correcting the infringement or preventing further damage, including measures to suspend or ensure the suspension of the tender procedure or the implementation of any decision taken by the contracting authority;

- Set aside or ensure the setting aside of any decision taken unlawfully, including the removal of discriminatory technical, economic or financial specifications in the tender notice or in tender documentation.

Judicial Character of a Review Body

4. The procedure before the review body is between the parties (inter partes)

- All interested parties are given an adequate opportunity to present the facts and evidence, and each party should have the right to respond or to challenge all evidence and arguments presented by the other party

- Oral hearings (an acceptable alternative is to allow the parties to submit written statements during the review procedure)

- Both parties must have access to the review proceedings file, with the exception of confidential information

5. The body applies the rules of law

6. The body is independent

The main principle is that the review body carries out its task independently and under its own responsibility, and that its members are subject only to observance of the law

Practical Issues

The capacities of the review body have to be adequate

Staff size

• Range of tasks assigned to the review body

• Number of contracting authorities in the country

• Review culture, including local mentality and propensity of economic operators to file complaints against the decisions of contracting authorities

• Time limits provided in the law for deciding on the dispute

• Number of members of the review body that, according to the law, have to deal with each case

• Support that can be offered to the members of the review body by the technical and administrative staff of the institution

Practical Issues

Educational background of the staff

Members must not only have a good knowledge of public procurement matters but must also be capable of assessing evidence and drafting substantiated decisions

Training is a must !

The independence of the review body have to be ensured

Practical Issues

Clear and detailed norms should be established in the legislation

- Procedural requirements and rules for the review process

- The way of allocating cases among the members of the review body (random distribution is probably the best choice)

- The means of avoiding conflicts of interest

- The qualifications required to become a member (studies, experience, knowledge and other specific skills)

- Maximum deadlines for the decisions of the review body

- Panels or not?

- The review body shall exclusively investigate the pleas presented by the economic operators or it should be better to investigate the entire file?

Practical Issues

Access to remedies should be open to all economic operators without discrimination

- On grounds of nationality

- Fees to be paid

- Time limits for submission of complaints

- Evidence to be presented

All the above mentioned aspects must not render the exercise of rights conferred by law impossible or excessively difficult!

Practical Issues

Transparency of the decisions

- clear and transparent procedures in order to ensure the coherent application of

the law

- each party should have the right to be informed of the development of the

proceedings, so as to enable them to adequately prepare their arguments

- the parties should be informed of the reasons for the review body’s decision,

including the arguments that determined the evaluation of the evidence and the

considerations of legal issues that were relevant to the decision

Also:

- Publication of the review body’s decisions on its website

- Database of decisions, including search facilities

Thank you

for your attention