In connection with the upcoming discussion of the bill for amendments and additions to the Law on Public Procurement, No. 302-01-14, submitted to the National Assembly, the Confederation of Employers and Industrialists in Bulgaria expresses the following position:
Most of the amendments and additions to the Law on Public Procurement proposed in the draft law are expected and appropriate. We hope they will be supported and protected. Their correct application would help the smooth and efficient conduct of the procedures for the benefit of society.
We believe that the following measures, also recommended by the European Commission, are essential for optimizing the national market for public procurement in the Republic of Bulgaria:
1. Division of public procurement into lots (separate positions) and more opportunities to include subcontractors.
In this direction, the European Commission considers that the division of larger public procurements into separate lots is an extremely appropriate tool for strengthening competition in the public procurement market and facilitating the access of small and medium-sized enterprises to it.
2. Improving the quality of information related to public procurement;
3. Application of proportional criteria for the selection of participants in public procurement procedures;
4. Improvement of the regulation and practice regarding criteria for awarding public contracts and indicators for evaluation of offers;
5. Removal of administrative-bureaucratic obstacles to participation in the procedures;
6. Ensuring regularity and stability in payments under concluded contracts for public procurement;
7. Preventive control over the documentation for the conduct of the procedures and effective subsequent control for the execution of the concluded contracts
At the same time, the previous practice in the preparation and conduct of public procurement procedures shows problems that are not regulated in the law or can be regulated more completely and more precisely.
SPECIFIC PROPOSALS UNDER THE BILL:
1. Creating a new paragraph § 3a with the following content:
§ 3a. In Art. 5, para. 4, the first sentence should be amended as follows: "The public contracts under paragraph 1 are awarded for a period of up to 5 years".
Motives:
The one offered change provide that the 5-year term applies to all public procurements under paragraph 1, and not only to public procurements under item 1 and item 2. In the current version, for the remaining items (item 3 and item 4), in practice, the indefiniteness of the contracts is introduced.
It would be much more expedient if a one-year term for supplies and a two-year term for services were introduced (for them, the organization of the activity and the return on investments require a longer period of time), but not 5 years; a long term allows contracts entered into as a result of vicious procedures to be enforced over several years.
2. In § 17, article 22b, paragraph 2, we propose to introduce a deadline for these documents to be uploaded to the Buyer's Profile one working day after the date of their creation.
Motives:
With the newly proposed text of Art. 22b, para. 2 provides that in the Buyer's Profile, each contracting authority shall publish documents on the development of the announced procedure. In para. 4 of the same Article 22b provides a deadline for the publication of these documents in the Buyer's Profile, and this deadline is the first working day after they are sent for publication in the Public Procurement Register or the Public Procurement Portal. The types of documents that are not subject to publication either in the Public Procurement Register or on the Public Procurement Portal /such as the protocols of the commission/, actually remain without a specific deadline for uploading to the Buyer's Profile.
3. In § 22, we propose a new point, which would stipulate that in the event of a change in the announcement and the documentation of the announced procedure, the deadline for submission of offers shall be extended by a mandatory minimum of the number of days that have elapsed since the initial publication of the announcement.
Motives:
With Art. 27a, the contracting authority is given the opportunity to make a change in the announcement and documentation of the announced procedure. The change may be at the initiative of the contracting authority or at the request of an interested person, and the decision to change is published within 14 days of publication of the announcement.
When making a change in the announcement and documentation of the announced procedure, with para. 5 of Art. 27a provides for setting a new deadline for receiving offers, but at the same time with the same provision, the contracting authority is given the opportunity to keep the originally determined deadline. The phrase "which cannot be shorter than originally determined" actually gives the contracting authority the right not to extend the deadline, which we consider to be a real reduction of 14 days in the time period that the participants have for preparing and submitting an offer. We note the presence of para. 6 of Art. 27a, which inthe condition is that the term be extended if the changes affect the specified selection criteria, the requirements for the offer or the execution of the order, but we believe that a change in other parameters would necessarily lead to the commitment of time and human resources of the participants to study the newly introduced circumstances and requirements of the contracting authority, then to correcting or completely reworking already prepared documentation and offer, organizing the extraction of new documents, and all of this should be developed within the same initially determined period.
4. In § 23, item 1 to create a new subsection with the following content:
..) в item 3 after the word "positions" to add the phrase "and the deadlines for
performance"
Motives:
The absence of an obligation to include in the documentation for participation in the procedure for awarding the public procurement required deadlines for the implementation of the various activities, allows these deadlines to be selected as indicators in the bid evaluation methodology. This, in turn, creates a field for cheating between companies and does not contribute to the quality of the procedure.
5. In § 23, item 2, para. 2 in the second sentence to delete the expression "may" and to add a new sentence - third, as para. 2 is amended as follows:
"(2) The methodology for determining the complex evaluation of offers contains the indicators for complex evaluation, their relative weight and precise instructions for determining the evaluation for each indicator. The methodology, in accordance with the technical specifications, defines the minimum and maximum permissible values of the quantitative indicators. Indicators measurable in time, including delayed or rescheduled payment, proposals in favor of the contracting authority and/or activities uncharacteristic of the subject of the order, are not allowed for evaluation. In the cases under Art. 25, para. 3, item 3, with the methodology in accordance with the technical specifications, the method of evaluating the offers that have been submitted for part of the nomenclature under the specific items should be determined."
Motives:
In order to reduce subjectivity in the evaluation, the framework for the values of the quantitative indicators should be announced in advance.
There is a European directive and texts in the Commercial Law for deferred and rescheduled payment. The time indicators only lead to a tussle between the candidates. As for the proposals in favor of the contracting authority and improper activities, these are vicious practices to extort the candidates or tacitly agreed with the "winning" supplier. An example is the recently won public contract by a candidate who gave 101% property liability.
6. To create a new paragraph § 26a with the following content:
§ 26a. Art. 32 is amended as follows:
1. In para. 1 tbspto the phrase "technical specifications must" be added "to be objectively justified and"
2. A new paragraph is created. 3 with the following content:
"(3) In the documentation for participation in a public procurement procedure, the contracting authority is obliged to present a detailed justification of the reasons for determining the specific technical specifications."
Motives:
The proposed amendments and additions are dictated by the need to stop the practice of setting technical specifications by public procurement contractors, which, without being imposed for objective reasons, limit the possibility of certain legal entities to participate in the public procurement. In practice, this leads to restriction of competition and discrimination, which violates both the basic principles laid down in the Law on Public Procurement and norms of European law.
For the period from 2006 to the beginning of 2011, the Commission for the Protection of Competition and the Supreme Administrative Court have established a number of cases of restriction or violation of competition and the principle of equality and non-discrimination, regulated in Art. 2, Art. 25, para. 5 and Art. 32 of the ZOP. Violations on the part of contracting authorities are most often related to setting conditions in the announcement and documentation that give priority or unreasonably limit the participation of persons in public procurement, including by formulating technical specifications that eliminate competition. In this sense, they are: Decision No. 876/2007 of the CPC, Decision 218/2008 of the CPC, Decision 378/2008 of the CPC, Decision No. 608/2007 of the CPC, etc.
The proposed amendments and additions will lead to greater precision in setting technical specifications and limiting violations before the appeal phase of the contracting authority's acts.
7. To create a new paragraph § 29a with the following content:
§ 29a. In Art. 36, para. 2 to add a new, second sentence: "The use of
leave cannot automatically be considered an objective reason.".
Motives:
In practice, this issue is controversially resolved and is sometimes used as a formal reason for appeal - either because a member of the commission who is on leave was not replaced by a reserve member or because such a member who was actually able and wanted to continue his work in the committee, was forcibly replaced by a reserve member.
8. In § 32, create a new item 3 with the following content:
3. In Art. 39, para. 4 the expression "the lowest offered price" to be replaced by the expression "the lowest and justified offered price".
Motives:
This will limit the existing practice of pre-agreed actions of the contracting authority with a certain supplier - announcement of an unrealistically low "estimated value", presentation of a fictitious offer, termination of the procedure on the basis of Art. 39, para. 1, item 3 ("3. all offers that meet the conditions previously announced by the contracting authority exceed the financial resources that he can provide;") and placing the candidates under the new order in incorrect conditions that cannot be disputed .
9. A new paragraph § 33a is created with the following text:
§ 33a. In Art. 41, para. 2 sentence two is created:
"The contracting authority cannot enter into a public procurement contract above the announced estimated value in the announcement and/or the participation documentation."
Motives:
It is necessary to explicitly introduce a ban on concluding contracts for public procurement above the estimated value announced by the contracting authority, to avoid abuses.
10. IN § 34, item 1 we offer in Art. 43, para. 2 to include a hypothesis allowing the amendment of a public procurement contract, except in cases where there is a change in state-regulated prices, as well as in cases of a change in prices, the amount of which is determined during negotiations with the participation of a state body (in the case with NHIF).
Motives:
According to Art. 43, para. 2, amendment of a public procurement contract, except in the other specified cases, it is also allowed: in the event of a change in state-regulated prices, when the main subject of the public procurement contract is an activity, the price of which is subject to state regulation and its execution period is over 12 months, orwhen an increase in price is required due to the adoption of a normative act - up to the amount arising as a direct and immediate consequence of it.
The hypotheses described in this way do not include in their content the cases when the NHIF invites the holder of the authorization for the use of a medicinal product to present proposals for discounts from the price it pays for medicinal products included in the Positive medicinal list. The described procedure is regulated in Art. 20 et seq. of Ordinance No. 10 of March 24, 2009 on the terms and conditions for payment of medicinal products under Art. 262, para. 5, item 1 of the Act on Medicinal Products in Human Medicine, Medical Devices and Dietary Foods for Special Medical Purposes.
Insofar as this procedure essentially constitutes price negotiation, it implies relations of equality between the participants, i.e. is not subject to unilateral state regulation and does not fall within the scope of the above hypotheses ofArt. 43, para. 2, items 3 and 4. In cases where, after negotiation according to the described procedure, the price of a medicinal product increases, compared to the price before the negotiation, there is no legally regulated possibility for the contractor under an already concluded public procurement contract to demand from the contracting authority a correction of the agreed prices.
11. В § 41 in the proposed amendment to para. 1, the expression "the contracting authority may require from each candidate" to be replaced by the expression "the contracting authority requires from each candidate".
Motives:
The word "may" does not bind the contracting authority.
If a mandatory permit is required for a certain activity and the contracting authority does not require it, then a candidate may be admitted to participate in the procedure in violation of a special law or such a candidate who carries out or will carry out an unregulated activity.
12. In § 43, item 1, the proposed text to create item 13 should be deleted or the proposed text should be specified
Motives:
We believe that the proposed amendment to Art. 51, para. 1 by adding item 13 is not justified, and also does not fully synchronize with European law. Provision 48 of Directive 2004/18 does not necessarily include the possibility for contracting authorities to require the implementation of quality management systems when proving the technical capabilities. We admire the choice of companies to voluntarily apply internationally recognized standards in their activities, and we are convinced of the adequacy of compliance with a number of requirements of the contracting authorities to be proven through recognized certification for implemented and effectively functioning management systems in enterprises, and it is in this aspect that we believe that it is set the philosophy of the Directive. It is no accident that this instrument is not included in the scope of Art. 48, and is further considered in the context of introducing a clear regulation on the scope and recognition of certificates, as well as to ensure that the objectives can be achieved through the use of standard-equivalent quality assurance measures. Although it brings to a certain extent greater clarity than the currently applied practices, leaving the possibility for the contracting authorities to demand as a condition for the delivery of a specific product the implementation of a quality management system in the enterprise, without regulating the conditions under which such a requirement is justified, may have the effect of narrowing the potential participants in the procedure. It should be noted that in certain economic sectors the requirements for a systematic approach in the production process are part of the regulatory conditions for carrying out business activities, for example food production. Please note that the reasons for the addition of item 13 in Art. 51, para. 1 are not presented in the document accompanying the bill, which, in our opinion, warrants a broader discussion.
13. In § 48, item 1, letter "c" to acquire the following revision:
в) evidence of exercising a professional activity under Art. 49, if
such are required by the contracting authority or are mandatory by law;"
Motives:
If a mandatory permit is required for a certain activity and the contracting authority does not require it, then a candidate may be admitted to participate in the procedure in violation of a special law or such a candidate who carries out or will carry out an unregulated activity.
14. In § 48, item 3, the proposed text of para. 3 to acquire the following revision:
"(3) In the cases under Art. 25a the request of the contracting authority for the use of subcontractors may not be fulfilled if the participant is an association that is not a legal entity and each of the persons in the association will take part in the execution of the public procurement in an amount corresponding to the types of work specified in the submitted contract for an association or in another document signed by the persons in the association. The distribution of works must ensure that the amount specified by the contracting authority for subcontractors is performed by at least one of the persons in the association. In this case, the relations between the partners are regulated according to the agreement between them for the execution of the order."
Motives:
The meaning of this change is that the concept of "partners' shares", as defined in the Civil Code, should not be confused with the concept of size or amount of work that the partners of the association undertake to perform as a result of the OP. The confusion of these concepts leads to many practical problems of an accounting and tax nature in the settlement between the partners upon receipt of payment from the contracting authority. The controversial practice of the Supreme Court also contributes to this.
15. In § 56 in Art. 69a, para. 3 the first sentence to acquire the following content:
"At least three working days before the specified date for the opening of the price offers, the commission announces through a message in the buyer's profile the date, time and place of the opening of the price offers."
Motives:
In the new proposed text of Art. 69a, para. 3, it is intended that the commission will announce the date, time and place of the opening of the price offers through a message in the Buyer's Profile. The new provision does not set a time limit for making this announcement, in order to give the participants the opportunity to send their representatives to the opening of the price offers.
In practice, there are cases where commissions send letters by fax announcing the opening of price offers on the same day, 3 hours after sending the fax, without taking into account the fact that their headquarters are outside Sofia, and the headquarters of the participating companies are in Sofia and it is not possible for representatives of the participants to physically arrive at the place of bid opening.
The absence of a legally established mandatory minimum period before the opening of the price offers, in which to announce the date and time of the opening of the price offers, creates prerequisites for vitiating the principle of transparency in conducting the procedures.
16. In § 75 in Art. 101b to add a new paragraph 7 with the following content:
"(7) During the preparation and conduct of the procedure, the contracting authorities comply with the obligations, prohibitions and restrictions contained in Art. 25, Art. 28, Art. 37a, Art. 50 and Art. 51 of the Act".
Motives:
Chapter 8 lacks texts that would regulate in detail the selection criteria, the preparation of the assessment methodology, etc., which allows vicious practices against which the requirements in the above-mentioned norms are directed.
17. In § 85, make the following changes:
1. In item 1, letter "a", the proposed new item 1 should be amended as follows:
"and) a new item 1 is created:
1. the expiration of the term under Art. 27a, para. 3 – against the decision to open the procedure and/or the decision to change, and regarding requirements that are not specified in the announcement – from receiving the documentation, when it is not published simultaneously with the announcement to open the procedure and/or the decision to change;
2. a new item 6 is created:
"6. until the expiration of the deadline for submission of offers - against the decision under Art. 25, when criteria are laid down in it, conditions or requirements that give priority or unreasonably limit the participation of persons in public procurement or when there is a violation of Art. 32, para. 3."
Motives:
The introduction of criteria, conditions and requirements giving advantage or unreasonably limiting the participation of persons in public procurement, represents a significant violation of the procedure, which particularly affects the public interest. According to the current version of Art. 120 of the Civil Code, similar vices should be allowed to appeal within ten days from the publication of the decision and the announcement for the opening of the order, and with regard to the requirements that are not specified in the announcement - from receiving the documentation.
Often, in practice, the presence of discriminatory and anti-competitive criteria is established by the participants in the procedure at a later stage, when the deadline for appealing the decision to open the procedure has already expired. In this way, an essential defect of the procedure is rectified. The public interest requires the introduction of a legal norm that will stop the current practice.
The proposed extension of the appeal period is also in accordance with the provision of Art. 29, para. 1 of the ZOP, according to which the persons are given the opportunity, within the term eo 10 days before the expiry of the deadline for submission of offers or applications, to be able to request in writing from the contracting authority clarifications on the documentation for participation. For its part, the contracting authority is obliged to respond to the inquiry within 4 days of its receipt. Only after this period had expired could the subjects consider whether the set criteria, conditions or requirements actually favor or unreasonably limit the participation of certain persons in the public procurement. It is proper for the law to provide the subjects with an opportunity to exercise their rights when they have access to all the information on the basis of which they can make a reasonable conclusion about the presence or absence of a violation.
At the same time, the proposed extension of the period for appealing the decision to open the procedure is limited to the stage of submission of tenders, which is an acceptable balance between the need for stability and speed of the procedure on the one hand and on the other hand - the public interest in procurement, in accordance with the principles of free and fair competition, equality and non-discrimination (Article 2, Paragraph 1).
PROPOSALS FOR OTHER CHANGES AND ADDITIONS TO THE PLAN
1. In the Additional Provisions, the term "estimated value" should be defined:
"The estimated value is the maximum amount of the contracting authority's budget for the execution of the contract, which cannot be changed during the procedure".
Motives:
The publication of the estimated budget in the announcement will give the applicants the opportunity to assess in advance the meaning of their participation.
In practice, contracting authorities, when they announce an estimated value, have the maximum value in mind and none of the candidates offers an equal or higher price. But when there is a reason to appeal the announced estimated value, the contracting authority immediately points out as a justification that it is an estimated value and not a maximum; The CPC, of course, accepts such a justification, because the law lacks a definition of the concept of "forecast value".
The budget is an important element of the methodology for evaluating offers under the "economically most advantageous offer" criterion. In practice, it shows the limit up to which the methodology works correctly, and its publication will allow participants in the procedure to calculate for themselves the assessment they deserve.
Tying the estimated value to the maximum amount of the budget will take away the possibility and will stop the existing practice of contracting authorities terminating the procedure on the basis of Art. 39, para. 1, item 3 or item 5 of the ZOP, without the existence of objective reasons for this and/or if by chance the "correct" company did not win.
2. In the Additional Regulations, item 12 should be amended as follows:
"12. "Minimum cost of labor" is the minimum amount of the wage fund for the workforce, determined on the basis of minimum insurance income by activities and groups of professions, according to Article 8, item 1 of the law on the budget of the state social insurance for relevant year."
Motives:
Mandatory labor costs are not only remuneration costs, but also include economic indicators related to the application of labor insurance legislation (insurance at the expense of the employer, overtime, vacations, professional experience, work on holidays and weekends, night work etc.)
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