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Procurement Law – 21 Amendments and Counting
Since 2018, we have been publishing an annual update on amendments to the system of remedies under the Slovak procurement law. The appetite for changes to the procurement rules seems insatiable so there are now more than 20 amendments to the law, which was passed in 2015, and one can bet that this is far from the final count. Granted, there is always room to improve legislation, but constant changes mean that it is extremely difficult to identify what the rules are even for professionals. In fact, before the last amendment we discussed in 2021 has come into force, the law was amended two more times. And that was not it for 2022. So, this is our fifth take on the effects of the changes in procurement and the system of remedies.
Sanctions against Russia
The Russian invasion of Ukraine had significant effects on all aspects of life and business in Slovakia and public procurement was no exemption. In parallel to the regulation of sanctions in this area enacted by the European Union, Slovakia introduced a national rule which requires contacting authorities to disqualify or otherwise restrict participation in procurement to economic operators located in countries listed in a decree issued by the Cabinet of Ministers. In reality, this was, as many other amendments to the law, just a populistic modification of the law which is practically obsolete given the common European system of sanctions against Russian firms and the fact that the Cabinet of Ministers has still not issued the decree although the amendment was passed in March 2022.
No Ex-Ante Review of Contracts and Exclusion of Review
JUDr. Ján Azud, Partner, RUŽIČKA AND PARTNERS s. r. o.
A controversial decision by the Public Procurement Authority compromising an important motorway project in East Slovakia has prompted an argument between the PPA and the Ministry of Transport and Construction. Massive backlash from the stakeholders prompted the Public Procurement Authority and the Ministry of Transport and Construction to agree on an amendment to the procurement law that made this project funded by the EU feasible during the current programming period. A pact with the devil was made and the toll it took has been massive. In exchange for waiving the so-called ex-ante review by the Public Procurement Authority, the regulator accepted only reviewing the contracts ex-post. It might not look so bad. Except, it is. The effect is that a decision issued by the Public Procurement Authority on a contract funded even partly by EU funds in the 2014 – 2020 Programming Period cannot be appealed or reviewed by the court. A working system has been traded and distorted in exchange of a single project. Bad deal.
Public Procurement Authority as Part of the EU Funds Management System
Based on the legislative development of 2022, the Public Procurement Authority became an integral part of the EU Funds Management System in relation to the 2021 – 2027 Programming Period. EU funded contracts will no longer be reviewed by the Public Procurement Authority within standard inspection procedures but are pursuant to special rules which will only apply to these contracts. A review will be mandatory both ex-ante and ex-post, and the Public Procurement Authority will replace the managing authorities which reviewed the contracts during the Programming Period 2014 – 2020. The rational behind is to decrease the number of inspections previously carried out by both managing authorities within the EU Funds Management System and the PPA as a public procurement regulator. As always, the road to hell is paved with good intentions. Making the PPA a part of the system is naturally a good thing. On the other hand, the new regime seems to concentrate too much power on an already incredibly powerful entity. Based on the law, inspections carried out by the PPA will be concluded by a simple protocol rather than a full-fledged decision. Moreover, the protocol will not be subject to an appeal or a judicial review. The PPA will also determine and decide on financial corrections. Less inspections have been desired for a long time as the process took way too long, which led to slow spending of EU funds. It remains to be seen if the deal sacrificing the system of checks and balances to speed up the process really works or if it is another pact with the devil.
Overall Assessment
An assessment of amendments to the public procurement law has now become pointless. Anarchy has replaced the system; changes are so commonplace that more amendments can be expected anytime. On the plus side, there is still something to write and complain about. We are looking forward to doing so again in 2023.
This article has been brought to you byRUŽIČKA AND PARTNERS s. r. o.
