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Procedures and contracts

How do I participate in a public procurement procedure?

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How do I participate in a public procurement procedure?

 

1. General provisions.

The Public Procurement Act is tasked with creating legal guarantees for the development of free and fair competition, i.e. to  provide an opportunity  for  all legal entities to participate in the procedures  and for the competition between them to take place on the basis of objective market criteria.

The contracting authority makes a decision to open a procedure for awarding a public order according to its needs, which this order should satisfy in compliance with the principles and conditions laid down in the PPA. For this purpose, the Law grants  the right to every business entity  as  an interested party  to participate  in procurement procedures, according to its financial, technical and resource capacity. This collaboration of available opportunities of business entities should be relevant to the requirements set by the contracting authority.

 

2. "Interested person" in the sense of the ZOP .

In §2, item 14 of the DR of the ZOP, a definition of the term "Interested person" is given: "any person who  has or had an interest in receiving a certain public contract and who  has been or may be harmed  by the alleged violation". The essence of this concept is especially important in cases of contesting the contracting party's act, in accordance with the provision of Article 198, item 1 of the Civil Code. In these cases, each "interested person" must state the circumstances in his complaint ,  on which he  bases his status as an  interested party, as well as applies to it evidence of the stated  circumstances    § 2, item 14  of the DR of  ZOP  do not have a legal interest  in appeal.

The presence of  a legal interest  of the interested person must exist  throughout the duration of the dispute , and not only at the time of filing the complaint, respectively the date of removal of irregularities in the complaint and initiation of proceedings before the CPC. Such is the consistent judicial practice of the Supreme Court. [1]

A legally relevant fact  for substantiating  a legal interest   of the "interested person" in contesting the decision of the contracting authority is  the submission of an application for participation  /offer/. In this way, he would acquire the status of a participant and substantiate a real interest in obtaining a public contract.

Since the interested party applicant is not registered on the CAIS EOP platform to submit a bid for participation, he has finally lost the legal interest to appeal the procedural act of the contracting authority, as it in no way adversely affects his legal sphere.

The second cumulative requirement provided for in the law in order to accept that the applicant is an interested person, according to the definition of § 2, item 14 of the DR of the ZOP - that the person  has been harmed or may be harmed  by the alleged violation, which relieved statements should be supported by data and evidence.

Last but not least, the "interested person" should carefully assess  the scope of the subject matter of the public order in which he is interested and his ability to fulfill it with his own resource capital. If the subject is complex, for example the sale of medical equipment, but also the installation and commissioning of a specific one (sterilizers), he must have the capabilities for its complete implementation - both delivery and commissioning.

Because the mere existence of a permit for wholesale trade in medical devices, for example, cannot justify the existence of the legally required personal, direct and immediate legal interest in contesting the act of the contracting authority. In accordance with the permanent and uncontroversial judicial practice, when  specific activities are included in the subject of the public procurement ,  the interested persons  as disputants bear the burden of proof to establish and  prove the existence of  a real possibility of implementation and the specific object  of delivery, installation and operation. [2]  Often in these cases fitness or legal capacity to exercise professional activity is required of the participants (entry in a professional register, in the builder's chamber, possession of the relevant certificates, etc.) 

In case of failure to present such documents and certificates, the submitted complaint is considered to have been filed by a person who is not an actively legitimized party, because he does not possess the status of "interested person", within the meaning of Art. 198, paragraph 1, item 1 of the Civil Code, in connection with § 2, item 14 of the Additional Provisions of the Civil Code. 

The above-mentioned objective legal facts concerning the status of the concept of "interested person" are relevant for every business entity that has an interest in participating in an announced public procurement procedure.

 

3. Every interested person is a potential candidate/participant in a PPA procedure.

Article 10 of the Public Procurement Law regulates the possibility for a "candidate" [3]  or "participant" [4]  in a public procurement procedure to be any Bulgarian or foreign natural or legal person or  their associations , as well as any  other entity that is entitled to perform construction, supplies or services under the laws of the country in which it is established.

The law does not require a special legal personality or form of legitimacy for an "association" or "any other entity", and no written form of establishment is required.

A legal definition of  "unification" is given in  Art. 357  of  the Civil Code , according to which, with the partnership agreement, two or more persons agree to combine their activities to achieve a common economic goal. From this legal definition, it can be concluded that the purpose of the association of persons in a civil society is to achieve an  economic goal with common efforts and with common means . According to  Art. 275  and  Art. 276  of  the Commercial Law  (TC), traders can also join together to carry out a common specific commercial activity. This association can take the form of commercial companies or by forming  a consortium to which the civil company rules apply.  The association has only economic goals and functions, motivated and related to participation in the specific public procurement.

That is why I draw attention to the fact that the issues of representation of the association under ЗЗД or consortium under ТЗ for carrying out other legally regulated actions, including active legal standing when appealing an act of the contracting authority, should be settled in an unambiguous manner in a relevant founding agreement .

These unincorporated companies are not parties to the administrative process within the meaning of Art. 15, para. 1 of the APC, as they do not possess the signs of an organization in the sense of § 1, item 2 of the DR of the APC. Because of this and as a consequence of the fact that they are an impersonal entity - there are no management bodies and representative bodies to appeal against the acts of the contracting authority, which are individual administrative acts - art. 22, para. 9 of the ZOP, the appeal should be filed either by all participants in the association on his behalf and at his expense or to be authorized by one or some of them to submit complaints and representation in relation to procedural legal actions.

A legislative limitation should be taken into account, that a person who participates in an association or has given consent to be a subcontractor of another candidate or participant,  cannot submit an application for participation or an offer independently  (Art. 110, Para. 9 ZOP). In addition, a natural or legal person  may participate in only one association  in  a procedure for awarding a public contract (Art. 110, Para. 10 of the Civil Procedure Code).

 

4. Requirements for candidates and participants .

Mandatory procedures for the removal  of participants or candidates participating in a procedure for awarding a public contract are expressly stated in  Art.  54 ZOP.  

Part of the grounds [5]  for mandatory removal also apply to the persons who  represent the participant or candidate  and to  the members of its management and supervisory bodies  according to the register in which the participant or candidate is entered, if any, or the documents certifying its legal personality . When a legal entity participates in the composition of these bodies, the grounds also apply to the natural persons who represent it according to the register in which the legal entity is entered, if there is one, or the documents certifying its legal personality. In those cases, when the applicant or the participant, or a legal entity in the composition of its control or management body is represented by  a natural person by power of attorney, the grounds under Art. 54,  para. 1, items 1 ,   and    of the ZOP also apply to this natural person.

Art. 55 ZOP concerns optional grounds for removal , i.e. the contracting authority may not include them in the procedure as requirements for participants or candidates. However, if the contracting authority specifies them as circumstances in the announcement, in the invitation to confirm interest or in the invitation to participate in negotiations, they become  mandatory for economic entities  in the public procurement procedure.

The commented requirements under Art. 54 ZOP and Art. 55 ZOP also apply when a candidate or participant in the procedure  is an association of natural and/or legal persons and for a member of the association one of the grounds for removal is present.

In order to prove the absence of grounds for removal, the participant/candidate selected as an executor shall submit the documents specified in Art. 58 of the Civil Procedure Code.

 

5. Criteria for the selection of participants/candidates in a public procurement procedure .

The selection criteria refer to the suitability (legal capacity) to exercise a professional activity, economic and financial status, technical and professional abilities of the participant/candidate.

Art. 60 - 64 of the Labor Code  exhaustively regulates the essence of the selection criteria and the ways of proving them.

An option provided by the special law in favor of the participants or applicants to prove their compliance with the criteria related to economic and financial status, technical and professional abilities, is the possibility for them  to use the capacity of third parties , regardless of the legal relationship between them for a specific public order - (Art. 65 ZOP).

Candidates and participants  may also use a subcontractor  for the execution of a concrete public procurement. In these cases,  they indicate in the application or offer the subcontractors and the part of the order that they will assign to them, as well as proof of the obligations assumed by the subcontractors.

Important!!!  With the latest amendments to the Public Procurement Act (SG, No. 88 of 2023), the possibility of contractors to subcontract the subject of the contract or parts of it to other persons is taken away. This applies in specific cases for which the legislator requires  an express declaration that the participant can fulfill the order with his own resources . [6]

 

6. Registration of a business entity in the electronic platform TSAIS EOP, according to art. 39a, para. 1 ZOP .

All actions related to the participation of economic entities in a specific public procurement are carried out in  the unified national electronic web-based platform called "Centralized automated information system "Electronic public procurement" (CAIS EOP) . For this purpose, business entities must register, which creates a profile of the organization on the platform (Art. 9g PPZOP) 

All actions and inactions of the business entities on the platform, which create rights or obligations or directly affect the rights or legal interests of other persons, are considered to have been committed by the business entity.   Business entities are responsible for the reliability, up-to-dateness and completeness of the information entered by them in the platform, as well as for meeting the deadlines.

 

6. 1.  Presentation of a single European document for public procurement (EEDOP).

When submitting an application for participation or an offer, the applicant or participant declares the absence of grounds for removal and compliance with the selection criteria through EEDOP. [7]

Important!!  §11 of the Resolution of the Council of Ministers on changes to the Regulations for the Implementation of the Public Procurement Law (PPZOP) foresees the creation of a new Article 30, according to which " The contracting authority prepares a model of a single European public procurement document (EUDP) through the System for filling and re-using the EEDOP available through the platform.'

In support of this proposal is the idea laid down in §15 of the draft decree, where it is foreseen the possibility of the contracting authorities to require the information on compliance with the selection criteria to be presented  by filling in the EEDOP only in part IV "Selection criteria" .  The purpose of the proposal is cit.  "To minimize the possibility of making mistakes when providing the required information. Cases were observed where participants' responses did not allow for assessment of their compliance with eligibility requirements. This, in turn, necessitates re-provision of EEDOP, correspondingly unjustified extension of the time for conducting the procedure" [8]

There is also another new point in the latest amendments to the ZOP concerning EEDOP. Thus, Article 67 of the special law has been  supplemented with the possibility for  the Public Procurement Agency to have official access  through the platform under Art. 39a, para. 1 to data within the scope of EEDOP for which other administrative authorities are primary data controllers.

This addition was promulgated SG No. 88 of 2023, and  will be in force from 22.10.2024. It is tied  to the obligation of AOP, regulated in the new art. 38 (new, No. 88 of 2023, in force from 22.10.2024) of the PPA  "Open Data" [9] . This norm concerns pending publication by the executive director of the Public Procurement Agency of PPA data, on the open data portal, available in a structured form and in an open, machine-readable format within the meaning of the Law on Access to Public Information. The Ministry of Electronic Management sets out reasons for the introduction of this   "Open Data" function,  the purpose of which, according to the Ministry, is above all  to ensure the irrefutable guarantees of transparency and efficiency of the spent public resource provided with the money of Bulgarian taxpayers.

 

6.2. Offer or application for participation.

The EOP offer submitted through TSAIS guarantees the legal interest of the business entity in participating in a specific procurement procedure

The content of the offer is specified in Art. 39 PPZOP, which, in addition to the EEDOP, includes a technical proposal, a proposal for the execution of the order in accordance with the technical specifications and the requirements of the contracting authority, a declaration that the obligations related to taxes and insurance have been complied with when preparing the offer , environmental protection, protection of employment and working conditions, when applicable,  as well as documents to prove the reliability measures taken, when applicable,   a copy of a document establishing the association, when applicable. Depending on the order, the offer may also include mock-ups, a description and/or photos of the goods to be delivered, as well as other information and/or documents requested by the contracting authority, when required by the subject of the order.

Important!!!  AOP has published on its website an instruction for submitting an offer from an association without registration in the CAIS EOP, which you can find here:

https://www2.aop.bg/wp-content/uploads/2021/12/Instruction_SS_submit_16122021.pdf

The instruction affected the cases when associations that do not have independent registration in the CAIS EOP participate. Then the application/offer is submitted either by one of the participants in the association or by a person expressly authorized by the partners. In these cases, the AOP explains, the submission of an application/offer is carried out from  the relevant person's CAIS EOP profile , by sequentially performing actions described in detail as steps in the Instructions.

Depending on the type and stage of the public procurement procedure, the participation documents are stored on the platform in an encrypted form until they are opened. Offers and applications for participation are considered by a committee appointed by the contracting authority.  

A new aspect  of the commission's activity is  the possibility for the participation of external observers, according to new section Ia  (New - SG No. 88 of 2023, effective from 01.01.2024)  Preliminary and current control".  They will have the opportunity to participate in the commission's work as observers during procedures for awarding public contracts of particular complexity, increased public interest and/or related to critical infrastructures. In this regard, the Public Consultation Portal [10]  has published a Draft Decree on Amendments and Supplements to the Regulations for the Implementation of the Law on Public Procurement, which is highly anticipated given the numerous changes that have occurred in the field of public procurement through ZIDZOP (promulgated SG, No. 88 of 20.10.2023). This project includes a number of proposals regarding the organization of activities and the participation of observers in the commission's work, which is an additional guarantee of openness and publicity in the actions of the contracting party's commission.

 

7. Selection of contractor and conclusion of contract.

The conclusion of a contract usually begins after the decision to appoint an executor enters into force, and the parties agree on the date and manner of concluding the contract. Upon conclusion of the contract, the person selected as the bailiff submits documents in accordance with Article 112 of the Civil Code. The contracting authority does not have the right to request documents to which it has access in an official way or through a public register, or which can be provided through direct and free access to the national databases of the member states under arg. of Art. 67, Para. 8 of the Civil Code.

Contracts for the assignment of activities in connection with a public procurement carried out in accordance with the Public Procurement Act, have a civil law existence, which also predetermines the applicability of the Law on Obligations and Contracts (LLC) and the Commercial Law (TL) to them. This conclusion follows from the reference made with the provision of art. 120 of the Civil Code, according to whose prescription the provisions of the Labor Code and the Labor Code are applied to all outstanding issues in connection with the conclusion, execution and termination of public procurement contracts. 

The subject of appealing acts of the contracting authority will be the focus of a subsequent article, which is why it will not be covered here. Moreover, with an optimal professional attitude in the process of conducting the procurement procedure on both sides - the contracting authority - the participant/candidate, the desired result of the timely conclusion of a performance contract will have its logical conclusion, without having to challenge the contracting authority's act.

 

 

Author: Borislava Doncheva - attorney at law

 

 

If you have any questions regarding the subject of public procurement, their correct structuring, preparation of documents and legal representation, please contact us at the following email address: office@ kostovparners.bg

  

[1]  Decisions under Adm. d. No. 1131/2018, by adm. d. No. 13319/2017 and determined under adm.d. No. 5381/2022, adm.d. No. 5520/2022, adm.d. No. 4303/2022 and others.

[2]  Decision No. 6746 of 07.07.2022 under Adm. No. 6010 / 2022 of the Supreme Administrative Court

[3]  §2, 19 regulated that   "Candidate"  is an economic entity that has submitted an application for participation in a limited procedure, competitive procedure with negotiation, negotiation with prior invitation to participate, negotiation with publication of an announcement, competitive dialogue, partnership for innovations or participates in a limited project competition.

[4]  §2, item 59 PPA  "Participant"  is a business entity that has submitted an offer or conceptual project or is invited to participate in negotiations.

[5]  The grounds under Art. 54, para. 1, items 1, 2 and 7 ZOP 

[6]  Art. 14, para. 6 LLP, art. 15, para. 2 LLP, art. 149, para. 7 ZOP

[7]  Art. 67 ZOP

[8]  We attach to the article in its entirety the Draft Resolution of the Council of Ministers on Amendments and Supplements to the Regulations for the Implementation of the Law on Public Procurement, included in the legislative program for the period January 1 - June 30, 2024.

[9]  You can get acquainted with the motives of the MEU here:  https://egov.government.bg/wps/portal/ministry-meu/ministry/public-discussion/strategy.izmenenei.zop

[10]  https://www.strategy.bg/publicconsultations/View.aspx?lang=bg-BG&Id=8301

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