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Rules for participating in tenders - public procurement law

ALICJA BIEŃ & ALICJA TARKOWSKA LAW OFFICES & PARTNER OFFICES

Pawilonska 47
91-487 Lodz, Poland
tel. +48 42 630 40 10
fax +48 42 630 97 00
kancelaria@alicjabien.pl

author of the study

NAVIGATION

INTRODUCTION

WHERE ARE THE RULES FOR AWARDING PUBLIC PROCUREMENT?

WHERE CAN I GET KNOWLEDGE ABOUT PUBLIC PROCUREMENT?

WHO APPLIES PUBLIC PROCUREMENT LAW?

WHEN IS AN ORDER PUBLIC?

EXCLUSIONS FROM THE SCOPE OF PUBLIC PROCUREMENT LAW

PUBLIC PROCUREMENT RULES

THRESHOLDS OF APPLICATION OF THE ACT

PUBLIC PROCUREMENT NOTICES

PUBLIC PROCUREMENT MODES

PROCEDURE FOR PREPARING AN OFFER FOR PUBLIC PROCUREMENT

HOW TO SUBMIT AN OFFER AND COMMUNICATE WITH THE ORDERING PARTY?

DEPOSIT

APPEAL IN THE PROCEEDINGS

Introduction

Issues related to participation in tenders in Poland are regulated by the Public Procurement Law.

Public procurement – ​​what is it?

The Act introduces the concept orders, it should be understood as a paid contract concluded between the ordering party and the contractor, the subject of which is the purchase by the ordering party of construction works, supplies or services from a selected contractor.

In the case where the contracting authority is a public entity, i.e. – among others –

  • public finance sector units,
  • other state organizational units,
  • legal entities established for the specific purpose of meeting needs of a general nature, not having an industrial or commercial character, if public finance sector entities or state organizational units finance them by more than 50%, hold more than half of the shares or stocks of these entities, or otherwise supervise them,

in this case we are dealing with public procurement. Generally speaking, it is about the ordering party, which is the government administration or local government units that buy goods or services.

Thus, the term "public procurement" means a paid contract concluded between a public contracting authority and a contractor, i.e. an entity that offers construction works, services or supplies to the contracting authority.

The public procurement system describes detailed procedures by which contracting authorities can make purchases. It is a formalized system, and orders are awarded according to strictly defined rules.

Where are the rules for awarding public contracts regulated?

Public procurement is regulated by the Act of 11 September 2019 – Public Procurement Law (hereinafter referred to as PZP).

The Act specifies:

  • entities obliged to apply the provisions of the Act;
  • scope of exclusions from the application of the provisions of the Act;
  • procurement rules;
  • stages of preparing and conducting the procurement procedure;
  • procurement procedures and specific procurement instruments and procedures;
  • requirements for public procurement contracts and framework agreements;
  • authorities competent in procurement matters;
  • legal remedies;
  • extrajudicial resolution of disputes concerning the implementation of public procurement contracts;
  • control of procurement and financial penalties.

Where can you get information about public procurement?

Information about public procurement can be obtained from the website of the Public Procurement Office (https://www.gov.pl/web/uzp). There are materials available there that describe in detail individual issues related to public procurement.

Who applies public procurement law?

PZP applies the ordering party, which is a public entity, i.e. – among others – public finance sector entities, other state organizational units, legal persons established for the specific purpose of meeting needs of a general nature, not having an industrial or commercial character, if public finance sector entities or state organizational units finance them by more than 50%, hold more than half of the shares or stocks of these entities, or otherwise supervise them.

These include, for example, public authorities, local government authorities, state administration, universities, courts and health care facilities.

PZP also uses the so-called. sector ordering party, i.e. entities performing a specific type of activity from the point of view of the state economy and meeting the needs of the population. These are entities involved in the production of electricity, gas, heat, their sale, public transport, water management, fuel extraction, postal services.

For example, sectoral activities in the field of:

  • water management is:
    • providing or operating fixed networks intended to provide public services in connection with the production, transport or distribution of drinking water,
    • supplying drinking water to the networks referred to in letter a,
    • activities related to the activities referred to in letters a and b, in the scope of:
  • projects concerning water engineering, irrigation or land improvement, provided that the quantity of water used for the purpose of supplying drinking water constitutes more than 20% of the total quantity of water available from these projects or irrigation or land improvement installations,
  • disposal or treatment of sewage;
  • electricity is, among others:
    • providing or operating fixed networks intended to provide public services in connection with the production, transmission or distribution of electricity,
    • supplying electricity to the networks referred to in letter a,
  • gas and heat energy is:
    • providing or operating fixed networks intended to provide public services in connection with the production, transport or distribution of gas or heat,
    • supplying gas or heat to the networks referred to in letter a,
  • transport services are activities consisting in providing or operating networks intended for the provision of public services in the field of railway, tram, trolleybus, bus, cableway or using automatic systems;
  • ports, harbours and airports are activities relating to the exploitation of a geographical area for the purpose of providing air carriers, sea carriers and inland carriers with airports, sea ports and inland ports or other terminal facilities, respectively;
  • postal services is an activity consisting of, among others, the provision of services:
    • receiving, sorting, moving or delivering postal items,
    • management of the services referred to in letter a,
  • Fuel extraction is an activity involving the extraction of crude oil or gas and their natural derivatives as well as the exploration for or extraction of brown coal, hard coal or other solid fuels.

This is an activity subject to the Public Procurement Law, provided, of course, that the activity is performed by public contracting authorities or entities over which public contracting authorities exercise a decisive influence.

The entities listed above must apply the PZP to the purchasing process, provided that other conditions are met.

The other party to the order is contractors, this should be understood as a natural person, a legal person or an organizational unit without legal personality that offers on the market the execution of construction works or a construction object, the supply of products or the provision of services or applies for the award of a contract, has submitted an offer or concluded a public procurement contract.

When is a procurement public?

Public Procurement Law applies to the following groups of procurements:

  • classic orders, i.e. contracts awarded by a public contracting authority other than sectoral contracts and contracts in the fields of defence and security; if the value of the contract awarded is at least equal to the amount 130 PLN net (VAT)
  • sector orders – this should be understood as an order placed by a sectoral contracting authority in order to conduct one of the types of sectoral activity, for example transport services, energy, if the orders exceed the thresholds specified in the Act,
  • orders in the fields of defence and security – this should be understood as a contract awarded by a public contracting authority or a sectoral contracting authority, the subject of which are:
    • supplies of military equipment, including any of its parts, components, subassemblies or software,
    • delivery of critical equipment, including any of its parts, components, subassemblies or software,
    • construction works, supplies and services related to securing facilities at the disposal of entities carrying out orders in the fields of defence and security or related to the equipment referred to in letters a and b, and all its parts, components and subassemblies related to the life cycle of this product or service,
    • construction works and services intended exclusively for military purposes, sensitive construction works or sensitive services.

As a rule, in the classic case of public procurement, the provisions of the Public Procurement Law apply to contracts the value is equal to or exceeds PLN 130 (excluding VAT).

Exclusions from the scope of application of public procurement law

The Act defines a number of orders to which it does not apply – it introduces a number of exclusions. These exclusions occur due to:

  • the entity that awards the contract – the so-called Subjective exclusions.
  • subject of the order – the so-called subject-related exclusions.

Subjective exclusions

The provisions of the Act do not apply to orders or competitions awarded, among others, by:

  • National Bank of Poland, related to, among others:
    • performing tasks related to the implementation of monetary policy, in particular orders for financial services related to the issue, sale, purchase and transfer of securities or other financial instruments,
    • trading in securities issued by the State Treasury,
    • domestic and foreign debt management services,
    • the issue of currency and the management of these currencies,
    • accumulating foreign exchange reserves and managing these reserves,
    • accumulation of gold and precious metals,
    • maintaining bank accounts and conducting bank monetary settlements;
  • National Economy Bank:
    • related to the implementation of tasks related to the management of funds created, entrusted or transferred to the National Economy Bank and the implementation of government programs, in the part concerning:
      • maintaining bank accounts, conducting bank monetary settlements and operating on the interbank market,
      • obtaining financial resources to ensure financial liquidity, financing the activities of supported funds and programs, and refinancing credit activity,
    • related to operations on the interbank market concerning the management of the State Treasury debt and the liquidity of the state budget,
    • related to the performance of banking activities by Bank Gospodarstwa Krajowego, in the part concerning:
      • opening and maintaining bank accounts, conducting bank monetary settlements and activities on the interbank market,
      • obtaining financial resources to ensure financial liquidity and refinance credit activity,
    • with a value lower than the EU thresholds;
  • public contracting authorities, in order to conduct business in the field of:
    • providing access to a public telecommunications network or
    • operating a public telecommunications network or
    • the provision of publicly available telecommunications services via the public telecommunications network;
  • sectoral contracting entities carrying out sectoral activities in the field of certain types of postal services.

Subject-related exclusions

The provisions of the Act do not apply, for example, to contracts or competitions the subject of which is:

  • there are arbitration or conciliation services;
  • there are legal services, for example notarial services
  • there are some research or development services
  • is the acquisition of programmes and programme materials or their development, production or co-production, if they are intended for the provision of audiovisual media services or radio media services – provided by providers of audiovisual or radio media services;
  • is the purchase of airtime or programmes from providers of audiovisual or radio media services;
  • is the acquisition of ownership or other rights to existing buildings or real estate;
  • there are some financial services
  • are certain services in the field of civil defense, population protection and danger prevention provided by non-commercial organizations or associations
  • are deliveries of allowances for the emission of greenhouse gases and other substances into the air, units of certified emission reduction and emission reduction units, within the meaning of the regulations on trading in allowances for the emission of greenhouse gases and other substances into the air.

Furthermore, the provisions of the Act do not apply to labour law contracts.

The provisions of the Act shall not apply either for the purpose of ensuring the protection of classified information or the protection of essential state security interests.

Public procurement rules

As already mentioned, public procurement is a very formalized process. Therefore, the regulations define the rules for their implementation. The most important rules for public procurement are:

  • The procurement procedure is overt, which means that documents from the procedure are publicly available, and the contracting authority may limit access to information related to the contract award procedure only in cases specified in the Act.
  • Principle written proceedings, means that the procurement procedure, subject to exceptions provided for in the Act, is conducted in writing. There is no oral communication with the ordering party.
  • the rule of the Polish language –the principle of conducting the procurement procedure in Polish.
  • the principle of fair competition – introduces the need to conduct the proceedings in a manner consistent with the law, good practices and the interests of another entrepreneur or client, ensuring access for groups of contractors and limiting the use of a monopolistic position by other entities.
  • the principle of equal treatment of contractors –introduces a ban on the contracting authority to give preference to or discriminate against entities taking part in the contract award procedure; they should be treated on equal terms during the procedure, and the requirements imposed on them should be clear and known at the time of preparing the offers
  • the principle of impartiality and objectivity – imposes on the contracting authority the obligation to ensure that the activities related to the preparation and conduct of the contract award procedure are performed by persons ensuring impartiality and objectivity
  • principle of efficiency – as part of the implementation of this principle, the ordering party ensures the selection of an offer that guarantees the best effects of the order, including social, environmental and economic effects, provided that any of these effects can be achieved in a given order, in relation to the costs incurred.
  • principle of transparency – requires that the public procurement procedure contains clear rules and that there are means to verify their correct application and that the criteria on the basis of which the contracting authority takes action are established in advance.
  • principle of proportionality – the ordering party conducts the procedure in order to guarantee the best quality of supplies, services and construction works, justified by the nature of the order, within the funds that the ordering party can allocate for its implementation.

The above principles correspond to the contractor's rights. In the event of a breach of the contractor's rights resulting from the above principles, the contractor may use the legal remedies specified by the Act, for example, it may appeal against the result of the procedure for awarding the order, and during the procedure it may, for example, demand that the description of the subject of the order does not contain unjustified preferences for goods offered by its competitor (the principle of fair competition, the principle of equality).

Thresholds of application of the Act

There are two thresholds by which an order is assessed:

1. Threshold of application of the Public Procurement Law:

The provisions of the Public Procurement Law apply to contracts and competitions, the the value is equal to or exceeds PLN 130 (excluding VAT). This threshold means that in the case of contracts that do not carry it out, the Act does not apply.

2. EU thresholds:

These are thresholds that do not affect the application of the Public Procurement Law, but determine the choice of the procurement procedure. Therefore, in order to correctly define the procedures according to which the procurement must be awarded, it is important to examine whether it is equal to or exceeds the EU thresholds - procurements above these thresholds are subject to more stringent obligations. They concern, among others, the obligation to conduct an analysis of the needs of the ordering party or to appoint a tender committee, as well as special requirements regarding the procedure documents or the rules for publishing procurement notices. The offer in proceedings with a value equal to or higher than the EU thresholds must be prepared in electronic form signed with a qualified signature.

The EU thresholds change over time, they are published, among others, on the website of the Public Procurement Office. They vary depending on the subject of the contract, different for construction works contracts, different for supplies and services, different for social services (e.g. health).

Information on EU thresholds is published by the President Public Procurement Office in a notice published on the website of the Public Procurement Office.

Public procurement notices

Public procurement notices are made publicly available; the manner of their publication depends on whether they are equal and above or below the EU thresholds.

In the case of contracts awarded at or above the EU thresholds:

  • The ordering party has the obligation to submit the notice to the Publications Office of the European Union, who publishes them in Official Journal of the European Union.
  • The contracting authority shall also make the notice available on the website of the procedure being conducted, from the date of its publication in the Official Journal of the European Union.
  • The contracting authority may also publish the advertisement in another place.

In case of contract award below the EU thresholds:

  • It is required to place an announcement in the Public Procurement Bulletin available on the Public Procurement Office platform e-Procurement (e-Zarządzanie platform – link to the platform – https://ezamowienia.gov.pl).
  • The contracting authority may additionally submit a notice for publication in the Official Journal of the European Union.
  • The Ordering Party may publish the notice in another manner, but not earlier than in the Public Procurement Bulletin.

Public procurement modes

Public procurement is awarded in several modes. There is no freedom of choice for the ordering party, the mode is specified by the provisions of the Public Procurement Law and a specific order must be processed according to the appropriate mode, in light of the regulations.

As a rule, the procedures differ depending on the value of the order, in accordance with the thresholds (EU, below the EU threshold).

The Act distinguishes the following procedures for contracts equal to and above the EU thresholds, which are as follows:

  1. unlimited tender – is characterised by the fact that all potential contractors may submit offers in response to the contract notice;
  2. restricted tender – the difference in relation to the above procedure is that, in response to the contract notice, applications to participate in the procedure may be submitted by all interested potential contractors, while only contractors invited to submit offers may submit offers;
  3. negotiations with announcement – in response to the contract notice, applications to participate in the procedure may be submitted by all potentially interested contractors. The Ordering Party admits certain potential contractors to the procedure by inviting them to submit initial offers, then conducts negotiations with them in order to improve the content of the initial offers and offers submitted at the negotiation stage; after the negotiations are completed, the Ordering Party invites contractors to submit final offers;
  4. competitive dialogue –in response to the contract notice, applications to participate in the procedure may be submitted by all potential contractors. Then, the ordering party conducts a dialogue with the contractors it has invited to participate, regarding the solutions they have proposed. After the dialogue is completed, it invites them to submit their offers;
  5. innovation partnership – in response to the contract notice, applications to participate in the procedure may be submitted by all interested contractors. The contracting authority decides which contractors to invite to participate in the further stage of the procedure and invites them to submit initial offers, then conducts negotiations with them in order to improve the content of the initial offers and offers submitted at the negotiation stage; after the negotiations are completed, it invites contractors to submit offers for research and development work aimed at developing an innovative product, service or construction works. It then purchases supplies, services or construction works resulting from the research and development work on the basis of which the innovative product, service or construction works were developed, provided that they correspond to the performance levels and maximum costs agreed between the contracting authority and the contractor or contractors;
  6. negotiations without announcement – the contracting authority negotiates the terms of the public procurement contract with potential contractors of its choice, after negotiations invites them to submit offers, and then proceeds with the award of the contract;
  7. free-hand order –the ordering party conducts negotiations with only one contractor and, after conducting these negotiations, awards him the contract.

 

For orders below the EU thresholds the following procedures apply:

  • basic
  • innovation partnership
  • negotiations without announcement
  • free-hand order mode.

Basic mode can take one of the following three variants:

  1. first variant – analogous to the unrestricted tender procedure – occurs in a situation where the needs of the ordering party are sufficiently specified, and thus the terms of the order leave no doubts and there is no need to conduct negotiations. For the purposes of the procedure conducted in this variant, the ordering party prepares the Specification of Order Conditions (SWZ), because this is possible from the beginning of the procedure.
  2. second variant – assumes the mandatory preparation of the SWZ at the beginning of the procedure, and in the next step, negotiations of submitted offers, if the ordering party has provided for such a possibility. In such a case, the scope of conducted negotiations concerns only those elements of the content of the offers that are subject to evaluation within the criteria for evaluation of offers and these negotiations cannot lead to a change in the content of the SWZ.
  3. third variant assumes the negotiation of submitted offers in order to improve them. In the first step, the ordering party prepares a description of needs and requirements, then conducts negotiations, and as a result of the conducted negotiations, prepares the SWZ. Negotiations cannot lead to a change in the minimum requirements concerning the subject of the order or the execution of the order, specified in the description of needs and requirements. Negotiations are conducted until all the terms of the order subject to negotiation are clarified or supplemented. In the last step, potential contractors submit their final offers.

 

The innovation partnership, negotiated procedure and direct procurement procedures applicable to contracts below the EU thresholds generally correspond to the procedures applicable to contracts above the EU thresholds.

Procedure for preparing an offer for public procurement

An offer for a public procurement contract should be prepared based on the following principles:

  • Analysis of the Tender Specification (hereinafter referred to as the Tender Specification):

Information on how to prepare an offer in a specific procedure is included in the SWZ. The SWZ is prepared by the ordering party. First, the content of the announcement and the SWZ should be analyzed to decide whether it is possible to submit an offer according to the ordering party's expectations and then to execute the order.

The regulations strictly define the elements of the SWZ, and their absence may be a reason for an appeal by a potential contractor. These elements are the most important data that allow for the correct preparation and submission of an offer, for example:

    • name, address of the ordering party,
    • public procurement procedure,
    • description of the subject of the order,
    • order completion date,
    • information about the required documents to be submitted with the offer,
    • information on how to communicate with the ordering party,
    • the period of validity of the contractor's offer,
    • grounds for exclusion from the proceedings,
    • criteria for evaluating offers.
  • If the provisions of the SWZ are unclear, an inquiry should be submitted in order for the ordering party to provide additional explanations.

The inquiry should be submitted within the time specified by the ordering party. The ordering party provides an answer to it, and the explanations prepared by the ordering party are made available to all potential contractors.

  • Submitting an offer

It should be remembered that an offer is a statement by a potential contractor that they are ready to enter into an agreement with the ordering party on the terms specified in the offer. The person submitting the offer is bound by it. The offer must be signed by persons authorized to represent the person submitting the offer, as at the date of its submission.

The offer should be accompanied by documents and declarations that are indicated by the ordering party in the SWZ. The offer cannot be supplemented. Only in the case where it contains obvious errors can it be corrected, but on condition that this does not lead to significant changes in the content of the offer.

The ordering party has the right to demand from the contractor explanations regarding the content of the offer, however the explanations provided may not change the content of the offer or supplement it.

The contractor may submit only one offer. It is also possible to submit a variant or partial offer, but only if the ordering party allows such a possibility, which will result from the content of the SWZ.

In the event that the offer contains a trade secret of the contractor, the contractor should indicate this in the content of the offer and indicate to the ordering party which information constitutes a secret. It must be demonstrated that the given information constitutes a secret. Since the ordering party is obliged to protect the secret, indicating what this secret is guarantees protection of the contractor's information.

  • Rejecting the offer

The ordering party shall reject the offer if it is inconsistent with the requirements specified in the order documents, and such rejection shall occur only if the inconsistency of the offer content with the requirements is of a fundamental and irremovable nature, which is assessed in each specific case; additionally, the inconsistency must relate to the subject of the order or other essential requirements.

How to submit an offer and communicate with the ordering party?

Information on how to submit a bid is included in the documentation for the specific public procurement procedure. These guidelines must be followed.

The offer is submitted using electronic means of communication, although the regulations contain exceptions in this respect.

The offer is submitted in different ways, depending on whether we are dealing with an order that falls within the EU thresholds or not.

The offer in procedures with a value equal to or higher than the EU thresholds must be prepared in electronic form, i.e. as a digital file signed qualified signature.

An offer in lower value proceedings does not have to include a qualified signature.

Deposit

The ordering party may require potential contractors to pay a deposit.

The purpose of the deposit is to secure the offer throughout the period in which the contractor is bound by it. The aim is to ensure that the contractor does not withdraw from its binding offer. The contractor is obliged to pay the deposit before the deadline for submitting offers and maintains it continuously until the expiry of the deadline for the offer. As a rule, the amount of the deposit cannot exceed 3% of the order value (orders equal to and above the EU thresholds) and 1,5% of the order value (orders below the EU thresholds).

A security deposit is not mandatory in procurement contracts (irrespective of whether the contract is above or below the EU thresholds), but it is common practice for contracting authorities to request such security from contractors.

The Ordering Party shall return the deposit immediately, but no later than within 7 days from the date of occurrence of one of the following circumstances:

  • expiry of the validity period of the offer;
  • conclusion of a public procurement contract;
  • invalidation of the contract award procedure, except for situations where the appeal against the invalidation action has not been resolved or the deadline for filing it has not expired.

Appeal in the proceedings

The possibility of filing an appeal applies to all proceedings, regardless of their value.

The appeal is available to the person applying for the order.

An appeal may not be lodged only against the decision of the proceedings, but also against any action taken by the ordering party during the proceedings in breach of the provisions of the Act. An appeal may also be lodged against the omission of an action to which the ordering party was obliged under the provisions.

The appeal should include, among other things:

  • identifying data of the appellant,
  • subject of the order,
  • concise statement of the allegations.

The appeal is subject to a fee – an appeal fee, proof of payment of the fee must be attached to the appeal. Failure to pay the fee leads to the appeal being returned.

The appeal is lodged with the President of the National Chamber of Appeal (www.gov.pl/web/uzp/krajowa-izba-odwolawcza).

The appeal must be filed within the time limit which, as a rule, is:

  • 5 days – for orders below the EU thresholds
  • 10 days – for orders with a value equal to or above the EU thresholds.

The deadline is counted from the date of providing the information constituting the basis for filing the appeal.

If the appeal contains formal deficiencies that prevent it from being properly processed, the President of the National Appeal Chamber shall call upon the appellant to supplement them within 3 days from the date of delivery of the call, under penalty of the appeal being returned.