public procurement | In Principle

The nature of the resources that can be presented in a tender to demonstrate a contractor’s economic capacity raises doubts concerning the permissible forms in which economic capacity can be realistically shared. But the latest case law shows that there are actually many different ways for a contractor to make use of the economic capacity of another entity.

The construction industry rightfully tries to limit modifications to the FIDIC general conditions to essential issues. One of them is the rules for the contractor’s liability for defects in the structure. Failure to address this in the particular conditions can lead to disputes.

In complicated construction projects, the amount the contracting authority must ultimately pay the contractor in the final settlement is often higher than the originally agreed fee. The final amount will largely depend on the allocation of risks between the parties to the contract.

The Public Procurement Law does not outright ban an entity from taking part in the same procurement proceeding as the general contractor and as a subcontractor for another bidder. But under certain circumstances this may be found to be impermissible and result in rejection of the offer.

This year’s amendment of the Waste Act is forcing changes in the scheduling of incinerator projects. Target load start-up tests must be postponed until after the integrated permit is issued. This may give rise to claims by contractors for prolonging the project completion period because of a change in the law.

The contractual division of duties to obtain decisions and permits does not change the principle that the investor is basically required to cover the costs of obtaining them. Nor can a division contrary to law be imposed on the contractor.

The engineer’s task is to take necessary measures to ensure that the contract is performed correctly and on time. But not all actions by the engineer will directly affect the investor’s own rights and obligations.

The contracting authority is not required to comply with contractors’ requests raised during negotiating sessions. It should allow contractors’ wishes in its own objective interest by including them in the terms of reference and the proposed contract.

Proper exercise of the function of contract engineer is crucial for the success of any construction project. The scope of the engineer’s obligations and the impartial attitude required of the engineer toward issues arising on the construction site are also reflected in the rights of the parties to the contract.

The contracting authority does not violate Art. 26(2b) of the Public Procurement Law by not awarding a contractor points for borrowed resources, because fulfilling the conditions to qualify for participation in a procurement proceeding relying on the potential of a third party is different from the stage of selection of a shortlist of contractors, for which the conditions may be defined in the manner adopted by the contracting authority.

If the deadline for filing an appeal in a tender procedure falls on a Saturday, Sunday or holiday, the contractor may file the appeal on the next business day.

Are proceedings before the Dispute Adjudication Board a necessary condition for seeking arbitration?