public procurement | In Principle

An optional ground for exclusion from procurement proceedings, breach of an earlier public contract, is limited to three years after occurrence of the event that is basis for the exclusion. But a problem arising in practice is which event should be considered when calculating the three-year period. Termination of the contract by the contractor? Repudiation of the contract by the contracting authority? Or perhaps entry of a judgment for damages for breach of the earlier contract? The answer can be found in the ruling by the National Appeal Chamber of 26 August 2020 (case no. KIO 1781/20).

A contractor filing an appeal must duly demonstrate that it has standing to appeal under Art. 179(1) of the Polish Public Procurement Law. There is an endless debate in the case law and the legal literature over which entities are entitled to file an appeal in a procedure for award of a public contract. The National Appeal Chamber spoke out in this dispute in its ruling of 23 October 2019 (case no. KIO 2031/19), responding to the question whether a contractor whose bid has been rejected still has a legal interest in filing an appeal.

In the tender documentation, the contracting authority may require contractors to meet certain conditions for participation. These should be precise and duly described so the contractors can adequately demonstrate their fulfilment. But what if the contracting authority has not precisely defined a condition for participation in the procedure? In its ruling of 3 July 2020 (KIO 1001/20), the National Appeal Chamber held that the interpretation of the condition more favourable to the contractor should be applied.

If tax arrears are a ground for exclusion under the procurement documentation, exclusion can be prevented by making payment or entering into an agreement with the tax authority. It is worth considering whether providing voluntary security would be an effective way to prevent exclusion.

To meet conditions of education, professional qualifications and experience in a contract award procedure, a contractor may rely on the abilities of other entities. How to do so properly? And can a defective third-party commitment be corrected? The National Appeal Chamber answered that question in its ruling of 13 July 2020 (KIO 1174/20). A contractor who relies on resources of other entities must entrust the performance of the relevant part of the contract to the entity making those resources available.

Poland’s new Public Procurement Law, which enters into force on 1 January 2021, identifies a set of clauses that cannot be included in public contracts. Will Art. 433 of the new act be regarded as a catalogue of abusive clauses? What types of provisions will be prohibited?

Despite its similar function, the general contractor’s retention of a portion of a subcontractor’s fee to secure its own claims cannot be equated with a security deposit. Consequently, the investor is jointly and severally liable for payment of such amounts to the subcontractor.

Several contractors apply together for the award of a public contract. Can they submit a bid bond in the form of a bid bond guarantee that does not name all of the members of the consortium? This issue has been, and remains, the subject of debate in the legal literature and case law. Taking a position in this debate, in its ruling of 31 July 2020 (case no. KIO 1183/20), the National Appeal Chamber stressed that the decisive role is played by the wording of the guarantee itself, which must unequivocally specify the scope of liability of the guarantor (e.g. bank, insurance company, or corporate guarantor) in terms of which entities and subject matter are covered.

The “self-cleaning” procedure set forth in Art. 24(8) of the Public Procurement Law allows a bidder to seek the award of a public contract despite the existence of grounds for exclusion. But what evidence of self-cleaning should a contractor present for the effort to be effective? In the recent ruling of 31 July 2020 (case no. KIO 1248/20), the National Appeal Chamber held that contractors are not only required to show the personnel, organisational and technical measures they have taken to remedy past irregularities, but must also show that these measures will prevent similar violations in the future.

Can a summons for clarification of an abnormally low price be used with the aim of obtaining information from the contractor to verify whether the tender complies with the terms of reference for the procurement? What duties must the contracting authority observe, and when can it summon a contractor to provide an explanation? These issues were addressed in a ruling by Poland’s National Appeal Chamber of 16 June 2020 (case nos. KIO 709/20 and 715/20). The chamber considered the specific purpose of the summons for clarification.

As a result of the pandemic, many planned and existing contracts have been paralysed. The uncertain situation forces the parties to cease performing contracts or at least poses barriers to performance. In this situation, can they change the contract? Will they have to pay contractual penalties and damages? The situation now looks somewhat different than it did at the start of the pandemic.

In procurements, minor errors often creep into the terms of reference or the forms for bids. Can these errors exert negative consequences on contractors? An important statement on this issue was made by the National Appeal Chamber (KIO) in its ruling of 13 March 2020 (KIO 423/20). The chamber stressed that if there are differences between the description of the subject of the contract and the offer form, the description of the subject matter will control, and contractors cannot be penalised for errors committed by the contracting authority in its own documentation.