Review procedure of the tendering proceedings before the public procurement supervisory tribunal

A review procedure of the tendering proceedings before the public procurement supervisory committee (tribunal) starts only at request of a company.

Certain formalities have to be respected, in order to avoid the rejection at the time of the review procedure.

Federal Cartel Office and Public Procurement Tribunals of the respective German Länder

 Public procurement tribunals both at a federal and provincial level are present on the German territory. The Federal Government is affiliated to the Cartel Office.

Summary Expiration of the Review Proceedings

 It is an „administrative instance“ that, with an administrative act, decides whether infringement from the applicant is present. This must be done from the start of the proceedings with an exchange of opinions of the parties and, if necessary, oral proceedings that are generally possible within one month.

In its decision, the Public Procurement Tribunal will take appropriate measures to eliminate an infringement and to prevent severe “injuries” to the company concerned. The review procedure can also be rejected or withdrawn.

The contracting authority receive the company´s application with the result that this former my not award the contract until the public procurement authority has decided on the application and the appeal period (to the competent higher regional court) of 2 weeks has expired.

If the contract has already been awarded, it shall not be cancelled. After the definitive awarding of the contract, the possibilities of legal protection for the tenderer end in the review procedure.

Duty of notification of the forthcoming contracting award

In order to allow a company to avail of legal protection, it is therefore imperative to inform about the proposed surcharge 14 days before the awarding of the contract.

Costs of the review procedure

 The fees of the Federal Procurement Chamber are between EUR 2500 and 25000. Please consider that attorney fees of the parties also have to be calculated.

Complaints and review proceedings in public procurement law

According to § 160 (1) GWB, the public procurement tribunal shall initiate review proceedings (Rüge) only upon application.

Paragraph § 160 (3) of the GWB specifies that an application becomes inadmissible if the applicant became aware of the violation of public procurement provisions during the awarding procedure, but did not complain to the contracting entity without undue delay. The application is also considered inadmissible if violations of public procurement provisions which become apparent from the tender notice are not notified to the contracting entity by the end of the period for the submission of a tender or application specified in the notice. If violation of public procurement is not notified to the contracting entity by the end of the period for the submission of a tender or application specified in the notice, the application is also inadmissible. After the expiration of 15 calendar days since receipt of notification from the contracting entity that is unwilling to redress the complaint, the application is unlawful.

Immediacy of the review proceedings (10-Days Limit)

According to a number of procurement boards and senates, a review proceeding has to be raised within ten days. It has to be recognizable to the client by describing the alleged facts and remedial action.

For reason of evidence, the complaint not linked to a particular form shall be made per e-mail, fax or written letter.

Whether the immediacy of the complaint withstands the European provisions, is actually really controversial. The procurement tribunals are trying to leave this question mark open.

Tender evaluation in public procurement law

The evaluation of the offers by the public sector takes place in four statutory levels, the order of which must be observed. A commingling of the levels, an evaluation at the wrong level or the multiplying of a criterion can easily lead to a violation of bidding rights.

First Assessment Level

At the first stage (§§ 19 EC para. 1-4 VOL / A and 16 para. 1 VOB / A) it is necessary to check whether the offers meet the formal requirements. A distinction must be made between the infringements which imperatively exclude supply (e.g. lack of essential price information or signature, late receipt of tenders, alterations / additions to the tender documents) and infringements in which the public authorities have discretion in relation to exclusion (e.g. an offer does not contain the required information and explanations).

Second Assessment Level

At the second stage (§§19 EC Abs. 5 VOL / A and 16 Abs. 2 VOB / A) the suitability, the capacity and the reliability of the bidders are examined on the basis of the evidences submitted by the bidders.Only such evidences must be considered, as required in the contract notice. A request for additional evidence is admissible (§§ 19 EC Abs. 2 VOL / A, 16 Abs. 1 Nr. 3 VOB / A).

Third Assessment Level

At the third stage (§§ 19 EC Abs. 6 VOL / A and § 16 Abs. 6 Nr. 1-2 VOB / A) the appropriateness of the prices is controlled.Offers where the price appears to be unreasonably low in relation to the service should be identified and excluded. In these cases, there is a risk of poor performance due to lack of cost recovery.

Fourth Assessment Level

At the 4th stage (§§ 21 EC Abs. 1 VOL / A and § 16 Abs. 6 Nr. 3VOB / A) the most economical tender will be determined according to the award criteria specified in the contract notice.Note: This is not necessarily the cheapest offer.

Threshold values in public procurement law

If, according to § 2 VgV*[1], the expected order value exceeds a so-called threshold, a Europe-wide awarding proceeding must be carried out. In such a case, it can be assumed that the mandate is of cross-border interest and relevant to the internal market. Above these thresholds, here applies laws “coined” by the European directives (the GWB); below these thresholds only national law applies.

The thresholds are constantly being re-determined (usually increased).

European Threshold Value (EU-wide invitation to tender required)

The threshold values ​​are currently defined as follows (§ 100 (1) GWB, § 2 VgV, § 1 (2) Sekt-VO):

  • For construction contracts, EUR 5.186.000 net
  • For supply and service orders, EUR 134.000 net of the highest / upper federal authorities
  • For supply and service contracts, EUR 414.000 net in the area of ​​drinking water, energy supply and transport
  • For all other delivery and service orders, EUR 209.000 net  

Meaning of thresholds for bidders 

Thresholds are of major importance for the legal protection possibilities of the bidders. It is therefore illegal for contracting authorities to subdivide a contract into subcontracts in order to remove it from the scope of European procurement law.

Thresholds of the German Regions – Länder (de minimis limits)

National public procurement law also recognizes thresholds that are to be distinguished from the thresholds mentioned above: the legislators and regulators of the federal and state governments determine when it is necessary to carry out a procurement procedure (de minimis limit) and which type of award procedure applies. For example purposes, following the threshold values ​​of some Länder:  Limited tender Free-handed awardingConstruction services 500.000 EUR net 50,000 EUR netDelivery costs 100.000 EUR net 10,000 EUR netServices 100,000 euros net 10,000 euros netFreelance services none

[1] *VgV: Verordnung über die Vergabe öffentlicher Aufträge,  Regulations on the Award of Public Contracts

 

Electronic Procurement law in Germany

eProcurement law

Public procurement authorities and companies in the upper threshold area shall already principally use electronic means of communication (see § 97 (5) GWB, § 9 (1) VgV).

The electronic procurement (E-Vergabe) makes it possible to handle procurement proceedings completely via the Internet and especially through other particular procurement platforms. This is extremely advantageous for both the contracting authority and the private contractors as the e-procurement is more efficient due to its uniform procedures and the lower costs.

Legal foundations of electronic procurement

For procurement in the sub-threshold area, the respective procurement and contractual regulations (VOL/A and VOB/A) are legally relevant. For instance, the VOL/A 1st section (following the provisions on electronic procurement):

  • § 11 VOL/A regulates some principles of information transmission. For example, this provision in paragraph 2 states that the programs used must be widely accessible and compatible with commonly used ICT products. ·         § 12 para. 1 p. 2 VOL/A requires contracting authorities to ensure that announcements in Internet portals must be centrally ascertainable via the search function of www.bund.de. ·
  • § 13 VOL / A makes provisions for the use of electronic signatures and data protection. ·
  • § 5 VOL / A defines and regulates the so-called dynamic electronic procedure.

For procurements in the upper threshold area, the Restriction of Competition Act – Gesetz gegen Wettbewerbsbeschränkungen – (§ 97 sect. 5) and the Procurement regulation – Vergabeverordung – (§9 and followings) are legally extremely relevant.

At every stage of a public procurement process, principals and companies use electronical instruments.  In particular, electronic communications concern the electronic production and notice of the bid documentation, electronic tendering and the electronic preparation of the contract.

Nowadays, the transition into electronic communication is mandatory, regardless of the delivery and service subject of the award. Contracting authorities shall use (apart from specific special cases, see § 12 VgV) electronic means of communication which are non-discriminatory, generally available as well as compatible with the widely used information and communication technology (ICT) products and which do not restrict the economic operators access to the procurement procedure (see § 11 Abs.1 VgV). This obligation concerns only the exchange of data between contracting authorities ad businesses.

EU-wide e-procurement in the upper threshold area

Since April 2016, EU-wide notices can only be submitted electronically to the Publications Office of the European Union. The notices must include an internet address under which all procurements documents can be downloaded free of charge, without restriction and completely using the ICT. Exemptions apply only to those parts of the procurement documents that shall not be electronically mapped using commonly available ICT or that have to respect particular security provisions that are clearly defined by the new EU- Procurement Directives.

By October 2018, all contracting authorities and contracts must have completely switched over to electronic processing of procurement proceedings. Until that time, offers, participation applications, expressions of interest and confirmations of interest may still be sent by post or by any other appropriate means.

The Central Procurement Offices of the Federation as well as of the Federal States and municipalities must already completely switch over to e-Procurement by April 2017. After October 2018 (with exception for electronic offers) participation applications, expression of interest and confirmation of interest – except in very few exceptional cases – may no longer be accepted and taken into account in the awarding proceeding.

The public contracting authorities set the required level of security for the electronic means used to be used in the various stages of the procurement procedure (see § 10 sect. 1 VgV).

 

The procurement platform of the Federal Government: e-Procurement

On the website www.evergabe-online.de, procurement procedures can be handled completely electronically. Here, tender documents are freely accessible thanks to the extremely comprehensive search function of the platform. There is no need for post correspondence anymore!

The portal:  www.bund.de

Current public tenders can be found on the website www.bund.de. In addition, for instance, (pursuant § 12 (1) ph. 2 VOL/A) electronic tenders which have been published on other portals, must be ascertainable over the search function of this website. This guarantees a high hit rate by a targeted use of the possible search criteria.

European developments related to electronic procurement

On 27th May 2014, the Directive 2014/55/EU on the so called “e-invoicing” came into force: European standardization body CEN has been developing and testing a European standard for e-invoices. According to the EU-Directive, this new norm should be released at the latest by the 27th of May 2017 at the latest. Germany and the other EU Member States must implement the Directive by the 27th of November 2018. In a not so far future, contracting authorities will be obliged to accept and process invoices issued electronically that comply with the new European Directives. All companies are assured that their electronic invoices will be accepted if they comply with the European standards.

Public procurement procedures

Open procedure (EU-Procurement Law)/ public tendering (national award)           

We talk about open procedures (for national proceedings below the EU thresholds: public tendering) in the specific case of contracting authority publicly requesting an unlimited number of companies to submit their offers.

Restricted procedure (EU-Procurement Law/ restricted tendering (national award)

A procedure is considered restricted (Europe-wide) in case the contracting authority selects a limited number of companies on the basis of objective, transparent and non-discriminatory criteria (competitive bidding), before requesting a limited number of companies from the applicant group to tenders.

Negotiation procedure (EU-Law Granting) / direct award (national award)

The negotiation procedure (in the case of national procedures below the EU threshold: direct award), allows inter alia, negotiations on the terms of contract with the companies.

The negotiation procedure with competitive bidding has been subjected to more simplified admission requirements since the procurement law reform. It has to be taken into consideration in case of contracts for conceptual or innovative solutions, or in contracts that require prior negotiation on the basis of specific circumstances related to the nature, complexity or legal or financial framework and corresponding risks.

Competitive Dialog (EU-Procurement Law)

The competitive dialogue (only in the case of European procurement procedures), gives the contracting authority even more room for negotiation with tenderers.

Innovative Partnership (EU-Procurement Law)

In an innovative partnership (only in the case of European awarding proceedings), the contracting authorities negotiate initial and follow-up offers, subsequently to the competitive bidding, in several phases with the selected companies.