WHAT ARE THE NEW CHANGES IN PUBLIC PROCUREMENT?

Public procurement has undergone two amendments that bring new exemptions, adjusted thresholds and changes to the supervision of public procurement. Here is an overview of the key changes effective from 1 August 2024.

June 2024 was a period of significant change in public procurement. Parliament approved two amendments to Act No. 343/2015 Coll. on Public Procurement, one taking effect on 27 June 2024 and the other on 1 August 2024. These amendments bring significant changes both for contracting authorities and for businesses bidding for public contracts.

The approved changes concern several areas, including the introduction of new exemptions, adjustments to thresholds and changes to the supervision of public procurement, as well as to the rules and procedures of public procurement.

WHAT EXEMPTIONS ARE THERE IN PUBLIC PROCUREMENT?

The exemptions from the Public Procurement Act cover situations in which the standard public procurement procedures do not have to be followed. These exemptions allow a contract to be awarded directly to a selected economic operator or business without the need to hold a competition.

The exemptions are defined in Section 1 of the Public Procurement Act. Under the amendment effective from 1 August 2024, it will also be possible to award a below-threshold contract directly for:

• the creation and supply of the results of one’s own creative intellectual activity resulting in an audiovisual work,
• the supply of food for school catering facilities, university facilities providing catering, and facilities providing social services, where the contract is awarded by a self-governing region, a municipality or a social services provider,
• the creation and publication of textbooks, teaching texts and workbooks, or the purchase of these materials, where the contract is awarded by a school.

CHANGE IN PUBLIC PROCUREMENT THRESHOLDS FROM 1 AUGUST 2024

The change in the thresholds that determine public procurement procedures is intended to simplify the process significantly. This change also brings adjustments to the procedures for procuring goods, services and construction works.

NEW THRESHOLD FOR SMALL-SCALE CONTRACTS

One of the most significant changes is the increase in the threshold for a small-scale contract (zákazka malého rozsahu). This threshold is the amount up to which a contracting authority does not have to apply the Public Procurement Act. This means that the contracting authority can select a supplier directly.

UP TO EUR 50,000 WITHOUT THE PUBLIC PROCUREMENT ACT

Until now, the threshold for a small-scale contract was an estimated value of up to €10,000 during a calendar year, or during the term of the contract if the contract is concluded for a period longer than one calendar year. From 1 August 2024, this threshold will increase to €50,000.

This means that if, for example, a contracting authority is procuring a cleaning service for one year with an estimated value of €40,000, under the new rules it will be able to award the contract directly to a specific supplier. Until July 2024, it would have had to procure such a service under Section 117 of the Public Procurement Act.

Although the procedure under Section 117(1) allows direct award for services of up to €40,000 per year, it requires other obligations to be met, such as demonstrating cost-effectiveness and keeping records of the documents for at least 10 years. Raising the threshold to €50,000 will remove these obligations, so the Public Procurement Act will not apply at all to contracts up to this value.

BELOW-THRESHOLD CONTRACTS FROM 1 AUGUST 2024

At present, the Act distinguishes between low-value contracts, below-threshold contracts and above-threshold contracts. From 1 August 2024, the number of procedures will be reduced and the category of low-value contracts will be abolished entirely. The Act will distinguish only between below-threshold and above-threshold contracts.

NEW PROCEDURES FOR BELOW-THRESHOLD CONTRACTS

Under the new rules, two basic procedures will apply to below-threshold contracts: with publication and without publication.

• WITHOUT PUBLICATION: Goods and services may be procured by inviting at least three economic operators to submit a tender, while observing the rule of cost-effectiveness. The contract must be published in the Central Register of Contracts within 10 days of its conclusion, together with the report on the contract. The contracting authority may voluntarily choose the procedure with publication.
• WITH PUBLICATION: For construction works with an estimated value of up to €800,000, it is possible to proceed in a similar way as for goods and services. If the value exceeds €800,000, it will be mandatory to publish a call for tenders via the electronic platform. The call must contain the minimum required content and observe the minimum time limits for submitting tenders: 9 working days for goods and services and 14 working days for construction works.

Even after August 2024, it remains possible to procure below-threshold contracts via the electronic platform using the so-called simplified procedure for commonly available goods and services. This procedure involves either the preliminary acceptance of the tender with the lowest price or taking part in a competition via the electronic platform, known as procurement through the electronic marketplace.

ABOLITION OF THE REQUEST FOR REMEDY FROM 27 JUNE 2024

The abolition of the request for remedy (žiadosť o nápravu) is speeding up public procurement processes. This request, which was delivered to the contracting authority, was one of the review procedures that made it possible to have errors or irregularities identified in the procurement documents corrected or remedied.

The contracting authority had two options: either to grant the request for remedy and adjust the conditions, or to reject it, giving reasons. A request for remedy always preceded the filing of objections.

This instrument is abolished from 27 June 2024. Although this means that this form of remedy in public procurement ceases to exist, it remains possible to file objections or to request clarification. Because a request for remedy will no longer precede the filing of objections, the public procurement process should become faster.

REQUEST FOR CLARIFICATION FROM 1 AUGUST 2024

The Public Procurement Act continues to allow parties to seek clarification of the information needed to prepare a tender. Interested parties may ask the contracting authority for clarification, which will then be provided to all known interested parties so that they all have the same conditions for submitting their tenders.

The contracting authority must respond to a request for clarification no later than 6 days before the time limit for submitting tenders expires, provided the request was delivered in sufficient time. If the clarification is provided late, this may lead to the time limit for submitting tenders being extended.

From 1 August 2024, the amendment also adjusts the obligation to extend the time limit for submitting tenders. If the contracting authority makes substantial changes to the documents needed to prepare a tender, it will have to extend the time limit by its entire original length. The obligation to extend the time limit appropriately also remains if the contracting authority fails to respond in time to a request for clarification delivered sufficiently in advance.

FILING OBJECTIONS FROM 1 AUGUST 2024

Another way of obtaining a remedy in an ongoing public procurement procedure is to file objections. This instrument derives directly from the public procurement directives, and the Public Procurement Act determines for which contracts, by which parties and within what time objections may be filed.

1. LIMITS ON FILING OBJECTIONS FROM 1 AUGUST 2024

Objections cannot be filed for every contract. Under the current legislation, objections cannot be filed in the case of:

• the award of contracts for construction works where the estimated value of the contract is equal to or lower than €800,000,
• the award of below-threshold contracts by a contracting authority for the supply of goods or the provision of services,
• the award of low-value contracts,
• the award of a below-threshold concession,
• the award of contracts for the supply of goods or the provision of services in the field of defence and security where the estimated value of the contract is equal to or lower than €300,000.

These rules will change from 1 August 2024. Objections will not be possible in the case of:

• the award of a below-threshold contract for the supply of goods or the provision of a service, or a below-threshold concession,
• the award of a below-threshold contract for construction works where the estimated value of the contract is equal to or lower than €1,500,000,
• the award of a contract in the field of defence and security where the estimated value of the contract is lower than the financial threshold under Section 5(4) of the Public Procurement Act, i.e. €300,000 for goods and services and €800,000 for construction works.

The most significant change is the increase in the threshold for construction works contracts from which objections may be filed: it will now be as high as €1,500,000.

2. TIME LIMIT FOR FILING OBJECTIONS FROM 27 JUNE 2024

Objections are delivered to the Public Procurement Office (Úrad pre verejné obstarávanie) and to the contracting authority as the reviewed entity. With effect from 27 June 2024, the time limit for filing objections changed in connection with the abolition of the request for remedy, which shortened the time available to file a relevant objection.

Under the new legislation, the time limit for filing objections is 10 days from:

• the publication of the notice of intention to conclude a contract or concession contract,
• the provision of the documents needed to prepare a request to participate, a tender or a proposal,
• the delivery of the notice of exclusion, where the objections are directed against the exclusion,
• the delivery of the notice of non-inclusion in a dynamic purchasing system or qualification system,
• the delivery of the notice of the result of the evaluation of tenders or proposals,
• the performance of an act by the reviewed entity, where the objections are directed against that act.

3. PERSONS ENTITLED TO FILE OBJECTIONS FROM 1 AUGUST 2024

From 1 August 2024, the number of parties entitled to file objections is changing. Objections may no longer be filed by persons whose rights and legally protected interests were or could have been affected by the procedure of the reviewed entity, nor by state administration bodies that demonstrate a legal interest where the reviewed entity received funds from the European Union.

From 1 August 2024, objections may be filed by:

• tenderers,
• interested parties whose rights or legally protected interests were or could have been affected by the procedure of the reviewed entity,
• participants.

CHANGES TO THE CONDITIONS OF PARTICIPATION FROM 1 AUGUST 2024

Only an economic operator that meets the conditions of participation may take part in public procurement. These conditions also include criteria concerning the operator’s integrity. Under Section 32(1)(a) of the Public Procurement Act, only an operator whose statutory body, supervisory body, their members or the holder of commercial power of attorney (prokurista) have not been finally convicted of criminal offences such as corruption, money laundering, human trafficking, terrorism and the like may take part in public procurement.

The amendment to the Public Procurement Act clarifies that this condition must also be met by another person, for example a company’s top manager or director, who has the right to act on behalf of the economic operator. It is therefore necessary to check whether these persons have been finally convicted of the offences listed.

Compliance with this condition of participation is demonstrated by submitting a solemn declaration, and it will not affect entries in the list of economic operators.

Another condition of participation is the absence of arrears in social insurance, health insurance and taxes. With effect from 1 August 2024, the amendment adjusts Section 40(12) so that arrears of less than €200 are not taken into account, regardless of when they arose. Arrears are assessed cumulatively, so the total debt must not exceed €200. An operator will not be excluded from public procurement if it has paid arrears of up to €200 or has been allowed to pay them in instalments.

CHANGING A TENDER FROM 1 AUGUST 2024

The amendment introduces the option of correcting errors in the itemised budget of a submitted tender without the correction being regarded as a change to the tender. If the total price remains the same and the correction does not affect any other tender evaluation criterion, it will not be regarded as a change to the tender.

CHANGES TO THE SUPERVISION OF PUBLIC PROCUREMENT FROM 1 AUGUST 2024

The new rules combine the performance of an inspection with proceedings on an administrative offence. If the Office begins a review of the acts of the reviewed entity, this will also include deciding whether to impose a fine if a breach of the law is found. The decision will also include the option of appealing against the fine, which will allow the reviewed entity to obtain a final decision more quickly, with the possibility of having it reviewed by a court.

The amendment also introduces a range of fines for administrative offences, which the Office will impose at 0.1–5% of the contract price. When imposing a fine, the Office will take mitigating and aggravating circumstances into account, for example whether the contracting authority has taken steps to remedy the situation.