Contributed By SDZLEGAL SCHINDHELM
This guide comes at the perfect time for a brief analysis of public procurement law in Poland. As of 1 January 2021, the new Act of 11 September 2019 Public Procurement Law (Journal of Laws from 2019 number 2019 as amended (PPL)) is in force. The Act of 29 January 2004 Public Procurement Law (Journal of Laws from 2004 number 19 item 177 (PPL 2004)) has been repealed. Detailed rules during the transition period are regulated by the Act of September 11th, 2019 Regulations introducing the Act – Public Procurement Law (Journal of Laws from 2019 number 2020 as amended, hereinafter: IPPL).
Key rules applicable during the transitional period:
The remainder of the analysis is based on the provisions of the PPL currently in force.
Regulations Specific to COVID-19
It is worth underlining that, due to the circumstances caused by the COVID-19 pandemic, the Act of 2 March 2020 on Special Solutions to Prevent, Counteract and Combat COVID-19, Other Infectious Diseases and Crisis Situations Caused by Them (Journal of Laws from 2020 number 374 as amended (SHIELD)) was introduced, which contains regulations concerning amendments to the public procurement agreements and amendments to agreements with subcontractors, which will be discussed in more detail in the following part of the study.
A distinctive feature of Polish public procurement law is the fact that it is shaped to a large extent by the jurisprudence of the National Appeal Chamber (Krajowa Izba Odwoławcza or NAC) and the courts, including the CJEU, also handed down when the PPL 2004 was in force. Therefore, it is crucial to be familiar with established practices and detailed consequences, especially in the context of elements such as: self-cleaning, demonstration of experience, misleading, in-house contracts, breach of competition law.
The provisions of the PPL apply to awarding authorities, which are:
The PPL introduces a general principle that the Act applies to the widest possible range of entities and subject matter, however, it provides also for numerous exemptions, eg, for legal, research and development services; acquisition of ownership or other rights to existing buildings or real estate; financial services relating to the issue, sale, purchase or disposal of securities or other financial instruments, loans or credits; passenger transport by rail or metro and others. These provisions are the key to determine whether it is obligatory to apply the PPL.
The PPL applies to:
The EU thresholds are applied in accordance with EU law, according to the fixed euro to Polish zloty exchange rate of 4.2693 in 2021:
Only certain provisions of the PPL apply to the preparation and conduct by awarding authorities of a classic procurement procedure with a value below the EU thresholds.
There are no restrictions as to the origin of a contractor seeking to conclude a public procurement contract in Poland. However, attention should be paid to proceedings where, in exceptional circumstances, the awarding authority has the right to invite one or more selected entities to conclude a contract or to negotiate. Of course, there are no exclusions with respect to contractors from the EU and the situation of contractors from non-EU countries is presented below.
Poland is a party to the Government Procurement Agreement concluded in Marrakesh in 1994 (Official Journal of the EU L 1994 No 336, hereinafter: GPA). These regulations are modelled on the EU regulations and the North American Free Trade Agreement (NAFTA). They cover public procurement for the supply of goods, services and works and, in addition, also cover awarding authorities other than governments – certain entities of central government and regional and local administrations. Article XX of the GPA 1994 directs the parties to the agreement to put in place non-discriminatory, timely, transparent and effective procedures to allow contractors to challenge violations of the GPA 1994 in the course of awarding a contract in which they had or have an interest.
The recent regulation is the revised Government Procurement Agreement which was signed in 2012 and came into force on 6 April 2014. It aims to ensure an even higher degree of transparency and equal treatment in international public procurement, including electronic means, eg, a free database containing central government procurement notices.
Thus, any entities that are party to the GPA have an open route to apply for Polish public procurement. Recently, an increased interest in the Polish market from non-EU contractors has been observed.
Key Responsibilities of Awarding Authorities
Polish law, implementing EU obligations, introduced specific obligations for awarding authorities, giving contractors the right to appeal and question any action of the awarding authority, which frequently allows irregularities to be eliminated and determines the outcome of the procedure.
The most important rules for the awarding authorities are as follows.
Maintaining fair competition
A comprehensive competition law applicable throughout the EU applies here, above all the ban on limiting competition in the procedure by setting excessive conditions or subject-matter requirements, and thus narrowing the circle of contractors beyond the need to ensure that the contract will be performed by a reliable contractor capable of performing it properly, in a manner that meets the needs of the awarding authority and the law.
Equal treatment of contractors
This is a requirement that comparable situations should not be treated differently and that different situations should not be treated in the same way, especially the obligation to provide contractors with the same opportunities both at the stage of formulating applications or tenders, and during their examination and evaluation, in accordance with CJEU case law, in particular with regard to equal treatment of foreign contractors.
The measures adopted should not go beyond what is necessary to achieve the objective pursued, so the description of the subject matter of the contract, the conditions for participation in the procedure or the criteria for evaluating tenders must be related to the subject matter of the contract and proportionate to its value and objectives without imposing excessive requirements, so for example additional, unjustified requirements cannot be imposed merely so as to limit access to the contract to foreign entities.
This is an obligation that guarantees the effectiveness of all other obligations by enabling contractors to acquaint themselves with the actions of the awarding authority, including all terms and conditions of the procurement procedure described in the contract notice or the contract documents in a clear, precise and unequivocal manner, as well as with all subsequent actions of the awarding authority, so that a contractor is able to review them by way of appeal, described further.
Key Obligations for Contractors
The obligations imposed by PPL on contractors are not overly burdensome compared to other EU countries, but our experience dictates that special attention should be paid to:
Merely complying with formal requirements is not enough to win a contract today. What is needed is know-how in the use of legal remedies and a deep understanding not only of the law, but also of the practice of such proceedings.
Generally all award procedures at a value above the relevant EU threshold must be advertised by publishing a contract notice within the Official Journal of the European Union and in the EU public procurement database Tenders Electronic Daily. Awarding authorities must ensure that the procurement documents can be accessed directly, without restrictions and in full by electronic means and free of charge.
In proceedings below the EU thresholds, publication takes place in the Public Procurement Bulletin (Biuletyn Zamówień Publicznych).
In the above-mentioned sources, you can find announcements on:
The websites allow for saved searches and email notifications of contracts relevant to specific industries, products, etc. In addition, it is worth using publicly available schedules of public procurement procedures published by individual awarding authorities, which will allow for the planning of bid submissions throughout the year.
The awarding authority, before launching the procurement procedure, may conduct preliminary market consultations to prepare the procedure and inform contractors about its plans and requirements for the contract.
The awarding authority is obligated to:
Therefore, market research and the search for alternative means of satisfying the awarding authority's needs will precede each procedure. However, in practice, Poland shows that very often the participation of contractors is only possible after the publication of a contract notice, eg, in the form of consultations, because officials are afraid of even the suspicion of corruption.
Procedures above the EU Thresholds
Open tenders (Przetarg nieograniczony)
The most common contract award procedure above the EU thresholds is the open tender, where in response to a contract notice, tenders may be submitted by all interested contractors.
Restricted tender (Przetarg ograniczony)
A contract award procedure where in response to a contract notice, requests to participate may be submitted by all interested contractors, and tenders may only be submitted by contractors invited to submit a tender.
Negotiations with publication (Negocjacje z ogłoszeniem)
A contract award procedure in which, in response to a contract notice, requests to participate may be submitted by all interested contractors. The awarding authority shall invite the contractors admitted to participate in the procedure to submit initial tenders and conduct negotiations with them in order to improve the content of initial tenders. Tenders are submitted during the negotiation stage, after the completion of which it shall invite contractors to submit final tenders.
The awarding authority may award a contract on the basis of preliminary tenders without negotiations, provided that it indicates in the contract notice that it reserves such possibility.
Competitive dialogue (Dialog konkurencyjny)
A contract award procedure in which all interested contractors may submit requests to participate in the procedure in response to a contract notice. The awarding authority conducts a dialogue with the contractors invited to participate in the dialogue with regard to the solutions proposed by them, after completion of which it invites them to submit tenders.
Innovation partnership (Partnerstwo innowacyjne)
The awarding authority may award a contract under the procedure of innovation partnership in the case of demand for an innovative product, service or works, if they are not available on the market.
Negotiations without an announcement (Negocjacje bez ogłoszenia)
A contract award procedure where the awarding authority negotiates the terms of a public procurement contract with selected contractors and then invites them to submit tenders – this procedure is possible in exceptional situations, eg, when no tender was submitted in the previous procedure on the same subject.
Single-source procurement (Zamówienie z wolnej ręki)
A contract award procedure where the awarding authority awards a contract after negotiations with only one contractor – this procedure is possible in exceptional situations, eg, when supplies, services or works can be provided by only one contractor for objective technical reasons.
Below the EU Thresholds
The PPL provides for four modes of public procurement procedures below the EU thresholds:
It is possible to challenge the very initiation of the procedure in a given mode, especially in the case when it is done in a manner limiting competition, which makes it impossible for a contractor to submit a tender. Then, the NAC verifies whether the statutory and factual prerequisites to apply a given mode were properly demonstrated and may decide to cancel the procedure and conduct it in a competitive mode.
The awarding authority may award a contract in open and closed procedures, except in cases specified in 2.3 Tender Procedure for the Award of a Contract.
In accordance with the above-mentioned rules, the use of a non-competitive procedure is connected with the obligation to publish an announcement, thanks to which a contractor who was interested in the contract, but did not get a chance to submit a tender, can appeal to the National Chamber of Appeal and question the initiation of proceedings under a given procedure.
In competitive procedures, all documents are publicly available at the same time as the announcement itself. It is necessary to verify the completeness of the documents and to ask the awarding authority for other necessary documents or clarifications. Publication deadlines are standard in accordance with EU law.
What is important in this respect is that the contractor has the right to legal protection measures within five days in the case of proceedings below the EU thresholds and ten days in the case of proceedings above the EU thresholds, and it is then that an appeal should be lodged, which may consequently lead to the cancellation of the proceedings or changes imposed in a NAC’s ruling in favour of the contractor.
The time limit for receipt of requests to participate or initial tenders may not be shorter than 30 days from the date on which the contract notice is transmitted to the Publications Office of the EU – please note, this is not counted from the publication of the notice, which normally takes place within a maximum of three days of transmission.
A contractor may be excluded by the awarding authority at any stage of the procurement procedure, provided that this is a mandatory reason or an optional reason, if the awarding authority indicated the optional reason in the contract notice.
A contractor shall be excluded from the contract award procedure if:
An awarding authority may exclude from the procurement procedure a contractor:
A contractor shall not be subject to exclusion in certain circumstances set out above if they prove to the awarding authority that they have jointly fulfilled the following conditions:
The awarding authority shall assess whether the measures are sufficient to demonstrate its reliability, taking into account the importance and specific circumstances of the act. If the measures taken are not sufficient to demonstrate its reliability, the awarding authority shall exclude that contractor.
Limiting the access of contractors to a given public procurement procedure may take place only by choosing a non-competitive procedure, as described in 2.3 Tender Procedure for the Award of a Contract.
In some cases, only one contractor may participate in the procedure.
The awarding authority shall choose the most advantageous tender on the basis of the tender evaluation criteria laid down in the tender documents. The awarding authority shall describe the tender evaluation criteria in a clear and comprehensible manner, which shall not give the awarding authority unlimited freedom to choose the most advantageous tender and shall allow the level of performance offered to be verified and compared on the basis of the information provided in the tenders.
The most advantageous tender may be selected on the basis of quality criteria and price or cost, and in certain cases, solely on the basis of price or cost.
Qualitative criteria may in particular be criteria relating to:
The tender evaluation criteria detailed in 2.9 Evaluation Criteria must be described in the contract notice or in the documents published together with the notice, in an open manner and equally accessible to all contractors. As one of the elements of activities in the procedure, with the tender evaluation criteria and the evaluation methodology, these are all subject to appeal to the National Appeal Chamber by interested contractors.
The awarding authority shall immediately inform all contractors who submitted either requests to participate or initial tenders, of the results of the same, providing the factual and legal reasons for the decisions.
Case law has developed standards under which the justification must include detailed reasoning that allows a contractor to understand exactly why it did not qualify for the next stage of the procedure, which gives it the opportunity to lodge an appeal to the National Appeal Chamber, and should it win, to have incorrect decisions repealed by the awarding authority.
Immediately after selecting the most advantageous tender, the awarding authority shall simultaneously inform the contractors who submitted tenders as to:
The awarding authority shall make this information available immediately on the website of the procedure. The awarding authority may withhold such information in exceptional cases where its disclosure would be contrary to an important public interest.
The standstill period complies with the EU law. The awarding authority shall conclude a public procurement contract within no less than ten days from the date of sending the notice of selection of the most advantageous tender if the notice was sent by means of electronic communication, or 15 days – if it was sent by other means.
In case of an appeal, the awarding authority may not conclude an agreement until a judgment or a decision closing the appeal proceedings is announced by the Chamber. However, the awarding authority may apply to the Chamber for exceptional consent to conclude a contract before the end of appeal proceedings, in strictly specified situations.
The standstill period does not extend to court proceedings in the event of a complaint against a judgment of the Chamber. However, in such a case a request may be filed with the court to grant security in the form of a prohibition to conclude a contract.
The National Appeal Chamber is a body competent to hear appeals filed in public procurement proceedings in the first instance. It is a specialised body which meets the requirements of a court within the meaning of EU law, but which has been incorporated into the administrative structure of the Public Procurement Office.
The parties and participants of the appeal proceedings may appeal against the decision to the court. The complaint is lodged with the District Court in Warsaw – the Public Procurement Court. This court was established in 2021 – prior to that, cases were resolved in local district courts.
In the first instance, an appeal can be lodged against:
An appeal must contain, inter alia, a concise presentation of charges, a demand as to the manner of resolving the appeal, indication of the factual and legal circumstances justifying the appeal and evidence in support of the circumstances cited. Any contractor may join the appeal proceedings, indicating the party it accedes to and its interest in obtaining a ruling in favour of the party it accedes to. The awarding entity may accept the appeal in part or in its entirety – unless a contractor acceding to the proceedings files an objection. The Chamber cannot rule on charges which were not included in the appeal.
In the second instance the case shall be heard by the Public Procurement Court. The complaint should meet the requirements prescribed for a pleading and contain a designation of the appealed decision, indicating whether it is appealed against in whole or in part, stating the pleas in law, brief justification thereof, indication of evidence, as well as a motion for reversal of the decision or for modification of the decision in whole or in part, indicating the scope of the requested modification. In proceedings instituted as a result of an appeal, the form of order sought by the appellant and new forms of order sought may not be extended. The court may not rule on grounds which were not the subject of the appeal.
A court judgment or a decision ending the proceedings in a case may be appealed in cassation to the Supreme Court. A cassation may be filed by a party and the President of the Public Procurement Office in exceptional cases specified in the Act of 17 November 1964 – Code of Civil Procedure.
In case of an appeal, the awarding authority cannot conclude a contract until the Chamber announces a judgment or a decision ending the appeal proceedings. The awarding authority may submit a request to the Chamber to waive the prohibition to conclude a contract – exclusively on the grounds specified in the PPL. However, apart from concluding the contract, the awarding authority has the right to perform any other actions in the public procurement procedure, which often affects the appeal proceedings themselves.
The standstill period does not extend to court proceedings in the event of a complaint against a verdict of the NAC. In such a case, however, a request may be filed with the court to provide security in the form of a ban on entering into the agreement.
Legal remedies are available to the contractor and other entities if they have or have had an interest in obtaining a contract or an award in a competition, and have suffered or may suffer a loss as a result of an infringement of the PPL by the awarding authority.
The concept of "interest" is crucial and understood as broadly as possible in order to ensure that interested parties can verify the actions taken by the awarding authority and eliminate possible violations of the PPL.
In case of contracts which value exceeds the EU thresholds, appeal shall be lodged within ten days of the date of communication of information on the awarding authority's actions constituting grounds for lodging an appeal, if the information was transmitted by means of electronic communication, or within 15 days if the information was transmitted in a different manner.
In case of contracts where the value is lower than the EU thresholds, an appeal shall be lodged within five days of the date of communication of information on the awarding authority's actions constituting grounds for lodging an appeal, if the information was transmitted by means of electronic communication, or ten days if the information was transmitted in a different manner.
If the deadline for filing an appeal falls on a Saturday or a statutory holiday, the deadline shall expire on the day following the holiday.
The complaint to the court shall be lodged within 14 days of the day of delivery of the Chamber's verdict.
Pursuant to the PPL, the Chamber examines the appeal within 15 days from the day of its delivery – the hearing is set within that period. In complicated cases, it is sometimes necessary to set further hearings, in exceptional circumstances also connected with obtaining, for example, an expert opinion. The Chamber announces the ruling after the hearing is closed; in complicated cases, the Chamber may postpone the announcement of the ruling for no longer than five days. Although the above are only instructional deadlines, appeals are usually heard within those deadlines.
It is worth noting that in 2020, due to the COVID-19 pandemic, the hearing of cases by the Chamber was suspended for a period of time, but all backlogs have now been caught up and there are currently no delays.
In summary, the typical duration of appeal proceedings from the filing of the appeal to the pronouncement of the judgment usually does not exceed one month.
According to the PPL, the Court shall hear the case promptly, but no later than within one month from the date of receipt of the complaint in court. In practice, due to the creation of a single court for all complaint proceedings, a time limit of at least four to six months should be expected.
According to the Public Procurement Office, almost 2,700 appeals were recognised in 2019, of which 20% were upheld, 27% were dismissed, and in 20% of cases the awarding authority upheld the charges contained in the appeal. In the remaining cases, there was return for formal reasons or discontinuance due to withdrawal of the appeal. In 2020, over 3500 appeals were recognised, of which 26% were accepted, 19% were dismissed, and in 21% of cases the awarding authority accepted the charges included in the appeal.
It appears that more contractors are participating both at the bidding stage and in the appeal proceedings than in previous years, and the COVID-19 pandemic crisis has intensified competition in public procurement.
In 2020, 122 complaints were lodged against NAC judgments.
The amount of the appeal fee varies and depends on the value of the contract and its type. The funds must be in the account of the Public Procurement Office no later than on the day on which the deadline for filing an appeal expires.
In the case of lodging a complaint to the court, the court fee amounts to three times the appeal fee.
The costs of the proceedings shall be borne by the losing party. In addition to the above fees, these may include the costs of legal representation (PLN3,600 in the first instance), costs of an expert opinion, etc.
Public Supply or Service Contract
The amount of the appeal fee in a procedure for the award of a public supply or service contract or in a competition depends on a value:
Public Works Contract
The amount of the entry fee for an appeal filed in a procedure for the award of a public works contract depends on a value:
A contract may be amended without a new procurement procedure only in the following cases:
According to regulations issued in connection with COVID-19 pandemic (SHIELD as described in 1.1 Legislation Regulating the Procurement of Government Contracts), each party to a public procurement contract is required to inform the other party without any delay of the impact, if any, COVID-19 might have on the proper performance of that contract.
The impact of COVID-19 on the proper performance of the contract must be confirmed by appropriate documents or statements. By way of an example (the catalogue is open), the draft act lists such documents as those relating to:
The above-mentioned circumstances may also apply to a subcontractor or a second-tier subcontractor.
The anti-crisis shield 2.0. provides that in the case of contractors registered outside of the territory of Poland or conducting activities related to the performance of the contract outside the territory of Poland, instead of the above-mentioned documents, the documents issued by relevant institutions in these countries or statements of these contractors should be submitted.
If the awarding authority decides that the circumstances surrounding the occurrence of COVID-19 may affect or do in fact affect the proper performance of the contract, then, in consultation ¬with the contractor, it may amend the contract by, in particular:
In the case of the main contract amendment related to public procurement, the contractor and the subcontractor have to agree on the appropriate amendments to the subcontract. The terms of the subcontract shall not be less favourable than those of the main contract. The same applies to the contract with the subsequent subcontractor.
Moreover, if the provisions of the contract contain more favourable conditions for the contractor concerning the amendments to the contract, the provisions of the contract shall apply and not the COVID-19 Act. The circumstances surrounding the occurrence of COVID-19 do not constitute a valid reason for withdrawal from the contract.
The above-mentioned regulations, related to the possibility of making changes to the agreement, apply accordingly to agreements on public procurement, to which the 29.01.2004 Act on Public Procurement does not apply.
The possibility of direct award of a contract exists in the event of occurrence of premises for applying any of the non-competitive mode, such as single-source procurement discussed in 2.3 Tender Procedure for the Award of a Contract. These regulations are similar to those in other EU countries; however, in each case it is possible to verify the actions of the awarding authority and to appeal to the National Appeal Chamber.
Contractors who have not been awarded a contract may claim damages without a prior finding of a breach of the PPL by the National Appeal Chamber, the Supreme Court held in Resolution III CZP 16/20 of 25 February 2021.
There is no detailed regulation of damages payable by the awarding authority in Polish law, although the appeal directives 89/665/EEC and 92/13/EEC introduce the obligation to adopt appropriate measures to award damages to contractors who have suffered as a result of an infringement. This case opens new possibilities in that field.
The amendment to the regulations, which came into force in 2021, is comprehensive and far-reaching, so major changes should not be expected, although some elements requiring improvement have already been identified. For example, currently, a member of the management board of a foreign contractor must present a certificate from the Polish criminal register, so it should be expected that this shortcoming will be corrected and a certificate from the place of residence will be required, as in the previous act.