The government approved the proposal for the Public Procurement Act

Prague - The government today approved a draft law on public procurement. Prime Minister Bohuslav Sobotka (ČSSD) stated this at a press conference after the cabinet meeting, noting that it is one of the most important proposals within the mandate of this government. According to the Ministry for Regional Development, the law is intended to provide greater powers to contracting authorities while also requiring them to act transparently and proportionately. The proposal has been criticized by the Chamber of Commerce.
    Minister for Regional Development Karla Šlechtová (for ANO) mentioned before today’s cabinet session that the office had addressed most of the objections raised by other ministries. Minister of Agriculture Marian Jurečka (KDU-ČSL) informed journalists before the government meeting that the proposal does not address the access of foreign companies with unclear ownership structures to public contracts, which contradicts the coalition agreement. After the law was approved, he said that foreign companies will also need to demonstrate their structure when interested in public funds.
    The law, which the ministry wants to rename the law on procurement procedures, must be in effect by April 18, 2016, at the latest. By that time, the Czech Republic must transpose European directives into national legislation. At the same time, the existing law on public procurement and the concession law should be abolished, and related legal regulations will await amendments.
    Sobotka and Šlechtová emphasized today that the new law on public procurement is one of the government's most important commitments. Sobotka noted that the coalition is therefore prepared to ensure that it smoothly passes the approval process in Parliament.
    Šlechtová believes that because deputies and senators from opposition political parties also participated in preparing the regulation, there will be no problems with its approval. If there is a risk that the regulation will not reach the proper meeting of the Chamber in time, an extraordinary meeting will be held because of it. "I do not rule out that we may request an extraordinary meeting of the Chamber, if time demands it," the minister said.
    The Chamber of Commerce is not satisfied with the law. "We urge the government of the Czech Republic not to support this pivotal law, which represented 600 billion CZK in 2014, in its current version solely for the sake of validity from April 18, 2016, but to focus on ensuring that the law is of high quality," the chamber stated today. The law, for example, does not mandatorily introduce the assessment of other criteria based on price during selection. "Competing on price is simply the easiest for the contracting authority, and the law does not mandatorily introduce the assessment of other criteria," the chamber stated. It also had reservations about increasing the limits for so-called additional work or possible increases in contract prices.
    The government ultimately, according to Šlechtová, removed the possibility of increasing the limits for so-called additional work from the current 30 to 50 percent of the original price and maintained 30 percent in the law. The cabinet also decided, according to the minister, that the Office for the Protection of Competition (UOHS) will continue to decide on projects co-funded with EU funds.
    The cabinet discussed the law on public procurement at the previous cabinet meeting. There were 30 comments remaining, most of which the ministry resolved by today. Šlechtová said today before the discussion began that four disagreements remain.
    The new regulation, which sets the conditions for the procurement procedure, for example, prohibits concluding a contract with a tender participant who does not meet the requirements of the law or the contracting authority. The Ministry for Regional Development also requested that in some types of tenders, selecting a winner solely based on the lowest price be prohibited, or that more mandatory evaluation criteria be introduced. It wants to allow public institutions to award contracts for legal services in court and administrative disputes without a selection process. The contracting authority could also exclude a candidate who previously did not perform satisfactorily.
    According to lawyer Ondřej Chmela from Ambruz & Dark Deloitte Legal, the removal of some excessive administrative requirements regarding evaluation committees and formal assessment of bids is a positive change compared to the current regulation. "Conversely, the regulation allowing the exclusion of a supplier who is deemed 'unsatisfactory' could prove problematic for suppliers in the future - the application of this provision could lead to a number of disputes between contracting authorities and suppliers," Chmela warned.
    Executive director of Otidea Kateřina Koláčková, who deals with public procurement, fears that no one will manage to prepare for the new rules in time. "If the drafters of the law did not spend so much time changing established terminology, they could have had much more time to prepare the fundamental provisions of the law and related regulations. The law is now being dealt with at the last minute. Even if it is approved by the end of the year, officials and companies will not have enough time to learn the new rules by April," Koláčková warns.