1 General information
Romanian public contracts are great business opportunities for companies from all over the world.
The legislation on public procurement (Romanian PPL) is however complex and quite intricate, as in most other EU Member States. Thus, the essential prerequisite for participating to award procedures is to give due consideration in the tendering process to the applicable legal rules. Fifteen years of public procurement practice has taught us that not knowing the law is a greater barrier to public contracts than the much talked about corruption.
This legal guide provides a general overview of the rules to be followed, as applicable on 09th of July, 2019. Nevertheless, in oder to successfully navigate the labyrinth of a complex and ever changing set of rules, steady and tenacious legal support is necessary throughout the award procedure.
1.1 The legal and institutional framework
The Romanian PPL regulates the award of public procurement and utilities contracts, as well as concession contracts. A special law on remedies and review procedures related to the award of these contracts was also adopted.
The main platforms and institutions that a tenderer might encounter during an award procedure are:
- The Electronic System for Public Procurement (SICAP) is the online platform where contract notices are published and through which most of public procurement procedures are organized;
- The National Council for Solving Complaints (Council or CNSC) is the independent body that settles complaints filed by economic operators during award procedures, before contracts are concluded;
- The National Agency for Public Procurement (ANAP) is the institution which controls the manner in which public procurement contracts are awarded by contacting authorities, even upon notification by economic operators.
1.2 Types of award procedures
The most common award procedures are the following:
- open procedure, within which any interested economic operator has the right to submit a tender; this procedure is carried out in one stage;
- restricted procedure, within which any economic operator is entitled to submit a participation request, but only selected candidates can submit a tender; this procedure is carried out in two stages: (i) submission of participation requests and selection of candidates and (ii) submission and evaluation of tenders;
- simplified procedure, the procedure applicable for the award of contracts below EU thresholds and above direct purchase thresholds, whereby the contracting authority requests tenders from several economic operators; this procedure is carried out either in one stage or several stages consisting in the selection of candidates, negotiation and evaluation of tenders.
In specific circumstances, expressly provided by the law, contracting authorities may award public contracts by means of other award procedures (e.g. competitive procedure with negotiation, competitive dialogue, innovation partnership, negotiated procedure without prior publication, design contest).
Additionally, the Romanian PPL regulates the framework agreement, the written agreement between one or more contracting authorities and one or more economic operators, the purpose of which is to establish the terms and conditions governing the public procurement contracts to be awarded during a given period, in particular with regard to price and, where appropriate, to quantities.
1.3 Are foreign companies required to set up branches/subsidiaries in Romania?
Foreign companies are not required to set up branches/subsidiaries or otherwise in order to participate to award procedures. Moreover, establishing local preference criteria for the participation to the award procedure would constitute a breach of Romanian PPL that prohibits discrimination by reason of nationality.
2 The preliminary steps for TENDERING
Most award procedures are organized online (through SICAP). Thus, in order to take part in a procedure, two preliminary steps are required, as follows:
- obtaining an extended electronic signature – all documents related to the tender (g. technical and financial parts of the tender, European Single Procurement Document (ESPD), responses to requests for clarification) will be signed with an extended electronic signature;
- registering in SICAP – a company should be registered in SICAP in order to be able to tender in online award procedures.
2.1 Obtaining the extended electronic signature
The electronic signature shall be based on a qualified digital certificate, issued by an accredited certification services provider.
The exact documents and procedure to be followed might differ depending on the services provider selected by the company. A list of accredited certification services providers as well as their contact information is available at http://data.gov.ro/dataset/registrul-furnizorilor-de-servicii-de-certificare.
2.2 Registration of a company in SICAP
The registration procedure includes three mandatory steps:
- completing the online registration form available at https://sicap-prod.e-licitatie.ro/reg/account/su/edit/new;
- signing the online registration form and sending the online registration form and the accompanying documents to the SICAP operator (i) via e-mail or (ii) via courier;
- receiving from SICAP the confirmation e-mail for validation of the registration form and an electronic digital certificate for registration, downloading and installing the certificate.
Detailed instructions regarding registration with SICAP can be found at https://sicap-prod.e-licitatie.ro/reg/account/register/stepRegister/su.
A detailed user manual of SICAP can be found at http://sicap-prod.e-licitatie.ro/pub/manual/su/.
The digital certificate is valid for two years and its first issuance is free of costs.
3 TENDERING for public procurement contracts
After being registered in SICAP, the following steps should be followed:
- identifying the relevant contract notice in SICAP and downloading the award documentation from SICAP;
- checking the compliance with the minimum qualification criteria in the award documentation;
- identifying possible partners, subcontractors and/or third parties for technical/financial support;
- requesting for clarifications from the contracting authority, if the case;
- preparing the tender (the bid bond, the European Single Procurement Document, the technical and the financial proposals, possible proposals for contract amendment) and wrapping it as required in the award documentation;
- submitting the tender within the set deadline (in most cases, by uploading it in SICAP as most award procedures are carried out online);
- evaluation of submitted tenders by the contracting authority, including answering to requests for clarifications regarding the tender addressed by the evaluation committee, if the case;
- annulment of the procedure, if the case;
- receiving the communication on the award procedure result and, if the case, signing the contract.
Each of the steps mentioned above may contain numerous traps for the tenderers – the smallest mistake in form or in content can lead to elimination from the award procedure. It is, thus, extremely important to comply with all requirements in the contract notice, in the award documentation as well as in the potential clarifications published in SICAP by the contracting authority.
3.1 Identifying the relevant contract notices in SICAP and downloading the award documentations
Companies’ access to the contract notices and the award documentations published by contracting authorities in SICAP is ensured through the website http://sicap-prod.e-licitatie.ro/pub.
The access to these notices and documentations is free of charge and does not involve any prior registration procedure.
Certain contract notices are also published in the Official Journal of the European Union (OJEU), available at the address http://ted.europa.eu.
While contract notices contain summarized information on the award procedure, the award documentations include more detailed information and are composed of the bid data sheet, the technical specifications, the draft contract and the forms to be filled in by tenderers.
Upon identifying in SICAP the procedures of interest, signing up for the award procedure is necessary in order to receive notifications regarding the respective award procedure (e.g. new clarifications posted by the contracting authority), as well as in order to be able to upload the tender in SICAP. Usually, each signing up for an award procedure is charged by SICAP. However, each economic operator is granted 1 participation/month free of charge (this participation is non-refundable and can only be used in the current month).
3.2 Checking the compliance with the minimum qualification criteria
Compliance with the minimum qualification criteria in the award documentation is mandatory. Such compliance should be verified from the very beginning, so that no further effort is invested into a procedure without any chances of success.
Contracting authorities have the right to apply qualification and selection criteria regarding: exclusion grounds and the capacity of the candidate/tenderer.
On one hand, all exclusion grounds are stipulated as mandatory under the Romanian PPL, the contracting authority being thus bound to exclude the companies falling under such cases. The exclusion grounds regard aspects such as: the company being under a conflict of interest within or in connection to the procedure; the company’s participation in the preparation of the award procedure leading to a distortion of competition; the company having entered into an agreement with other companies aimed at distorting competition; the company having committed a serious professional misconduct which renders its integrity questionable. The grounds are conditional either upon the impossibility of the contracting authority to remedy the situation by taking other, less intrusive measures (the first two grounds) or the contracting authority having reasonable enough evidence/concrete information/appropriate means of proof, such as a decision of the court or an administrative authority (the last two grounds).
Romanian PPL provides the possibility for the tenderer to prove the taking of appropriate self-cleaning measures in relation to the exclusion grounds.
The absence of the exclusion grounds must be also checked by the contracting authority in relation to the subcontractors/supporting third parties proposed by the tenderers. If the subcontractors/supporting third parties fall into such exclusion cases, the contracting authority may request their replacement only once.
On the other hand, the capacity criteria may regard only the following: suitability to pursue the professional activity (e.g. certain authorizations); economic and financial standing (e.g. a minimum level of the turnover); technical and professional ability (e.g. similar experience).
Contracting authorities may also require the submission of specific certificates attesting the compliance with certain quality assurance standards or with standards or environmental management systems, in which case the European standards series shall be taken into consideration.
Contracting authorities may establish minimum levels for the above-mentioned criteria and may request supporting documents. Those tenders not fulfilling the qualification criteria shall be rejected as unacceptable.
When a company does not fully comply with the capacity criteria, it should take into account the possibility to participate in the procedure jointly with other economic operators.
3.3 Identifying possible partners, subcontractors and third parties for technical/financial support
Any company has the right to participate in the award procedure either individually or jointly with other economic operators (including in the form of a consortium), as a proposed subcontractor or as a supporting third party.
Depending on each case (e.g. tenderer, subcontractor or supporting third party), certain documents must be submitted by each company as part of the tender (e.g. ESPD) whilst other documents shall be presented only by certain members (e.g. if the case, the documents proving the economic and financial standing shall be presented by the supporting third party nominated to that purpose).
Companies often submit tenders as a consortium, especially those with different areas of expertise. The main advantage of a consortium is that certain resources of its members (e.g. technical, financial) are taken into consideration jointly, for the consortium as a whole, by the contracting authority when assessing compliance with minimum qualification criteria.
For this purpose, the companies are generally required to conclude a consortium agreement.
When signing the public procurement contract, the members of the consortium are jointly and severally liable and each member commits itself to perform all obligations under the contract. One of the members of the consortium shall be designated as the authorized representative of the consortium (leader of the consortium) in relation with the contracting authority.
Subcontracting is also a common participation formula, through which a company subcontracts part of the activities of the contract to a subcontractor. Certain resources of the subcontractor (e.g. authorizations) may be used in order to prove compliance with minimum qualification criteria.
Generally, the subcontractor is not part of the public procurement contract, event though it performs activities part of the subject matter of the contract. It has a contractual relationship with the main contractor (not the contracting authority) and is liable in front of the contractor. However, under certain conditions (e.g. contractual clauses to that purpose), a subcontractor may receive its fee directly from the contracting authority.
18.104.22.168 Supporting Third party/parties
Companies may also rely on the capacity of third entities in order to fulfill the minimum criteria on economic and financial standing and/or technical and professional capacity. For this purpose, the tenderer is required to submit within the tender the commitment of the third party.
The supporting third party is not part of the public procurement contract. However, if a tenderer proves the fulfillment of minimum criteria invoking the support of a third party/parties, the contracting authority requests the tenderer and the supporting third party/parties to be jointly and severally liable for the performance of the contract.
3.4 Requesting clarifications from the contracting authority
Any interested company has the right to request clarifications on the award documentation, within the deadline set by the contracting authority in the contract notice. The contracting authority sets the deadline within which it is obliged to respond, clearly, fully and without ambiguity to the requests for clarification submitted by the interested companies.
Without revealing the identity of the economic operator, the contracting authority must publish the clarifications in SICAP, where they are fully accessible to all economic operators. If not registered with the procedure, companies should check periodically the clarifications published in SICAP until submission of tenders, in order to have all information necessary to prepare a correspondent tender.
If clarifications are requested in due time (within the deadline set in the contract notice), the response of the contracting authority must be published no later than 10 days (5 days in emergency situations duly demonstrated by the contracting authority) before the deadline for submitting the tenders. For simplified procedures, the terms are shorter, namely 6 days (for works contracts) or 3 days (for services or supply contracts) and 2 days (in emergency situations) before the deadline for submitting the tenders.
Contracting authorities may amend the award documentation, within the limits imposed by the PPL, exclusively before the deadline for submission of tenders. In case the changes lead to adjustments/completions to the technical specifications that require additional time for potential tenderers, the contracting authority is bound to extend the deadline for submission of tenders. Substantial amendments of the tender documentation may lead, in certain conditions, even to the annulment of the procedure.
3.5 Preparing the TENDER and wrapping it as required in the award documentation
As a general rule, initially, the tenderer shall submit:
- the European Single Procurement Document (ESPD, in Romanian DUAE);
- the technical and financial proposals;
- the bid bond, if the case;
- possible proposals for amendment of the contract published within the award documentation, if the case.
ESPD is a self-declaration of the company’s financial status, abilities and suitability for a public procurement procedure. It is available in all EU languages and used as a preliminary evidence of fulfilment of the qualification criteria required in the award documentation. A general template of the ESPD can be found at: http://eur-lex.europa.eu/legal-content/EN/TXT/PDF/?uri=CELEX:32016R0007&from=EN.
However, an adjusted template of the ESPD (in accordance with the qualification criteria required through the award documentation), as well as its instructions (for completion and uploading in SICAP) are published by the contracting authority for each procedure. The contracting authority will set up the ESPD directly in the section of SICAP dedicated to the award documentation. Based on the information completed by the contracting authority in the system, SICAP will automatically generate the ESPD in .xml format.
The justifying documents (supporting the information mentioned in the ESPD) are requested in general only to the tenderer ranked on the first position (or all the selected candidates in two-staged award procedures).
A bid bond may be also requested by contracting authorities. The bid bond has to be submitted by the company for the amount and the validity period set in the award documentation. The amount cannot exceed 1% of the estimated value of the public procurement contract or of the largest subsequent contract (in case of a framework agreement).
The company may constitute the bond through bank transfer or a bond instrument issued by the bank/insurance company. The bid bond must be presented latest at the date and hour set for the submission of tenders. The contracting authority has to return the bond if no incident that might lead to its retention occurs (i.e. the successful tenderer refuses the conclusion of the contract or the submission of the good performance bond, the tenderer withdraws its tender) to both unsuccessful and successful tenderers.
The formal requirements of the documents (e.g. language, form) are established in the award documentation. Usually, documents issued in foreign language shall be accompanied by authorized translations in Romanian.
3.6 Submitting the TENDER within the set deadline
The deadline set within the contract notice or subsequently amended through errata to the notice shall be duly observed by tenderers. Any tender submitted after the deadline is rejected.
The submission deadlines shall be reasonable, taking into consideration the complexity of each procedure. In any case, the law stipulates certain minimum timescales between the publication of the contract notice and the deadline for submission of tenders/participation requests:
- for open procedure – 35 days;
- for restricted procedure – 30 days;
- for simplified procedure – 10 days in case of services/supply contracts, 6 days in case of low complexity products supply contracts and 15 days in case of works contracts.
Most of the above timescales can be further diminished under certain conditions, such as publication of a prior information notice and/or accepting the submission of tenders through electronic means.
The tender will be signed with an extended electronic signature, based on a qualified certificate issued by an accredited certification service provider, and will be uploaded in SICAP before the deadline mentioned within the awarding documentation. Any tenders submitted after the deadline will not be taken into consideration by the contracting authority.
Considering that the upload time in SICAP can be longer for certain documents (e.g. for a complex and sizable technical proposal), the upload of the tender should be organized in due time to provide sufficient time for the tender to load, as well as to avoid any last minute technical problems (e.g. unavailability of SICAP or poor internet connection). Moreover, since documents larger than 20 MB cannot be uploaded in SICAP, the necessary time for archiving these documents should also be taken into consideration.
3.7 Evaluation of submitted tenders AND clarification of tenders
After submission of tenders, the evaluation process commences. The evaluation committee verifies each tender from a technical and financial point of view, as well as its compliance with the qualification criteria by analyzing the content of the ESPD.
22.214.171.124 Clarification of TENDERS
During this stage, the committee requests to tenderers the clarifications considered necessary for the evaluation of the tenders. No other communications between tenderers and the contracting authorities are allowed at this point. If the tenderer does not send (upload in SICAP) the required clarifications within the deadline established by the evaluation committee or if the clarifications submitted are not conclusive, the tender shall be rejected from the procedure.
Should the tenderer amend its technical or financial proposal by means of clarifications, the tender shall also be rejected as unacceptable, as the general rule is that no changes are allowed to tenders already submitted. The PPL provides, however, for the following exceptions:
- for the technical proposal – formal flaws or corrections of certain minor technical errors as long as a possible price adjustment caused by such corrections would not have led to changes in the ranking of the tenderers; and
- for the financial proposal – arithmetical errors.
Moreover, the replacement of the subcontractors/supporting third parties nominated in the tender during the award procedure is permitted, upon the request of the contracting authority (e.g. for falling under the exclusion grounds). However, changes in the structure of the consortium are not allowed.
126.96.36.199 Admissibility of TENDERS
The tenders shall comply with all requirements, conditions and criteria stipulated in the contract notice and award documentation (e.g. qualification/selection criteria, minimum technical specifications, formal requirements etc.). A tender might be hence excluded as unacceptable (e.g. for not complying with qualification/selection criteria, for not submitting a tender duly signed with an extended electronical signature etc.) or as non-conformant (e.g. for not meeting the technical specifications, for containing proposals for amendment of contract clauses that are obviously disadvantageous for the contracting authority and the tenderer, although informed, does not accept to renounce to such clauses, for tendering an abnormally low price/costs as compared with the works, products or services etc.).
188.8.131.52 Establishing the winning TENDER
The contract is then awarded to the admissible tenderer who submitted the most economically advantageous tender. To establish the most economically advantageous tender, the contracting authority applies one of the following criteria: (i) lowest price (only for procedures under the OJEU publication thresholds), (ii) lowest cost, (iii) best quality-price ratio or (iv) best quality-cost ratio. Best quality-price/quality-cost ratio is determined on the basis of evaluation factors including quality, environmental and/or social aspects, in connection with the subject of the contract/framework agreement.
The award criterion (including evaluation factors) have to be specified within the contract notice and award documentation.
Should the contracting authority not be able to conclude the contract with the successful tenderer, due to a force majeure situation or a fortuitous case, the contract may be awarded to the tenderer ranked second provided that its tender meet the above-mentioned conditions.
3.8 When can/may a contracting authority cancel the award procedure?
Contracting authorities must cancel the procedure in certain cases (e.g. only unacceptable or non-conformant tenders were submitted, no tender was submitted, the submitted tenders cannot be compared because of the uneven approach to technical and/or financial solutions; serious infringements of the PPL affect the procedure or the conclusion of the contract is impossible; following a decision of the Council according to which certain technical specifications were removed/amended), whilst certain situations only give the right to annul the procedure (e.g. the minimum number of candidates was not reached in several two-stages procedures). The annulment decision must be thoroughly justified and all participants must be informed regarding such a decision.
Nevertheless, the contracting authority may not arbitrarily cancel the procedure, the annulment decision being as well subject to judiciary or administrative-judiciary control.
3.9 The communication on the award procedure result and signing the contract
Tenderers are entitled to be informed by the contracting authority on the result of the procedure, in writing, not later than three days as of the issuance of the decision on the result.
Within this communication, the unsuccessful tenderers must be informed of the reasons that led to the decision.
After communication of the award procedure result, the contracting authority is bound to allow, upon request, free access of any tenderer to the evaluation report and the information within the qualification documents, technical and/or financial proposals of the other tenderers that were not declared as confidential, classified or protected by an intellectual property right.
The public procurement contract will be signed with the winning tenderer after a minimum standstill period (i.e. 6 or 11 days). The right to conclude the public procurement contract is suspended in case a complaint is submitted. Furthermore, the contract concluded before CNSC/court of law rules on the complaint is null and void.
A good performance bond shall be constituted only by the successful tenderer after signing of the contract, when such request was stipulated within the award documentation. Its purpose is to guarantee the quantitative, qualitative and timely fulfilment of the contract. The amount is established by the contracting authority and cannot exceed 10% of the contract price (without VAT).
4 Remedies and enforcement
The remedies procedure against the acts issued by contracting authorities during award procedures include the following phases: (i) complaint afore the CNSC (an administrative-jurisdictional body) or a tribunal (a judicial body) and (ii) appeal against the CNSC’s/tribunal’s decision.
Also, the law provides for means of recovering damages, annul wrongfully concluded contracts and even to apply pecuniary sanctions to the contracting authorities.
4.1 Available remedies during award procedures
The person harmed by an act of the contracting authority may file a complaint in front of CNSC or the tribunal from the headquarters of the contracting authority.
Complaints can be filed within 5 or 10 days from the day following the acknowledgment of the act of the contracting authority deemed illegal. If the complaint regards the award documentation published in SICAP, the date of acknowledgment is considered its publication date.
Economic operators have the obligation to submit with the complaint a bond amounting to 2% of the estimated value of the contract. The value of the bond is limited to (i) RON 35,000 in the case of contracts with an estimated value below the financial thresholds for publication in the OJUE; (ii) RON 220,000 in the case of contracts with an estimated value equal to or above the financial thresholds for publication in the OJEU. In case the bond is not submitted, the complaint shall be rejected. The submitted bond is released upon request of the economic operator after final settlement of the case, within a minimum term of 30 days, if the contracting authority does not claim any damages against the economic operator.
Even though the contract cannot be concluded until the complaint is ruled upon the CNSC/the court, the complaint does not automatically suspend the award procedure. CNSC or the tribunal may nevertheless decide on the suspension of the procedure, upon request, if certain conditions are met.
Until the complaint is settled by CNSC/the tribunal, any interested economic operator can file a voluntary intervention claim within 10 days as from the date the complaint is published in SICAP by the contracting authority. When ruling on the complaint, the CNSC/tribunal shall also rule on this claim.
CNSC has the obligation to rule upon the complaint within 15 days from the receipt of the public procurement file from the contracting authority or within 5 days where an exception occurs, which prevents an analysis of the complaint on the merits. However, in duly justified cases, the initial term can be extended only once with 10 days. In practice, complaints are ruled upon within three to six weeks as of the date the complaint is filed, depending on its complexity.
Alternatively, the tribunal has the obligation to rule upon the judicial complaint within 45 days as of its referral to the court. In practice, complaints are ruled upon by courts within four to twelve weeks as of the date the complaint is filed, depending on its complexity.
The terms for filing the appeal before the competent court of appeal are different depending on whether the appeal refers to the CNSC’s or the tribunal’s decision, as follows: (i) 10 working days as of the date of the communication, for the appeal against the CNSC’s decision; and (ii) 10 calendar days as of the date of the communication, for the appeal against the tribunal’s decision.
The appeal does not suspend the execution of the decision. In this case, the public procurement contract can be concluded even before the court of appeal rules on the appeal. However, in duly justified cases, the award procedure and/or the performance of the contract can be suspended by the court, upon specific request.
Appeals filed against the administrative or judicial decisions must be solved within 45 days of their referral to the court. In practice, appeals submitted afore the competent courts are ruled upon within an average timescale of one to three months. The decision of the court of appeal is final.
Claims for compensation for damages caused during the award procedure can be filed within the general prescription term of 3 years, provided that certain conditions are met (e.g. the damages may be granted only after the aggrieving act was annulled or revoked or remedies were adopted by the contracting authority).
4.2 Available remedies after contract conclusion
Litigations and claims regarding damages caused during the award procedure as well as the annulment or nullity of public contracts are settled in first instance by the administrative section of the tribunals, whilst litigations and claims related to the performance of contracts are settled by the civil courts. The competent courts are from the jurisdiction where the contracting authority is headquartered.
Any interested person can request the total/partial absolute nullity of public procurement contracts in certain cases (e.g. the contracts are concluded without the prior publication by the contracting authority of a contract notice; the contracts are concluded in breach of the standstill periods).
5 Changes after an award procedure
Changing the contract provisions upon its conclusion is a sensitive matter. Hence, changes to a public procurement contract are allowed without a new procurement procedure only in the situations expressly and strictly provided by the PPL.
For example, such a situation is where the amendments, irrespective of their value, are not substantial. An amendment to a public contract is considered substantial when at least one of the following conditions is met:
- the amendment introduces conditions which, if included in the initial award procedure, would have allowed the selection of other candidates than those initially selected or the acceptance of another tender, or would have attracted more participants in the award procedure;
- the amendment changes the economic balance of the contract in favor of the contractor in a manner not provided for in the initial contract;
- the amendment substantially extends the subject of the contract;
- a new contractor replaces the original contractor, in other cases than those provided by the law.
Furthermore, the adding of new subcontractors during the performance of the contract is allowed provided that it does not lead to a substantial amendment of the contract.
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