Presentation for SIGMA public procurement workshop in Moldova 9 June 2014 by Zoran Blazevic

1. © OECD
AjointinitiativeoftheOECDandtheEuropeanUnion,
principallyfinancedbytheEU
Importance of the independent
review system and key benefits
- EU legislation and
international good practice -
Zoran Blažević, Croatia
Chisinau, Moldova, 9 June 2014

2. Content
Procurement review and remedies system
Principles
First steps PRB – Procurement Review
Body
Recommendations
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3. 3
Creating an adequate „Procurement
Environment”
Law
Clearly drafted
Principle-based
Reliable
framework
Remedies
Accessible
Effectiveness
Cost
Institutions
Review body
Oversight body
Central
purchasing
agency
Key questions
Procurement
system
Training
Procurement
personnel
Public Procurement Environment

4. Public procurement market
• PRIVATE ENTITIES
– Survival in business? YES
– Where happening? MARKET
• PUBLIC ENTITIES
– Do they have to buy? YES
– Where? MARKET
ROLE OF PRB?
• Public procurement market in Republic of Croatia in 2012.:
33.250.330.011,00 HRK. In BDP 11.9%.
• Value of appeal cases in front of PRB in 2012.: 11.555.556.000,00
HRK.
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5. What are the rights of the parties in
the remedies procedure
• A dissatisfied party may appeal to the PRB’s and
to seek protection of rights before the PRB’s
against:
- Decisions
- Acts
- Omission
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6. The most common complaint alleges
• Description of procurement – technical
specification.
• Conditions and evidence of suitability.
• Selection criteria.
• The central institutes of public procurement
conditio sine qua non.
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7. Why is the independence the key
issue?
• Dispute between contracting authorities and
representatives of private sector.
• To whom the unsatisfied party may appeal?
• Executive government vs private sector…
• How to create trust from the side of private
sector and avoid distrust.
• Court system or independent review bodies.
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8. To whom appeal can
be submitted?
• To the Courts ?
• To the independent procurement review bodies
(PRBs)?

9. Directive 89/665
What if PRB is not part of judicial
government
Decisions of the PRB-s in the process of control of the public
procurement, have to be in writing, with an clear explanation of
reasons for such decision-making.
For all participants in the review proceedings, after the decisions
of PRBs, judicial review in the last instance have to be secured.
PRB has to be independent and the members of PRB will be
elected on mandate.
PRB procedure is inter partes and decision of such body have to
be legally binding.
Members of the PRB shall be appointed under the same
conditions as the representatives of the judiciary.
President of PRB must meet the same legal and professional
qualifications as members of the judiciary.

10. REPUBLIC OF CROATIA
PRB IN PUBLIC PROCUREMENT SYSTEM
CROATIAN PARLIAMENT
GOVERMENT OF THE REPUBLIC OF CROATIA
VICE – PRESIDENT OF GOVERMENT AND MINISTER
of the MINISTRY OF ECONOMY, LABOUR AND
ENTREPRENEURSHIP
- Negotiator for Chapter 5 -th
- Public Procurement
MINISTRY OF ECONOMY, LABOUR AND
ENTREPRENEURSHIP
Directorate for the PP System
REPORT
STATE
COMMISSION
FOR THE
SUPERVISION OF
PP PROCEDURES
PARTICIPANTS IN
THE PUBLIC
PROCUREMENT/
APPEALS
MINISTRY OF FINANCE
AGENCY FOR THE PPP
COORDINATING BODY for the IMPLEMENTATION of
PP SYSTEM
INFORMAL
OPERATIONAL
WORKING
GROUP

11. Remedies available to economic
operators
• Pre-trial complaints before the contracting authority (if
available under national law);
• Interim measures against procurement decisions,
including the award decision;
• Set aside of unlawful procurement decisions, award
decision and
• Annulment of concluded contract.
• Compensation of economic operators for all harm
suffered as a result of a breach of procurement law -
damages

12. Benefits of independent review
bodies
• Stimulation of competition on the market,
• Promotion of government of public finance,
• Decreased possibility for corruption,
• Minimizing of administrative duties,
• More participants on the side of private sector,
• Lower prices at the public procurements,
• Stimulation of excellence,
• Creation of case database
• etc.

13. Review procedure
- best practice model-
• Standstill period
• Suspension effect of the appeal
• Review of public procurement award procedure
should be a two-stage procedure:
1st stage: procedure before the contracting entity
2nd stage: procedure before the Court or the PRB
• Legal protection against the PRB’s decision

14. 2nd stage – procedure in front of PRB or the
Court:
Proceedings before the PRB or the Court should only be
initiated:
• after an unsuccessful 1st stage review before the
contracting entity.
• when the aggrieved party does not consent (partially or
entirely) to the decision of the contracting authority on the
demands from the appeal.
• if it does not decide in due specific time (for example 10
days).

15. The PRB should decide within the limits of the
review appeal (and with or with out ex offo legality
test of the procurement procedure).
In case of violation of the basic principles of public
procurement the PRB should be competent to
examine all evidence considered relevant for the
clarification of the subject matter of the claim and
those necessary for adoption of a legally correct
decision.
Competence of the PRB

16. Before bringing the final decision, the PRB should:
• ask for additional explanations from the contracting
entity or the claimant of the review claim.
• review other documents and the actual situation of
both parties.
• collect other information necessary for making a
decision.
• ask public and private law persons for personal and
other data which are required for making a decision.
Competence of the PRB

17. PRB should decide on the appeal authoritatively.
There are three types of main decisions it can adopt:
• appeal can be dismissed as unlawful or late or..
• appeal can be rejected as ungrounded.
• appeal can be accepted and the decision or the
• procedure in question partially or entirely invalidated.
Competence of the PRB

18. Major risks in development of PRB-s
Independent
PRB
Lack of
experience in
public
procurement
Lack of financial
independence
Lack of
transparency in the
process of
selection of the
members of PRB
Influence of the
political
structure
Increased
administration in
the procedure
And possible
delays in
procurement
procedure

19. Answers to the risks…
Education of the
private and public
sector about legal
protection in public
procurement
PRB – main
questions?
- Independents of PRB
- Sufficient budget
- Case law
PRB - Visibility
Transparent
functioning
Web – page
Awareness raising
material
Manuals for all stake
holders
PRB - Independents
• Relationship toward
the government
• Relationship toward
the representatives of
private sector
• Relationship toward
the contracting
authorities

20. Instead of conclusion
• Transparent and efficient review system is precondition
for development of public procurement system.
• To accomplish best value for the public money case law
in remedies procedure is necessary.
• Private sector is second party in the public procurement
contract with equal rights as public side.
• Role of the Courts is to ensure protection of the legal
rights of all parties in the public procurement system.
Judicial control over the PRB’s case law.
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21. Time for….
Questions and comments ???

22. Thank you for your attention !
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