New act no. 134/2016 Coll. on public procurement

Mgr. Marek Zeman 09.06.2016

The new law was signed by President of the Republic on 22. 4. 2016 and has been published in the Collection of Laws as Act no. 134/2016 Coll., On public procurement, (hereinafter referred to as „ZZVZ“) will acquire with the efficiency of 1. 10. 2016 . According to the MMR is the core purpose of the new law "to ensure the creation of a competitive environment and prevent discrimination in public procurement, to achieve a rational allocation of public funds based on the selection of the best bid, equal and fair treatment of suppliers in the procurement market, where there are significant business opportunities and strengthening competition among entrepreneurs. "what does the new law provides for the changes and what has remained as before?

Limits to exclude the application of the Act (procurement of small scale) remain the same, ie CZK 2 000 000 for supplies and services and CZK 6,000,000 for construction work.

Entering below the threshold public procurement It is now possible to all limit orders for supplies and services, and also works to CZK 50 mil. To enter the simplified sub-limit procedure (SMRs). Adjusting SMRs are limited to establishing specific deviations from the applicable public procurement above the limit that unless the Act made to the specific provisions applicable for above-threshold regime purchaser is only entitled (but not obliged) to these institutes of the overallotment regime used or are they only inspire the implementation of SMRs. Newly sufficient publication of the invitation to tender for the contracting entity profile, no need to invite at least 5 suppliers. The contracting entity within the SMRs may not even require proof of compliance with qualification supplier. May possibly voluntarily apply the treatment of excess proceedings or in part. It may therefore wish e.g. demonstrate qualification only partially to the extent that it is relevant.

Categories of major public contracts and their practical importance This category of public procurement has been completely canceled. According to the authorities of major procurement, this institute has not fulfilled expectations, which to him by the legislature inserted.

Exceptions from the procedure under the new law The new law imposes a number of exceptions under which the law does not apply. Especially in terms of general exceptions, eg. The contract to ensure the provision or operation of public communications networks or provide electronic communications services to the public, as well as the acquisition, rental or leasing existing immovable or related property rights, in the case of arbitration, conciliation or similar activities, legal services provided by a lawyer representing a client in court, arbitration, conciliation or administrative proceedings before a court, tribunal or other public authority or in proceedings before international bodies for settling disputes etc. Furthermore, there are specific conditions for limit orders.

Simplified regime Newly introduced regime is called simplified scheme (procedure for awarding the contract in simplified mode) for supply of social services and other services listed in the Annex to the Act. These orders have been entered by default as other jobs. Newly these contracts will be entered in a simplified manner in accordance with § 129 ZZVZ.

Vertical cooperation (in-house procurement) Initial Public Procurement Act contains a so-called in-house exception, under which the contracting authority is not obliged to procure the terms of the original law in the event that a provision of supplies, services or works person which pursues a substantial part of its activities for the benefit of the contracting authority, and in which the contracting authority has exclusive property rights. Therefore the point is that the contracting authority may not award public contracts under the terms of the Act, where the supply of services or works to be provided by a person whom the contracting authority directly controls. The New Testament this exemption in principle, retains and refines when newly according to § 11 ZZVZ for the award of a contract does not, when a contracting authority enters into a contract with another legal entity that (i) operates similarly to an organizational unit (ii) has operated person any other property rights, and (ii) more than 80% of the activities of the controlled entity is performed when carrying out the tasks entrusted to the controlling public authority. The share of activity is then calculated from the turnover of the controlled legal person.

Horizontal cooperation Horizontal cooperation is newly introduced institute, which is a contractual right of cooperation between contracting authorities, which is not considered awarding the contract. This institute existing law did not recognize. The purpose of horizontal cooperation is to facilitate cooperation between public authorities in order to ensure public needs in accordance with the public interest.

Innovation Partnership ZZVZ introduces a new type of award procedure called Innovation Partnership, aim of which is the development of an innovative product, service or works that are not yet available on the market, and therefore can not compete in other types of procurement procedures. In this procedure, it is possible to compete only those products, services or works that are not in the market and therefore need to be developed.

Distribution of procurement New law allows the division of public contracts more partial orders, while the relevant EU directive, which served as the prototype for a new ZZVZ even distribution of procurement prefer, and for this reason, so as not to exclude small and medium entrepreneurs from participation on public procurement. In the case of the distribution of the tender is for the entire tender procedure crucial estimated value of the entire contract, not just its parts. Individual parts can be given in one or more sub procurement procedures, but the procedure is always based on a total estimated value of the contract as functionally and time-related whole. If the allocation of public contracts, the contracting authority is entitled to restrict a participant to only some parts.

The operating units of the contracting entity Operating units are various organizational units of the contracting authority, such as branch plants, branches, university faculties, and so on. Generally, the sponsor is required to determine the estimated value of a public contract for the entire legal entity or organizational component of the state, therefore, for all their organizational units for which ZZVZ used tor operating unit. Such operating units may be, for example, branch plants, branches, university faculties, and so on. For reasons of existing problems in public procurement (especially universities), then ZZVZ now allows the predicted value was established only in relation to one operating unit under the condition that the unit in terms of procurement has functional autonomy.

Economic qualification ZZVZ newly re-enables the contracting authority to require (with some exceptions) demonstrate the economic qualifications of the supplier of proving minimum yearly turnover and a maximum of the last 3 financial years. The condition of the minimum annual turnover must not exceed twice the estimated value of public contracts.

Transparent ownership structure Transparency of ownership structures suppliers when dealing with public funds is one of the prerequisites necessary to prevent corruption and misuse of public funds. However ZZVZ requirements for transparent disclosure of ownership structures vendor does not, because it does not provide all the details of the application vendor to public contracts. This regulation is left to particular law.

The issue of time limits for references Public contracting authorities may by suppliers in order to demonstrate its technical qualifications also require presentation of a list of works over the last 5 years and for supplies or services for the last three years (ie. The reference). So far, the interpretative doubts about how the moment is the construction, supply or service capable of putting on the appropriate list required by the contracting authority, more specifically, whether it is for these purposes, you could only finished construction or delivered the supplies and services, or whether it may also be provided in case that has not yet been fully met. The new law removes the existing uncertainty and provides that, unless the tender documents otherwise specified, it is possible to introduce such a list only those buildings, supplies and services that have been completed at that time.

Sub-contractors (subcontractors) The new law allows the contracting authority to require compliance with the basic qualifications and professional competence after sub-contractors. Under the conditions set out in the tender documentation, the contracting authority is also authorized to pay the amounts due within sub-contractors; This change focuses mainly on protecting subcontractors who were still in the payment of bonuses dependent on suppliers and payment history.

The concept of deposit as a contractual penalty Although the original bill was a certainty conceived as a penalty, which they would have applied only if would be contrary to law or contract documents to amend or withdraw the offer, refused to cooperate, etc., Not this proposal changes the nature of security accepted. Legislation and security remains the same as before, that security must be provided within the deadline for submission of tenders (if the sponsor provide security required).

Disclosure, preliminary announcement ZZVZ brings change when a new authority is not obliged to publish in the form of prior notification of its intention to commence the tender, as it was before, but they are also entitled to do so. So it depends on the will of the contracting authority, if they do so. If they decide to publish its intention to give the possibility to use certain privileges, which would otherwise not be used, eg. To reduce the deadline for submission of tenders under the under-steering. Publication takes place through the completed form sent to the Public Procurement Bulletin.

Negotiations about Tenders ZZVZ beyond existing regulation extends the possibility of the contracting authority to negotiate with the parties about the conditions of the public contract or as its prices further for competitive dialogue and innovative partnerships.

Disqualification of participant The Act gives the contracting authority permission under specified conditions, to exclude a participant from the tender, that there is a shift in favor of the autonomy of the will of the contracting entity, because now it is not legally obliged to exclude participants, as it was before, but it usually depends on his will. Most of the reasons for the exclusion of participants is formulated as reasons for the possible exclusion remain but also some reasons for which the participant is obliged to exclude. From the perspective of the contracting authority is a fundamental responsibility to respect the fundamental principles ZZVZ, in particular the principle of equal treatment and non-discrimination. Permission contracting authority to exclude a participant can not be understood arbitrarily.

Reduction (reducing) the number of participants ZZVZ allows a reduction in the number of tendered (or preliminary bids or solutions) only if the law for the chosen type of award procedure accepts and at the same time if such a possibility of reducing contracting authority has reserved. Criteria for reduction tendered (or preliminary bids or solution) must be based only on objective and verifiable facts related to the subject of the public contract or a qualified contractor.

Two-envelope system ZZVZ introduces the possibility of contracting authorities to lay down in the specifications that you first assess the various bids received in terms of compliance and to then publish the bid price. In practice, this will look like, so that subscriber within the envelope containing the bid will be inserted next envelope containing the bid price.

Evaluation criteria The only criterion according ZZVZ is the economic advantage of a tender, which is assessed on the basis of (i) the most favorable ratio between the bid price and quality, including the ratio of life-cycle cost and quality, possibly based on (ii) the lowest bid price, or (iii) the lowest cost lifecycle. In some types of procurement procedures must be established only economic profitability based on the lowest bid price.

Abnormally low tender price Abnormally low tender price is used to protect the sponsor before the absurdly low prices and unrealistic bids participants. The amount of abnormally low tender price of the contracting authority may specify already in the tender documentation. In the event that the participant submits a bid with a price that is in accordance with the tender documents (or with respect to the subject contract appears to be) extremely low, the contracting authority is required to invite the participant to justify fixed prices. If a participant justifies the price, the contracting authority is entitled to (in some cases even obliged) to exclude him from the proceedings.

The evaluation committee It is an advisory body Sponsor has been obligated in most species of the tender procedure to appoint an evaluation committee that was tasked to assess the fulfillment of the terms of the participant and the contracting authority to recommend the best offer. This concept ZZVZ leave now, when the establishment of a commission usually voluntary, except in the case where the estimated value of the contract exceeds 300 million Czech crowns.

Changing existing contract Law on public procurement fundamentally alter the contract did not allow for the public contract in a material way, such as the subject contract. ZZVZ However, the possibility of changing the contract expands and allows to change the contract and in general terms the scope, services or works, other commercial and technical conditions, or even in person contractor during performance of a public contract. A condition of such changes to the contract is the fact that the contracting authority in advance the possibility of changing the contract in the tender documents reserves and determines precisely the conditions and subject to possible change. Amendments to the contract must be no change in the nature of a public contract. Moreover, it is still possible to modify the contract in an unsubstantial way; What means unsubstantial way changes the contract provides ZZVZ.

Question of offset of the extra work and canceled work ZZVZ (as well as the existing Public Procurement Act) issue of counting on additional work or canceled work is excluded.

Additional supplies, services and works Provision of additional supplies, services or works from the contractor the original procurement is not considered a substantial change in the contract, provided that they are necessary and for economic or technical reasons it is not possible to change supplier or a change of supplier for the submitter pose significant difficulties or increased costs significantly, and if the value of additional supplies, services or works does not exceed 50% of the original commitment. In the event that will be carried out more such additional supplies, services or works, the sum of all decisive.

Design competition Design competition is a special kind of procurement procedure, whose purpose is to provide professional design, project or plan, and therefore it is most used in architecture, engineering and urban planning. Legislation contained in ZZVZ is generic and rather brief, and should be supplemented by implementing a document issued by the Ministry for Regional Development.

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