In connection with the latest amendment to the Public Procurement Act, we would highlight the new obligations of the public contracting authorities and contractors concerning the publication of contracts, the prices actually paid, and the subcontractors used (§ 147a of Act No. 137/2006 Sb. on public procurement, as amended).

The interpretation guidance of the Czech Ministry for Local Development (available at: http://www.portal-vz.cz/CMSPages/ GetFile.aspx?guid=e0252a62-d123-46bca8c0- 85052fa12db5) ties these duties to the time of execution of the contract or the time of performance of the contract (with respect to the duty to publicise the price that was actually paid for the subject matter of the contract and the list of subcontractors), regardless of the time when the tender procedure in question was commenced. Thus, these duties may also apply to tenders that were commenced prior to the effective date of the latest amendment, i.e., before 1 April 2012.

Contractors – submission of the list of subcontractors after the performance of the contract

If a contract is performed after 1 April 2012, the contractor will be obligated to deliver a list of subcontractors to the public contracting authority, so that the latter may post the list on its profile.

The list should include all the subcontractors to whom the contractor paid more than 10% for the performance (or 5% in the case of a significant public contract). If the subcontractor is a joint-stock company, the list must also include an appendix containing a list of holders of shares representing more than 10% of the share capital. The time limit for producing the list of shareholders is 90 days prior to the date of submitting the list of subcontractors.

The list of subcontractors (with the list of shareholders attached, as the case may be) must be presented to the contracting authority within the time limits specified below.

  • If the term of the contract does not exceed 1 calendar year – the list is to be submitted within 60 days of the performance of the contract. In this case, the subcontractor's share is calculated from the value of the entire contract.
  • If the term of the contract exceeds 1 calendar year – the contractor is required to submit the list by 28 February of the next calendar year. In this case, the subcontractor's share is calculated from the part of the value of the contract that was paid by the contracting authority in a single calendar year (the amount paid by the contracting authority in a specific year will serve as a basis for the calculation of the share that was paid by the contractor to its subcontractors).

The obligation to submit a list of subcontractors does not apply to small public contracts, i.e., contracts the value of which does not exceed CZK 1 million net of VAT with respect to the supply of products and the provision of services or CZK 3 million net of VAT with respect to construction works.

The performance of a contract is generally understood to mean the discharge of the contractor's obligation to provide the requested performance and, on the other hand, the discharge of the contracting authority's obligation to pay the price for such performance. It follows from informal consultations with the Czech Office for the Protection of Competition (the "Office") that the publication of information that is tied to the moment of the performance of the contract should not be deliberately postponed until, for example, after payment of the retention money. We have been informed that the Office should issue a detailed interpretation guidance to clarify the phrase "performance of a contract" within the meaning of the Act on Public Procurement.

Public contracting authorities

1) Publication of contracts – after the execution of the contract

If the contract is executed after 1 April 2012 (i.e., after the effective date of the latest amendment), regardless of when the tender for the public contract was announced, the contracting authority must post the complete wording of each contract whose worth is equal to or greater than CZK 500,000 net of VAT, including its modifications and subsequent amendments, on its profile within 15 days of the date of its execution.

2) Publication of the price paid – after the performance of the contract

  • If the contract is performed after 1 April 2012, regardless of when the contract was executed, the contracting authority must post on its profile the price actually paid for the performance of each public contract whose worth is equal to or greater than CZK 1 million net of VAT with respect to the supply of products and the provision of services or CZK 3 million net of VAT with respect to construction works, by the deadlines specified below:
  • If the term of the contract does not exceed 1 calendar year – the actual amount of the full price for the performance is to be published within 90 days of the date of performance of the contract;
  • If the term of the contract exceeds 1 calendar year – the price paid for the previous year will always be published by 31 March of the next calendar year.

3) Publication of subcontractors – after the performance of the contract

Another obligation tied to the moment of the performance of a contract is the obligation to post on the contracting authority's profile a list of subcontractors to whom more than 10% of the price of the contract (or 5% with respect to significant public contracts) was paid for their performance. If the subcontractor is a joint-stock company, it is also necessary to publish a list of holders of shares representing more than 10% of the share capital. This obligation requires the cooperation of the successful bidder who has a duty to provide these data to the contracting authority one month before the contracting authority has to post them on its profile (details below).

For practical purposes, we offer a link to the methodological document of the Czech Ministry for Regional Development concerning the publication of tender announcements http://www. portal-vz.cz/getdoc/e0aee1e6-ab04-44d4- a37f-975323a1cd2a/Metodicke-pokynyk- uverejnovani-(1). We would highlight mainly Art. 3.1.2, which specifies the requirements concerning information to be published on the contracting authority's profile. With respect to executed framework agreements and DPS (dynamic purchasing system) contracts, the cited article stipulates on page 13 of the methodological document that: "In the case of framework agreements and DPS, the amount of the price actually paid and the list of subcontractors will be published on an aggregated basis for the dynamic purchasing system or the framework agreement. The Ministry for Regional Development is preparing, in cooperation with the Office for the Protection of Competition, a statement regarding the publication of public contracts awarded on the basis of a framework agreement or DPS; the statement will be reflected and subsequently incorporated in this methodological document."

On page 15, the cited article further points out a duty set out in § 8 (1) (g) of Decree No. 133/2012 Sb. on the publication of tender announcements and on the formal requirements concerning the contracting authority's profile: "The contracting authority will ensure that all the documents and information that were posted on the contracting authority's profile will be accessible to the general public, at no cost, for at least 5 years from the date of their posting (with the exception of notices in simplified below-threshold proceedings and the text part of the contract documents)." The posted contracts, the prices paid and the lists of subcontractors will thus have to remain posted on the contracting authority's profile for 5 years from the date of their publication.

Failure to publish or provide the requested information is subject to penalisation: the Office may impose a fine of up to CZK 20 million on contracting authorities, and a fine of up to CZK 2 million on contractors. It would be unreasonable to expect any leniency on the part of the Office in the case of failure to comply with one's obligations.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.