Professional services, as well as large and technologically complex deliveries and supplies, entail certain intrinsic criteria for the selection of a suitable contractor, including the quality of services, financial strength and stability, and a responsible approach of the contractor to his performance. This is particularly true where the contractor's failure may have a material adverse impact on the contracting authority or on the public service.
A closer examination of the governmental draft of the amendment (the "Amendment") to Act No. 137/2006 Sb. on public procurement (the "Public Procurement Act"), and some of the measures proposed therein, raises the question of whether the draftsmen of the Amendment realize the risks that may potentially ensue from the combination of those measures if the Amendment is enacted. The risk-involving measures include, in particular, the following proposals:
- cancellation of economic and financial qualification criteria (mainly turnover and insurance) and their replacement with a mere affidavit of the contractor regarding his ability to perform the public contract,
- cancellation of the certificate of ISO quality management systems,
- cancellation of the possibility to limit the number of tenderers after the qualification round in restricted procedures, negotiated procedures with prior publication, and in fact also in the competitive dialogue procedure
On one hand, the proposed changes will result in an expansion of the pool of tenderers submitting their tenders, and also, in allowing access to public procurement procedures for smaller companies that may have hitherto been discriminated against by the economic and financial qualification criteria set by contracting authorities and who, as a rule, were disqualified by the contracting authorities as the weaker or less experienced tenderers. On the other hand, the changes may in fact substantially hinder the contracting authority from selecting the most economically advantageous bid. This assumption is based on the generally accepted view that "the cheapest does not necessarily mean the best". In the context of our practical experience, we believe that the proposed changes described above, if adopted in their current form, could very likely have the following consequences:
1. The contracting authority would have to place more emphasis on the specification of the technical qualification criteria, such as production capacity, referrals and the professional team. It is unlikely that an affidavit of the tenderer regarding his ability to perform the public contract could be of any relevant significance.
The practical issues will then include the question of adequacy and reasonability of these requirements, as well as their factual use within the performance of the public contract. Furthermore, the information value of the technical qualification will not be comparable with that of the financial criteria, which should illustrate the contractor's financial soundness, strength and stability.
2. The contracting authority would no longer be able to reduce the pool of tenderers through means of qualification requirements to ensure that those tenderers who remain are, in the contracting authority's view, most suitable in light of the subject matter of the public contract and are, amongst themselves, truly comparable in terms of strength, stability and practical experience, and to let these remaining tenderers compete with one another while emphasizing the price.
There is a risk that the contracting authority will receive bids that are incomparable in terms of subject matter or quality, or bids where quality and the warranty of feasibility may differ considerably. As a logical consequence, the contracting authority will, in these cases, choose unquantifiable, non-financial evaluation criteria that may be considerably less transparent and, as the case may be, less economically advantageous. In addition, the situation is further complicated by the current applicable prohibition of evaluation of the qualification criteria, which should remain in place with respect to professional advisory services where the quality depends substantially on the know-how and abilities of the supplier's professional team. This leads to practices (accepted by the Office for the Protection of Competition, but nonetheless unnecessarily complicated where contracting authorities, as opposed to directly evaluating the team and its members' expertise, evaluate the "methodology" of the suppliers' approach to the performance of public contracts.
3. Cancellation of the possibility to reduce the number of tenderers after the qualification round in restricted procedure and in negotiated procedure, with prior publication (or, additionally, in the competitive dialogue procedure), may have an adverse impact on the protection of the contracting authority's information.
In situations where contracting authorities wish to protect information that is otherwise made available to tenderers to enable them to prepare their tenders, the contracting authorities reduce the number of tenderers to ensure that such information is only disclosed to potential contractors who are actually competent to perform the public contract, and have a realistic chance of being selected by the contracting authority. The cancellation of the possibility to reduce the number of tenderers effectively extinguishes the main reason for the existence of the restricted procedure (as opposed to open procedure).
4. In negotiated procedures with prior publication, it will only be possible to reduce the number of tenderers in the course of the negotiation phase.
The reduction of the number of tenderers will be moved to the phase when the potential contractors have prepared and submitted their respective tenders. The contracting authority will have to consider and evaluate all the tenders, and negotiate with all the tenderers (potentially a large number of them – this will enlarge the administrative burden placed on the contracting authorities). The motivation of tenderers to bid, and subsequently to improve their bids during the negotiation, will depend, as a rule, on their number and on the evaluation criteria set by the contracting authority.
Although we fully support the government's efforts to strengthen the principles of transparency of the procurement procedures and the non-discrimination against tenderers for public contracts, we believe that, in the context of the arguments above, certain aspects of the changes proposed in the Amendment should be considered so as to allow the contracting authorities to consistently take account of the quality and capabilities of the tenderers, and subsequently evaluate the bids from an economically advantageous perspective.
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