On 1 April 2020, the European Commission (the "Commission") issued a Communication entitled Guidance from the European Commission on using the public procurement framework in the emergency situation related to the COVID-19 crisis (the "Communication").
The Communication serves as a reminder to contracting authorities in Europe on the alternatives allowed by the current EU public procurement legislative framework in urgent emergency situations akin to the COVID-19 pandemic. It also contains crucial guidance on how the Commission is minded to interpret and apply the relevant provisions in the legislative framework to the current crisis.
This note attempts to go over the options set out by the Commission in the Communication, but it also sets out the Commission's guidance on how to apply those options. This note will then proceed to an overview on how Malta is approaching emergency procurement during this current crisis.
A. The Commission's Communication
The Communication outlines the following options to contracting authorities:
- Accelerated procedure
- Negotiated procedure without prior publication
- Alternative and innovative solutions
The Commission recommends contracting authorities to pursue a multi-stage strategy for their procurement requirements: negotiated procedures should be resorted to for immediate and projected short-term needs, while the accelerated procedure is used to address medium-term needs.
1. Accelerated Procedure
The EU public procurement legislative framework allows the shortening of standard time limits applicable to the open and restricted procedures in cases of a "state of urgency [which] renders impracticable the time limits" in the law.
In the case of the open procedure, the standard time limit for the submission of bids can be shortened from 35 days to 15 days. In the case of the restricted procedure, the standard time limit for the submission of bids can be shortened from 30 days to 10 days, but only if it was preceded by a request for participation, whose time limit can also be in turn shortened from 30 days to 15 days.
Contracting authorities are reminded that the reasons for resorting to the accelerated procedure have to be duly substantiated and available to bidders in the publication notices and/or the procurement documentation.
The Commission recommends the use of the accelerated procedure during the current pandemic for it "complies with the principles of equal treatment and transparency and ensures competition even in cases of urgency". However, it points out that the accelerated procedure might not be appropriate where the "immediate needs" of contracting authorities in a "matter of days, even hours, if necessary". That is where the other options highlighted by the Commission might be more appropriate.
2. Negotiated Procedure without Prior Publication
While the negotiated procedure without prior publication has become the procurement procedure of choice in health and medical procurement during these challenging times, it is perhaps beneficial for contracting authorities (but also for economic operators) to take stock of the Commission's approach to its use at this time.
The Commission has taken a reassuringly flexible approach in the Communication on the interpretation of the provisions relating to negotiated procedure without prior publication in the EU public procurement legislative framework, principally, the Classic Directive 2014/24/EU and the Utilities Directive 2014/25/EU.
The Commission perceives the current COVID-19 crisis as a situation of "extreme and unforeseeable urgency"—one of the instances where contracting authorities may resort to the exceptional negotiated procedure without prior publication.
The Commission boldly states that in such cases of "extreme and unforeseeable urgency" the EU public procurement framework does not, in its view, contain "procedural constraints" for procurement by contracting authorities. It reminds contracting authorities that under the negotiated procedure without prior publication:
- Contracting authorities may negotiate directly with potential contractor(s);
- There are no publication requirements;
- There are no time limits;
- There are no minimum number of candidates to be consulted;
- There are no other procedural requirements.
The Commission encouraged contracting authorities, who have elected to resort to the negotiated procedure, to contact potential contractors in and outside the EU by phone, email or in person; to hire agents that have better contacts in the markets; to send representatives directly to the countries that have the necessary stocks and can ensure immediate delivery; and to contact potential suppliers to agree to an increase in production or the start or renewal of production.
The Commission also offered its guidance on how to interpret the essential requisites for the case of "extreme and unforeseeable urgency" to subsist:
- Events unforeseeable by
the contracting authority in question. The Commission
takes the view that the daily increase in the number of COVID-19
patients requiring medical treatment constitutes an event which has
to be considered unforeseeable for any contracting authority. The
Commission writes that, in the current circumstances, the following
procurement requirements could not be foreseen and could not have
been planned in advance:
- specific needs for hospitals, and other health institutions to provide treatment;
- personal protection equipment;
- ventilators;
- additional beds; and
- additional intensive care and hospital infrastructure, including all the technical equipment.
- Extreme urgency making compliance with general deadlines impossible. The Commission writes that there is no doubt that the "immediate needs" in public health systems have to be met with "all possible speed". Contracting authorities were advised by the Commission that an assessment, on a case by case basis, has to be made to verify that it is indeed impossible to comply with the time limits in the EU public procurement legislative framework, including, the shortened time limits under the accelerated procedure.
- Causal link between the unforeseen event and the extreme urgency. Under this indent the Commission again states that there is no "reasonable doubt" that there is a causal link between the "immediate needs" of public health systems which need to be addressed quickly and the current COVID-19 pandemic.
- Only used in order to cover the gap until more stable solutions can found. The Commission warns that the negotiated procedure without prior publication can be used to address the "immediate needs" of public health systems and as a stop-gap solution.
3. Alternative and Innovative Solutions
The Commission points out that irrespective of concluding the formal procurement process quickly, whether through the accelerated procedure or through the negotiated procedure without prior publication, the contractor might still encounter difficulty to actually deliver or perform in view of: (i) the exceptional increase in demand of similar goods, products and services; and (ii) the significant disruption of the supply chain.
For these reasons, the Commission encourages contracting authorities to explore alternative and innovative solutions and to engage with the market in order to address the immediate needs of the public health system.
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