PUBLIC PROCUREMENT LAW IN POLAND – A BRIEF OVERVIEW

Prof. Dr. Piotr Bogdanowicz

Organisations

There are three main institutions involved in public procurement procedures in Poland: Public Procurement Office (the “PPO“), National Chamber of Appeals (the “Chamber“) and Public Procurement Court – Warsaw District Court (the “Court“).

PPO plays a policy making and co-ordinating role for the whole public procurement system. The President of the PPO is appointed by a minister responsible for economy. The Chamber is the first instance body in the review proceedings against decisions of contracting authorities. Lastly, the Court is the second instance body in the review proceedings, and it is responsible for hearing appeals against the decisions of the Chamber. The Court is a relatively new institution, introduced in its form with exclusive jurisdiction over all public procurement cases only in the newest Public Procurement Law Act of 11 September 2019 (the “PPL“). The Court started operating on the date of the PPL’s entry into force, which was 1 January 2021. Prior to that, on the grounds of the old regime the appeal was submitted to the district court competent for the seat or place of residence of the contracting authority.

Rules and regulations governing public procurement in Poland

The PPL is a primary regulation on public procurement in Poland. It specifies the rules and procedures for awarding public contracts, legal remedies, control of the award of public contracts and the competent authorities with respect to matters addressed in the PPL.

Before the new PPL, the main statute regulating Polish public procurement matters – also transposing Directive 2014/24/EU and Directive 2014/25/EU (jointly referred to as the “EU Directives“) – was the Public Procurement Law Act of 29 January 2004 (the “PPL 2004“) (none of the EU Directives were transposed on time). It constituted a complex regulation which has been subject to nearly 50 amendments since its adoption in 2004, for which reason it was highly criticised. Hence, the derogation of the PPL 2004 and subsequently the introduction of the new PPL were strongly welcomed. The new Acts made it possible for the rules and regulations to be structured in a better way, while focusing on the quality of the transposition. They also took measures to improve previously criticized areas of the public procurement law in Poland, such as ineffectiveness of the available legal remedies.

The subject-matter of the new PPL covers, similarly to the PPL 2004, public contracts, utilities contracts, contracts in the field of defense and security and contests (concessions are regulated on a separate basis – see below). There are nine procedures for awarding public contracts. The primary ones are open tendering and restricted tendering. Contracting authorities may award contracts also by way of a negotiated procedure with publication, competitive dialogue, negotiated procedure without publication, single-source procurement procedure, request for quotations procedure (?), innovation partnership or by an electronic bidding procedure only under the circumstances specified in the PPL. The PPL provides for special regulations concerning the award procedures for utilities contracts and the contracts in the field of defence and security.

The two other major statutory regulations on the Polish public procurement system are the Public-Private Partnership Act of 19 December 2008 and the Act on Concession Contracts for Construction Works and Services of 21 October 2016 (purpose of the latter Act served the transposition of Directive 2014/23/EU).

A few regulations (ordinances) were also issued based on the delegation contained in the new PPL. They concern such issues as the record of the contract award procedure (protocol) or the types of documents that may be requested by the contracting authority from an economic operator in the course of a contract award procedure.3) Procedures

The PPL does not apply to public contracts and contests whose value does not exceed the PLN equivalent of EUR 30 000. As far as utilities contracts and contracts in the field of defence and security are concerned, the PPL applies to the awarding thereof only when the contract value is equal to or exceeds the EU thresholds.

There are nine procedures for awarding public contracts. The primary ones are open tendering and restricted tendering. Contracting authorities may award contracts by way of a negotiated procedure with publication, competitive dialogue, negotiated procedure without publication, single-source procurement procedure, request for quotations procedure, innovation partnership or by an electronic bidding procedure only under the circumstances specified in the PPL. The PPL provides for special regulations concerning the award procedures for utilities contracts and the contracts in the field of defence and security.

Contract award procedures are generally conducted in Polish, however in particularly justified cases contract authority may conduct them in a language commonly used in international trade or in a language of the country in which the contract is awarded.

Examples of gold-plating and wrongful transposition

Regarding the transposition of the EU Directives Poland in many cases took the line of the least resistance, used a copy-out approach, and rarely went beyond their provisions. Consequently, there are not many provisions in the PPL which could be described as an example of the so-called gold-plating.

A notable example could be however the case of the regulation regarding public contracts between entities within the public sector, i.e. in-house rules. In the latter case, under Directive 2014/24/EU these rules are set forth in Article 12 as falling outside the scope of Directive 2014/24/EU. Under the PPL, if the conditions for awarding or concluding a public contract between entities within the public sector are met, the application of the PPL is not excluded but this allows the contracting authority to apply the so-called single-source procurement procedure. Additionally, the amount of required activity performed by a controlled legal person consisting in the performance of tasks entrusted to it by the contracting authority was increased from 80% to 90%.

On 9 June 2021, the European Commission acting pursuant to Article 258 of the Treaty on the Functioning of the European Union brought a matter before the Court of Justice of the European Union[1], claiming that Poland has failed to fulfil its obligation under the Treaty by failure to properly transpose the EU Directives (2014/24/EU, 2014/25/EU, 2014/23EU). According to the Commission, polish public procurement rules and regulations are not fully compliant with the EU law in the matter. Polish public procurement rules exclude 2 types of procurement from the scope of application of their application. These are: contracts for the production and distribution of certain official documents and banking resolution contracts. While the EU Directives allow certain exemptions for contracts awarded without competitive tendering, the Commission considers that they do not apply to the broad categories of contracts excluded under Polish law. In particular, the Commission considers that the Polish exemption for the production and distribution of public documents and banking resolution services infringes EU law.

[1] The European Commission’s press release on 9 June 2021, “Public procurement: Commission is referring Poland to the Court of Justice of the European Union for failure to comply with EU public procurement rules”, https://ec.europa.eu/commission/presscorner/detail/pl/ip_21_2787, latest access on 22 July 2021.

Discretion exercised by Poland in transposition regarding options left open under Directive 2014/24/EU

Poland has already exercised the right of discretion while transposing EU Directives in 2016 and the introduced provisions were not substantially changed in the new PPL. Examples of discretionary use of the options left open are:

• negotiated procedure without prior publication – the list of circumstances that justify this procedure is shorter than a corresponding list set forth in Article 32 of Directive 2014/24/EU,
• the rules regarding central purchasing bodies (this corresponds to the discretion given to Member States envisaged under the third paragraph of Article 37(1) of Directive 2014/24/EU),
• exceptions from the obligation to use the MEAT award criterion given to public finance sector units, state organisational units without legal personality, and their associations, if certain conditions are met (the ability to use solely the price criterion),
• sub-contracting (the EU Directives allow Member States to exercise many options in this field).