LMS Presentation – Romania

Romania has transposed the 2014 Directives through 3 separate laws, Law no.98/2016 on public procurement, Law no.99/2016 on utilities procurement, Law no.100/2016 on concessions. The 4th law Law no.101/2016 transposes separately the Remedies directive, which were previously transposed in the Public Procurement Law 2006 together with the substantial law. On top of these, the Government has issued Government decisions to complement the Laws. The decision to transpose through separate laws was criticised in practice, due to the complexity and number of sources of law that need to be consulted.

The Laws on public procurement are at the top of the sources of national law, as they are adopted by the Parliament. Next in the hierarchy are Governmental decisions – meant to detail the provisions of the law but sometimes practically adding to the law by restricting the interpretation of the provisions of the law. The same practice was adopted before, under the 2006 regulations. Unfortunately, there is a lack of coordination with the CJUE case law and the interpretation thus given to the Directives. The Orders of the President of the National Agency for Public Procurement (restructured with this occasion) are also bearing importance in the practice of public procurement, as they guide public entities in much more detail.

Romania has been using “gold plating”when transposing the directives into national law. In the absence of a coherent and long-established national legal regime applicable to public procurement previously to the EU accession, the option of the Romanian legislator to transpose almost identically the provisions of the EU Directives in this field and to extend them to almost all public procurement contracts is base on the fear of corruption. This is not to say that the PP legal regime has been completely in line with EU rules – in numerous cases there were transposition errors, delays (with regard to remedies), and challenges embedded in the national context such as limited institutional capacity, corruption, lack of experience in the newly created institutional framework, and so on. The precautionary approach in a context of widespread corruption, is based on the intention of the legislator being to allow as little discretion as possible to contracting authorities in the award of PP contracts. Only contracts bellow 30000 Euros are subjected to national rules and thus direct procurement. Copy-paste method is used for certain provisions, but not all the way through. At the transposition phase major inconsistencies with national law were left undetected and they start to show up in practice – for instance the possibility to conclude a public procurement contract in case of waste management.

The main provisions of gold plating regard the extension of the procedures (although simplified a bit) to contract below the thresholds, down to the national threshold of 30000 Euros; The threshold for local authorities was removed, it is the same one for central and regional/local authorities; the imposition of a participation deposit for tenderers.

The transposition has been done with few weeks delay, and it seems correct at first(s) sight(s), with the observations made above. However, the critics say that the package was prepared by a lawyer’s firm for the ANAP, the supervisory procurement agency, and that the moment was not used for policy decisions by the Government during the transposing phase. The mostly copy-paste transposition followed by detailed rules in secondary legislation restrict the discretion of contracting authorities to a minimum. An abundance of executive orders of the ANAP describe in detail every step that has to be taken by contracting authorities. Private entities financed by EU structural funds are required to follow a mirror procedure, supposedly less bureaucratic, but practically the procedure from the Directive in a nutshell.

The current institutional arrangement in public procurement is composed of the following public bodies:

  • The National Agency for Public Procurement (hereafter NAPP) is the institution responsible for monitoring contracting authorities throughout the entire PP process. Its role is felt before the publication of the tender documentation, which is thoroughly monitored by the institution, with recommendations for contracting authorities. The decision to publish the tender documentation is taken by the NAPP when the tender documentation is considered to be in line with the legal requirements, either of EU nature or national. It’s ‘power’ over contracting authorities is rather large, since it can order them to submit any documents, to suspend/annul any PP procedure pending verifications, to provide any information related to public procurement, etc. This monitoring takes place for all PP contracts above €30,000 (direct procurement threshold) and it is especially attentive to contracts financed from Structural Funds. Following the review/monitoring procedure, NAPP has to issue the acceptance for initiating the award procedure or to inform the contracting authority with regard to the errors found in the award documentation and the reason why the award documentation is not in conformity with the law. This ex-ante control has reduced the award documentations that are not conforming to the law, but has also reduced any “creativity” of the contracting authority when it comes to using the most advantageous economic tender criteria or out-of-the-ordinary qualification and selection criteria.
  • The Management Authorities for Structural Funds, organized within different field ministries, are competent for an ex post control of the way in which payments from Structural Funds Grants have been done, and this includes verifying the public procurement procedures in terms of irregularities. The control mechanism is very important in practice and generates a lot of litigation.
  • The National Council for Solving Legal Disputes (first instance review body in PP matters, hereafter the Council). The nature of the Council, considered an administrative (quasi-judicial) body or a special jurisdiction similar to a tribunal in the common law system, has resulted in national debates regarding its competence in relation to the courts of law. Any aggrieved participant in a PP procedure can choose to submit its complaint either with the Council or with a court of law. The decisions issued by the Council are also reviewable by the courts.
  • The courts of law – the special units of administrative and fiscal law at tribunals, Courts of appeal and at the Highest Court of Cassation and Justice are competent to rule on public procurement procedures, in first instance or in recourse correspondingly.