Hamilton Nyhetsbrev

New public procurement legislation – practical aspects from a supplier perspective

The new Public Procurement Act (the PPA) en­te­red in­to for­ce in 2017 and con­tains plen­ty of sig­ni­fi­cant changes com­pa­red to pre­vious le­gis­la­tion that are ne­ces­sa­ry for sup­pli­ers to be awa­re of.

Amendments in pub­lic contracts

There ha­ve pre­viously be­en no spe­ci­fic ru­les in the PPA re­gar­ding amend­ments of contracts. In the new PPA, ho­wever, the­re are de­tai­led ru­les in this re­gard. If a contract is amen­ded in bre­ach of the PPA, the contract can be decla­red in­ef­fecti­ve by the ad­mi­nist­ra­ti­ve courts. Naturally, it is ve­ry im­por­tant for a sup­pli­er to be fa­mi­li­ar with the­se new ru­les in or­der to as­sess whet­her or not a pro­po­sed amend­ment is per­mitted. The new ru­les al­so ap­p­ly to contracts en­te­red in­to be­fo­re 2017, which me­ans that all ex­is­ting pub­lic contracts are sub­ject to this new le­gis­la­tion.

Abnormally low pri­cing

Abnormally low ten­ders ha­ve pre­viously be­en pos­sib­le to ac­cept as it was up to the contracting aut­ho­ri­ty to de­ci­de whet­her or not an ab­nor­mal­ly low ten­der should be di­scar­ded. However, the new PPA sta­tes that ab­nor­mal­ly low ten­ders must be di­scar­ded un­less the sup­pli­er can pro­vi­de a sa­tis­facto­ry ex­pla­na­tion. Hence sup­pli­ers must ex­pect ques­tions from contracting aut­ho­ri­ti­es re­gar­ding low pri­cing mo­re of­ten than be­fo­re. It is the­re­fo­re im­pe­ra­ti­ve for sup­pli­ers to know what ex­pla­na­tions are con­si­de­red sa­tis­facto­ry and what evi­dence might be requi­red to sup­port them. The ad­mi­nist­ra­ti­ve courts ha­ve al­re­a­dy de­ci­ded a num­ber of ca­ses re­gar­ding ab­nor­mal­ly low ten­ders, and mo­re ca­ses are su­re to come.

Case law

Public procu­re­ment is an area of law which to a lar­ge ex­tent is go­ver­ned by ca­se law. Due to the ma­ny changes in the new PPA, the need for furt­her le­gal pre­ce­dents is ob­vious. New in­te­re­s­ting ca­se law can be ex­pec­ted in 2018.