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.
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.