Public procurement in the classic sectors A further step towards a new system

Indeed, very recently, a “Royal Decree of 15 July 2011 concerning the award of public procurements in the classic sectors” (“RD”) was published in the Belgian Official Gazette, as well as two laws dated 5 August 2011, to amend the Public Procurement Act of 15 June 2006 (“Public Procurement Act”). The date of entry into force of both this Royal Decree and the law of 5 August 2011, has not yet been determined, but its is expected that they will enter into force early 2012, within the framework and together with the Public Procurement Act (of 15 June 2006). The latter provides for a comprehensive reform of regulations on public procurement (the current dating back from 1993) within the classic sectors, and the water, energy, transport and postal services sectors, transposing also the non-mandatory rules of the Directives 2004/17/EC and 2004 /18/EC.

This report brings a brief overview of the key elements in the RD of 15 July 2011 and the law of 5 August 2011, amending and completing the Public Procurement Act (hereafter the “Law”), which are innovative comparing to the former and still current public procurement legislation.

Both, the Law and the RD completely transform the procedures that must be respected for the award of public works contracts, public supply contracts and public service contracts and public works concessions, in the classic sectors (as opposed to the special sectors, i.e. water, energy, transport and postal services), as currently in force by virtue of the royal decree of 8 January 1986. The Law further conforms the Public Procurement Act to amendments that have been enacted since that its publication. Although both acts aim to provide for innovation and clarification, several existing principles and terms are reiterated.

The Law as well as the RD introduce new terminology and its definitions. The RD, on its turn, clarifies the scope of certain important terms. For example, the RD recognizes the validity of market research, if it is provided prior to the initiation of any procurement procedure and does not lead to any kind of pre-negotiations with some enterprises nor does it prevent or distort competition.
Clarification by the RD is given to the term "variant" to demonstrate a clear distinction with the term "option". The “variant” is an alternative method of conception or execution of works, which covers all or part of the public procurement and should always be necessary for its execution (for example for a vehicle: a petrol motor with as variant a diesel). The option, however, is relative to the base project an element which is not strictly necessary and is even incidental to the execution of the procurement (for example, for a vehicle: the provision of a trailer hitch). Both the variant and the option are introduced at the request of the contracting authority or upon the initiative of the tenderer.
A novelty is the fact that the tenderer may submit offers for one or more lots, or use different modes of tendering by lot.
The RD also introduces rules regarding the use of electronic communication, and consequences of the transfer or the sharing of infected files.
By virtue of the Public Procurement Act, the RD now introduces a genuine system and rules for price adjustments, which will apply not only in respect of public contracts work but also public supply and public services contracts.

Regarding the publication of a contract notice, the main principles are maintained, except for the advertisement itself. The contracting authorities now have the opportunity to make improvements or amendments to the data that have been officially published without incurring the obligation to make a completely new publication.

Also with respect to the submission of requests to participate and the tenders, current general principles will still apply. However, new provisions were introduced when the contracting authority decides to permit or require the use of electronic means for the submission of requests to participate or tenders. In this case, the deadline for receipt of tenders may be reduced when the contract notice is drawn up online and sent electronically, or if the contracting authority offers unrestricted, direct, immediate and complete access to all contract documents through a website specified in the advertisement.
The Law now defines terms as “in writing”, “electronic means” and “tender documents”.

The RD specifically addresses new methods of awarding contracts. In principle, public contracts are awarded by (open or restricted) tender, negotiated procedure or competitive dialogue procedure.
In some cases, public contracts may be awarded by means of a negotiated procedure without advertisement, but, if possible, after consultation of several contractors, suppliers or service providers. This method may be considered when only irregular tenders were submitted or presented against unacceptable price conditions.
The competitive dialogue is a new procedure to award public contracts. It is allowed in very complex projects, when the contracting authority is not objectively able to define the technical means capable of satisfying its needs or is not objectively able to specify what the market can offer in the way of technical, financial or legal solutions, and it believes that the application of open or restricted procedures would not allow the award of such contracts. All contractors, suppliers or service providers may request to participate in this procedure, in which the contracting authority conducts a dialogue with the selected candidates to develop one or more solutions that meet its needs and its requirements and on which basis selected candidates are requested to submit an offer.
The Law provides for a new definition of the negotiated procedure with publication of a contract notice. All contractors, suppliers or service providers may request to participate, but only those selected are allowed to submit an offer. In addition, conditions of the contracts may be negotiated with the tenderers.

Furthermore, the RD contains provisions concerning specific and complementary contracts and procedures regarding the dynamic purchasing system, the electronic auction and the framework agreement, which are new in the Belgian system of public procurement.
The dynamic purchasing system is an electronic process for the implementation of a public tender or open tender. It is limited in time and is only intended for commonly used supplies and services (such as the acquisition of work clothes, printing services, purchasing and maintenance of vehicles ...). The system remains open throughout its validity to any supplier and service provider meeting the selection criteria and having submitted an indicative tender that complies with the specifications.
The framework agreement is an agreement between one or more contracting authorities or public companies and one or more contractors, suppliers or service providers, the purpose of which is to establish the terms governing contracts to be awarded during a given period, in particular with regard to price and, where appropriate, the quantity envisaged.
The electronic auction is only allowed if the price is the unique award criterion. If the conditions of the contract can be clearly specified and the contract relates to supplies or services for common use, this procedure can be set up to precede a negotiated procedure, when new invitations for framework agreements are launched, or in respect of contracts awarded within the dynamic purchasing system.

It is the aim of the Belgian authorities that the Public Procurement Act (of 2006) together with this RD and the Law will enter into force early 2012.