Public Procurement Act (2006) enters into force on 1 July 2013

The public procurement act and related implementation measures’ effective entry into force is finally set for 1 July 2013. This news comes with the publication, on 5 June 2013, of the 2 June 2013 Royal Decree.

1. Regulatory framework

The regulatory framework applicable to public contracts will be as follows:

  • Act of 15 June 2006 regarding public contracts and certain contracts for works, supplies and services (Belgian Official Journal of 15 February 2007)
  • Royal Decree of 15 July 2011 regarding procurement procedures in classic sectors (Belgian Official Journal of 9 August 2011)
  • Royal Decree of 16 July 2012 on procurement procedures in special sectors (Belgian Official Journal of 11 February 2013)
  • Royal Decree of 14 January 2013 on general execution rules (Belgian Official Journal of 14 February 2013)

It should be noted that the Act of 16 June 2006 regarding the procurement procedures, information to candidates and tenderers, as well as standstill for public contracts and certain contracts for works, supplies and services (Belgian Official Journal of 15 February 2007) will not enter into force on 1 July 2013. With regard to legal protection, the applicable articles of the Act of 24 December 1993 regarding public contracts and some contracts for works, supplies and services will temporarily remain in effect.

2. Implementation measures

The new regulatory framework must be applied starting 1 July 2013 to

  • all public contracts and contracts/concessions for public works announced (or that should have been) from this day onwards in TED or the Belgian Public Tender Bulletin (‘Bulletin der Aanbestedingen/Bulletin des Adjudications’), and
  • public contracts and contracts/concessions for public works for which no notification is mandatory and invitations to submit a request for participation or an offer are sent from this day.

The old regulatory framework remains applicable on all contracts for which a notification is published before 1 July 2013, or for which the procedure has been started by an invitation to submit a request for participation or an offer, sent out to the selected candidates before this day.

Regarding the contracts that have been awarded and are in execution, the further execution of the contract is controlled by the old regulatory framework, especially the Royal Decree of 26 September 1996 regarding the general contracting conditions.

3. Important changes

The most important changes that come with the public procurement legislation’s entry into force can be summarised as follows:

  • Thresholds increase for applying (1) the negotiation procedure without publication and (2) the order procedure: these thresholds are increased to EUR 85,000 and EUR 8,500 respectively, for classic sectors, and EUR 170,000 and EUR 17,000 for special sectors.
  • The introduction of central purchasing bodies (already entered into force):This allows contracting entities to entrust their purchases of works, supplies and services to other contracting entities. The public procurement legislation does not apply to the relationship between such entities.
  • Framework agreement for the classic sectors: this agreement is already used in practice, although not explicitly foreseen in the legislation. The new legislation explicitly allows the possibility to conclude framework agreements and reinforces the applicable legal framework.
  • The competitive dialogue (already entered into force): “the procedure in which any interested contractor, supplier or service provider may request to participate and whereby the contracting entity conducts a dialogue with the candidates admitted to the procedure, to find one or more solutions answering the needs of the contracting entity to and based on which the selected candidates will be invited to submit a tender”. This procedure entered into force in September 2011.
  • A dynamic purchasing system which introduces a fully electronic process to acquire commonly used supplies and services. Such system may be used for catalogue offers such as work clothing, cleaning services, office supplies, but also larger equipment such as vehicles.
  • An electronic auction system which can be used to ask participants to a framework agreement or a dynamic purchasing system for a new bidding.
  • The mandatory verification and payment terms applicable to the paying contracting entity, from which no deviation in the specifications is possible. Failure to respect these mandatory terms brings severe consequences, as the contractor will be automatically, and without notice, be entitled to the payment of interest. For contracts awarded as of 16 March 2013 the contractor will also be entitled to a recovery fee of EUR 40.
  • The limitation of the contracting entity’s unilateral right to change the contract during its execution: Apart from the eventual possibility to apply a negotiated procedure without publication to assign additional works, supplies or services during the contract’s execution, the contracting entity’s unilateral right to change the contract is restricted to changes limited to 15% of the contract’s original value. Furthermore, the contract’s subject must remain unchanged and appropriate compensation for the contractor must be granted if necessary.

Other than these important changes, the new public procurement legislation also introduces, amongst others, new terminology and clarifications with respect to the applicable 1994 public procurement legislation.