Publication of Law on Public Procurement

On 14 July 2016, the Belgian Official Journal published the Law of 17 June 2016 concerning public procurement (Wet van 17 juni 2016 inzake overheidsopdrachten/Loi du 17 juin 2016 relative aux marches publics; the “Law concerning Public Procurement”). The Law concerning Public Procurement, which was adopted by the Chamber of Representatives on 12 May 2016 (See, VBB on Business Law, Volume 2016, No. 5, p. 16, available at www.vbb.com), implements into Belgian law Directives 2014/24/EU and 2014/25/EU.

Containing 193 Articles, the Law concerning Public Procurement is significantly more elaborate than its predecessor, the Law of 15 June 2006 (Wet van 15 juni 2006 inzake overheidsopdrachten en bepaalde opdrachten voor werken, leveringen en diensten/Loi du 15 juin 2006 relative aux marchés publics et à certains marchés de travaux, de fournitures et de service), which consists of 80 Articles. Although the Law concerning Public Procurement maintains a number of provisions stemming from the Law of 15 June 2006, it introduces important innovations, some of which are discussed below.

Greater Flexibility in Choice of Tender Procedures

First, while the Law concerning Public Procurement no longer uses the distinction between “adjudication” (aanbesteding/adjudication) and “call for tender” (offerteaanvraag/appel d’offres), it continues to put forward the so-called “open procedure” (consisting of one phase in which any interested party can submit an offer) (openbare procedure/procedure ouverte)  and the so-called “restricted procedure” (in which interested parties first have to submit a request for participation) (niet-openbare procedure/procedure restreinte) as the standard procedures to be used by contracting authorities. However, compared to the situation under the Law of 15 June 2006, the open and restricted procedures are no longer given absolute priority.

The Law concerning Public Procurement thus marks an important shift in the choice of tender procedures by promoting the use of more flexible procedures, other than the open and closed procedures. In line with the intention of the European legislator to provide greater flexibility for contracting authorities in their choice of procurement procedure and to further the use of procedures that contain an element of negotiation, the Law concerning Public Procurement relaxes the conditions for the use of the so-called “competitive procedure with negotiation” (the successor of the procedure previously known as the negotiated procedure with prior publication) (mededingingsprocedure met onderhandeling/procédure concurrentielle avec négociation) and the competitive dialogue (concurrentiegerichte dialoog/dialogue competitive). The Law concerning Public Procurement further introduces a new, flexible tender procedure, the so-called “innovation partnership” (innovatiepartnerschap/partenariat d'innovation).

The innovation partnership is a procedure specifically designed for situations where a need for the development of an innovative product or service or innovative works and the subsequent purchase of the resulting supplies, services or works cannot be met by solutions already available on the market. In such situations, the new procedure allows contracting authorities to establish a long-term innovation partnership for the development and subsequent purchase of a new, innovative product, service or works provided that these can be delivered to agreed performance levels and costs, without the need for a separate procurement procedure for the purchase. According to the parliamentary report for the Law concerning Public Procurement, the introduction of this procedure is intended to give a positive signal to innovative sectors.

Award Criteria

A second innovation is the new approach in applying the award criteria. The Law concerning Public Procurement provides that contracting authorities should award their contracts to the most economically advantageous tender. While under the current regulatory framework the term “most economically advantageous tender” refers to the offer with the best price-quality ratio, the meaning of this term is significantly broadened under the Law concerning Public Procurement. Accordingly, a contracting authority can determine the most economically advantageous tender on the basis of criteria of its choice. These can include price, cost, and/or price-quality ratio.

Thus, even though the Law on Public Procurement no longer uses the concept of “adjudication”, contracting authorities still remain free to award a contract based on price as the sole award criterion. The preparatory works of the Law concerning Public Procurement explicitly state that, in the case of highly standardised products such as needles for hospital use, it seems likely that contracting authorities will prefer to use price as the sole tender criterion, as it suffices to refer to the relevant standards in the technical specifications in order to ensure the desired quality. By contrast, contracting authorities using the competitive dialogue or innovation partnership procedures are obliged to award contracts on the basis of the price-quality ratio and are not authorised to award the contract on the basis of price alone.   

The Law concerning Public Procurement generalises the use of tender criteria, which become applicable regardless of the tender procedure used. However, for tenders of limited value and in specific circumstances in which the negotiated procedure without prior publication is applied, contracting authorities are not bound by the rules on award criteria.  

Entry into Force

Most of the provisions of the Law concerning Public Procurement will enter into force only on a date determined by a Royal Decree yet to be adopted. However, three Articles already entered into force on 27 July 2016.  Pursuant to these provisions, contracting authorities will only be allowed, as far as a number of products, services and buildings listed in a Royal Decree are concerned, to purchase these with a demonstrated high energy efficiency performance. However, even the Articles that have already entered into force still have to wait for the publication of a Royal Decree in order to become operational.