The Commission for Protection of Competition has issued an opinion(1) on public procurement and consortium agreements concluded between competitors in tendering and public procurement procedures.
The commission views consortium agreements as restrictive agreements, as they inevitably set prices and other commercial requirements for performing specific transactions. Therefore, such agreements must be submitted to the commission for an individual exemption.
The commission bases its analysis of the permissibility of such agreements on whether any of the parties to the agreement could have independently submitted a bid in the public procurement procedure in question. If any party is in a position to submit a bid independently (ie, it independently fulfils all tender criteria), such a bidder cannot be party to an agreement to submit a joint bid, and such an agreement will not be exempt. In other words, parties to an agreement can expect a favourable individual exemption decision only if they can prove that they fulfil all tender criteria jointly and demonstrate that the joint-bid submission results in some benefits to consumers.
Inconsistency between the commission's deadlines for adopting decisions (which are considerably longer) and public procurement deadlines (which are significantly shorter) constitutes a major problem. However, the commission deems there to be no inconsistency in the deadlines. It claims that a situation in which it does not clear an agreement (whose parties in the meantime enter into a public procurement contract) is purely hypothetical, as it has never occurred in practice.
The commission particularly stresses that the contracting entity itself may, for example, distort competition in a procedure by means of overly strict tender criteria or abuse of negotiation processes. In such a case, the commission would point out that the solution is not to form a consortium, but that bidders should instead seek protection under the Public Procurement Act.(2)
For further information on this topic please contact Srdjana Petronijevic at Moravcevic Vojnovic i Partneri in cooperation with Schoenherr by telephone (+381 11 320 26 00), fax (+381 11 320 26 10) or email ([email protected]).
This article was first published by the International Law Office, a premium online legal update service for major companies and law firms worldwide. Register for a free subscription.Endnotes
(1) See www.kzk.org.rs/kzk/wp-content/uploads/2012/10/MISLJENJE-JAVNE-NABAVKE-ZAJEDNICKA-PONUDA.pdf (in Serbian).
(2) See www.kzk.org.rs/kzk/wp-content/uploads/2012/12/Obavestenje-javne-nabavke.pdf (in Serbian).
