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22 March 2021
The COVID-19 pandemic has infected public procurement, creating new challenges for companies and public purchasers. At least in the short term, exemptions have become the rule, procurement procedures have gone almost completely electronic and new contracts have had to be 'COVID-19 secured'. Some of these measures have an expiry date, but others will likely remain.
Extraordinary times call for extraordinary measures. This also applies to public procurement law, especially if unforeseeable events trigger an urgent procurement need. The COVID-19 pandemic is considered an unforeseeable event. As outlined by the European Commission and several member states, the need for hospitals and other health institutions to provide treatment, personal protective equipment, ventilators, additional beds and additional intensive care and hospital infrastructure could not have been foreseen or planned. Therefore, exceptional and special procurement procedures are considered permissible. Unsurprisingly, many contracting authorities used these permissions extensively. Many applied accelerated procedures due to the urgency of the case and significantly shortened the deadlines for participation and tenders. This allowed for swift contract awarding.
Numerous procurements – from the supply of protective masks to consultancy contracts – were not put out to public tender but were tendered by applying the 'negotiated procedure without publication'. In these cases, the contacting authority negotiated directly with suitable companies without a prior call for tenders.
With respect to emergency awards, often only one company was approached and the contract was awarded directly based on exclusive acts. During the national lockdown especially, and when COVID-19 infection rates rose, many urgent purchases were processed in this way, quickly and without bureaucracy. In addition, many urgent needs were covered by adapting existing public contracts since, in exceptional cases, extensive changes to contracts subject to tender are permitted.
The COVID-19 crisis has also infected regular tenders in many areas. Purchasing bodies and suppliers must ensure that order processing is affected as little as possible, even when faced with COVID-19 restrictions. Parties must adjust their performance specifications accordingly and provide additional procedures which allow for COVID-19 measures. Bidders should provide for an appropriate risk surcharge and consider how the measures will affect their:
Many countries are experiencing a second or third wave of COVID-19 infection rates. This raises the question of whether accelerated procurement can continue.
This seems doubtful for several reasons. The crisis exceptions each presuppose that procurement takes place in connection with events that the purchasing body could not foresee. Clearly, the pandemic and the extent of the measures to be taken could not have been foreseen in Spring 2020. However, the duration and probability of a second wave in Autumn 2020 or Winter 2020 was quickly addressed.
Accelerated or emergency procedures may be used only to fill the gap until more stable solutions can be found. Regular award procedures (especially framework agreements) should be carried out for urgently needed services parallel to emergency procurement.
Accelerated procedures or procedures without prior publication result in less transparency and competition. Therefore, the chances of individuals being awarded a public contract are drastically reduced; only the fastest accelerated procedures have a chance of being awarded. Direct awards and exclusive negotiations practically exclude competition. The longer this persists, the more susceptible the system will be to corruption.
Therefore, there are good reasons for a return to normality in public procurement law.
For further information on this topic please contact Johannes Stalzer at Schoenherr by telephone (+43 1 534 37 50740) or email (email@example.com). The Schoenherr website can be accessed at www.schoenherr.eu.
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