Public procurement in relation to the coronavirus pandemic

On 1 April 2020, the European Commission published guidance on using the public procurement framework in the emergency situation related to the COVID-19 crisis (2020/C 108 I/01 – Guidance). The Commission’s Guidance explains the options for more flexibility in public procurement, which is particularly urgent in view of the current crisis.

The Commission states that the Guidance focuses on the procurement of special medical equipment such as ‘face masks and protective gloves, medical devices, notably ventilators,’ as well as ‘hospital and IT infrastructure’. The Guidance serves both generally to facilitate the legal interpretation of the European Public Procurement Directive (Directive 2014/24/EU – Public Procurement Directive) and is not limited in its scope of application to public contracts to tackle the Covid-19 crisis.

The Guidance simply serves to interpret the existing procedural rules, but does not come with any relaxation of the rules on procurement procedures. At German level, the Federal Ministry for Economic Affairs and Energy has already published explanations on the transposing provisions of the Act against Restraints of Competition and the Public Procurement Regulation in a circular dated 19 March 2020. Circulars and administrative regulations of some federal states for contracts below the thresholds are now also available.

Instruments for fast awarding of contracts

In the Guidance, the Commission essentially explains the possibilities for shortening the open or restricted procedure in cases of urgency and for conducting a negotiated procedure without prior publication of a contract in cases of extreme urgency. The arguments can be transferred to the essentially identical provisions of the national transposing laws.

Shortened deadlines in open and restricted procedures

The Commission initially notes that in urgent cases the Public Procurement Directive allows for a significant reduction in procedure deadlines. In particular, the Commission points out that:

1. For open procedures, a deadline of 35 days for the submission of tenders may be reduced to 15 days from publication of the tender.

2. In restricted procedures, the deadlines of at least 30 days for submitting the request for participation and for submission of the tender may be reduced to 15 and 10 days respectively.

Negotiated procedures in cases of extreme urgency

 

The Commission also points to the ‘negotiated procedure without publication’, as an instrument for fast awarding of contracts in extremely urgent cases. In doing so, the Commission stresses that this procedure departs from the principle of transparency under European law and therefore ‘the use of this procedure remains exceptional’ and to be applied under the strict conditions laid down in Article 32 of the Public Procurement Directive.

A negotiated procedure without publication allows the contracting authority to make direct and informal contacts and negotiations with potential contractors, e.g. by telephone or email, and therefore allows for particularly rapid awarding of contracts. The following is necessary:

1. First, an event ‘unforeseeable by the contracting authority’; this criterion is said to be met in urgent procurement cases due to the Covid.19 crisis.

2. There must also be ‘extreme urgency making compliance with general deadlines impossible’. This criterion has to be examined on a case-by-case basis even in the context of the COVID 19 crisis. Invoking extreme urgency will be ruled out if the award of the contract is possible within the deadlines of the accelerated open or restricted procedure.

3. Next, there must be a ‘causal link between the unforeseen event and the extreme urgency’. The Commission has stated that there is no doubt about this in any event when it comes to the ‘satisfaction of the immediate needs of hospitals and health institutions’ within a very short timeframe.

4. Finally, the Commission stresses that these are only bridging measures, ‘until more stable solutions can be found’. The negotiated procedure without publication is therefore a way of meeting ‘immediate’ needs. Long-term solutions such as framework contracts will be awarded through the regular procurement procedures, including accelerated procedures.

Incidentally, the Commission's Guidance is broadly in line with the statements of the Federal Ministry for Economic Affairs and Energy in the circular dated 19 March 2020 (starting on page 2 of the circular).

Conclusion

Whether the conditions for the urgent award of contracts are met must always be carefully examined on a case-by-case basis, as contracting authorities otherwise risk unduly restricting bidders’ rights.