Poland approves changes in public procurement 2021

Poland - 

On January 1, 2021, a new law on public procurement, adopted by the Polish Parliament on September 11, 2019, entered into force, (Journal of Laws of 2019, item 2019) . The new regulation aims to organize the public procurement system and further harmonize it with EU law.

The text of the new act was prepared in cooperation with the Public Procurement Office, and considers as well the comments and remarks made during extensive consultations with participants in the public procurement system.

The new public procurement law is more transparent and well-ordered than the previous act. A division into material and procedural regulations was introduced, provisions common to all procurement procedures were distinguished, and a more detailed division into editorial units was introduced.

Key issues included in the new act - a response to the expectations of entities participating in the public procurement system

1. The legal basis for the state purchasing policy was introduced, which, after being adopted by the Council of Ministers, will define the planned activities and priority objectives in the field of public procurement over a 4-year period.

2. Emphasis was placed on the planning stage of public procurement procedures. A novelty is the introduction of the obligation to carry out a needs analysis before initiating the procurement procedure, as well as the possibility of conducting preliminary market consultations aimed at preparing the procedure, and informing potential contractors about the contracting authority's requirements. Published annual public procurement plans are to be updated on an ongoing basis so that they are a source of information for market participants throughout the period of their validity.

3. Procedures have been simplified, both those below the EU thresholds and those above these thresholds. Separate procedures were introduced, the conditions for participation in the procedure were simplified, and the grounds for exclusion from the procedure were clarified.

4. Solutions were introduced to balance the parties to the public procurement contract. First, the provisions of the new act include the basic provisions that must be included in the contract. The cooperation of the parties in the performance of the contract is now regulated by law. The new act also contains a catalogue of abusive clauses that are prohibited in the case of public procurement contracts.

5. Principles of indexation of contracts have been defined, as well as the rules of obligatory application of advance payments or partial payments in specific contracts.

6. The complaint procedure against KIO rulings was facilitated by reducing the fee for such a complaint and extending the deadline for its submission, rules for conducting inspections in the field of public procurement were introduced, and provisions were made to strengthen the role of the President of the Public Procurement Office.

7. Provisions were also introduced that shape the possibility and obligation of out-of-court dispute resolution by increasing the role of mediation and conciliation between the parties.

One of the most important changes in the public procurement law

a) new procedures for tenders up to PLN 130,000

The procedures introduced are aimed at simplifying the procedure and making it more informal in the case of low-value contracts. It leads to a streamlining of the process and greater accessibility for small entities.

b) provisions relating to public procurement contracts

The introduction of obligatory contractual provisions, as well as the catalogue of abusive clauses allow for greater legal certainty among the participants of the public procurement system. Reducing the number of risks transferred to contractors and balancing the position of the parties to the contract guarantees contractors greater predictability during the performance of the contract. In addition, the introduction of limits on the amount of contractual penalties, as well as the compulsory granting of advances and partial payments, removes barriers to access for small and medium-sized enterprises, which usually resigned from participation in the procurement procedure due to unfavorable contractual provisions.

c) out-of-court dispute resolution

The introduction of regulations relating to out-of-court dispute resolution with the participation of public finance sector entities is certainly a step towards accelerating the amicable settlement of controversies between the parties. Due to the provisions penalizing the violation of public finance discipline by representatives of public entities, the wider adoption of the application of out-of-court dispute resolution in the event of an optional choice of the procedural direction will require time and analyzes after a longer period of application of the new act will indicate how the practice has developed.

If you have any questions regarding the public procurement system in Poland, please contact us.