Public procurement from the perspective of the contractor

When taking part in a public tender, it is necessary to be aware of the fact that preparing an offer that meets the criteria specified in the terms of the contract is only half way to success.

Too little attention is paid to the formation of the offer and development of cooperation in the event of joint bidding in order to avoid exclusion from the tender and further negative consequences resulting from f. ex. provisions of competition law.

Antitrust regulations, especially ones concerning concluding agreements restricting competition, are enforced strictly in case of the collusive biddings.

It is important that entrepreneurs are aware of which actions should be taken and which behaviours to avoid in the course of tender procedure especially at the stage of negotiation with potential co-workers in order not to be exposed to the accusation of concluding an agreement restricting competition.

Effects of violation of regulations

Violation of antitrust regulations in the course of applying for the contract may cause a number of extremely adverse consequences, not only in the field of administrative law but also civil and criminal. The most serious threats include:

  • exclusion of the entrepreneur from the tender procedure;
  • termination of the tender contract that has already been concluded;
  • imposition of a fine by the President of the Office of Consumer and Competition Protection in the amount of up to 10% of turnover achieved in financial year preceding the year of imposing the fine;
  • no possibility of applying for a public contract in the future;
  • civil law liability towards other bidders that were not subject to collusion, f. ex. on the basis of regulations on combating unfair competition;
  • liability for damages against the Ordering party;
  • criminal liability of the entrepreneur’s representatives responsible for concluding bid rigging (the offense of disrupting the public tender is punishable by imprisonment of up to 3 years).
The most common mistakes and omissions

In the proceedings before the President of the Office of Consumer and Competition Protection, events and entrepreneurs’ activities that may seem to be inconspicuously insignificant, may prove the conclusion of an agreement restricting competition. The actions may be as follows:

  • conclusion of consortium agreement, cooperation agreement or other similar agreement providing for making a joint offer by entrepreneurs who could have made the individual offer;
  • conclusion of agreement on subcontracting between the entrepreneur making an offer in the tender and an entity who could have also made the individual offer;
  • making a formal or informal division of public procurement market between entrepreneurs;
  • resignation from participation in a tender by one of the entrepreneurs in exchange for a specific advantage;
  • disclosure of the offer price to other bidders before the deadline for submission of offers;
  • obtaining the price offers of the competitors unlawfully;
  • conducting negotiations (especially informal) on results of a given public procurement between entrepreneurs interested in submitting competitive offers in the tender;
  • establishing compensation between bidders for one of the entrepreneurs in the event of selecting the offer of the second of them;
  • tacit consent to the collusion bidding even without active participation.

Secure Business Program

As part of the Secure Business Program, RGW offers legal audit in the area of compliance of the tender policy with the relevant provisions of law, including competition and criminal law.

Both the general tender policy of the enterprise and plans as to the offer to be made in the proceedings to receive a public contract may be assessed under the Secure Business program.

The analysis prepared at your request will include a detailed calculation and a review of behaviours and procedures that could lead to violation of public procurement regulations.

In addition, the analysis presented by RGW will include recommendations on the application of legal measures to mitigate potential legal risks tailored to the needs and specific situation.

The next stage of providing legal assistance under the Secure Business program is implementation of recommendations presented in the legal opinion. The implementation of preventive measures may occur, inter alia, through:

  • preparation of detailed internal procedures aimed at eliminating risk of violating applicable laws;
  • preparation of necessary annexes to contracts with contractors;
  • carrying out the process of withdrawal or termination of agreements that could be considered as agreements restricting competition;
  • preparation of draft or amendment of a consortium agreement, cooperation agreement or other regarding the submission of joint tender offer;
  • preparation of draft or amendment of contracts for subcontracting as part of public procurement;
  • preparation of an application to the President of the Office for Consumer and Competition Protection as part of the procedure of leniency and representing before the Office in the case.