COVID-19 Outbreak: Does the Public Procurement Mechanism Apply?

In light of the COVID-19 outbreak, it is obvious that certain exemptions from the general principles under public procurement regulations, in both the EU and Serbia, are to be triggered.  In this regard, the relevant derogations laid out in the EU acquis and the Serbian Public Procurement Act[1] (“PPA”), as well as the new Public Procurement Act[2] (“New PPA”), call for closer examination.

EU framework

EU Directive 2014/24/EU on public procurement (“PP Directive”), prescribes that contracting authorities may award public contracts by a negotiated procedure without prior publication in case of extreme urgency.  This exemption is applicable only if it is “strictly necessary where, for reasons of extreme urgency brought about by events unforeseeable by the contracting authority, the time limits for the open or restricted procedures or competitive procedures with negotiation cannot be complied with[3]. The circumstances invoked to justify extreme urgency shall not, in any event, be attributable to the contracting authority.

With more than 150,000 cases confirmed worldwide, the World Health Organization (WHO) has declared coronavirus COVID-19 a pandemic, and in turn labelling the situation as one of extreme urgency:  lending all the more support to the claim that triggering these derogations is the appropriate course of action.

National framework

Exemption from the use of the negotiated procedure without prior publication is also recognized in Serbia, both by the New PPA, and the current PPA which is to be repealed on June 30, 2020.

Article 36 of the PPA defines situations in which a contracting authority is permitted to conduct a negotiated procedure without prior publication. In order to do so the following requirements must be fulfilled:

  • extreme urgency is caused by extraordinary circumstances or events unforeseeable by the contracting authority;
  • the contracting authority cannot comply with the time limits for the (i) open procedure, or (ii) restricted procedure;
  • the circumstances invoked to justify extreme urgency shall not, in any event, be attributable to the contracting authority.

In a similar fashion, Article 61 of the new Public Procurement Act, which is to come into force on July 1, 2020, requires fulfillment of the following criteria:

  • the procedure is conducted to the necessary extent;
  • due to reasons of extreme urgency brought about by events unforeseeable by the contracting authority;
  • the time limits for the: (i) open procedure, or (ii) restricted procedure, or (iii) competitive procedure with negotiation, or (iv) negotiated procedure with publication cannot be complied with,
  • the circumstances invoked to justify extreme urgency shall not, in any event, be attributable to the contracting authority.

Consequently, an alternative approach, in the event there is an urgent need to procure services or supplies which are not immediately required, is to invoke the provisions which provide for an expedited procurement timetable compared to the open, restricted and competitive procedure with negotiation.  Nevertheless, as the global outbreak of coronavirus COVID-19 was unforeseeable and the need to protect the public is of critical national importance, there is a clear and strong case for invoking these derogations, rather than turning to expedited procurement timetables.

[1] “Official Gazette of the Republic of Serbia”, Nos. 124/2012, 14/2015 and 68/2015

[2] “Official Gazette of the Republic of Serbia”, No 91/19

[3] Article 32 of Directive 2014/24/EU of the European Parliament and of the Council of 26 February 2014 on public procurement and repealing Directive 2004/18/EC

 

For more information, please contact us via covid19@geciclaw.com