Public Procurement SeminarTrier, 15-16 July 2019

Implementation of Remedies Directives Administrative body (experiences and

lessons learned)

Goran Matešić

With financial support from the Justice

Programme of the European Union

EU LEGAL FRAMEWORK

2

MATERIAL DIRECTIVES

• 2014/24/EU PP for the public sector

• 2014/25/EU PP for the utilities sector

• 2014/23/EU Awarding of concessions

• 2009/81/EF PP for defence and security

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EU LEGAL FRAMEWORK

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DIRECTIVES ON LEGAL PROTECTION IN PP

• 89/665/EEC Remedies Directive for the publicsector

• 92/13/EEC Remedies Directive for the utilitiessector

• 2007/66/EC Amending both Directives

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EU LEGAL FRAMEWORK

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REASONS FOR ADOPTING DIRECTIVES 89/665/EEC AND 92/13/EEC

• Material Directives do not contain any specificprovisions ensuring their effective application

• National legal frameworks do not ensureproper (timely) elimination of violations

• Lack of legal remedies deters entities fromsubmitting tenders

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EU LEGAL FRAMEWORK

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• To open up public procurement to competitionin the EU

• To increase transparency and preventdiscrimination

• To ensure that appropriate procedures exist inall Member States to allow setting aside ofdecisions taken unlawfully

• To ensure compensation to those who havebeen harmed by violations

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EU LEGAL FRAMEWORK

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REASONS FOR ADOPTING NEW DIRECTIVE 2007/66/EC

• Mechanisms introduced by old Directives donot always ensure compliance with Communitylaw, ecpecially at a time when infringementscan still be corrected

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EU LEGAL FRAMEWORK

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• In order to combat the illegal direct award ofcontracts there should be provision for effective,proportionate and dissuasive sanctions. Therefore,a contract resulting from an illegal direct awardshould in principle be considered ineffective.

• Weaknesses were noted with regards to theabsence of a period allowing an effective reviewbetween the decision to award a contract and theconclusion of the contract in question.

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EU LEGAL FRAMEWORK

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2017 REPORT ON THE EFFECTIVENESS OF DIRECTIVES

• Directives remain relevant and continue to bring EU added value

• First instance judical administrative review bodies are more effective than first instance judicial instances in terms of duration of procedures and standards of review

• No need to amend Remedies Directive

• Need to promote cooperation between first instance review bodies

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EU LEGAL FRAMEWORK

CONTENTS OF DIRECTIVE 2007/66/EC

• a ten-day standstill period between the award decision and the publiccontract signature

• automatic debriefing – an obligation to inform all tenderers about theoutcome of tender procedures

• provisions related to interim measures for the purpose of correctingalleged deviations or prevent further damages

• setting aside of decisions taken unlawfully

• awarding of damages

• time limits for pre-contractual remedies

• sanctions for ‘ineffectiveness’

• the possibility to introduce alternative penalties via fines or the limitationof contract duration.

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EU LEGAL FRAMEWORK

CONTENTS OF DIRECTIVE 2007/66/EC

• Decisions taken by the contracting authorities must bereviewed effectively and, in particular, as rapidly aspossible (Art. 1),

• Legal protection may be provided by:

- a judicial body,

- a non-judicial body (decisions must be subject ofjudicial review or review by a court/tribunal withinthe meaning of Article 234 (267) of the Treaty).

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EU LEGAL FRAMEWORK

REVIEW PROCEDURES – GENERAL EU REQUIREMENTS

• Available at least to any person having or having had an

interest in obtaining a particular contract, who has been or

risks being harmed

• Ensure that effective and rapid remedies are available

• Contracts which fall within the personal and material

scope of the Directives

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EU LEGAL FRAMEWORK

„JUDICIAL BODY”

• whether a body is to be considered of a judicial nature is a matter of the EUand not of the national law;

• criteria, set in remedies directives:

- members of such an independent body shall be appointed and leaveoffice under the same conditions as members of the judiciary as regardsthe authority responsible for their appointment, their period of office, andtheir removal,

- at least the President of this independent body shall have the samelegal and professional qualifications as members of the judiciary,

- the independent body shall take its decisions following a procedure inwhich both sides are heard,

- decisions shall, by means determined by each Member State, be legallybinding.

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EU LEGAL FRAMEWORK

„JUDICIAL BODY”

• Additional criteria, set in ECJ cases:

C-54/96 (Dorsch Consult)

C-103/97 (Josef Köllensperger)

C-53/03 (Syfait)

C-96/04 (Standesamt Stadt Niebü)

C-246/05 (Häup)…

➢ body established by law

➢ permanent character

➢ binding decisions

➢ inter partes procedure

➢ application of the rules of law

➢ independent body

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NATIONAL FRAMEWORK

• Directives set minimal standards - efficiencyand timely protection, an independent body

• 98% of the legal framework is on MemberState

• 1st instance review body in Croatia- The StateCommission for Supervision of PublicProcurement Procedures

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NATIONAL FRAMEWORK

CROATIA AS CASE STUDY

STATE COMMISSION FOR SUPERVISION OF PUBLICPROCUREMENT PROCEDURES

• The State Commission is responsible for resolving legal disputesregarding public procurement, concessions and public-privatepartnerships.

• A review procedure before the State Commission is initiated by lodging anappeal and it is available to anyone having or having had an interest inobtaining a contract and who has been, or is at risk of being harmed byan alleged infringement.

• When deciding on the disputed legal issue, the State Commission actswithin the limits of the appellate reasons, while ex officio considerssubstantive violations of law namely listed in the Public Procurement Act.

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STATE COMMISSION

• State Commission has nine members, one ofwhom is a president, and two are deputypresidents.

• The President of the State Commissionrepresents, manages and is responsible for thework of the State Commission.

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STATE COMMISSION

• The President, Vice-Presidents and othermembers of the State Commission are appointedby the Croatian Parliament on the proposal of theGovernment of the Republic of Croatia.

• The President of the State Commission must havecompleted a university degree or a specialized BAdegree course, passed a bar examination and atleast ten years of professional work, of which atleast three years in the field of public procurement.

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STATE COMMISSION

• In addition to the President of the State Commission, atleast four other members of the State Commissionmust have completed a university graduate study or aspecialist BA in legal studies and at least eight years ofprofessional work, at least three in the field of publicprocurement.

• The other members of the State Commission musthave completed a university graduate study or aspecialist graduate professional study of legal,economic, natural or technical direction and at leasteight years of professional work, of which at least threein the field of public procurement.

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STATE COMMISSION

• A member of the State Commission is obligedto maintain its reputation, impartiality andindependence in decision-making, as well asthe reputation, autonomy and independence ofthe State Commission.

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STATE COMMISSION

• 9 DECISION-MAKING PERSONS

• 21 LEGAL ADVISORS (lawyers with bar exam)

• 3 ADMINISTRATIVE STAFF

• 1 SECRETARY OFFICE

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President

Two Deputy Presidents

6 Members

(3 Conuncils)

Administrative Office

Secretary Office

Accounting Office

Department for AppealProcedures

Department for CaseLaw and Court Proceedings

STATE COMMISSION

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DIGITALISATION

EFFICIENCY

TRANSPARENCYPREDICTABILITY

INDEPENDENCE

INTEGRITY

STATE COMMISSION

DIGITALISATION

• E-APPEAL LODGING – sinceJanuary 1st 2018 e-appeal can be lodged through the national TEDsystem

• E-COMMUNICATION – during the review procedure the StateCommission communicates with the parties through the national TED system (EOJN RH)

• E-PUBLICATION - The StateCommission delivers its decisions on the State Commission’swebsite

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STATE COMMISSION

TRANSPARENCY & PREDICTABILITY

• Publicly availableRegister of Appeal Cases

• All State Commission’sdecisions are published

• Since January 1st 2017 all court decisions are published

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STATE COMMISSION

EFFICIENCY

• 1170 cases in 2018

• cca 130 administrative disputes per year

• average reviewprocedure length - 14 days from the completionof the appeal case

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STATE COMMISSION

INDEPENDENCE

• Random assignment ofthe cases

• Three levels ofauthorisation(administrative office, legal advisors, decision-making persons)

• Moving target

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ADMINISTRATIVE COURT

• 4 Administrative courts in 2nd instance

• Average number ofadiministrativedisputes - 130 per year

• 98% disputesresolved withdecision of the SC

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0

200

400

600

800

1000

1200

1400

2014 2015 2016 2017 2018

Number of appeals/Administrative disputes

State Commission Administrative Court

ADMINISTRATIVE COURT

• Average length of thereview procedure before SC is 14 daysfrom completion ofthe appeal case

• Average length ofthe procedure beforeadministrative courtsis 566 days (2017)

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0

100

200

300

400

500

600

2016 2017

Duration

State Commission Administrative Court

ADMINISTRATIVE COURT

2017 REFORM

• Till JANUARY 1st 2017- 2nd instance- 4 administrative courts- 3rd instance- high administrative court

• From January 1st 2017- 2nd Instance- High Administrative Court

• Lack of judicial control for more than 2 years

• February 2019- Decision on constitutionality of PublicProcurement Act (competence, deadline)

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ADMINISTRATIVE COURT

• TIMELY DECISON MAKING (cca 30 days)

• DECISIONS ON THE MERITS OF DISPUTE

• HIGHER EFFICIENCY AND PREDICTABILITY

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0

100

200

300

400

500

600

2016 2017 2018 2019

AVERAGE DURATION

With financial support from the Justice

Programme of the European Union

Thank you!