Bulgarian public procurement practices and irregularities have often been criticized and therefore the timely transposition of two new EU Directives on public procurement and on procurement by entities operating in the water, energy, transport and postal services sectors in the new Bulgarian Public Procurement Act (PPA) came much as a pleasant surprise. PPA entered into force on 15 April 2016 and the Bulgarian government already adopted the rules for its implementation.
The new law differs substantially from the latest Public Procurement Act as it introduces an entirely new package of EU public procurement regulations into the Bulgarian legislation. The PPA aims to meet the needs of both the contracting authorities/entities and the national market. It creates a legal platform to help EU companies get better access to the Bulgarian procurement market.
A clear victory over bureaucracy
Over-bureaucratization has been one of the main areas of concern related to the Bulgarian public procurement procedures, because it created indirect barriers for foreign companies. Now the new PPA allows for the bidders to submit a European Single Procurement Document in which they declare the fulfilment of the conditions regarding the personal criteria required for the public procurement without providing any additional documents to certify these. The actual certification shall be done only after the bidder has been awarded the contract, which substantially streamlines the procedures and allows bidders from abroad to spend substantially less time and money in preparation for public procurement procedures in Bulgaria.
Once a bidder fills the European Single Procurement Document, it can be used again in subsequent tenders if the information contained in it is still up-to-date. In line with this legislative trend the PPA also provides a possibility for the contracting authority to award a contract jointly with contracting authorities from other EU member states.
In an attempt to introduce cost-savings into the process, the new PPA provides for fully electronic management of the entire tender process, guaranteed by a centralized electronic platform administered by the Bulgarian Public Procurement Agency. The complete electronic tendering platform shall become fully applicable no later than 15 April 2017 and will therefore allow for quicker and much more efficient public procurement procedures to be carried out.
Compliance with market
The new PPA introduces several other important changes including a clear division between the two mains groups of contracting authorities: sectorial and public. The PPA also excludes the obligation of the contracting authorities to follow the PPA in certain cases of internal "in-house" awarding. This regime is of particular importance in the Bulgarian defense and transportation sectors where the process of privatization of the former consolidated conglomerates of companies is still not complete and the competitiveness of these state-owned companies is somewhat restricted.
In preparation for tenders the PPA permits the contracting authority to conduct prior market consultations with independent experts and market players in order to examine the market and the nature of the activities to be assigned. The fact the introduction of a legal regulation of this very important aspect of each public procurement procedure is a clear recognition of the important of this pre-tender stage. In line with the EU procurement requirements that advice may be used in the planning and conduct of the procurement procedure, provided that such advice does not have the effect of distorting competition and does not result in a violation of the principles of non-discrimination and transparency.
In an attempt to avoid combination of objectively separable activities, the PPA provides that where the different parts of a potential public procurement contract are objectively separable, the contracting entities are obliged to divide the contract into separate lots allowing for more competition. Similar considerations led to the requirement that contracts be awarded on the basis of the most economically advantageous offer. The option for the contracting authorities to award the contract on the basis of the lowest price is no longer available. The flexibility for the contracting authority is granted by the provisions permitting up to 20% of the procurement to be excluded from the total forecasted value of the procurement when the contracting authority deems it appropriate.
The practices of the Bulgarian public procurement was limiting the availability of alternative and equally secure instruments for guaranteeing the performance of the public procurement contacts and therefore the PPA permits insurance policies to be offered as a form of a performance guarantee and optimizes the terms for public procurement related appeals.
The new PPA is a general framework law that includes main principles and rules that will need to be further clarified and specified in a secondary legislative act to be adopted by the Bulgarian Government. However, it provides the necessary legislative background for a modern, successful and timely evolution of the public procurement in Bulgaria.
Kostadin Sirleshtov has been a partner at CMS Cameron McKenna in Sofia since 2008. He is head of the Energy, Projects and Construction practice of the office and covers Central and Eastern Europe for CMS Cameron McKenna when it comes to energy issues.