On 2 February 2016 the Bulgarian Parliament voted to enact the new Public Procurement Act (the “PPA” or the “Act”). The PPA has not yet been promulgated in the State Gazette but is expected to enter into force by 15 April 2016.  The new Act drastically differs from the current Public Procurement Act as it introduces two new EU Directives (Directive 2014/24/EU and Directive 2014/25/EU) and three older Directives, which have not yet been implemented. The two new Directives introduce an entirely new package of public procurement regulations.  The Act aims to meet the needs of both the contracting authorities/entities and the national market. 

The new Act introduces several important changes, most notably, it:

  • clearly divides contracting authorities into two mains groups: sectorial and public. The rules and procedures applicable in respect of them are also well differentiated, in line with the two separate Directives. The Act also provides a new possibility to award a contract jointly with contracting authorities from other member states.
  • excludes the obligation of the contracting authorities to observe the PPA in certain cases of internal “in-house” awarding.
  • permits up to 20% of the procurement to be excluded from the total forecasted value of the procurement when the contracting authority deems it appropriate. 
  • where the different parts of a contract are objectively separable, the contracting entities are obliged to divide the contract into separate lots. 
  • 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.
  • allows 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 documents to certify them. The actual certification shall be done only after the bidder has been awarded the contract. 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.
  • provides for fully electronic management of the entire tender process, guaranteed by a centralized electronic platform administered by the Public Procurement Agency.  The complete electronic tendering shall become fully applicable within about a year time after entry into force of the new Act. 
  • requires 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.
  • permits insurance policies to be offered as a form of a performance guarantee and optimizes the terms for public procurement related appeals.
  • contains public procurement thresholds that comply with the European Directives, with the exception of the threshold in the construction sphere. The threshold for Bulgaria has been reduced to BGN 5,000,000 which is half of the amount for EU market.  However, the minimum contract value thresholds under which the contracting authorities / entities are free to directly award a contract are quite low and comparable to the current ones in Bulgaria.

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 Council of Ministers.  However, it is still not clear when the specific rules will be adopted, which worries part of the business and the political communities.

Valentin SavovGabriela Edreva