Simpler and faster award procedures
No 'clean bill of health' for direct awards
Comment
The regulation increasing the Procurement Act's thresholds has been extended once again for a further two years. Thus, contracting authorities can continue to benefit from substantial procedural simplifications when awarding contracts below the threshold until 2018.
Simpler and faster award procedures
The regulation (most recently amended by BGBl II Nr 250/2016) allows public sector contracting authorities and utilities to award small and medium-sized contracts unbureaucratically and efficiently. Under the regulation, the federal government and its provinces and municipalities can continue to award contracts with an estimated value of less than €100,000 directly to suitable bidders, without following a formal procurement procedure. Simplifying and expediting the procurement process enables provinces and municipalities – the most directly affected entities – to:
- stimulate regional economies by quickly and directly awarding specific contracts; and
- reduce their administrative costs significantly by avoiding complex and time-consuming procurement procedures.
In addition, direct award proceedings spare small and medium-sized enterprises the substantial investment of time and expenses associated with participating in complex procurement procedures.
Contracting entities can continue to award construction contracts that fall below the €1 million threshold via the so-called 'restricted procedure without prior publication'. In practice, this procedure is used to invite directly a minimum of three bidders located in the surrounding area to submit a bid. This approach enables all participants to reduce the costs and duration of the procurement procedure substantially and boost the regional economy.
No 'clean bill of health' for direct awards
Irrespective of the possibility that the threshold regulation provides for contracts of up to an estimated value of €100,000 to be awarded directly, the basic principles of the EU Treaty may still require an ex ante notice for contracts of a certain cross-border interest. The direct award of any such contract (including for small and very small orders) contradicts the respective EU law. Hence, contracting authorities are well advised to examine in detail and on a case-by-case basis whether a contract below the threshold might be subject to a potential cross-border interest.
By extending the threshold regulation, contracting public authorities can continue to benefit from the significantly wider application of the direct award procedure and the restricted procedure without prior publication when awarding public contracts until 2018. In particular, in the area of local and municipal procurement, authorities can continue to boost regional economies by awarding contracts in a direct and quick manner. Finally, extending the threshold regulation until the end of 2018 provides stability, continuity and long-term planning security for contracting authorities and economic operators.
For further information on this topic please contact Johannes Stalzer at Schoenherr by telephone (+43 1 53 43 70) or email ([email protected]). The Schoenherr website can be accessed at www.schoenherr.eu.