As of 1 April 2012, the Czech Public Procurement Act (Act No. 137/2006 Coll.) has been significantly amended. The aim of the Amendment, according to its promoters, is to obtain the best price without the possibility of collusion. For this reason, the Amendment brings many changes to the Act, which have to be taken into account in the field of public procurement.

  1. Reduction of financial thresholds for compulsory procedure under the Act

The Amendment reduces the current financial thresholds for small-scale public contracts (now CZK 2 million without VAT for public supply and service contracts, or CZK 6 million without VAT for public works contracts) to the amount of CZK 1 million without VAT for public supply and service contracts, or CZK 3 million without VAT for public works contracts. With effect from 1 January 2014 onwards, these financial thresholds for all public contracts will be unified to the amount of CZK 1 million without VAT.

  1. Significant public contracts

The Amendment introduces a new category of “significant public contracts”. In the case of the state, significant public contracts shall be understood as public contracts that achieve the expected value of at least CZK 300 million without VAT. In the case of regional and municipal government, public contracts exceed the expected value of at least CZK 50 million without VAT. Significant public contracts at the state level shall be approved by the Government and in the case of regional and municipal government shall be approved by the Council. Significant public contracts have also been granted longer deadlines for submission of offers and have more demanding requirements regarding the composition of the evaluation committee.  

  1. Change in qualification

The Amendment to the Act significantly limits the contracting authority’s ability to set qualifications that would lead to a substantial restriction of competition and which can be replaced by a corresponding adjustment in a contract concluded for the implementation of a public contract.  

This change means that existing methods for demonstrating the fulfilment of economic qualification will be replaced by an affidavit on economic and financial competence to perform a public contract. The contracting authority will not be entitled to require tenderers to submit an insurance contract or to require evidence of a certain minimum turnover level.  

Some of the technical qualification prerequisites that the contracting authority often used to restrict competition among tenderers were repealed. According to the Amendment, it is no longer possible to require the submission of a certificate such as ISO, EMAS, etc.  

The Amendment has brought a change in the area of basic qualification. Submission of (i) the list of persons, who are a statutory body or a member of statutory bodies and who have been in the past three years in a labour, functional or similar relationship to the contracting authority, and (ii) the list of shareholders, where the aggregate nominal value of the shares exceeds 10 of the capital, shall not fall under the basic qualification prerequisites. The tenderers, however, shall still be obliged to submit the lists as a necessary part of the tender.

  1. Obligations of the contracting authority in relation to disclosure

In order to increase the transparency of the award of a public contract, the Amendment significantly extends the obligations of the contracting authority relating to disclosure of information on public procurement.  

The contracting authority shall be obliged to publish preliminary information on public contract at least one month before the award of a public contract. The preliminary notice shall include a justification of the effectiveness of the public contract. After awarding the public contract, the contracting authority shall publish in its profile, among other things, the reason for the effectiveness of the public contract and whether the requirements conform to the technical qualification prerequisites.  

Finally, the contracting authority has an important obligation to publish in its profile (i) contracts concluded on the basis of a tender, including any amendments and annexes of the contract; (ii) the amount of the actual paid price for the public contract; and (iii) a list of subcontractors of the public contract supplier.  

  1. Evaluation of tenders

If the contracting authority evaluates the tenders according to the basic criterion of which is the most economically advantageous, the Amendment of the Act shall set forth constraints – under which the payment terms or the contractual terms cannot be partial evaluation criteria – in order to ensure the supplier’s obligation. Furthermore, the contracting authority shall be obliged to cancel the procurement procedure if the contracting authority obtains only one tender or if only one tender remains for the evaluation after the assessment of tenders.  

  1. Change of the contract

The contracting authority has limited ability to change the contract signed by the successful tenderer. The contract can be changed only if it does not substantially change the rights and obligations under the contract. Under the Amendment of the Act, any change that extends a subject of the public contract or changes the economic balance of the contract in favour of the selected tenderer shall be considered as a substantial change of the contract.