Q&A: public procurement in Switzerland

Public procurement

What legislation (if any) governs public procurement in your jurisdiction? What does each piece of legislation cover?

Legislation at the national, cantonal and intercantonal levels is based on the revised WTO Agreement on Government Procurement (GPA 2012) and the bilateral agreement between Switzerland and the EU on public procurement. These international agreements have been implemented in Switzerland’s domestic law: With the revision of the Federal Act on Public Procurement (PPA), which came into force on 1 January 2021, federal law was adapted to the GPA 2012. Cantonal law was also adapted to the amended provisions of the GPA 2012 with the revised Intercantonal Agreement on Public Procurement (IAPP) on 15 November 2019.

Federal authorities functioning as contracting entities are bound by the PPA (article 4(1) PPA) and the corresponding Ordinance on Public Procurement (PPO) further implementing the PPA. Furthermore, public and private entities that provide public services and that have exclusive or special rights are subject to the PPA if they carry out activities in certain sectors in Switzerland, including water, electricity, airports, inland ports, postal services, railways, gas or heat networks, and natural resource exploration concerning oil, gas, coal or other solid fuels (article 4(2) PPA).

Cantonal or communal authorities (governed by cantonal law) are subject to the IAPP, provided that the canton concerned has acceded to this agreement. At the time of writing, almost all cantons have joined the revised IAPP or are in the process of acceding to it. In cantons that have not yet acceded, rules on public procurement, in particular procedural provisions, may be substantially different. The scope of the IAPP is broader than that of the GPA and extends in principle to all types of public contracts awarded by cantonal and communal contracting authorities.

What types of contract award procedures are used for public procurement in your jurisdiction? What are the main stages of each procedure?

Depending on the value of the contract and the applicable thresholds, the contracting authority may choose to award public contracts by open procedure, selective procedure, invitation procedure or direct award procedure (articles 16–17 PPA and Annex 4; articles 16–17 IAPP and Annex 1 and 2). The determining factors in this context include whether the contract involves a supply of goods, services or construction work, and whether the procurement project falls within the scope of international treaties or not.

In the open procedure, the contracting authority issues a public invitation tender on www.simap.ch without pre-selection. All interested and suitable parties can submit tenders within the specified period. The contracting authority evaluates tenders based on pre-defined eligibility and award criteria and weighting, ultimately awarding the contract to the most advantageous bid, published on the platform (article 18 PPA; article 18 IAPP).

The selective procedure takes place in two phases. During the initial phase, the contracting authority may issue a public invitation to tender and invites the tenderers to submit a request to participate within a specific period. Subsequently, the contracting authority selects the tenderers that may submit a tender based on previously defined eligibility criteria and conditions for participation (article 19 PPA; article 19 IAPP). It is up to the contracting authority whether it chooses an open or selective procedure.

In the invitation procedure, the contracting authority invites the tenderers of its choice to submit tenders without launching a public invitation to tender. The contracting authority compares the tenders and awards the contract to the most advantageous bid. In contrast to the open and selective procedure, there is no publication of the awarded bid. The invitation procedure applies to public contracts outside the scope of international treaties in accordance with the defined thresholds (construction work: from 300,000 Swiss francs, supplies of goods or services: from 150,000 francs, according to article 20 PPA and Annex 4; construction work (depending on the type): below 500,000/250,000 francs, supplies of goods or services: below 250,000 francs, according to article 20 IAPP and Annex 2).

In the direct award procedure, a public contract is directly granted without an invitation to tender. Below specified threshold values, this can occur informally without justification, allowing the contracting authority to obtain comparative quotes and conduct negotiations (construction work: below 300,000 francs, supplies of goods or services: below 150,000 francs, according to article 21(1) PPA and Annex 4; construction work (depending on the type): below 300,000/150,000 francs, supplies of goods or services: below 150,000 francs, according to article 21(1) IAPP and Annex 2). Exceptions allowing a direct award, even if the contract value exceeds the threshold, encompass scenarios such as receiving no suitable tenders in the open, selective, or invitation procedure, no tender meeting the essential requirements or eligibility criteria, only one tenderer being eligible due to technical or artistic features or intellectual property, and urgent procurement due to unforeseen events (compare for all the exceptions article 21 PPA).

Are there any key exclusions or exemptions to the requirement to follow public procurement procedures?

If there is effective competition in the market for a sector under article 4(2) PPA, the Federal Council, acting on a proposal from a contracting authority or the Intercantonal Public Procurement Body, shall issue an ordinance exempting procurements in this market from being subject to this Act in whole or in part (article 7 PPA; see for a similar regulation article 7 IAPP). The sectoral markets that may be exempted are listed in Annex 1 to the PPO and currently include telecommunications on Swiss territory, fixed network communications sub-sector, mobile communications sub-sector, internet access sub-sector, data communications sub-sector, rail transport on Swiss territory, freight transport on standard gauge sub-sector.

Are any procedures available to provide effective redress in respect of the breach of public procurement laws? If so, are these the same procedures as those used to challenge administrative decision-making (eg, judicial review)?

Possible objects of an appeal in public procurement matters are: the invitation to tender for the contract, the decision on the choice of tenderers in the selective procedure, the decision to include a tenderer on a list or to remove a tenderer from a list, the decision on recusal requests, the award, the revocation of the award, the abandonment of the tender procedure, exclusion from the tender procedure or the imposition of a sanction (article 53(1) PPA; article 53(1) IAPP). When filing such an appeal, however, certain special rules must be observed that apply in an appeal procedure under public procurement law:

Appeals can be filed with the Federal Administrative Court against award decisions at federal level within and outside the scope of international treaties. However, the contracting authorities’ decisions may only be challenged before the Federal Administrative Court if the contract value reaches or exceeds specific thresholds (article 52(1) PPA):

• in the case of supplies of goods or services the contract value must exceed the applicable threshold for the invitation procedure (150,000 francs); and
• in the case of construction work the contract value must exceed the applicable threshold for the open or selective procedure (2 million francs).

Furthermore, in the case of contracts outside the scope of international treaties, the appeal may only seek a declaration that a decision violates federal law (article 52(2) PPA). The federal act only provides for the possibility of an injunctive prohibition of the conclusion of an agreement, and therefore full judicial protection, in areas within the scope of international treaties (article 54(2) PPA). Appeals must be submitted in writing with a statement of the grounds within 20 days of the decision being notified, excluding court holidays (article 56(1) PPA).

Legal protection against award decisions governed by cantonal law is more comprehensive. Whether within or outside the scope of international treaties, legal protection must be provided once the minimum contract value for the invitation procedure has been reached (article 52(1) IAPP and article 9(2) Internal Market Act). In their implementing legislation, individual cantons may choose to provide legal protection for award decisions below this contract value, thereby enabling comprehensive legal protection without limitations in terms of amount. With regard to the time limit, the same rules apply as at federal level (article 56(1) IAPP). However, in cantons that have not yet adopted the revised IAPP, the deadline is 10 days. Appeals against decisions of the contracting authorities can be filed with the cantonal administrative court, which is the only cantonal instance.

The Federal Supreme Court has direct jurisdiction over appeals against procurement decisions taken by the cantonal court or the Federal Administrative Court. However, the Federal Supreme Court will only accept cases in the field of public procurement that exceed certain contract value thresholds and pose a legal question of fundamental importance (article 83(f) Supreme Court Act).