Q&A: public procurement in Portugal

Public procurement

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

The public procurement regime in Portugal is primarily governed by the Public Procurement Code, which was approved by Decree-Law No. 18/2008. The Code transposed Directives 2004/17/EC and 2004/18/EC, hence it can be said that the legal regime of public procurement in Portugal is deeply parameterised by the European Directives. More recently, the Public Procurement Code was amended following new European Directives – namely, Directives 2014/23/EU, 2014/24/EU and 2014/25/EU – which were transposed into the current law. Part I of the Public Procurement sets out the scope of its application. Part II lays down the rules on procedures for the award of public contracts. The final part, Part III, contains the substantive regime applicable to public procurement, which governs the contract and its performance. 

Alongside the Code are complementary laws, of which the following stand out: (1) Law No. 96/2015, which establishes the regime of electronic public procurement platforms and in which the contractual formation procedures are processed; (2) Law No. 30/2021 establishing special measures for public procurement; and (3) Decree-Law No. 73/2021, which enshrines the price review regime in public works.

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

The contractual formation procedures provided for in the Public Procurement Code are as follows:

• Direct award: this is characterised by the fact that there is no competition to the extent that the invitation to submit a proposal is made to a single entity.
• Prior consultation: in this procedure, the call for proposals is made to at least three entities.
• Public tendering: the public tender is the procedure open to competition in which the contracting authority issues a notice and bids may be submitted to tenderers who meet the respective requirements.  
• Restricted competition by prior qualification: there are two phases to this procedure. The first phase involves selecting candidates who meet the minimum requirements of economic or technical capacity laid down by the contracting authority. In the second phase, the candidates selected in the previous phase will participate and submit a proposal that will be evaluated by the contracting authority.
• Negotiation procedure: this follows the model of the restricted tender by prior qualification, but with a third stage involving negotiation of the tenders submitted.
• Competitive dialogue: in this procedure there is a phase in which the candidates present solutions and dialogue, followed by a phase of proposals.
• Partnership for innovation: this is a new and complex procedure designed for the development of research and innovative solutions from a technological point of view.

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

Part I of the Public Procurement Code contains several relevant provisions that delimit the entities and contracts that must be subject to the training procedures provided for in Part II of the Code. This is based on a broad concept of contracting authority, which covers public entities in various forms and which, in addition to public bodies, may even include ‘bodies governed by public law’, which are understood as public or private persons who are under decisive influence or majority financing of public entities. All these entities will therefore be subject to the application of public procurement rules from the outset.

However, there are contracts that, by their nature, are excluded from the application of the regime of Part II – see articles 4 to 15 of the Public Procurement Code. The rules provided for therein establish excluded types of contracts, such as: contracts that, by a specific legal regime, have their own rules (as is the case with employment contracts or contracts for the purchase and sale, gift, exchange or lease of immovable property); contracts intuitu personae (such as the contract for the donation of movable property); and contracts whose object is not liable to be submitted to competition and therefore there is no point in launching a competitive procedure. Also excluded are in-house contracts, namely those that are established between two contracting authorities, and cooperation contracts between contracting authorities.

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)?

In respect of contract formation procedures, it is possible to challenge administrative decisions through a complaint or hierarchical appeal within the Administration itself. This is optional; the complainant may choose to challenge these decisions immediately in court. Pursuant to articles 267 et seq of the Public Procurement Code, the regime is similar to the general regime for administrative acts, but with shorter deadlines.

Arbitration may be applicable in public procedures and contracts, provided that this possibility has been expressly provided for in the documents of the procedure – see article 476 of the Public Procurement Code.

As for judicial remedies, there is a special type of action called pre-contractual litigation, which serves to call into question the acts carried out in the pre-contractual tendering procedure (for example, a decision to exclude a tenderer or a decision to award a tender). Such action must be brought within one month, failing which the right of action will lapse under the terms provided for and regulated in article 100 et seq of the Code of Procedure in the Administrative Courts. This is a very common type of litigation in Portugal.