General frameworki Types of public-private partnership
PPPs in Belgium can take many forms. Because of the complexity of its political and administrative context, Belgium does not really have a unified policy or a true Belgian PPP model. A basic distinction is that between 'contractual' PPPs and 'participative' PPPs. While the contractual variant still bears a resemblance to an employer–contractor relationship, the participative variant implies the setting-up of a special purpose vehicle (SPV) by both the authority and the private partner. Combinations of both variants are also possible, but the participative variant has recently come under pressure following the entry into force of the ESA 2010 Regulation.
Various contractual structures are used, including a more traditional (more basic) contract setting forth specific performance criteria with limited PPP characteristics; and a more integrated contract approach with either a design and build contract (DB), a design, build and finance contract (DBF) or a design, build, finance and maintain contract (DBFM), possibly combined with an operating contract (DBFM(O)). Another model introduced in Belgium is DBM+F, whereby the DBM and finance tenders are split at the bidding phase and merged afterwards.
In other structures, long-term lease agreements, building rights agreements, concession contracts, other sui generis contracts or a combination thereof are used.ii The authorities
Each public body, whether at the national, regional or local level, can initiate a PPP. No previous authorisation is required, except in the Flemish Region, where the Flemish PPP Knowledge Centre has to give its 'advice' before a project of a Flemish public body can formally be accepted as a Flemish PPP.
The responsibility for structuring, awarding and implementing PPPs remains a task of the relevant administration, but the supervising authorities (at the relevant regional, community or national level, as applicable) can always repeal or reform the decisions of the lower public bodies.
The Institute of National Accounts (the Institute) gives advisory opinions on PPP projects. The Institute is a government body at the federal level, charged with a review of the debt burden of the public sector, which assesses the project's impact on the government budget and debt position, in particular with reference to the ESA rules, to the Manual on Government Deficit and Debt 2016 (MGDD) and to the Guide to the Statistical Treatment of PPPs. In 2018, the Institute issued opinions on five PPP projects (two at the federal level, one at the level of the Flemish Region and two at the level of the Brussels Metropolitan Region).
In Flanders, the Flemish PPP Knowledge Centre advises and guides the PPP policy of all public bodies and supports PPP projects in the Flemish Region. It assumes an advisory role (both in general and with regard to the specific project) and collects and shares PPP knowledge, experience and models with all parties involved. It has contributed substantively to standardising the contractual approach to PPPs in the Flemish Region.
There is no equivalent public body at federal level or in the Brussels Region.
In the Walloon Region, the government has established the Financial Reporting Cell, an entity of the Walloon administration that provides advice on PPPs for the Walloon Region, the French Community and for related public bodies before the adoption of a decision to implement PPP projects. It also has a role in the follow-up and assists these entities with the implementation of a PPP.
The Court of Audit exercises external scrutiny of the budgetary, accounting and financial operations of the federal state, the communities, the regions, and the public service institutions depending upon them. As part of its audit, it also reviews PPP projects involving any of the aforementioned institutions, for example, the maintenance of prisons by means of a public-private partnership.iii General requirements for PPP contracts
There are no specific legal constraints or requirements that apply to all PPPs. General public procurement rules (as interpreted by case law) or concession contracts rules apply., The Flemish and Walloon Regions have also adopted additional regulations with a view to facilitating PPPs in their respective regions.
Public contracts, including PPP contracts, remain equally subject to general administrative law and the Civil Code, as well as to more specific legislation, such as the Companies Code, tax legislation and insurance legislation, except to the extent explicitly provided otherwise.
From a contractual point of view, the competent authority is free to organise its projects as it sees fit, no value threshold applies and, except for traditional services and missions of the state, such as the police and the army, all types of public works, supplies and services can be contracted through a PPP structure.
Two important modifications included in the 2016 Public Tenders Law specifically affect the general requirements that the contracting authority must observe while concluding PPP contracts. First, the contracting authorities must apply, on top of the principles of equality and of non-discrimination, the principle of proportionality. For example, this implies that minor irregularities committed by a candidate regarding facultative exclusion grounds can justify his or her exclusion only in extraordinary circumstances. Second, environmental standards play a more prominent role. Indeed, authorities are able to take into account environmental labels during the bidding and award procedure and the failure to respect such environmental obligation by the contractor or one of his or her subcontractors during the execution of the contract may be considered as a breach of contract and could, therefore, lead to the termination of the contract.
Bidding and award procedure
To the extent the PPP contract falls within the scope of the Belgian public procurement rules, the general public procurement rules apply. In accordance with the EU Public Procurement Directives, Belgian public procurement rules cover all contracts in writing for consideration between a contractor, a supplier or a service provider and a public purchaser for the undertaking of works, supplies and services. The Concession Contracts rules will apply if the economic operators receive the right to exploit the works or services that are the subject of the contract as consideration and the award of a works or services concession shall involve the transfer to the concessionaire of an operating risk in exploiting those works or services encompassing demand or supply risk or both.
Belgian public procurement legislation distinguishes between the following types of procurement procedures:
- open procedure: all economic operators can participate;
- restricted procedure: only selected operators can participate;
- negotiated procedure;
- competitive dialogue; and
- innovation partnership.
The negotiated procedure with prior notification, based on Article 26.4(a)(iii), of the Public Procurement Directive 2014/24/EC, was the procedure most commonly used to award DBFM contracts. It was also often applied to award concessions for public works, but less for build and finance contracts. More recently, however, some PPP projects have been awarded under the competitive dialogue procedure. The conditions for using the negotiated procedure and the competitive dialogue are those provided in the Public Procurement Directives. The awarding authority must substantiate its choice for one procedure over the other. According to the Directive 2014/23, the public authorities have the freedom to organise the procedure leading to the choice of concessionaire, with respect to the principles of equal treatment, non-discrimination and transparency.
It is important to note that the new legal regime brought some minor changes as to award procedures for PPPs. As competitive dialogue has proven itself to be effective in complex projects, European and national legislators wished to further enhance its use. Hence, the 2016 Public Tenders Law considerably widens the cases in which contracting authorities are authorised to make use of this procedure. Competitive dialogue is, therefore, subject to the same conditions as for the negotiated procedure.
In a similar manner, 'innovation partnership' has been set up in the law as a new award-bidding procedure. Therefore, when a public authority's needs do not meet the existing market, it can decide to conclude an innovation partnership in order to develop products, services or pioneering work, which can later be purchased by the same authorities. The 2016 Public Tenders Law now gathers in one award bidding procedure two formerly distinct procedures of development and purchase.
Additionally, even if a contracting authority is still authorised to start a bidding procedure only on the basis of the price criterion, there is no longer be a formal distinction between the quote request and adjudication; the general criterion of the 'most advantageous offer' will be the applicable criterion in all tendering procedures.i Expressions of interest
The invitation of interested parties and the assessment of expressions of interest are governed by the public procurement or concession contract rules, provided that the project falls within their scope. All public contracts, whatever their value, must be advertised in advance in the Belgian Public Tender Bulletin, which is an annex to the Belgian Official Gazette. If contracts meet the European threshold level, a notice should also be published in the Official Journal. The negotiated procedure with prior notification and the competitive dialogue are restricted procedures, which means that only the preselected tenders are invited to submit an offer. As long as the principles of transparency and equal treatment are respected, the tendering authority is allowed to contact the candidates to ask for clarification or to complete their expression of interest.
For PPP contracts that fall outside the scope of the Belgian public procurement rules, such as land agreements and service concessions under €5.448 million, appropriate advertising is also required. In the absence of any specific rules, the awarding of such contracts is subject to the basic standards regarding advertising and contract award that are mentioned in the European Commission's Communicative Interpretation on the Community Law. The contracting entities are responsible for deciding the most appropriate medium for advertising their contracts. Other adequate and commonly used means of publication include the internet, national journals specialising in public procurement announcements, newspapers with national or regional coverage and specialist publications. The awarding authority can set criteria for qualitative selection, again, as long as the principles of transparency and equal treatment are respected. It is also allowed to contact the tenderers to ask for clarification or to complete their expression of interest, under the same conditions.ii Requests for proposals and unsolicited proposals
The use of e-tendering to solicit or submit a bid is permitted, required or prohibited, depending on the public procuring body involved. The federal authorities have developed IT tools to process public contracts electronically, which are also made available to the authorities of the other levels.
If a bidder has not been selected during the selection phase, he or she cannot submit an offer, except together with another bidder who has been selected.
With the 2016 Bill, however, the exclusion of a bidder is no longer be irrevocable. Bidders excluded during the selection phase are indeed able to take 'corrective measures' to correct the irregularities of their offer.iii Evaluation and grant
In the context of the negotiated procedure with prior notification and the competitive dialogue, the contracting authority may provide that the procedure is conducted in stages, by applying the award criteria in the contract documents so as to reduce the number of tenders to be negotiated. Bidders are invited to submit a second offer or a best and final offer. The same procedure can be organised for the concessions and the contracts that fall outside the scope of the public procurement rules.
During the negotiation procedure, as long as the object of the contract remains the same and the principles of transparency and equal treatment are respected, the offers can be amended, except for the best and final offers. There are no specific legal provisions regarding changes at the preferred bidder stage. It is, however, generally accepted that 'substantial' changes to the contract are no longer possible at that stage.
During the competitive dialogue, the alternatives proposed by the candidates can be amended as long as the bidders do not deviate from the 'essential' elements mentioned in the contract notice and contract documents. Also, once they have been submitted, the essential elements of the final offers cannot be modified. After the selection of the most economically advantageous tender, only minor changes to this offer are still allowed.
On the basis of the award criteria, the contracting authority shall designate a preferred bidder. Normally, but not always, the other candidates are placed in a 'waiting room' in case the negotiations with the preferred bidder fail, which allows the contracting authority to designate another preferred bidder without having to organise a new tendering procedure.
Once awarded, all awards of contracts meeting the European threshold levels are to be published in both the Public Tender Bulletin and the Official Journal, with the exception of contracts that fall outside the scope of the public procurement rules.