Changes to the regulation of public procurements Apr 21, 2010
On 2 March 2010, the latest amendments to the Law on Public Procurement entered into force. The amendments were prepared following the requirements of European Parliament and Council Directive 2007/66/EC as of 11 December 2007 and propositions by the Lithuanian Sunrise Commission (i.e. the commission giving propositions concerned with the development of the business market).
The new law has established a number of novelties relating to the activities of the Public Procurement Office, the content of procurement documents, evaluation procedures, the implementation of international negotiations and social procurement. What is more, the procedure for the settlement of public procurement disputes has been improved, internal transactions (in-house procurement) legitimated and a number of other amendments were made. Hereinafter, a brief review of the most significant changes is given.
Under the new legal regulation, contracting authorities (purchasing organizations) have to specify the pricing rules and the order of the change of subcontractors in the purchase documents and to demand that suppliers indicate their intention to use subcontractors. Furthermore, every contracting authority must familiarize the participants with the proposals of others if there is a demand. The new regulation establishes opportunities to simplify the order on valuation of qualification.
Probably the most important novelty in the law is the improvement of the system of the protection of suppliers’ interests. Based on a new system, the supplier is entitled to apply to the court for the application of interim measures, the annulment of the decisions of the contracting authority, compensation for damages, the annulment of the contract and application of alternative sanctions. Moreover, the Public Procurement Office, being the institution protecting the public interest, is able to apply to the court and to demand the annulment of contract as well as the application of alternative sanctions. The new regulation provides for longer limitation (prescription) periods to challenge the decisions or actions of the contracting authority.
It should be noted, that internal transactions (in-house procurement) were legitimated by the analysed amendments. This change was determined by the structural features of certain purchasing organizations as well as the jurisprudence of the European Court of Justice. From now on, in cases, provided for by the law, the contracting authority will be able to depart from the requirements of the Law on Public Procurement and to prosecute the in-house purchase procedures. This will be possible where the contracting authority enters into a contract with the controlled entity, which receives the largest part of its income from the activities designated to meet the needs of the contracting authority.
Hence, the main goal achieved by the latest amendments to the Lithuanian Law on Public Procurement was the harmonisation of Lithuanian and EU law. Additionally, the current regulation guarantees compliance with the principles of non-discrimination and transparency. The order of the settlement of public procurement disputes was improved as well: market players were granted rapid and effective remedies, which are possible to apply when the procedure of public procurement is on-going and violations can still be avoided.
For further information please contact Ms Elzė Matulionytė or Ms Rasa Grambaite
Under the new legal regulation, contracting authorities (purchasing organizations) have to specify the pricing rules and the order of the change of subcontractors in the purchase documents and to demand that suppliers indicate their intention to use subcontractors. Furthermore, every contracting authority must familiarize the participants with the proposals of others if there is a demand. The new regulation establishes opportunities to simplify the order on valuation of qualification.
Probably the most important novelty in the law is the improvement of the system of the protection of suppliers’ interests. Based on a new system, the supplier is entitled to apply to the court for the application of interim measures, the annulment of the decisions of the contracting authority, compensation for damages, the annulment of the contract and application of alternative sanctions. Moreover, the Public Procurement Office, being the institution protecting the public interest, is able to apply to the court and to demand the annulment of contract as well as the application of alternative sanctions. The new regulation provides for longer limitation (prescription) periods to challenge the decisions or actions of the contracting authority.
It should be noted, that internal transactions (in-house procurement) were legitimated by the analysed amendments. This change was determined by the structural features of certain purchasing organizations as well as the jurisprudence of the European Court of Justice. From now on, in cases, provided for by the law, the contracting authority will be able to depart from the requirements of the Law on Public Procurement and to prosecute the in-house purchase procedures. This will be possible where the contracting authority enters into a contract with the controlled entity, which receives the largest part of its income from the activities designated to meet the needs of the contracting authority.
Hence, the main goal achieved by the latest amendments to the Lithuanian Law on Public Procurement was the harmonisation of Lithuanian and EU law. Additionally, the current regulation guarantees compliance with the principles of non-discrimination and transparency. The order of the settlement of public procurement disputes was improved as well: market players were granted rapid and effective remedies, which are possible to apply when the procedure of public procurement is on-going and violations can still be avoided.
For further information please contact Ms Elzė Matulionytė or Ms Rasa Grambaite
