Table of Contents:
- What are the characteristics of public procurement?
- How is a procurement contract concluded?
Public purchasers often face the dilemma of whether a particular order should be considered public procurement. According to the definition contained in the Public Procurement Law of September 11, 2019, whenever the law refers to procurement, it is understood as a paid contract concluded between the purchaser and the contractor, where the subject of the contract is the acquisition by the purchaser from the selected contractor of construction works, supplies, or services.
What are the characteristics of public procurement?
A public procurement contract is civil in nature, as stated in Article 8, paragraph 1 of the Public Procurement Law (PPL), which specifies that in matters not regulated by the PPL, the provisions of the Civil Code of April 23, 1964, apply to public procurement contracts. The civil nature of a public procurement contract is also evidenced by its bilateral binding nature, remuneration, and reciprocity. The legal relationship between the purchaser and the contractor thus arises from a civil contract, characterized by, among other things, voluntariness and equality of the parties. This means that the conclusion and content of the contract (which consists of the mutual obligations of the parties) depend on the free will of each party.
Therefore, to speak of public procurement, it is necessary to determine that there is a binding relationship characterized by the above-mentioned features. The civil relationship between the purchaser and the contractor must be remunerated. The remuneration of the contract means that each party to the contract obtains a certain economic benefit, which does not have to be in monetary form. The economic benefit for the purchaser is the acquisition of the completed service, supply, or construction work, while the benefit for the contractor is the receipt of payment for the completed service, supply, or construction work.
Is every order a public procurement? How is a procurement contract concluded?
In the context of qualifying a contract as public procurement, it is also important that an integral part of public procurement is the selection of the contractor (winning bidder) following a procedure based on specific criteria and conditions for the selection of contractors, according to which their offers are compared. According to the judgment of the Court of Justice of the European Union (CJEU) of March 1, 2018, in Case C-9/17 Tirkkonen, the absence of selection from among the submitted offers excludes the existence of public procurement. A condition for the existence of public procurement is the difference between the offers of those bidders considered capable of providing the services, to make the final selection of the bidder or bidders to whom the service provision will be entrusted (criterion for awarding the contract). According to the aforementioned CJEU judgment, there is no public procurement when there is no competition among candidates to perform the service. In such a case, the contracting institution does not select offers but only ensures compliance with quality criteria.
In the factual state considered by the CJEU, a Finnish agency announced a procedure for awarding a contract for advisory services for the period 2015-2020 within the agricultural advisory system. The agency intended to conclude a contract with each applicant who met the specified conditions. Candidates had to demonstrate, by the application deadline, that they had qualifications, regularly trained, and had experience as advisors in the fields in which they intended to provide advice. The agricultural advisory system enabled farmers to turn to a chosen advisor approved by the system. The services provided by the advisor were paid for by the agency. The system was open only during the initial period, ending with the publication of the contract award decision, and thus a new advisor who was not originally part of the advisory contract could not join it. The Finnish agency intended to build a large base of professional advisors whose services could be used by farmers at their discretion. Each candidate who met the qualification criteria could conclude an appropriate contract with the agency without any additional selection. Since only the candidates’ qualifications were assessed, the agency did not select from among the submitted offers. None of the advisors obtained exclusivity rights. It was a typical system based on customer choice, which is not subject to public procurement regulations.
The CJEU did not qualify the considered system as public procurement and thus excluded it from the public procurement regime.
In the context of Polish law, systems based on customer choice play a marginal role. They occur exceptionally, for example, in some care services such as home care.
