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01 February 2021
roadmap
austria

Public procurement is not immune to COVID-19

The coronavirus has also infected public procurement, creating new challenges for companies and public purchasers. At least in the short term, exemptions have become the rule, procurement procedures have gone almost completely electronic, and new contracts have had to be "COVID-secured". Some of these measures have an expiry date, others will probably remain.

High season for special procedures

Extraordinary times call for extraordinary measures. This also applies to public procurement law, especially if unforeseeable events trigger an urgent procurement need. The coronavirus pandemic is considered an unforeseeable event. As outlined by the European Commission and several Member States, the need for hospitals and other health institutions to provide treatment, personal protective equipment, ventilators, additional beds, and additional intensive care and hospital infrastructure could not be foreseen and planned, so exceptional and special procurement procedures are considered permissible. Unsurprisingly, many contracting authorities used these extensively.
Many applied "accelerated" procedures due to the urgency of the case and significantly shortened the deadlines for participation and tenders. This allowed for the speedy awarding of contracts.

Numerous procurements, from the supply of protective masks to consultancy contracts, were not put out to public tender at all, but were tendered by applying the "negotiated procedure without publication". In this case, the contacting authority negotiates directly with suitable companies without a prior call for tenders.

In certain emergency awards, often only one company was approached, and the contract was awarded directly based on exclusive acts. Especially during the lockdown and as infection rates rose, many extremely urgent purchases could be processed quickly and without bureaucracy in this way.
Many urgent needs could also be covered by adapting existing public contracts, since in exceptional cases, even extensive changes to contracts subject to tender are permitted.

The coronavirus crisis has also infected regular tenders in many areas. Purchasing bodies and suppliers are required to ensure that order processing is affected as little as possible, even in the case of COVID restrictions. They must adjust the performance specifications accordingly and to provide additional positions for COVID measures. Bidders are well advised to provide for an appropriate risk surcharge and to consider how the measures affect their costs, calculation, effort and time.

Will COVID-19 procurements become the new normal?

The first wave of COVID-19 is over, and many countries are now experiencing the second wave. This raises the question of whether accelerated procurement can continue.

This seems doubtful for several reasons. The crisis exceptions each presuppose that the procurement takes place in connection with events that the purchasing body could not foresee. Clearly the pandemic and the extent of the measures to be taken could not have been foreseen back in the spring. However, the duration and the probability of a second wave in autumn/winter this year was very quickly addressed.

"The first wave of COVID-19 seems to be over, but since autumn many countries are facing a second wave. This raises the question of whether accelerated procurement can continue."

Accelerated or emergency procedures may only be used to cover the gap until more stable solutions can be found. Regular award procedures (especially framework agreements) should be prepared and carried out for urgently needed services parallel to emergency procurement.

Accelerated procedures or procedures without prior publication result in less transparency and less competition. The chances of individuals being awarded a public contract are therefore drastically reduced. Only the fastest accelerated procedures have the chance of being awarded. Direct awards and exclusive negotiations practically exclude competition. The longer this persists, the more susceptible the system is to corruption.

There are therefore good reasons to return to normality in public procurement law.

author: Johannes Stalzer

 

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Johannes
Stalzer

Counsel

austria vienna