One of the fundamental elements of the EU integration process, with a high impact on all the other interest areas of the “acquis communautaire” regarding the “Internal Market” refers to the implementation of an efficient and credible system of public procurement.
As time has proved, the previous system, as regulated by GEO no. 60/2001, was deficient as to the effective development of the procedure, as well as to the efficient challenge of the legal acts issued within the framework of this procedure and appreciated as unlawful by certain participants.
In order to improve the legal framework regarding the public procurement, the Romanian Government issued the GEO no. 34/2006 regarding the assignation of the public auction procurement contracts and the concession contracts for public works and services. This normative act transposed into the national legislation the following EU Directives:
Directive no. 18/2004/CE and Directive no. 89/665/CEE, regarding the acquisitions within the “classic” domain;
Directive no. 17/2004/CE and Directive no. 92/13/CEE, regarding the acquisitions within the “utilities” domain.
As expected, a special attention was paid to the settlement of the challenges within the public procurement procedures. This system has been entirely reconstructed. Thus, in contrast with the previous system which stipulated an unique procedure regarding the challenge of the legal acts issued within the public procurement procedure, GEO no. 34/2006 confers the interested person the possibility of choosing between:
The jurisdictional-administrative appeal, which rules exclusively upon the lawfulness or the unlawfulness of the acts issued by the contractive authority within the public procurement procedure;
The administrative contentious, which rules upon the lawfulness or the unlawfulness of the acts, as well as upon the indemnities due to the person who was harmed by the contested act.
Further, it is worth mentioning that the concept of “act of the contracting authority” designs any act issued by the contracting authority, whether or not it is an administrative act which produces or may produce legal effects including failure to issue an administrative act or a different act as well as the refuse to issue such act.
The jurisdictional-administrative appeal
In order to accelerate the settlement of litigations regarding the public procurement procedure, the legislator decided to found the National Council of Contestations Resolution (Consiliul Naţional de Soluţionare a Contestaţiilor – CNSC), an independent body, empowered with administrative-jurisdictional attributions, composed of 21 counsels.
In case the contestation is registered at the CNSC, it will be settled by 3 counsels within a term that may not exceed 30 days from the date of receipt of the public procurement file from the contracting authority. The files are randomly distributed, so that the composition of the settlement panel of counsels can not be influenced.
For celerity purposes, the legislator compels the person who challenges the procedure to communicate a copy of the contestation and of the written records to the contracting authority, the day following the registration of the contestation at latest. In any case, the person who challenges the procedure must append to the contestation at least a copy of the challenged act, if such act exists.
Also, the deadlines for challenging the acts issued by the contracting authority are extremely short – 10 or 5 days since the person who challenges is aware of that act, depending also on the estimated value of the contract and the classification of the administrative authority.
Another essential element is the fact that any such contestation suspends by effect of the law (de jure) the public procurement procedure regarding the respective contract until the settlement of the contestation by CNSC. Only in justified cases, the CNSC can rule on the cessation of the suspension.
Obviously, the suspension of the procedure following the registration of the contestation at the CNSC can lead to abuses generated by the persons who are interested in delaying the procedure. For this particular reason, the law sets forth the right of CNSC to fine the authors of abusive challenges by fine which ranges from RON 10,000 to RON 35,000 (EUR 2,700 EUR to EUR 12,900).
All the decisions given by CNSC, such as the decisions regarding the merits of the contestation as well as the decisions regarding the interim suspension must be grounded and communicated to the parties within 5 days from the date of issuance of the decision. The decisions approving the contestation are enforceable, while the decisions fining the parties are enforceable only if they are not appealed within the legally required deadline.
These decisions can be challenged at CNSC by the interested party within 10 days from communication, under the sanction of nullity. Then, CNSC must send the file (including the contestation) to the Court of Appeal within the jurisdiction of the correspondent contracting authority (the file being heard by the administrative and fiscal department of such court). A panel of 3 judges of the Court settles the case on an emergency basis, and its decision is final and irrevocable.
The administrative contentious appeal
Clearly, taking into consideration the celerity and the fact that it suspends by effect of the law (de jure) the public procurement procedure, the administrative-jurisdictional appeal is preferable to the administrative contentious appeal.
Nevertheless, the administrative contentious appeal is useful in certain cases in order to challenge the breaches of the rights under the public procurement procedure, for instance when the short legal deadlines (e.g., 5 or 10 days) for the registration of the contestation have not been complied with.
This procedure regulated by Law no. 554/2004 regarding the administrative contentious must begin with a prior petition addressed directly to the contracting authority within 30 days since the petitioner has been aware of the contested act. In its turn, the contracting authority must respond to the petitioner within 30 days from the date of registration of the petition.
In case of a negative response from the contracting authority or in case of failure to respond within the legally required term, the petitioner can file a court claim within 6 months from either the date of communication of the negative response or the date of expiration of the 30 – days term from registration of the petition (in case the contracting authority failed to issue a response).
The jurisdiction is conferred to the administrative departments of the tribunals or of the courts of appeal, depending on the contract’s value (i.e., lower or higher than the amount of RON 500,000, approximately EUR 12,000. The territorial jurisdiction is alternative so that the claimant can choose between the courts where he or the respondent has the head office. The enforcement of the court’s decision is suspended if appealed.
Should the interested party intend to suspend the challenged act, it must be noted that such suspension does not operate by effect of the law during the procedure. The suspension can only be ruled by the court, provided that the following conditions are accomplished:
The suspension prevents an imminent prejudice (either monetary or moral);
The suspension is justified (the claimant’s rights or legitimate interests are infringed or there are reasonable doubts as to the lawfulness of the contested act).
The person who challenges an act issued in the public procurement procedure can obtain the suspension of the contested act by two means:
The suspension request can be filed after filing of the prior petition and before the contracting authority settles it. In this case, if the suspension is approved, it subsists until the court settles the case on merits;
The suspension request can be filed after the settlement of the prior petition as well, with the nullity claim or separately. In this case, if the suspension is approved, it subsists until the appeal is settled.
The court who settles the nullity claim has jurisdiction to judge the interim suspension as well. The decision approving the interim suspension is enforceable de jure. It can be appealed within 5 days from communication, but the appeal does not suspend the execution.
With respect to the damages claimed by the person who challenges the illegal act during the public procurement procedure, they can only be settled by the administrative contentious court. These damages can be claimed together with the nullity claim or separately after the settlement of nullity aspect (either by administrative-jurisdictional appeal or by administrative contentious appeal).
If the nullity is ascertained in administrative contentious appeal, the damages claim must be filed within one year since the person who challenges was or must have been aware of the amount of the damages.
The main interest of the investors who wish to conclude public procurement contracts is the celerity of the contestations settlement. Therefore, the administrative-jurisdictional appeal is considered suitable. Nevertheless, the administrative contentious appeal is useful if the legal terms for registering the contestations at CNSC are not respected or if the investor does not intend to obtain a favorable outcome in the procedure, but merely to obtain an indemnity for the damage caused by the unlawful acts issued by the contracting authority.
This article does not represent an exhaustive analysis of the public procurement contentious procedure, but an expose of the main treats of the court proceedings.
Dan-Rareş Răducanu, Senior Partner STOICA & Asociaţii