Law 4412/2016 has incorporated into the Greek legal system, the European Directives 2014/24/EC and 2014/25/EC as in force and effect, which regulate award procedures for public procurement within the European Union. Furthermore, and importantly so, this Law has harmonized the mandatory procedures for the programming, controlling, award and judicial / administrative protection of legal interests during the bidding procedure of public procurement, (a) in case that European legislation is mandatorily applicable, due to the amount of the procurement (supply, services, works) according to the budget issued by the Public Authority conducting the procurement procedure, and (b) in case that the aforementioned budget of the Public Authority is below the threshold for mandatory application
of the European legislation for public procurement. In the latter case, the bidding procedure (award of contract) may be conducted without the need to abide to the detailed and extensive procedure prescribed by European legislation.
The Public Authorities are also obligated to comply with the provisions of Law 4412/2016 and relevant secondary legislation that refers to electronic procurement, namely conduct of the bidding procedure for award of public contracts through an independent and reliable electronic platform which is controlled by the Greek State and is accessible to participants world-wide.
This electronic platform, known as “Prometheus”, is the means for publication of the Invitation to Bidders, for submission of bids, for electronic auctions, for publication of award and all relevant notices to participants, and, in future, for publication of invoicing and payment during the project performance.
This electronic tendering procedure ensures transparency and fair competition at the stage of submission of bids, while the transparency of examination of submitted documentation and evaluation of bids is safeguarded by the other provisions of Law 4412/2016, which, as a general note, are strict and provide for (a) financial ranking evaluation in most cases as in clear auction, otherwise the mathematical type for evaluation has got to be stipulated in the tendering documents (b) technical evaluation accompanied by the grounds for the admission/rejection of technical offers, as well as for the ranking of technical offers (ranking of award criteria, as these criteria are stated in the invitation to bidders and other bidding documentation.
The tendering and contract award procedure pursuant to Law 4412/2016 is different, depending on whether the total budget of the procurement falls within the scope of the European Directives for award of public procurement, or not, namely: (i) for works - construction
contracts, € 5,548,000, (ii) for services or supply contracts, € 144,000, with the exception of Public Awarding Authorities acting in energy, water, transportation, post services, in which the threshold is set at € 443,000. These amounts are exclusive of VAT.
The total budget of the procurement is taken into account for the establishment of whether the threshold, as above, is met, since the original, main procurement for the completion of the project may have been broken down, for management or other (perhaps time-related
or fund availability) reasons.
The tendering and awarding procedure in the case of a budget above the above thresholds requires extensive publication of all stages of the procedure and the terms for conclusion of each stage, and of all terms and conditions, with the exception of documentation regarding technical specifications and specific technical obligations. Publication of the invitation to bidders and accompanying documentation, recommendation of the evaluation committee conducting the tendering procedure, resolutions of the public authority, award resolution, is mandatory and effected in the dedicated platform for public procurement and in the website of the contracting / public authority.
Legal consequences of mandatory nature of legislation on public procurement award – Mandatory audit of the public procurement by judicial authority
Non-compliance with the mandatory provisions of applicable legislation on public procurement leads to invalidity of the tendering procedure, at least after the stage when the incident of non-compliance with applicable mandatory legislation occurred, and, therefore, leads to invalidity of the contract award. Payment of the supplier / contractor in invalid contracts is forbidden, save in exceptional circumstances, in which the supplier / contractor has got to prove, following court actions and issue of court judgments upholding the contractors’ claim, that the contracting authority has unjustly been enriched and the amount of unjust enrichment.
The validity of the tendering procedure may be tested and controlled by the lodgment of a complaint with the specifically competent, for the auditing of the validity of the public contracts, public administrative authority, as well as with the competent Greek Courts, either by way of application for interim measures to the effect of temporarily regulating the tendering procedure and applying the mandatory piece of legislation that has been violated – according to the application – and/or by way of a main claim for damages due to the violation of the mandatory legislation. This right is vested by law to any person (legal entity or individual) that has got a lawful interest, financial or other, on the outcome of the tendering procedure. As a result such a complaint and/or application may be mainly filed by other participants to the tendering procedure.
Types of tendering procedures in public procurement – Invitation to Bidders
The Greek national legal system of public procurement is compliant with the European Union principles on award of public contracts. As a result, the basic rules that apply for participation to the tendering procedures, content of the bids to be submitted, examination and evaluation of bids by the competent committee, award criteria and notification of the result of the procedures, are common either in case that the European Union Regulation’s threshold is triggered (“international tender”) or in cases that the tendering procedure is considered as a “national tender”
Public procurement legislation is not applicable, save partially only, in the sector of public defense, in the field of electronic communications, in confidential pubic contracts, in privatization agreements. However, certain main principles regarding transparency of the tendering procedure and equal treatment of participants apply in these cases as well.
The principal differences between an international and national tender lie with (i) the time limits for submission of the bids (that commence the day after publication or receipt of the Invitation to bidders); national tenders allow for shorter time limits, (ii) the extent of the documentation that the bidders have to submit for admissibility of their participation to the tender; national tenders allow for less detailed documentation and evidence (iii) the obligation of the contracting Authority to answer within a specified time limit to clarifications that potential participants may request; international tenders set this obligation as principal for the contracting authority (iv) the time limits after the lapse of which the contracting Authority may proceed to the conclusion of the contract with the preferred bidder; international tenders provide for a judicial mechanism that forbids award before the lapse of the time limit for lodgment and examination of complaints. In national tenders the judicial authorities are more reluctant to stall the public authorities with continuation of the bidding procedure or execution of the contract.
Conclusion of public contracts may be effected in the following ways:
(a) By direct award to one and only selected contractor, in case that the contract’s total value, taking into account all amendments, renewals and supplemental contracts, is under the amount of € 20,000.
The contracting Authority, though, has got the obligation to publicize notice of contract award and contract value on the electronic platform for public procurement.
(b) By summary tender, during which a simplified (summary) Invitation to bidders is publicized in ‘Prometheus’ platform, in case that the contract’s total value taking into account all amendments, renewals and supplemental contracts, is under the amount of € 60,000. Moreover, in case of a supplemental agreement to a main contract, a summary tendering procedure is permitted under the condition that the supplemental agreement’s value does not exceed twenty per cent (20%) of the value of the main contract and is lower than the amount of € 60,000.
In summary tenders, any interested party may submit a bid for the award of the contract; additionally, the contracting authority may address the invitation to bidders to certain, at least three (3) suppliers / contractors, while the time limit for submission of bids of any interested party may not be less that fifteen (15) days starting the day after publication of the invitation to bidders in the platform for public procurement. In summary tenders, the committee examination and evaluation may be effected in one meeting leading to recommendation to the contracting authority for contract award.
(c) By open tender, during which the Invitation to Bidders, is addressed to an unknown number of participants which have to meet objectively described admissibility criteria.
In national tenders, the Invitation to bidders is publicized in the platform for public produrement; in international tenders, the invitation is publicized in the European Union Official Gazette, as well as in the platform for public procurement.
The invitation to bidders, or the tender documentation (in which case there must exist a clear indication that requirements are mentioned elsewhere, rather than in the invitation to bidders itself ), must include:
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all documentation that should be submitted for admissibility to the tender by the participants. Such documentation may not include restrictions in case of participants with a common offer (joint venture or otherwise), but may require a written commitment to the effect that, on contract award, joint liability towards the contracting authority is going to be legally ensured. Moreover, the participants may rely on the professional qualifications of other entities, as well as on the financial standing of third parties, in case they can sufficiently prove that, in case of contract award, these third parties or other entities have already been committed to provide their professional qualifications, by way of experienced personnel, or adequate technical support, or by way of financial back-up.
Additionally, to the extent that evidence that the participants are in order with their fiscal and social insurance obligations to their respective national authorities and Greek authorities, as well as that the participants are in order with their basic employment obligations towards their employed personnel, evidence that the participants’ legal representatives and chief operations officials have not been condemned or held ultimately liable for criminal offences relevant to the above obligations or for other financial and professional criminal offences, are required, the corresponding documentation for proof of the above must be mentioned in the tender documentation - the award criteria in detail, the gravity of each one on evaluation (mark), the mathematical type, if any, that is going to be applied for evaluation
- whether any bid may be excluded if its financial offer is found abnormally low in comparison with the others and the way that the participant may provide supporting explanations,
- the contract documentation, by way of attachments (non-publicized but available to potential participants), which in principle includes (a) the Agreement, (b) General terms and conditions, (c) Specific terms and conditions, (d) the contracting authority’s detailed budget, (e) Technical specifications (f) the participants’ financial offer, since the preferred bidder’s offer is going to be added to the contract documentation (g) the preferred bidder’s technical offer, only in case that the invitation so requires, as well as whether the participants may submit alternative (namely different from the authority’s study) offers,
- the participants’ rights and respective time limits regarding complaints on the outcome of the tendering procedure or any stage thereof. Importantly, participation to any tendering procedure equals to acceptance of the terms and conditions of the Invitation to bidders, including contract documentation, and any submission which includes reservation of rights to this effect is treated as an inadmissible bid.
(d) By restricted tender, during which the invitation to bidders, which should be publicized in the platform for public procurement and, in an international tender, in the European Union Official Gazette, is addressed to participants of specific identity, which has been defined in accordance with qualitative criteria, mainly professional, by the contracting authority.
The Invitation to Bidders and the bids’ examination and evaluation entails the same procedure as in open tenders.
(e) By competitive procedure with negotiation, during which participation to the tender is open to any interested party that may fulfill the contracting authority’s minimum standards regarding the object of the procurement, as set out in the Invitation to bidders. The appointed committee may negotiate the price and the other terms of the contract, as long as the minimum standards do not change.
(f) By competitive dialogue, during which participation to the tender is restricted only to the entities to which the contracting authority has addressed an Invitation to bidders, which sets out the qualitative requirements of the procurement and the award criteria, while there is an extensive field of negotiation on the specifications and the terms and conditions of the procurement.
(g) By way of a procedure with negotiation, without prior publication, in certain, exclusively prescribed, cases, mainly: (i) if an open or a restricted tender has already been followed, during which no bid or no suitable bid has been submitted. In this case, the procedure without negotiation should include the same terms and conditions as the first, fruitless, procedure, (ii) if the contract may be performed by an entity that has got unique, technical, intellectual property, lawfully exclusive qualifications, (iii) for supplemental agreements with the initial contractor / supplier, when procurement by another contractor / supplier would probably lead to incompatible products or disproportionate technical difficulties, (iv) for purchase of products or rendering of services / works on advantageous terms as a result of the supplier’s / contractor’s liquidation, (v) for award of services contracts, following the outcome of a design contest, (vi) for award of the same supply, services or works to the same supplier / contractor within the provisions of a basic project, provided that award is effected within three (3) years from the conclusion of the original contract.
As a result, selection of an improper tendering procedure by the contracting authority, which leads either to improper restriction in participation or to improper method of contract award, may validly give rise to the acceptance of a written complaint addressed to the competent, judicial or administrative, national or European, authority.
The outcome of examination of bids’ admissibility and the outcome of the bids’ evaluation, has to be stated in a justified written report of the relevant examination committee, different for each stage of the tendering procedure, in order to ensure transparency of the procedure.
In open tenders, examination of documentation required for lawful participation to the procedure, as well as of technical offer (if any), takes places in one stage. Depending on the outcome of this examination, following which a written report of the examination committee is executed, financial offers of the participating bidders are examined.
The examination committees’ reports form part of the Public Awarding (contracting) Authority’s resolution for award of the contract, which may accept or justifiably divert from the examination committee’s opinion and recommendation or may annul the procedure that took place in a particular stage of the tender and require new examination or evaluation.
Main contract terms in public procurement
The main terms in public contracts have to be mentioned in the documentation attached to the Invitation to bidders, including General terms and conditions, Specific terms and conditions and technical specifications. Nonetheless, the contracting authority may incorporate by reference the contract terms, as stated in mandatory applicable legislation for public construction / works, services / design –study or supplies.
The basic common contract terms in above pieces of mandatory legislation are as follows:
- the contract performance is supervised by an appointed engineer or an appointed public officer that issues orders to the contractor / supplier, which have to be complied with, even if this gives rise to claims for additional compensation and/or liquidated damages and/or time extension,
- the contractor / supplier is obliged to submit a Letter of Credit or other form of binding financial guarantee, at the time of commencement of performance of the contract, which sufficiently equals to a good performance bond, and which is released to the contractor, in installments, at the time of completion of each milestone (or periodical delivery),
- the contractor / supplier is obliged to submit for approval, at the time of commencement of performance, a binding detailed time schedule, to which penalties are attached as set out by the contracting authority,
- at the end of each calendar month or other suitable agreed period, the contractor / supplier submits for approval a detailed bill of account, describing all performed ac212 tions, works, supplies and services during the above period. The appointed supervisor checks the execution – not the proper performance – of the above, in order that payment is further approved
- price readjustment is forbidden. Exceptionally, in proven adverse and unforeseeable conditions or in cases that new type of works, services or supplies is required for the completion of the project, the contracting authority may approve new prices, on which the same terms of the financial bid of the contractor (discount or other offer, as the case may) shall be applied
- the mandatory warranty period, during which the contractor / supplier is obligated to support the works, or services or supplies, may vary from six (6) months to three (3) years depending on the nature of the project, and the project is legally and bindingly delivered by the contracting authority, releasing the contractor / supplier from the majority of its performance obligations, after the lapse of the warranty period. Ultimate and binding delivery leads to release of the Letter of credit of other performance bond.
- Novation of the contract on the part of the contractor / supplier is permitted in cases that the original contractor proves that it is impossible to continue with performance of the project, under the condition of the contracting authority’s prior approval. The contracting authority, though, may allow and approve the introduction of partnerships during performance of projects, as long as all partners remain severely liable for performance towards the authority.