One of the main objectives of the new public procurement legislation (PPA- 3, which in our law transposing Directive 2014/24 / EUR and 2014/25 / EU ) was, inter alia, to simplify procurement procedures and reduce the administrative burden for contracting authorities and in particular providers. This objective should be pursued, inter alia, also using the form ESPD, which should unify customers' requirements in the Member States in order to facilitate the participation of bidders in public procurement procedures in other Member States.
In practice, however, is increasingly showing the opposite, that the ESPD form constitutes an additional burden on customers who need that form in any contract, properly prepared, as well as for service providers who need this form (for each contract separately) to meet and to submit the bid as printed and signed . As legal advisers in the subject area, we are daily confronted with questions of subscribers and providers that are turning on us for an explanation, how to accomplish certain segments of ESPD form or what ever is necessary to state, and the most crucial when, for whom, and whether ESPD forms are required.
On 1 June 2016, Directorate for Public Procurement made the interpretation of public procurement legislation (PPA-3) in relation to the application of the Single European documents relating to the award of the contract (ESPD). In this article, we want to highlight outstanding issues that remain regarding the use of ESPD, and to contribute to the interpretation of application ESPD.
PPA-3 deals ESPD in Article 79. In the first paragraph of this Article, it is provided the obligation of the contracting authority, which instead of certificates issued by public authorities or third parties, adopts ESPD. An ESPD includes an updated statement of its own, as preliminary evidence that the economic operator fulfils the conditions and requirements set out in Articles 75 and 76 PPA -3. If applicable, also complies with the objective rules and criteria, established in accordance with Article 82 of the PPL-3. If the trader in accordance with Article 81 of PPA-3 is using capabilities of other entities, must ESPD information referred to the preceding paragraph also contain, in respect of the entities, whose capability is the economic operator using.
PPA-3 therefore provides an obligation of the contracting authority to adopt such a document instead of certificates, as preliminary evidence, which does not provide that the contracting authority is obligated to mandatorily and exclusively require providers to submit the ESPD form. This commitment from the very legal wording is derived neither for a provider nor its partners nor to third parties, in which capacity the provider relies. Based only on the duty of the client, instead of certificates issued by public authorities or third parties may also accept the completed form ESPD as preliminary evidence of compliance with these requirements. Of course, this does not exclude the possibility of the client, who can instead of using their own forms, use and require ESPD in the tender documents.
It should be noted that the provider can use ESPD, prepared by the previous procurement procedure or fulfil its own form on the Commission website, where it is possible to prepare your own ESPD by the provider, even if the contracting authority DO NOT draw ESPD form for a specific contract. That functionality Procurement Portal (currently) does not provide.
ESPD and other evidence for the purpose of qualification
Submission ESPD does not exclude the duty of the contracting authority, to meet the conditions defined in Article 75 based on Article 76, not to check before issuing a decision on the award of the contract, at least for the provider, to which he decided to award a public contract. That is quite clear from the seventh paragraph of Article 79 of the PPL-3. However, it should be noted that in this part is not be found, that the contracting authority may require the submission of proof solely and exclusively from the tenderer to whom it intends to award a contract, or to fulfil the conditions and requirements can be verified only for this provider. That does not derive from a literal nor a teleological interpretation of the above mentioned legal wording, since it merely lays down the duty of the client to do so, at least, but not only (!) for the tenderer to whom it intends to award the contract.
In the event that we take the view, that compliance with the law, permitted the verification of only the most favourable tender received, in the procedure where the contracting authority has received a larger number of bids, and the most favourable two offers were inadmissible, the verification of tenders would look like this:
The contracting authority opens the received tenders and initially classifies bids, depending on the criteria. If you do not take into account that there may be mathematical errors, or that the client set different weights, this can be done in a relatively short time. Then the most favourable bidder shall be invited to submit the requested supporting documents. Specific information should be verified through the e-Dossier, certain information should be checked with the PARS, and Criminal Records, as the link between the systems is not yet established. Within a week, contracting authority must obtain and review the required supporting documents. In doing so, they detect anomalies or malfunctions for which they summon the bidder for an explanation. It can take at least three weeks from the opening of tenders, to the contracting authority establishing that the offer of the most favourable bidder is inadmissible. In this case, the contracting authority undertakes an examination of the following advantageous tender. The method can be the same and again, it takes about three weeks. Then the contracting authority invites a third bidder whose bid is ultimately prove to be admissible. The contracting authority needs at least nine weeks (i.e. more than two months), in order to issue a decision on the award of the contract. We do believe that such a course of action is uneconomic and inefficient.
Therefore, we believe it is more appropriate, that at the same time the client can verify compliance with the basic conditions of all tenders received or at least in the best of three bids. If he received a larger number of tenders, as a rule, this does not pose a significant burden on providers (usually the majority of evidence contracting authority obtains itself), and can significantly speed up the procurement procedure.
ESPD and subcontractors
Consequently, in the light of the provisions of Article 79 of PPA-3 we can interpret a request for the submission of ESPD subcontracts, deriving from Article 94 of the PPL-3. If the law does not require the submission of ESPD for a provider and his partners, (yet it commands the reception of ESPD, if a tenderer submits), that provision should apply a fortiori to subcontractors. Act in Article 94 regarding subcontractors in connection with the ESPD provides, that, if the provider will carry out a contract of construction work or services by subcontractors, must offer a fulfilled ESPD from these subcontractors in accordance with Article 79 of the PPL-3. We believe that it is necessary in interpreting these requirements to derive from Article 79 of PPA-3, which provides that the contracting authority is obliged to accept, but not to require an ESPD. Therefore, in case, the provider of subcontractors submitted ESPD forms by the customer they are obliged to accept them as preliminary evidence, but not required to the submission of these forms. Therefore, it is possible to interpret that provision, mutatis mutandis, the provisions of Article 79 of PPA-3, that also for subcontractors it is not necessary to submit ESPD forms, unless the contracting authority has specifically requested, or when the bidder using the form ESPD as preliminary evidence of compliance with the requirements of the client.
Verification and evaluation of tenders
In accordance with the eighth paragraph of Article 79 of PPA-3 trader is not obliged to submit documents or other documentary evidence, if the contracting authority can get certificates or other necessary information obtain with a free direct access to national databases of any Member State. Some of the national databases, where he can get that information are the national register of public procurement, electronic company register, register of an electronic system for storing documents or prequalification system. In practice that means, that the provider, regardless of the customer's requirements, is not obliged (as was already the case for PPL-2) to provide evidence from official records. Nevertheless, he must provide specific evidence supplied by the client itself for which cannot be obtained free of charge (e.g. ISO certificates, declarations of conformity, ratings, certificates personnel, contracts for the hire of equipment ...). In the case of the latter data, however it is a rule of evidence with which the provider already has at disposal and therefore we cannot talk about a substantial additional burden, of course, it all depends on how wide range of requirements client in a particular ordered and what evidence in this regard is required. The use of ESPD form in no way conditions this, but with the respective requirements of the client, which must be proportionate to the object of the contract. Notwithstanding this, even if the provider does not submit such evidence, the contracting authority, based on Article 89, has to urge to submit the provider for the missing documents. Therefore, the failure of tender documents required for demonstrating the grounds for exclusion or qualification, a priori, does not constitute a direct exclusion, but (usually) a call for amendment.
Taking into account the current state of the purpose and objectives of the ESPD mellowed, especially in the light of its preparation and fulfilment as well as restrictions on the use, since practically every contract requires both, by the client and by the providers to prepare a new ESPD form.
In practice, this is reflected in the fact that contracting authorities have a problem because they need to prepare document properly and determine all relevant fields. Moreover, contracting authorities cannot get a simple way to review what ESPD prepared before sending it, since it is possible to export only structured .xml file that does not allow the inspection form. For an overview, the client should therefore import the form as a provider and review its contents, and as far as the error is noticed in the form, he should import it, as a contracting authority than repair it, and ... we believe that there is no need to interpret the circuit, by preparing such a form requires. The principle of efficiency is certainly not guaranteed, but also a stated objective to simplify the process greatly away. Preparation ESPD forms is certainly not easy, making notes of daily calls on fulfilling ESPD forms. We are confident that the survey would provide the same results, which would not be satisfactory. All said is all the more problematic for customers who carry out a small number of procurement procedures and, consequently, do not have the relevant experience and skills.
On the other hand, the providers have come up initiatives in the direction of the changes to the law, as providers increasingly recognize that the preparation ESPD forms is significantly more complex and cumbersome than the completion and signing forms produced by the contracting authorities themselves. The contracting authority may, for example prepare an umbrella statement on two sides and possibly a reference list and, if necessary, a list of staff indicating the requirements and conditions by the bidder only signed to certify compliance with the requirements. In the case of ESPD provider must first import the form, then during each request indicate whether it complies or not, and enter any additional required information (e.g. name records where the data can be verified). Instead of twoparties umbrella statement, which contains all the key elements of the grounds for exclusion and (most of) the conditions for establishing competences, only ESPD now accounts for at least 20 pages. We believe that such usage is not effective or economical, especially given the fact that (at least for now) the ESPD documents have to be submitted in the printed version, because otherwise it cannot be regarded as a signed statement of the entity to which the document relates.
Also in this form, enrolment offer price is not expected, registration period of implementation, enrolment warranty periods for equipment, payment terms, and commitments with regard to the presentation of financial collateral, indication of contact persons in the list of references. That means that it is necessary to prepare the tender documents for at least an additional form for entering all necessary data. As a result, therefore, we come from the typical 15 pages of the bidding documents at least 30 pages of the tender documentation.
Disposable ESPD
Taking the above, is also important that the provider of the form as such cannot save for further editing, but it can only be exported to .xml format, and while continuing to edit or amend reimported. This ultimately increases the possibility of errors or defects in compliance with the structure of the file, which can lead to errors in fulfilling. When a provider has completed the entire ESPD, then he should print it and sign it. Therefore, it is quite clear that providers are not enthusiastic about the use of ESPD form, as to them this further complicates the preparation of the bid, rather than to facilitate it, while significantly increasing the bid. If we ignore the vague diction in ESPD understood by hardly any provider.
It is not negligible even that abuse of the ESPD (unauthorized access to the database) would mean that the potential competitors may be familiar with this, who else will be performed in the execution of the contract. ESPD form but cannot be prepared at the last minute.
Can we unify uneven?
In any case, it is appropriate and desirable that the tender documentation contracting authorities in procurement procedures, which are to unify, so that bidders do not get lost between different documentation and requirements of the clients. It is also welcomed the practice to use standardized forms. However, based on previous experience in practice, we have noticed that the ESPD form at the moment and the current mode of use is not a solution. That would mean a simplification of procedures as an unnecessary extra burden on both suppliers and bidders, and that is not the easiest way for the fulfilment of the forms that contracting authorities have prepared themselves. At the same time but not after the time or after the paper is not more, but less economical solution.
Using only ESPD form does not cover all the grounds for exclusion!
It is necessary to draw attention to the key issue of the exclusive use of ESPD form for the purpose of showing the grounds for exclusion. ESPD form does not allow the inclusion of all the requirements, which are exclusively involved to the national legislation. Not included all crimes like deception in obtaining and using credit or benefits (Article 230 of KZ-1), deception in securities transactions (Article 231 of KZ-1), swindling customers (Article 232 of KZ-1), which states PPA-3 Article 75 did not take into account the specifics regarding the payment of taxes and contributions, and the like.
Solutions
Information technology solutions must facilitate users' work and provide benefit. Even if it means that the user can no longer work on one segment, therefore benefits must be visible on others (e.g. data transfer, recording data, data archiving, data review, and reuse data, highlighting errors, warning tasks, etc.). The introduction of the new solution simply because it is different from the previous, but instead benefit represent an additional burden and the benefits of them do not feel contracting authorities nor providers, is not the correct way. Objectives and purpose of the ESPD form is certainly good and need to continue to pursue, but it would be reasonable to consider another mode of implementation of the ESPD ideas that could actually simplify the preparation of tender documents, as well as the preparation of tenders or applications. Temporary solution in increasingly unsustainable situation would have been in contracting authorities drawing ESPD form within the tender documentation (such as a Word file). In this way, it is ensured by the electronic format of the form as the electronic completion of the form and greater transparency and the possibility of adapting the form of the necessary specific contract. It is also possible to re-use the form in the other public procurement procedures. In the future, a way of implementation of the ESPD is going to be provided. That will allow in practice an ease preparation and use ESPD forms, so that the objectives and purposes of ESPD use will be achieved.
If you would like to test how the electronic public procurement can effectively and efficiently, economically and effectively, be available, you can check our application eJN, which benefits more than 350 users. For further information, please visit us at our contacts.
Useful links (only in Slovene):
http://www.djn.mju.gov.si/resources/files/Stalisca/ZJN_3/430-77-2016_stalisce_wwwDJN_ESPD.pdf
https://ec.europa.eu/growth/tools-databases/espd/filter?lang=sl
