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Amendment to Federal Public Procurement Act enters into force

internationallawoffice.com, 2010
1. Mai 2010

On March 5, 2010 the amendment to the Federal Public Procurement Act 2006 entered into force. The main focus of the amendment is to implement the EU Remedies Directive (2007/66/EC), which was issued to improve the effectiveness of review procedures concerning the award of public contracts. Further, the EU Directive on the Recognition of Professional Qualifications (2005/36/EC) has been implemented in relevant Austrian laws (eg, trade law), which makes it necessary to amend certain sections of the Federal Public Procurement Act that refer to these provisions. This update looks at the key amendments to the act.

Annulment of contracts in breach of act

In order to combat serious infringements of the Federal Public Procurement Act and the EU public procurement rules (in particular, direct awards and awards in breach of the fundamental principle of transparency), the amendment provides the Federal Public Procurement Authority with enhanced powers when dealing with ascertainment proceedings and new powers to declare contracts null and void.

A contract may be annulled on request if the contracting authority awarded such contract:

· without prior publication of a contract notice;
· without prior notification of the decision to award a contract; or
· in infringement of substantial legal provisions by basing it on a framework agreement or a dynamic purchasing system.

If the Federal Public Procurement Authority deems the award of a contract to be unlawful for one of these reasons, it must declare the contract null and void.

Alternative penalties

The contracting authority may file a request for the Federal Public Procurement Authority to refrain from declaring the contract null and void, even though it has been awarded illegally, provided that overriding reasons relating to a general interest require the contract to be upheld. Economic interests in the ineffectiveness of the contract may be considered as overriding reasons only if, in exceptional circumstances, ineffectiveness would lead to disproportionate consequences.

The regime below the thresholds of the EU Public Procurement Directives (2004/17/EC and 2004/18/EC) is less severe. If the interests in maintaining a contract outweigh the interests in terminating it, the Federal Public Procurement Authority may not consider the contract ineffective, provided that the contracting authority made such a request and its approach was not evidently illegal.

In such cases the amendment provides for alternative penalties in the form of fines of up to 10% (below the thresholds) and up to 20% (above the thresholds) of the tender amount.

New system for proof of qualification

The amendment also provides for a simplified system regarding proof of qualification. It refrains from requesting extensive supporting documentation. In most cases the submission of a so-called ´self-certification´ is sufficient proof of qualification. However, in case of doubt, the contracting authority still has the right to ask bidders to submit certain documents.

New time limits for review proceedings

Further, the amendment establishes a new time limits system. The period between the decision to award a contract and the conclusion of the contract (the standstill period) now takes into account different means of communication. If fax or electronic means of communication are used, or if the decision to award a contract has been subject to a voluntary publication, a contract may not be concluded before the expiry of a standstill period of at least 10 calendar days. If other means of communication are used, the contract may not be concluded before the expiry of a standstill period of 15 days. The standstill period below the relevant thresholds is seven days. This new system also applies to a request for a review of a contracting authority decision.

Revocation decision

The provisions on notification of the revocation decision have been adapted to the provisions on notification of the award decision. According to the new provisions, the contracting authority is not obliged to file a notification of the revocation decision, provided that no other bidder was involved or remained in the award procedure. The new standstill periods also apply to the declaration of revocation.

Standstill period - framework agreements

The amendment establishes a standstill period for the conclusion of the framework agreement. Thus, the contracting authority must inform excluded bidders of the bidder with which the framework agreement will be concluded. The new standstill periods also apply to notification of the bidder with which the conclusion of the framework agreement is intended.

EU Clean Car Directive

The amendment also implements the EU Clean Car Directive (2009/33/EC). According to Section 5 of the directive, when purchasing road transport vehicles, member states must ensure that all contracting authorities take into account certain energy and environmental impacts by either: (i) setting technical specifications for energy and environmental performances in documentation for the purchase of road transport vehicles on each of the impacts considered, as well as any additional environmental impacts; or (ii) including energy and environmental impacts in the purchasing decision, whereby in case a procurement procedure is applied, these impacts shall be used as award criteria. The amendment has implemented these conditions established by the directive.

EU Regulation 1370/2007

The amendment highlights a need for adaptation by implementing the EU Regulation on public passenger transport services by rail and by road (1370/2007). This regulation contains provisions on the award of public service contracts and admits the direct award of public service concessions to a greater extent than the EU Public Procurement Directives.

Other amendments

Other amendments to the Federal Public Procurement Act are as follows:

· the amendment establishes a preference for electronic means of communication (ie, correspondence by email or fax);
· as regards proof of qualification, bidders can fall back not only on other undertakings´ technical, economical and financial capacity, but also on their professional qualifications;
· the transmission of the whole contract to affiliated companies is now admissible; and
· the amendment provides for more possibilities to choose negotiated procedures.


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