Presentation by Erika Bozzay, SIGMA, at the SIGMA regional conference on public procurement which took place in Beirut on 2-3 June 2015. Also available in Arabic.

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© OECD
AjointinitiativeoftheOECDandtheEuropeanUnion,
principallyfinancedbytheEU
SIGMA Regional Conference
on Public Procurement
Legal protection in public procurement –
institutional models for the establishment of a
review system
Erika Bozzay, SIGMA/OECD
Beirut, Lebanon
3 June 2015

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Remedies
• legal actions
• available to economic operators participating
in contract award procedures,
• which allow them to request the enforcement
of their rights and public procurement
regulations
• in cases where contracting authorities,
• either intentionally or unintentionally,
• fail to comply with the legal framework for
public procurement.
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Importance of the review and
remedies system
Effective remedies
 allow irregularities occurring in procurement
procedures to be challenged and corrected as soon as
they occur,
(and as a consequence)
 increase the lawfulness and transparency of public
procurement procedures;
 ensure fairness;
 discourage illegal practices, incite for compliance and
integrity of the procurement process;
 generate trust in the system, build confidence among
businesses as conditions for competition.
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A functioning review and
remedies system
According to the EU and other international
standards a functioning review and remedies
system has to provide aggrieved tenderers with
remedies, which must be
 rapid,
 effective,
 transparent,
 non-discriminatory, and
 provided through an independent review
body.
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A functioning review and
remedies system
• available to any economic operator having an
interest in obtaining a particular public
procurement contract and who/whose
interests being harmed by an alleged
infringement
• clear and easy to use for economic operators
• effective in preventing and correcting unlawful
acts of contracting authorities and economic
operators
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EU legislative framework
• Directive 89/665/EEC for Public Sector
• Directive 92/13/EEC for Utilities sector
as “the Remedies Directives”
• Directive 2007/66/EC amending the Remedies
Directives
• Treaty on the Functioning of the European
Union
• Case law of the Court of Justice of the
European Union
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What good procurement requires?
Key requirements in SIGMA’s Principles:
1. Public procurement is regulated by duly enforced policies and
procedures that reflect the principles of the Treaty on the
functioning of the European Union and the European Union
acquis, and are supported by suitably competent and
adequately resourced institutions.
2. In case of alleged breaches of procurement rules, aggrieved
parties have access to justice through an independent,
transparent, effective and efficient remedies system.
3. Contracting authorities are adequately staffed and resourced
and carry out their work in accordance with applicable
regulations and recognised good practice, interacting with an
open and competitive supply market.
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Principle 12
The remedies system is aligned with the
acquis standards of independence, probity
and transparency and provides for rapid and
competent handling of complaints and
sanctions.
(+7 sub-principles)
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Sub-principles
1. The procurement legislation lays down the
mechanisms and institutional set-up for
handling complaints in compliance with the
European Union Directives, and covers both
public contracts and concessions.
2. The acquis mechanisms for ineffectiveness of
the contract and the imposition of penalties
are transposed into the national legislation.
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Sub-principles
3. Due consideration is given to achieving the main
goals of public procurement (particularly value
for money through open, transparent and non-
discriminatory competition), as opposed to
focusing on purely formal errors and omissions,
especially those that do not impact on the
outcome of the procurement process.
4. The review and remedies system provides
speedy, effective and competent handling and
resolution of complaints and sanctions, including
comprehensive publication of judgements and
their rationale.
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Sub-principles
5. The review and remedies system is easily
available to economic operators, without
discrimination and excessive cost.
6. The review organisation handles complaints
and sanctions in a timely manner, in
accordance with the law, and ensures their
effective and competent resolution.
7. Data on the functioning of the remedies
system is published without delay.
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Review and remedies system in
the EU Member States
• EU Member States are left to decide on the choice
of administrative and legal solutions for organising
the review system
• a variety of models in EU Member States:
• Regular courts (civil or administrative courts);
• Specialised administrative bodies;
• A combination of the two.
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Institutional models:
Courts
• In half of the Member States (14) the review
body is a judicial body: the ordinary civil or
administrative courts in each country.
e.g.: in DE, EL, IE, IT, LT, PT, UK
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Institutional models: administrative
bodies
• In the remaining Member States there is an
administrative review body at first instance,
e.g.:
• BG: the Commission on Protection of
Competition
• CZ: the Office for the Protection of
Competition
• LV: Complaints Review Commission of the
Procurement Monitoring Bureau
• RO: National Council for Solving Complaints
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Institutional Models:
Administrative Bodies 2.
• 10 Member States (CY, DK, EE, ES, HR, HU, MT, PL,
SK and SI) have established specialised public
procurement review bodies (= established solely
to deal with cases relating to public procurement),
e.g.:
• the Tenders Review Authority in Cyprus,
• the State Commission for Supervision of Public
Procurement Procedures (SCSPPP) in Croatia,
• the Public Procurement Arbitration Board (PPAB) in
Hungary,
• the Public Contracts Review Board in Malta,
• the Office of Public Procurement (PPO) in Slovakia.
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Specialised Public Procurement
Review Bodies
• The procedure is usually simpler and quicker
than is the case in regular courts.
• The members of the specialised review body
deal exclusively with procurement cases (as a
result, they quickly gain specialised expertise).
• The cost involved when regular courts review
complaints may be much higher than it would
be in specialised review bodies, due to the
length of the procedure and the need for legal
representation.
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Institutional Models:
combination of the two
• In a few countries, depending on the nature of the
claim and the remedy sought, an application for
review can be made either to the administrative
or judicial body at first instance.
• e.g. in Belgium:
• claims for annulment or suspension:
• the Council of State (Administrative Branch) when the CAE is
an administrative body,
• the ordinary courts otherwise,
• claims for damages, declaration of absence of effects
and alternative sanctions: the ordinary courts (Ordre
judiciaire)
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Status and independence of a
specialised review body
• The independence of the review body is a
cornerstone for ensuring credible results of the
remedy procedures against public
procurement decisions (requirement of the
Remedies Directives as well as according to
international best practice)
• The issue of independence should be
addressed on two levels:
• Independence of the review body as an institution;
• Independence of the members of the review body.
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Independence of the review body
as an institution
1. independent from the parties of procurement
procedures – contracting authorities/entities and
economic operators and
2. functionally independent of the government
Implications to the location of the review body
within the governmental hierarchy.
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Independence of the members of
the review body
• The member’s independence is an essential
requirement for demonstrating the independent
status of the review body as an institution.
• Requirements:
• proper rules on the procedures of appointment and
dismissal of the members;
• the members must be protected by law from any
interference or even pressure;
• the members must exercise their functions with
complete independence, and any instructions given, in
the performance of their duties, on behalf of any other
person must be prohibited by law;
• proper conflict of interest rules;
• financial safety of the members
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Key determinants of a well-
functioning review system
• the transparency and efficiency of the
procedures
• the institutional capacity
• the quality of the decisions and how they
are implemented
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Major risks in developing PRBs
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Independent
PRB
Lack of
experience in
public
procurement
Lack of financial
independence
Lack of
transparency in
the process of
selection of the
members of PRB
Influence of
the political
structure
Increased
bureaucracy in the
procedure and
possible delays in
procurement
procedure

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4 major steps for successful
remedies system
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Education of the
private and public
sector about legal
protection in public
procurement
PRB set-up
- Independents of PRB
- Sufficient budget
- Premises for PRB
Branding of the PRB
Transparent
functioning
Webpage
Awareness raising
material
Manuals for all stake
holders
PRB in the public
procurement system
• Relationship towards
the government
• Relationship towards
the representatives of
private sector
• Relationship toward
the contracting
authorities

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Further information
See SIGMA procurement briefs on SIGMA
website:
http://www.sigmaweb.org/publications/public-
procurement-briefs.htm
SIGMA Paper No. 41 Public Procurement Review and
Remedies Systems in the European Union
SIGMA Brief 12 Remedies
SIGMA Brief 25 Establishing Procurement Review Bodies
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