Could the COVID-19 be grounds for streamlining acquisition procedures?
COVID-19-related events could justify adopting direct award procedures for reasons of “extreme urgency”. The following amendments introduced by Decree-Law 10-A/2020 must be highlighted:
- Possibility of direct award on the grounds of “extreme urgency” by the State, the Autonomous Regions of Azores and Madeira, municipalities, independent agencies, public institutes, public foundations, public associations and “public law bodies”, for the execution of public works, lease or purchase of goods and services procurement contracts, provided that they are related to Covid-19 (Articles 1.3 and 2.1, as amended by Decree-Law no. 10-E/2020, of 24 March)
- Possibility of simplified direct award where the contractual price of public works, goods or services procurement contract do not exceed EUR 20,000 (Article 2.2)
- Possibility of simplified direct award, to the necessary extent and for duly justified reasons of extreme urgency (which cannot be attributed to the contracting authority), regardless of the price and up to budgetary ceiling, for the execution of contracts for the acquisition of the necessary equipment, goods and services for the prevention, containment, mitigation and treatment of COVID-19, or related purposes, notably personal protective equipment, goods required for testing COVID-19, equipment and materials for intensive care units, medicines (including medical gases), and other medical devices and logistics and transport services (including air transportation), related thereto, or with the respective distribution to entities supervised by the member of the Government responsible for the health sector or to other public entities or entities of public interest for which they are intended (article 2-A/1 and 3, as amended by Decree-Law no. 18/2000, of 23 April);
- Removal of the limits to repeated procurement set out in Article 113.2 and 113.5 of the Public Contracts Code (“CCP”), where economic operators who have already concluded high-value contracts by direct award in the previous two years, as well as those who, during this period, have executed works, supplied goods or services, free of charge, to the contracting authority, may be invited to submit a bid in these direct award procedures (Article 2.3)
- Removal of the obligation to invite more than one entity, even where possible, due to the urgency of the procurement, as set forth in Article 27-A of the CCP (Article 2.3)
- Contracts concluded as a result of direct award procedures are not subject to the prior clearance of the Court of Auditors (Article 6.1)
- Possibility to exempt the awarding bidder from the submission of its qualification documents and of a performance bond prior to the contract’s execution (article 2.º/9 e 10, added by Law no. 4-A/2020, of 6 April)
Can an entity bound by the National Public Procurement System procure, in this context, goods and services outside the centralized framework agreements without the need for a prior authorization?
Yes. The legislator waived the prior authorization requirement for the procurement of goods or services in connection with Covid-19 and that are subject to a framework agreement executed by a purchase center binding on the buyer (Article 2.7 of Decree-Law 10-A/2020). The derogation from the subjection to the framework agreement is therefore fulfilled ope legis.
Could COVID-19-related events be grounds for administrative streamlining and cutting red tape?
Yes. Decree 10-A/2020 introduced many simplifications:
- Tacit expenditure authorization
Requests for authorization by the financial and sectoral authorities, where required by law, are considered tacitly granted, in the absence of a decision by those entities within 24 hours after referral to the authority empowered to authorize them [Article 3(a)].
Multiannual expenditure resulting from the execution of the contracts at stake is tacitly granted if the request for authorization by means of an ordinance extending the charges to the member of the Government in charge of finance is not rejected within three days [Article 3(c)]
Budgetary changes involving reinforcement, in return for other actual expenditure items, are authorized by the member of the Government in charge of the relevant sector [Article 3(d)]
If required, the release of funds to meet the objectives set out in Decree-Law 10-A/2020 shall be considered tacitly granted three days after the submission of the application [Article 3(e)]
- Release from administrative authorizations
The decision to procure services whose purpose is to carry out studies, opinions, projects and consulting services, as well as any specialized work, does not require the administrative authorizations provided for by law, and is entrusted to the member of the Government in charge of the relevant sector (Article 4)
- Derogation for Ministry of Health services
The decision to procure services by bodies, agencies, services and other entities, including the corporate public sector, the Ministry of Health, the Directorate General for Rehabilitation and Prison Services, IP, of the National Institute of Forensic Medicine and Sciences, IP, the Hospital of the Armed Forces, the Military Laboratory of Chemical and Pharmaceutical Products and the Institute of Social Action of the Armed Forces, IP, is authorized by the highest officer or highest management body, and is subsequently communicated to the members of the Government in charge of health ,justice and national defense, respectively (Article 7, as amended by Decree-Law no. 12-A/2020, of 6 April). Such contracts are also not subject to the prior clearance of the Court of Auditors (Article 6.1 of Law 1-A/2020).
The General Health Direction and the Central Administration of the Health System can authorize (regardless of the contract’s value) the expense related to the supply of equipment, goods and services necessary to prevent or combat the disease, up to their budget’s limit, or the additional funds provided by the members of the Government responsible by the finance and health sectors (article 2 of the Decree-Law no. 10-E/2020, of 24 March).
Could the COVID-19 be grounds for streamlining acquisition procedures? Can I withdraw a bid already submitted in a public procurement procedure claiming that as a consequence of COVID-19 I can no longer meet the requirements to which I am bound?
Specifically as regards public procurement, the COVID-19 may have a particular impact on the following aspects of the framework, depending on the specific case:
- As potential ground for adopting a direct award procedure for reasons of “pressing urgency” of urgent goods in connection with the disease
- As grounds to set a deadline longer than the standard deadline to submit offers or bids or to extend any deadlines already running
- As possible ground to release the bidder from the obligation to maintain the bid submitted provided that duly justification is provided (the disruption caused by COVID-19 must be an event which the bidder was not required to be aware of at the time of preparation of the bid and that demonstrably renders performance impossible or excessively burdensome)
Can I withdraw a bid already submitted in a public procurement procedure claiming that because of COVID-19 I can no longer meet the requirements to which I am bound?
The disruption caused by COVID-19 could be grounds to release the bidder from the bid submitted provided that it is duly justified (such disruption must be an event which the bidder was not required to be aware of at the time of preparation of the bid and that demonstrably renders performance impossible or excessively burdensome).
Does this context entitle interested parties to participate in public tenders and to enjoy a longer deadline to submit bids and offers?
The law does not expressly impose this – and, in fact, article 7.º-A/3 of Law no. 1-A/2020, added by Law no. 4-A/2020, emphasized that public procurement procedures deadlines were not suspended. Notwithstanding, considering the provisions in Article 63. 2 of the CCP in combination with the provisions in Law 10-2020 on the suspension of deadlines and justifiable reasons, it is advisable that awarding entities grant a period longer than the standard period to submit bids or proposals – except in the event of manifest and pressing urgency.
The disruption caused by the Covid-19 could further warrant extending deadlines already running.
What consequences could the pandemic have on the performance of my contracts with the Administration?
- Qualification as a “force majeure” event, as grounds for not complying, in whole or in part, with obligations provided for in an administrative contract, in particular with regard to deadlines (depending on what the contract specifically provides for and provided that a causal link between the illness and the impossibility of meeting deadlines is evidenced, as well as the impossibility or unenforceability of taking alternative measures, or their insufficiency, and always without prejudice to the counterparty’s duty to inform) – as already acknowledged by the Government concerning the insufficient implementation or achievement of actions or goals of the PT2020 (paragraph 4 of Council of Ministers Resolution no. 10-A/2020, of 13 March)
- Claiming the occurrence of an abnormal and unforeseeable change in circumstances as grounds for amending the contract and/or restoring the financial balance
- Increased duty of cooperation by the public contractor, in particular with regard to the immediate payment of contractual debts (paragraph 15 of Council of Ministers Resolution no. 10-A/2020) and the possibility to advance payments of the price (Article 2.6 of Decree-Law 10-A/2020, ratified by Law 1-A/2020, and article 2-A/4 of Decree-Law 10-A/2020, as amended by Decree-Law no. 18/2020).
- Postponement of the deadline for the mandatory use of electronic invoicing in public contracts (as per Decree-Law no. 14-A/2020, of 7 April).