As part of the so-called “Anti-Crisis Shield,” March 31 saw the Polish President sign an act (the “Act”) that contains modifications related to the public procurement law (“PPL”). Below you will find a summary of changes to the previous version of the “Anti-Crisis Shield” (the “Draft”) that we discussed in our alert of March 24, 2020.
- PRECLUSION OF THE APPLICATION OF PPL ACT – article 6 section 1 of the Act
The Act does not introduce any modifications to the Draft. PPL will not apply to orders for services or deliveries which are necessary to prevent COVID-19 if the disease is highly likely to spread in a fast and uncontrollable manner, or if required for the purposes of public health protection. Please note that pursuant to article 46c of the Human Infections and Infectious Diseases Prevention Act of December 05, 2008, “public procurement regulations do not apply to orders for services, deliveries or construction works, issued with the aim of preventing or combating the epidemic within the territory covered by the state of epidemic threat or the state of epidemic.”
This provision specifies a clearly broader range of orders that are exempt from the application of PPL during the epidemic since it includes construction works.
- AMENDMENTS TO PUBLIC CONTRACTS
2.1. It is possible to modify an agreement executed under PPL in terms of deadlines and remuneration. Also, the Act precludes liability of contracting authorities (incl. those that award utility contracts) for refraining from determination and pursuit of contractor’s financial obligations (e.g. contractual penalties), or for introduction of amendments to agreements – upon the conditions specified in the Act. Both these solutions have remained unchanged from the Draft.
2.2. The deadline has been extended for a party to a public contract to respond to the other party’s notification about the impact (whether actual or potential) of circumstances related to COVID-19 on proper performance of the agreement. The current term is 14 days from receipt of a notification, along with justification (and evidence, i.e. relevant statements or documents). The previous deadline was 7 days.
2.3. On a side note, it is worth adding that in order to introduce amendments to a public contract, it is necessary for parties to reach an understanding and enter into an amending annex. This means that claims of one of the parties do not automatically lead to amendments. The same is true for changes that could be related to the current COVID-19 threat.
2.4. It has been expressly stated that COVID-19 circumstances discussed in the Act cannot independently serve as the basis to exercise the contractual right of rescission.
- CONTRACTING AUTHORITIES’ LIABILITY
There have been no changes to the provisions involving the preclusion of contracting authorities’ liability, arising from the Liability for Breach of Public Finance Discipline Act, for amendments to a public contract and refraining from determination and pursuit of claims arising from non-performance or improper performance as a result of circumstances related to COVID-19.
- NATIONAL APPEALS CHAMBER AND INSPECTIONS
There are new regulations related to the National Appeals Chamber.
4.1. During the state of epidemic, declared due to COVID-19, the National Appeals Chamber does not hold any sessions and hearings
in the presence of parties and participants to the appeal procedure.
4.2. The Act does not interrupt or suspend the period for submission of an appeal, meaning that contractors that want to use legal protection measures will be bound by the dates specified in PPL. In case of an appeal, the standard term will be 5 or 10 days of knowledge about the basis for appeal submission.
We recommend filing appeals online, using a qualified electronic signature.
4.3. The Act does not suspend the inspections of prior public contracts co-financed by the European Union, which are conducted by the President of the Public Procurement Office with respect to contracts whose value is equal to or higher than: (i) EUR 20,000,000 for construction works; and (ii) EUR 10,000,000 for deliveries and services. A post-inspection report should be delivered within 14 days of receipt of all relevant documents (or 30 days – in case of a particularly complex inspection).
We reiterate all our recommendations for contractors and contracting authorities, related to the current situation, as provided in the previous alert .
We are ready to assist you in evaluating your particular situation. Please feel free to contact us any time by email or telephone.