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Slovenia adopted new Public Procurement Act

24/11/2015

Adoption of new Public Procurement Act shall, according to the official opinions of the Ministry of Public Administration bring simplification, enlarge flexibility and improve efficiency in all phases of public procurement procedures in Slovenia.

On 27 October 2015, Slovenian National Assembly adopted a Public Procurement Act (ZJN-3), which shall be valid as of 1 April 2016. Adoption of ZJN-3 is a consequence of transposition of the European Directive 2014/24/EU dated 26 February 2014, by which European Parliament and Council try to pursue several objectives, among others, simplification of public procurement procedures, increase participation of smaller and medium-size undertakings and to promote economic measures like ‘best value for money’. New ZJN-3 brings some significant novelties in the Slovenian public procurement procedure; some of them are briefly represented bellow.

With goal to simplify procedure, ZJN-3 introduces two new awarding procedures, namely the competitive procedure with negotiations that can be used in general area only and innovation partnership, used in both, general and infrastructure areas. Changes are introduced also in the pre-existing open procedure as well as in the simplified procedure, whereby the Contracting Authority may decide, first to range all offers in accordance with the established measures, second to verify those offers in the light of adequacy and last to check potential reasons for exclusion only for appropriate tenders. In accordance with ZJN-2, Contracting Authority has to review reasons for exclusions in the beginning of procedure and immediately exclude bidders that do not fulfil all non-exclusion conditions.

Important newness is possibility to award a contract by lots, whereby the Contracting Authority should clearly specify size, numbers and subject of those lots. When public procurement is not divided in lots, ZJN-3 states that Contracting Authority should argument such decision and include it in the Tender documentation, which is supposed to increase competition between bidders and enable involvement of smaller companies.

Regarding measures for selection, ZJN-2 stipulates that the Contracting Authority award contract based either on tender offering best value for money either on the lowest offered price, the latter being most often used in Slovenian public procurement procedures. According to the ZJN-3, Contracting Authority should award contract based only on the best value for money principle. The most economically advantageous tender is stipulated by virtue of price or costs, with use of cost-effectiveness approach, meaning that Contracting Authority may calculate costs in the operational life or best price-quality ratio and not simply to award contract to the bidder offering the lowest price as usual in all to date awards of the contract. How such a provision would de facto be implemented only the time can tell.

Chamber of Craft and Small Business of Slovenia has lodged a veto (via Council of State) because ZJN-3 still allows participation in competitive tendering for the companies that have not repaid their sub-contractors in the past. Further opposition against ZJN-3 outlined lowest offered price measure still remaining in prevailing scope within the law (scarce scope of activities where this measure is banned as the only one decisive). Considering new ZJN-s as a framework act based on EU directive requirement National Assembly reasonably passed ZJN-3 again with required absolute majority of all votes in the second voting on 18 November 2015.

Authors

Matevž Klobučar
Associate
Ljubljana