New Public Procurement Act into force as of 15 April 2016

The new Public Procurement Act ("PPA") implements EU Directive 2014/24/EU on public procurement and Directive 2014/25/EU on procurement by entities operating in the water, energy, transport and postal services sectors. The new legislation shall considerably simplify public procurement procedures.

The PPA provides for complete electronic management of the entire tender procedure. Electronic procurement shall be gradually introduced as of April 2016 and most e-procurement processes shall become operational by July 2017.

The PPA introduces the new European Single Procurement Document ("ESPD") that shall considerably reduce the administrative burden for bidders. The ESPD shall allow businesses to self-declare electronically that they meet the personal criteria for participating in the procedure. Submission of the documentation shall only be required once bidders have been awarded the contract.

The PPA sets lower thresholds for the estimated value of contract, above which procedures, provided for in the abovementioned EU directives, shall apply. The thresholds are identical to those in the directives, excluding the threshold for works, which is about half lower than the EU requirement. Under the new rules, contracting authorities shall be able to award contracts for individual lots without applying the PPA procedures, if the estimated value of the lot concerned is less than EUR 80,000 for supplies or services or EUR 511,000 for works. However, the aggregate value of the lots thus awarded shall not exceed 20% of the aggregate value of all lots.

The contracting authority shall be obliged to consider the appropriateness of dividing contracts into lots and duly motivate each refusal to do so.

The new rules benefit subcontractors by binding the contracting authority to pay subcontractors directly for those parts of the contract that could be delivered as a separate lot.