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Public Procurement | South Africa

Public Procurement

South Africa

Governance of procurement in the public sector is vital to the efficient service delivery of any government. It must be held to a higher standard of conduct because it accounts for a significant portion of taxpayer money. 

Public procurement underpins the relationship between the private and public sectors and requires an acute appreciation and understanding of the broader legal and policy framework in public law, including public procurement, public finance management, constitutional law, administrative law, municipal law and regulatory law. 

Our integrated approach 

Our team is uniquely comprised of a combination of corporate lawyers, ex-regulators, qualified Company Secretaries and certified Commercial Forensic Practitioners and Fraud Examiners who have sat on the boards and been members of executive and audit committees of national and municipal entities.

We have the long-standing practical experience and technical knowledge to assist you in achieving a policy system that is fair, equitable, competitive, commercial and cost effective whilst upholding the constitutional principles of accountability and transparency. 

Our services include:

  • accessing information from public bodies
  • advising on administrative legislation including the Municipal Systems Act, the Local Government Act, Municipal Finance Management Act, the Municipal Budget and Reporting Regulations, the Municipal Service Delivery and PPP Guidelines, Municipal Supply Chain Regulations, the Supply Chain Management Guide for Municipal Accounting Officers and municipal supply chain policies
  • advising and training on the Public Finance Management Act, regulations 16 and 16A of the Treasury Regulations, the PPP Manual issued by National Treasury, the Constitution and procurement legislation including the Preferential Procurement Policy Framework Act, the Public Service Act and the Promotion of Administrative Justice Act.
  • advising on tender procedures and the applicable legislative framework
  • advising on company acquisitions and sales
  • advising on property acquisition, development and management
  • challenging irrational and unlawful administrative action
  • drafting and negotiating outsourcing and performance management agreements'
  • drafting and reviewing risk management and procurement policies
  • drafting opinions on constitutional, administrative and local and municipal government issues
  • lobbying/submissions to Parliament and all levels of government regarding legislative changes
  • providing employment advice
  • representing clients in proceedings before quasi-judicial bodies and parliamentary sub-committees
  • structuring public-private partnership transactions
  • undertaking judicial reviews and litigation
  • working with local authorities
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7 October 2019
CMS ex­pands in Africa
Frank­furt, 7 Oc­to­ber 2019. CMS an­nounces that RM Part­ners and Daly & In­am­dar Ad­voc­ates, based in South Africa and Kenya re­spect­ively, have today joined the lead­ing glob­al law firm. Go­ing for­ward, they will be known as CMS RM Part­ners and CMS Daly In­am­dar Ad­voc­ates.The ad­di­tion of these firms con­sid­er­ably strengthens CMS’s pres­ence in Africa, already en­com­passing An­gola, Al­ger­ia and Mo­rocco. For over 50 years, CMS has de­veloped a track re­cord of sig­ni­fic­ant deals in Africa, show­cas­ing its deep know­ledge of the leg­al sys­tems across the con­tin­ent. CMS now has 75 of­fices in 43 coun­tries and more than 4,800 law­yers world­wide.Duncan We­st­on, Ex­ec­ut­ive Part­ner, CMS said, “Our cli­ents see Africa as a ma­jor growth op­por­tun­ity, and many are look­ing to ex­pand in­to key mar­kets on the con­tin­ent. South Africa and Kenya are both siz­able eco­nom­ies, but they’re also gate­ways in­to oth­er sub-Saha­ran mar­kets. RM Part­ners and Daly & In­am­dar Ad­voc­ates have out­stand­ing repu­ta­tions thanks to their loc­al mar­ket know­ledge and the over­all qual­ity of ser­vice they provide to cli­ents.” With this ex­pan­sion, CMS is un­veil­ing a ded­ic­ated or­gan­isa­tion that brings to­geth­er our Afric­an firms and ex­perts in a unique mod­el and aligned prac­tices to provide our cli­ents with the best sup­port in Africa. CMS Africa has a pres­ence in the most dy­nam­ic re­gion­al hubs – Cas­ab­lanca, Jo­han­nes­burg and Nairobi – provid­ing us with a strong foot­print, sus­tained by of­fices in Al­gi­ers, Lu­anda and Mom­basa. CMS Africa of­fers the ideal al­tern­at­ive for tax and leg­al ser­vices in Africa, a po­s­i­tion that is be­ing re­in­forced through the ad­di­tion of the new firms.CMS RM Part­nersCMS RM Part­ners spe­cial­ises in provid­ing prac­tic­al and in­nov­at­ive leg­al, tax and trans­ac­tion ad­vis­ory ser­vices. It is com­mit­ted to de­vel­op­ing young Afric­an tal­ent and is ac­cred­ited as a Black Eco­nom­ic Em­power­ment (BEE) Level 1 law firm. Foun­ded by seni­or law­yers with ex­cep­tion­al track re­cords from top in­ter­na­tion­al and loc­al firms, the firm is based in Jo­han­nes­burg and com­prises more than 20 law­yers. Its cli­ents in­clude loc­al private and pub­lic in­sti­tu­tions, lis­ted com­pan­ies and nu­mer­ous glob­al en­ter­prises.Riza Moosa, Founder and Dir­ect­or at CMS RM Part­ners, said, “We are on a jour­ney to trans­form and mod­ern­ise the South Afric­an leg­al mar­ket, but we also re­cog­nise the im­port­ance of an Afric­an and in­ter­na­tion­al foot­print. Join­ing CMS is the right step for our firm be­cause they re­cog­nise the im­port­ance of grow­ing an Afric­an busi­ness from Africa, and have a clear, re­gion­ally-fo­cused growth plan for Africa which aligns with our own strategies.”CMS Daly In­am­dar Ad­voc­atesCMS Daly In­am­dar Ad­voc­ates is one of the top-rank­ing law firms in Kenya. It was formed via the mer­ger of two of Kenya’s old­est law firms and com­prises more than 35 law­yers work­ing out of of­fices in Nairobi and Mom­basa. The firm’s part­ners have handled nu­mer­ous ground-break­ing com­mer­cial trans­ac­tions and con­ten­tious civil dis­putes.Ham­ish Keith, Seni­or and Man­aging Part­ner at CMS Daly In­am­dar Ad­voc­ates, said, “Kenya is East and Cent­ral Africa’s epi­centre of tech in­nov­a­tion and its eco­nom­ic ex­pan­sion has been sup­por­ted by a gov­ern­ment that is com­mit­ted to im­ple­ment­ing busi­ness re­forms. Our de­cision to join CMS fol­lows a peri­od of close col­lab­or­a­tion on cli­ent work and a shared com­mit­ment to ser­vice. This will only deep­en as Kenya be­comes in­creas­ingly at­tract­ive as a des­tin­a­tion for for­eign in­vest­ment.”Pierre-Sé­bas­tien Thill, Chair­man, CMS, said, “This is an ex­cit­ing time in the de­vel­op­ment of CMS. Our cli­ents have a glob­al mind­set, and when they come to CMS, they need to know that they can ac­cess qual­ity ad­vice and ser­vice de­liv­ery in every ma­jor jur­is­dic­tion. One of our primary ob­ject­ives for the next four years is to fur­ther grow our geo­graph­ic­al reach. This is a sig­ni­fic­ant ex­pan­sion in our jour­ney to be­com­ing a genu­inely glob­al law firm.”
Im­pact of COV­ID-19 on Pub­lic Pro­cure­ment
The COV­ID-19 crisis is hav­ing a ser­i­ous im­pact on the eco­nomy and busi­nesses. In these cir­cum­stances, pub­lic pro­cure­ment can be of even great­er im­port­ance than usu­al and vari­ous ques­tions arise, such as:Are pub­lic pro­cure­ment pro­ced­ures auto­mat­ic­ally sus­pen­ded due to the corona pan­dem­ic and, if not, are con­tract­ing au­thor­it­ies sus­pend­ing pro­ced­ures on their own ini­ti­at­ive?Does the cur­rent situ­ation al­low ex­ten­ded use of spe­cial pro­ced­ures or spe­cial meas­ures dur­ing a pro­cure­ment pro­ced­ure (ac­cel­er­ated timeline, use of elec­tron­ic means)?Are the dead­lines for rem­ed­ies auto­mat­ic­ally sus­pen­ded?How can ex­ist­ing con­tracts be mod­i­fied or ex­ten­ded in the con­text of the cur­rent situ­ation?In many coun­tries the leg­al situ­ation is chan­ging rap­idly, and time is valu­able. CMS Pub­lic Pro­cure­ment team has pre­pared a brief but com­pre­hens­ive over­view of the main de­vel­op­ments in 23 coun­tries. The over­view in­cludes links to art­icles or of­fi­cial guid­ance for fur­ther in­form­a­tion on each coun­try.Over­view: The im­pact of COV­ID-19 on pub­lic pro­cure­mentJur­is­dic­tionAu­thorSum­mary of the key as­pectsEuropean Uni­on The European Com­mis­sion has is­sued a guid­ance re­gard­ing choice of pro­ced­ures and dead­lines in pub­lic pro­cure­ment un­der the EU pub­lic pro­cure­ment law. The guid­ance is avail­able here.Aus­triaBernt Els­ner,  Robert Keisler, Ruth BittnerSev­er­al leg­al meas­ures have been taken in the last few weeks. They in­cluded the sus­pen­sion of dead­lines for rem­ed­ies; how­ever, this sus­pen­sion has been re­voked in the last few days. Apart from that, there have been no changes in the leg­al situ­ation un­til now. For fur­ther in­form­a­tion on this and oth­er ques­tions, see Guid­ance for pub­lic pro­cure­ment pro­ced­ures in Aus­tria dur­ing the COV­ID-19 crisis.Bos­nia and Herzegov­inaNedz­ida Sa­li­hović-WhalenThe main ques­tion for Bos­nia and Herzegov­ina is wheth­er the ex­traordin­ary cir­cum­stance is con­sidered a force ma­jeure event. Cur­rently, our an­swer is neg­at­ive, but this may change.Bul­gariaKostadin Sir­leshtov, Zor­nitsa Stoykova, Ant­o­nia Ke­hay­ovaThe Bul­gari­an par­lia­ment ad­op­ted meas­ures in the re­cent state-of-emer­gency law (Emer­gency Meas­ures Act) to reg­u­late ma­jor re­la­tion­ships dur­ing the cur­rent crisis, which for ex­ample stip­u­late that the Pub­lic Pro­cure­ment Act will not be ap­plied for cer­tain med­ic­al devices. However, ques­tions still re­main. For more de­tail, see Bul­garia: Pub­lic pro­cure­ments dur­ing the coronavir­us crisis.ChinaUl­rike GlückA no­tice was is­sued by the PRC Min­istry of Fin­ance (Cai Ban Ku [2020] No. 29) on 6 Feb­ru­ary 2020 that cov­ers vari­ous ques­tions re­lated to pub­lic pro­cure­ment, such as for ex­ample the sus­pen­sion of dead­lines in pro­cure­ment pro­ced­ures. See here for fur­ther de­tails.Colom­biaMaría Lu­cia Amador, Daniel RodríguezWith the ap­pear­ance of COV­ID-19 in Colom­bia, the Na­tion­al Gov­ern­ment has de­clared the coun­try in State of So­cial, Eco­nom­ic and Eco­lo­gic­al Emer­gency (the “State of Emer­gency”) by means of De­cree 417 of 2020, en­abling the Pres­id­ent to is­sue Le­gis­lat­ive De­crees de­signed to over­come the emer­gency. Based on this, a series of pub­lic pro­cure­ment meas­ures have been ad­op­ted which may be of in­terest to our cli­ents. For fur­ther de­tails see Pub­lic Pro­cure­ment Emer­gency meas­ures ad­op­ted by the Colom­bi­an Na­tion­al Gov­ern­ment to ad­dress COV­ID-19.Croa­tiaMar­ija Mušec, Mia Kancel­jak Croa­tian Gov­ern­ment ad­op­ted a De­cision to lim­it use of the state budget in 2020, which pre­scribes that as of 4 April 2020 budget­ary and ex­tra-budget­ary en­tit­ies in Croa­tia must sus­pend all pub­lic tenders and are not al­lowed to ini­ti­ate new tenders, un­less do­ing so is ne­ces­sary to carry out their es­sen­tial func­tions and work.The Min­istry of Eco­nomy, En­tre­pren­eur­ship and Crafts is­sued a Re­com­mend­a­tion to con­tract­ing au­thor­it­ies on the re­quire­ments and de­liv­ery of the bid guar­an­tee. The re­com­mend­a­tion con­cerns the fact that the ori­gin­al copy of the bid guar­an­tee must be de­livered and timely de­liv­ery of the bid guar­an­tees is dif­fi­cult due to the re­stric­tions on move­ment with­in Croa­tia (pro­hib­i­tion to leave res­id­ence) and re­stric­tions on in­ter­na­tion­al travel. Also, the Min­istry is­sued a Re­com­mend­a­tion to con­tract­ing au­thor­it­ies on the pub­lic open­ing of bids, in the light of a pre­vi­ous Civil Pro­tec­tion Dir­ect­or­ate de­cision on lim­it­ing so­cial gath­er­ings and the ob­lig­a­tion of em­ploy­ers to can­cel meet­ings and or­gan­ize tele­con­fer­ences for fu­ture meet­ings, which is also re­flec­ted in pub­lic pro­cure­ment pro­ced­ures.Moreover, the State Com­mis­sion for Su­per­vi­sion of Pub­lic Pro­cure­ment Pro­ced­ures (DKOM) ad­op­ted a de­cision on com­mu­nic­a­tion with cli­ents dur­ing the crisis.For more in­form­a­tion, please see the Guidelines for Pub­lic Pro­cure­ment in Croa­tia dur­ing the Cov­id-19 Crisis.Czech Re­pub­licLen­ka Kru­takovaEven though spe­cif­ic COV­ID-19 re­lated pub­lic pro­cure­ment law or rules have not been is­sued yet, in light of the state of emer­gency in the Czech Re­pub­lic de­clared on 12 March 2020, the Of­fice for the Pro­tec­tion of Com­pet­i­tion of the Czech Re­pub­lic pub­lished a state­ment re­gard­ing pub­lic pro­cure­ment. For fur­ther for de­tails on that state­ment and oth­er as­pects, see art­icle Czech pro­cure­ment rules waived for COV­ID-19 emer­gency med­ic­al sup­plies.FranceFrançois Te­nailleau, Kawthar Ben KhelilIn the field of pub­lic pro­cure­ment, po­s­i­tions were quickly stated by the French pub­lic au­thor­it­ies in re­sponse to the health crisis re­lated to the Cov­id-19 epi­dem­ic. However, there was no spe­cif­ic leg­al frame­work for this peri­od of crisis. This is now the case with the Or­din­ance of 25 March 2020 on pub­lic pro­cure­ment in the emer­gency situ­ation re­lated to the COV­ID-19 crisis. For more in­form­a­tion, see art­icle Pub­lic pro­cure­ment con­tracts in the con­text of the Cov­id-19 crisis in France.Ger­manyTo­bi­as Sdun­zig, Jakob SteiffIn the course of the cur­rent COV­ID19 pan­dem­ic, vari­ous meas­ures have been ad­op­ted in Ger­many (both at a fed­er­al and state level) to en­able pub­lic pur­chasers to pro­cure ser­vices which will help to con­tain the pan­dem­ic and main­tain the pub­lic ad­min­is­tra­tion's abil­ity to act more eas­ily and quickly. For more de­tails, see a guid­ance for pub­lic pro­cure­ment pro­ced­ures in Ger­many in times of COV­ID-19.Hun­garyVer­onika Ko­vacsThere have been leg­al amend­ments, such as the Gov­ern­ment De­cree No. 48/2020, ef­fect­ive since March 20, that in­tro­duced an ex­cep­tion for dir­ect pur­chases from Hun­gari­an sources (not in­clud­ing those from EU sources) for cer­tain goods men­tioned in the Pub­lic Pro­cure­ment Act. For more de­tail, see art­icle Hun­gary re­laxes cer­tain pub­lic-pro­cure­ment rules dur­ing COV­ID-19 crisis.ItalyPietro Cav­as­ola, Marco Ian­nacci, Tiz­iana Ma­soneAmong the gov­ern­ment meas­ures ad­op­ted for the cur­rent health emer­gency, none ex­pressly refer to the course of tender pro­ced­ures that have already been launched or the ex­e­cu­tion of on­go­ing pub­lic con­tracts. However, the Min­is­ter of Trans­port and In­fra­struc­ture has is­sued a no­tice re­gard­ing the sus­pen­sion of dead­lines. For fur­ther de­tails on this mat­ter see here.The Neth­er­landsPetra Heem­skerk, Olav de WitThe Dutch gov­ern­ment has left it up to con­tract­ing au­thor­it­ies to de­cide on how to con­tin­ue with pro­cure­ment pro­ced­ures and has not yet taken any spe­cif­ic leg­al meas­ures in this re­gard. However, sev­er­al of the pro­vi­sions for ex­cep­tion­al cases in the rel­ev­ant law are already ful­filled in the cur­rent situ­ation. For fur­ther de­tails, see: Neth­er­lands: guid­ance for Dutch pub­lic pro­cure­ment pro­ced­ures in re­sponse to COV­ID-19.Po­landMal­gorzata Urbańska, Mag­dalena Wyszyn­skaThe leg­al meas­ures taken in an act on spe­cif­ic solu­tions re­lated to pre­vent­ing, coun­ter­act­ing and com­bat­ing COV­ID-19, in­clude pro­vi­sions that re­vokes the Pub­lic Pro­cure­ment Law for cer­tain goods. For more  on this ques­tion and oth­er spe­cif­ic as­pects, see Pub­lic Pro­cure­ment Mar­ket in Po­land ad­apts to the pan­dem­ic real­ity.PeruRa­mon HuapayaIn Peru, the Gov­ern­ment has is­sued a series of meas­ures to tackle coronavir­us. The most im­port­ant is the de­clar­a­tion of the “state of emer­gency”, which re­stricts sev­er­al cit­izens’ rights. Fol­low­ing this spe­cial situ­ation, the Gov­ern­ment has is­sued spe­cif­ic meas­ures re­gard­ing pub­lic pro­cure­ment dur­ing the state of emer­gency:Sus­pen­sion of every pub­lic pro­cure­ment pro­ced­ure (tenders).Sus­pen­sion of the dead­line for sign­ing the con­tracts already awar­ded.Sus­pen­sion of the sanc­tion­ing pro­ced­ures be­fore the Pub­lic Pro­cure­ment Au­thor­ityHowever, the Gov­ern­ment has al­lowed the pro­ced­ures and con­tracts ne­ces­sary to fight the coronavir­us; there­fore, the dif­fer­ent Gov­ern­ment bod­ies (Health De­part­ment, pub­lic hos­pit­als, etc.) are still con­tract­ing those goods (medi­cines, pro­tec­tion equip­ment, etc.) and ser­vices (trans­port of food and medi­cines, health ser­vices, etc.) that are ne­ces­sary.For the per­form­ance of con­tracts, our cur­rent Pub­lic Pro­cure­ment Act provides two solu­tions: (i) the state of emer­gency is con­sidered a force ma­jeure event and, as a con­sequence, al­lows the parties to ask for more time to ex­ecute their ob­lig­a­tions; and, (ii) the parties are al­lowed to agree to sus­pend the con­tract, dur­ing the state of emer­gency.Sev­er­al reg­u­la­tions have so far been en­acted to tackle this state of emer­gency.Por­tugalGonçalo Guerra Tav­aresIn Por­tugal, the Pres­id­ent has de­clared a State of Emer­gency, but the Gov­ern­ment has not yet ad­op­ted any spe­cif­ic meas­ures re­lated to on­go­ing pro­cure­ment pro­ced­ures. For more de­tails see here.Ro­maniaGab­ri­el Sidere, Cristina Popes­cu, Laura CapataThe leg­al meas­ures taken did not in­clude any amend­ments to the pub­lic pro­cure­ment leg­al frame­work in Ro­mania. However, the cur­rent de­vel­op­ments have a sig­ni­fic­ant im­pact on pub­lic pro­cure­ment pro­ced­ures, and par­tic­u­lar ques­tions arise. For more on this ques­tion and oth­ers, see: COV­ID-19 State of Emer­gency in Ro­mania and Im­pact on Pub­lic Pro­cure­ment.Rus­siaMax­im Boul­baRus­sia has passed new laws on tightened li­ab­il­ity, in­solv­ency, rents, pub­lic pro­cure­ment and medi­cines.On 1 April 2020, a num­ber of amend­ments to Rus­si­an laws came in­to force in con­nec­tion with the spread of COV­ID-19. Among oth­ers, the Rus­si­an Pub­lic Pro­cure­ment Law has been amended. More spe­cific­ally, in ac­cord­ance with the amend­ments, goods, works and ser­vices (“goods”) may be pur­chased without ob­serving the es­tab­lished com­pet­it­ive pro­ced­ures if the fol­low­ing con­di­tions are met:such goods are needed for ur­gent pro­vi­sion of med­ic­al aid, sub­ject to the fol­low­ingthe med­ic­al aid is re­quired due to an ac­ci­dent, a force ma­jeure event or with a view to pre­vent or elim­in­ate the con­sequences of an emer­gency, or in a few oth­er cases; andcom­ply­ing with time-con­sum­ing com­pet­it­ive pro­ced­ures is un­jus­ti­fied un­der the giv­en cir­cum­stances re­quir­ing ur­gent meas­ures; orthe goods are lis­ted by the com­pet­ent au­thor­it­ies and are pur­chased by state bod­ies and state-owned com­pan­ies re­spons­ible for na­tion­al de­fence and se­cur­ity, in­clud­ing the fight against ter­ror­ism.An­oth­er im­port­ant change makes it pos­sible for parties to an ex­ist­ing pub­lic pro­cure­ment agree­ment to amend the tim­ing of the per­form­ance and the price of the agree­ment if it is no longer pos­sible to per­form the agree­ment due to COV­ID-19 or oth­er force ma­jeure reas­ons. This ex­cep­tion­al reg­u­la­tion is sub­ject to sev­er­al con­di­tions and will re­main in force un­til the end of 2020.Slov­akiaPetra Corba Stark, Mar­tin Bal­az, Vladi­mira RostarovaThe Slov­ak Na­tion­al Coun­cil passed Act No. 62/2020 Coll. on cer­tain ex­traordin­ary meas­ures in con­nec­tion with the spread of COV­ID-19, which, amongst oth­er things, amends Act No. 343/2015 Coll. on Pub­lic Pro­cure­ment. For more on this ques­tion and oth­ers, see: Guid­ance on pub­lic pro­cure­ment pro­ced­ures in Slov­akia dur­ing the COV­ID-19 crisis.Slov­e­niaDunja Jandl, Tamara Ža­jdela  Slov­e­nia is ad­opt­ing the “Anti-Corona Pack­age 1” Act, which in­tro­duces meas­ures to mit­ig­ate the ef­fects of the corona epi­dem­ic. Re­gard­ing pub­lic pro­cure­ment, a meas­ure to in­crease the thresholds for the ap­plic­a­tion of the Pub­lic Pro­cure­ment Act (ZJN-3) is en­vis­aged, namely from EUR 20,000 to EUR 40,000 for sup­ply and ser­vices, and from EUR 40,000 to EUR 80,000 for works. The act will come in­to force around 27 March 2020. Save for the above-men­tioned, the ZJN-3 is fully ap­plic­able even dur­ing the coronavir­us (COV­ID-19) epi­dem­ic. Only an in­di­vidu­al con­tract­ing au­thor­ity can de­cide on a spe­cif­ic pub­lic pro­cure­ment pro­ced­ure; how­ever, the min­istry ad­vises them as fol­lows:in case of a pub­lic pro­cure­ment pro­ced­ure, which has already been pub­lished but its award is not ur­gent now, to ex­tend the dead­line for sub­mis­sion and/or open­ing, in­clud­ing the dead­line for sub­mit­ting the po­ten­tial ten­der­ers’ ques­tions. The dead­line may be ex­ten­ded for at least three weeks and re-ex­ten­ded, if ne­ces­sary,in case of a pub­lic pro­cure­ment pro­ced­ure, which has already been pub­lished but its award is not ne­ces­sary now, to sus­pend the pro­ced­ure in ac­cord­ance with Art­icle 90 of ZJN-3,in case of a pub­lic pro­cure­ment pro­ced­ure, in which the dead­line for sub­mis­sion of tenders has already ex­pired and the con­tract­ing au­thor­ity is cur­rently ex­amin­ing and eval­u­at­ing the tenders, to ex­tend the dead­line for a po­ten­tial sup­ple­ment­a­tion or cla­ri­fic­a­tion of tenders,to re­quire such a tender guar­an­tee that can be sub­mit­ted elec­tron­ic­ally (i.e. not a bill of ex­change),to en­able such a way of prov­ing the tender doc­u­ment­a­tion that en­ables on­line or email veri­fic­a­tion without ob­tain­ing phys­ic­ally signed doc­u­ments, or to wait with the ex­am­in­a­tion and eval­u­ation of tenders un­til nor­mal busi­ness activ­it­ies are es­tab­lished,to con­duct a prop­er mar­ket con­sulta­tion and identi­fy risks that might arise dur­ing the pub­lic pro­cure­ment pro­ced­ure (e.g. is the pro­ced­ure ne­ces­sary in the cur­rent situ­ation, …),pres­sure to change agreed prices for any pro­tect­ive equip­ment or an in­ab­il­ity to sup­ply the pro­cured goods will be con­sidered as changed cir­cum­stances in ac­cord­ance with Art­icle 112 of OZ, as well as the pro­vi­sion on chan­ging the con­tract in ac­cord­ance with Art­icle 95 of ZJN-3.The min­istry has also ex­pli­citly cla­ri­fied that pro­vi­sions of the ad­op­ted Act on Tem­por­ary Meas­ures Re­lat­ing to Ju­di­cial, Ad­min­is­trat­ive and Oth­er Pub­lic Law Mat­ters to Con­trol the Spread of the In­fec­tious Dis­ease SARS-CoV-2 (COV­ID-19) do not ap­ply to pub­lic pro­cure­ment pro­ced­ures.South AfricaGav­in No­ethSouth Africa de­clared the COV­ID-19 out­break a na­tion­al state of dis­aster on 15 March in ac­cord­ance with the Dis­aster Man­age­ment Act. On 18 March reg­u­la­tions were gaz­etted pur­su­ant to the de­clar­a­tion and pre­scribe the steps ne­ces­sary to pre­vent an es­cal­a­tion of the dis­aster or to al­le­vi­ate, con­tain and min­im­ise the ef­fects of the dis­aster. These reg­u­la­tions re­quire com­pli­ance with the emer­gency pro­vi­sions of the Pub­lic Fin­ance Man­age­ment Act and the Mu­ni­cip­al Fin­ance Man­age­ment Act. As re­quired by reg­u­la­tion 9 of the COV­ID-19 dis­aster reg­u­la­tions re­gard­ing emer­gency pro­cure­ment for in­sti­tu­tions, on 19 March Na­tion­al Treas­ury is­sued emer­gency pro­cure­ment in­struc­tions in a Na­tion­al Treas­ury in­struc­tion to all or­gans of state and pub­lic en­tit­ies. The in­struc­tion fa­cil­it­ates emer­gency pro­cure­ment to deal with the COV­ID-19 pan­dem­ic and aims to avoid ab­use of the sup­ply chain man­age­ment sys­tem to deal with the dis­aster. The Na­tion­al Treas­ury has ne­go­ti­ated and agreed prices with sup­pli­ers of pre­vent­at­ive goods and taken meas­ures to en­sure con­tinu­ity of sup­plies and to keep prices in check. Items, sup­pli­ers and prices are lis­ted in long lists in an­nex­ures to the in­struc­tion (which will be up­dated from time to time). Ac­count­ing of­ficers and ac­count­ing au­thor­it­ies are dir­ec­ted to pro­cure the lis­ted goods from the sup­pli­ers and at the prices lis­ted. If none of the sup­pli­ers can sup­ply them, the lis­ted goods may be pro­cured from oth­er sup­pli­ers at prices not ex­ceed­ing the prices lis­ted in the in­struc­tion but in ac­cord­ance with the emer­gency dir­ect­ive is­sued in 2016 and without the need for ap­prov­al from the Na­tion­al Treas­ury. The Na­tion­al Treas­ury has taken sim­il­ar steps with sup­pli­ers un­der trans­vers­al con­tracts. Re­port­ing ob­lig­a­tions are aimed at keep­ing a check on such pro­cure­ment. The dis­aster reg­u­la­tions and emer­gency dir­ect­ive from Na­tion­al Treas­ury are lim­ited to com­batting COV­ID-19. All oth­er sate pro­cure­ment may con­tin­ue and must fol­low nor­mal pro­cure­ment laws and pro­ced­ures.Spain     Ig­nacio Gran­gel, Javi­er Torre de SilvaIn Spain, sev­er­al leg­al meas­ures have been taken re­lated to pub­lic pro­cure­ment that in­clude the sus­pen­sion of cer­tain con­tracts to be per­formed on a reg­u­lar basis with which it is im­possible to com­ply be­cause of COV­ID-19, and the Ad­min­is­tra­tion will in­dem­ni­fy the dam­ages caused. See our pub­lic­a­tions Roy­al De­cree-Law 11/2020 of 1 April on ur­gent and sup­ple­ment­ary so­cial and eco­nom­ic meas­ures in the fight against the vir­us and Guide ana­lys­ing Roy­al De­cree-Law 8/2020 on ur­gent and ex­traordin­ary meas­ures to ad­dress the eco­nom­ic and so­cial im­pact of COV­ID-19 for fur­ther in­form­a­tion.Switzer­landMarquard Christen, Fa­bi­an MartensTo date, no COV­ID-19-re­lated leg­al changes or re­com­mend­a­tions spe­cific­ally about pub­lic pro­cure­ment law have been put in place. The fed­er­al gov­ern­ment ex­ten­ded the gen­er­al stand­still for dead­lines dur­ing the East­er hol­i­days due to the COV­ID-19 pan­dem­ic, which does af­fect some pub­lic pro­cure­ment law pro­ced­ure dead­lines. Ur­gent pro­cure­ment of emer­gency goods (e.g. face masks, hand san­it­isers, etc.) may already be sub­ject to ex­cep­tions from pub­lic pro­cure­ment un­der the cur­rent law.Tur­keyDöne Yalçın, Levent BilgiOn 2 April 2020, Cir­cu­lar no. 2020/5 on the ef­fect of the coronavir­us (COV­ID-19) out­break on Turk­ish pub­lic pro­cure­ment con­tracts (the “Cir­cu­lar”) was passed with pres­id­en­tial de­cree and pub­lished in Of­fi­cial Gaz­ette no. 31087.Ac­cord­ing to the Cir­cu­lar, con­tract­ors, which won tenders have the right to claim im­possib­il­ity of per­form­ance due to the coronavir­us pan­dem­ic. In re­sponse to such claim, the rel­ev­ant pub­lic body may provide the con­tract­or with a time ex­ten­sion or con­tract ter­min­a­tion. To en­sure ser­vice con­tinu­ity dur­ing and after the pan­dem­ic, rel­ev­ant pub­lic bod­ies will eval­u­ate each claim on a case by case basis and the rel­ev­ant pub­lic bod­ies will provide fur­ther guid­ance.Based on our ex­per­i­ence this leg­al de­vel­op­ment will be cru­cial for con­tract­ors that re­cently won gov­ern­ment tenders that may now have to re­con­sider their budgets. For more in­form­a­tion, see art­icle COV­ID-19 – Force ma­jeure in pub­lic pro­cure­ment con­tracts?United King­domCar­oline Hob­son, Graeme Young, Shona MurphyUse­ful cla­ri­fic­a­tion on the ap­plic­a­tion of the pro­cure­ment rules to the cur­rent COV­ID-19 crisis has been pub­lished by the UK and Scot­tish gov­ern­ments that ad­dresses, for ex­ample, the dir­ect award of con­tracts or modi­fic­a­tions of ex­ist­ing con­tracts. For more on these and oth­er ques­tions, see: Buy­ing in a crisis – UK and Scot­tish Gov­ern­ments cla­ri­fy how the pub­lic sec­tor pro­cure­ment rules can be ap­plied dur­ing the COV­ID-19 crisis.UkraineAnna Po­grebna, Maria OrlykPub­lic pro­cure­ment pro­ced­ures in Ukraine have not been sig­ni­fic­antly af­fected by the meas­ures aimed at the over­com­ing of the coronavir­us (COV­ID-19) epi­dem­ic. Up to date, only an ex­emp­tion from pro­cure­ment pro­ced­ures of for phar­ma­ceut­ic­als, med­ic­al products and med­ic­al equip­ment used for com­batting the coronavir­us has been in­tro­duced by the Law of Ukraine “On the Amend­ment of Cer­tain Le­gis­lat­ive Acts of Ukraine Aimed at the Pre­ven­tion and Lim­it­ing Spread of the Coronavir­us Dis­ease (COV­ID-19)”, ad­op­ted by the Ukrain­i­an par­lia­ment on 17 March 2020. Con­tract­ing au­thor­it­ies shall pro­cure these goods un­der spe­cif­ic reg­u­la­tion of the Cab­in­et of Min­is­ters of Ukraine (“CMU”) un­til 18 April 2020. For more in­form­a­tion see here.
De­liv­ery prob­lems and the coronavir­us: force ma­jeure or not?
More and more com­pan­ies are start­ing to face prob­lems be­cause of the COV­ID-19 vir­us, as the coronavir­us is called of­fi­cially. One of the con­sequences of the coronavir­us is that the pro­duc­tion and trans­port of goods from China are cur­rently at a low level. It was re­cently an­nounced that this has promp­ted Cool­blue to in­crease the prices of products in its web­shop, and that Blok­ker is not re­ceiv­ing all its products. Ac­tion and vari­ous su­per­mar­kets are fa­cing sim­il­ar prob­lems. Now that the coronavir­us has also been de­tec­ted in the Neth­er­lands, the con­sequences may be­come even more no­tice­able.Can com­pan­ies such as the sup­pli­ers of Cool­blue, Blok­ker and Ac­tion suc­cess­fully in­voke force ma­jeure? Or will they be re­ceiv­ing claims for breach of con­trac­tu­al ob­lig­a­tions?What is force ma­jeure?Ac­cord­ing to the law, force ma­jeure refers to an event that renders com­pli­ance with agree­ments im­possible. Such an event must, moreover, be bey­ond the con­trol of (in this in­stance) the sup­pli­er and not be for its ac­count. An ap­peal to force ma­jeure must al­ways be as­sessed on the basis of the spe­cif­ic cir­cum­stances of the case. It is not un­usu­al to in­clude a defin­i­tion of force ma­jeure in agree­ments or gen­er­al terms and con­di­tions. This is per­mit­ted. This way, the term 'force ma­jeure' can be nar­rowed or ex­ten­ded. It is pos­sible that epi­dem­ics are des­ig­nated as force ma­jeure in an agree­ment. It is there­fore im­port­ant to al­ways check the agree­ment. But even without spe­cif­ic ar­range­ments on epi­dem­ics, there are vari­ous grounds for con­sid­er­ing the coronavir­us as a situ­ation of force ma­jeure: The China Coun­cil for the Pro­mo­tion of In­ter­na­tion­al Trade has des­ig­nated the coronavir­us as force ma­jeure for Chinese con­tract parties; There are rul­ings by Dutch courts about oth­er epi­dem­ics, such as the bird flu, in which an ap­peal to force ma­jeure was hon­oured; In gen­er­al, an epi­dem­ic is bey­ond the con­trol of the con­tract parties and is not fore­see­able. Al­though this provides a strong basis, it is not pos­sible to give an un­equi­voc­al an­swer to the ques­tion of wheth­er the coronavir­us con­sti­tutes force ma­jeure.It is al­ways im­port­ant to check the cause of non-com­pli­ance with agree­ments. It is pos­sible, for ex­ample, to make a dis­tinc­tion between a gov­ern­ment meas­ure re­lated to the coronavir­us ("ban on trans­port of spe­cif­ic goods by air") and fact­ory stag­na­tion due to ill­ness of per­son­nel. The ques­tion is wheth­er the dir­ect cause of non-com­pli­ance with agree­ments comes un­der the defin­i­tion of force ma­jeure.Also im­port­ant is wheth­er there are reas­on­able al­tern­at­ives. If trans­port by air is not or no longer pos­sible, this does not ne­ces­sar­ily mean that trans­port can­not take place in an­oth­er way. As a res­ult of cir­cum­stances like these, it is pos­sible that one case does in­volve force ma­jeure while an­oth­er does not. Con­sequences of force ma­jeureThe res­ult of a suc­cess­ful ap­peal to force ma­jeure is that com­pli­ance can­not be re­quired and that, in prin­ciple, no com­pens­a­tion is due. It is also pos­sible that a party has the right to make par­tial de­liv­er­ies and/or in­crease prices. This de­pends on the agree­ments in place.In gen­er­al, this would en­title the oth­er party to ter­min­ate the agree­ment. This de­pends on wheth­er the short­com­ing is ser­i­ous enough to jus­ti­fy ter­min­a­tion. It is also pos­sible that the oth­er party is au­thor­ised to or­der the products else­where. This, of course, also de­pends on what parties have set out about this in the agree­ment. Con­clu­sionIn so far as can be as­cer­tained, there is no court rul­ing yet on the ques­tion of wheth­er the coronavir­us can be con­sidered force ma­jeure. Should this come up in a par­tic­u­lar case, the court will rule on it based on all spe­cif­ic cir­cum­stances of the case. This con­cerns both ac­tu­al cir­cum­stances and leg­al agree­ments between the parties. In such a situ­ation, it is there­fore im­port­ant to care­fully re­view the con­trac­tu­al agree­ments and find out the ex­act cause of non-com­pli­ance with the agree­ments. For the fu­ture, it is im­port­ant to in­clude a clear defin­i­tion of force ma­jeure in agree­ments and/or gen­er­al terms and con­di­tions. It is also im­port­ant to clearly for­mu­late the con­sequences of force ma­jeure to pre­vent dis­cus­sion. This way, parties will know where they stand.


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1 June 2020
Cov­er­ing COV­ID-19: Level 3
Our Cor­por­ate and Com­mer­cial team provided key takeaways for busi­ness op­er­a­tions dur­ing alert level 4 in South Africa. Now, in this second part to our hand­book series: Cov­er­ing COV­ID-19, we provide sim­il­ar guid­ance in re­la­tion to the de­clar­a­tion of aler
5 May 2020
Cov­er­ing COV­ID-19: Level 4
Busi­ness has been any­thing but dull, and in these un­pre­ced­en­ted times, we have come to an­ti­cip­ate a level of un­cer­tainty in our busi­ness op­er­a­tions, as well as our per­son­al lives.