The new Law on Public Procurement, the implementation of which is scheduled for July 1, unlike the current one, does not contain a specifically titled provision of negative references. Essentially, this means that there is no longer a special article entitled “negative references” that has existed so far, but that it exists as one of the legal possibilities for excluding an economic entity from the public procurement procedure, according to the Public Procurement Institute.
– Namely, what we now know as a negative reference is regulated by Article 112 of the Law on Public Procurement and envisages a situation when the contracting authority in the tender documentation anticipates that it will exclude the economic entity if it “determines that the economic entity in the previous three years submission of bids did not fulfill the obligations from previously concluded public procurement contracts or previously concluded concession contract, the consequence of which was the termination of that contract, collection of collateral, damages, etc. – reminds the Institute.
Under the new law, this possibility will continue to exist as a possibility, but only if the contracting authority so provided in the tender documentation, and if this provision is not in the tender documentation, the contracting authority will not be able to apply it later.
According to the last published bulletin of the Republic Commission for the Protection of Rights, there are still not many decisions by which the commission considered the irregularity of the contracting authorities in applying the provisions of the law on negative references.
As they say in the commission itself, this institute is not applied much among the procuring entities, so the bidders do not have the opportunity to dispute this behavior.
The Commission, in a way, took the position that the reasons for non-application of these provisions by the contracting authorities are of a psychological nature, that is, that there are certain inconveniences with the contracting authorities and the absence of a desire to “resent the bidders”.
– From the experience of the Institute for Public Procurement, we can confirm this with the addition that public procurement officers very often point out that collecting evidence for this purpose is another job that they must do additionally, that it creates an administrative burden, and that they will not achieve anything globally, precisely because the existence of a negative reference is the possibility of the procuring entity to reject the bid, not its obligation – states the Public Procurement Institute.
However, there are sporadic examples before the commission when the contracting authority awarded a negative reference, based on the evidence of other contracting authorities and thus rejected the bid.
The Institute reminds the contracting authorities that the evidence of other contracting authorities can be used only under the following conditions:
– in the case of a reason arising in the previous three years prior to the publication of the invitation to tender,
– when the evidence for that circumstance is a final court decision or a final decision of another competent authority,
– when it comes to the same subject of public procurement.
In relatively recent practice, the Republic Commission has made a couple of decisions confirming the decision of the contracting authority to reject the bid due to a negative reference. Thus, the decision of the procuring entity that conducted the public procurement of food – chicken meat was confirmed, when it was determined that the procuring entity has other appropriate evidence appropriate to the subject of public procurement, in the form of invoices and invoices from which the delivery delay from the previously concluded public procurement contract, according to the Public Procurement Institute.
Perhaps one of the biggest misconceptions of bidders is that the only reason for a negative reference is the termination of the contract.
– The law provides for a total of four situations when the contracting authority may reject the bid if it has evidence that the bidder in the previous three years preceding the announcement of public procurement, and are related to the conscientiousness and work of the bidder in previous public procurement procedures. In fact, there are violations of the integrity of the procedure and violations of the obligation to report corruption, competition violations, submission of false information in the bid, unjustified refusal of the bidder to conclude the contract awarded to him, and refusal to submit evidence and security funds according to the bid content.
The procuring entity may also use evidence obtained by another procuring entity, but only if it is a final court decision, ie the final decision of the competent authorities, ie it cannot be other evidence collected by another procuring entity in its public procurement procedures.
The following two pieces of evidence provided by law in the form of a document on the realized means of securing the fulfillment of obligations in the public procurement procedure or fulfillment of contractual obligations, or a document on the collected penalty, the contracting authorities would generally have, especially having in mind that contractual penalties Complaints of consumers, ie users, should be related to making a record of the quality of delivered equipment, and should have appropriate evidence that the complaints were not resolved within the agreed period. The following envisaged evidence in the form of the report of the supervisory body on the performed works that are not in accordance with the project, ie the contract, is related to the construction works where these reports are made.
– So, all of the above can be the basis for the application of the institute of negative reference, and whether and how to apply it depends on the will and actions of the client, since the law does not oblige him to act in this way, but only gives the opportunity – Institute said.
They also points out that the rejection of the bidder’s bid due to a negative reference also exists only as a possibility, so that the contracting authority can decide in each specific case whether to accept such a bid or not, eKapija reports.
