Contesting tenders

Written by: Halka Jaklová
Photo by: René Jakl

Have you taken part in a public procurement tender that you thought wasn’t conducted lawfully? In such cases, Law No. 40/2004 Coll., on public procurements, offers you several ways to remedy the matter.

If you feel that the principal’s violation could cause or caused you damage, the first step should be submitting tenable objections to the principal. The principal is obligated to respond to objections in writing within ten days of their receipt and comply with or reject them. If they’re rejected the principal must wait to close a contract for sixty days after receiving the objections. Your next step can be to propose that the principal’s actions be reviewed. The proposal should be addressed to the Office for the Protection of Economic Competition (ÚOHS). The proposal must clearly state who submitted it, the matter to which it relates, where you consider the law on public procurements to have been violated, what you are suing for, and who the principal is. Documentation of the delivery of the objections to the principal is a part of and condition for the proposal.
When submitting a proposal you’re obligated to deposit into the (ÚOHS) account surety in the considerable amount of 1% of the bid price (up to CZK 1 million) and pay CZK 30,000 as an administrative fee. ÚOHS then demands documents from the principal and issues a written decision whereby it either confirms a violation of the law and orders the principal to remedy the matter and pay a penalty, or it halts the proceedings. If the proceedings are halted your surety remains with the state. The relative expense of the entire process results in hardly anyone being courageous enough to submit a proposal for such proceedings. ÚOHS publishes its final decisions issued over the previous calendar year in its Collection of Decisions and on its website.
It’s possible to submit a disquisition to the ÚOHS chairman against the decision issued at the first level. Further, ÚOHS decisions can also be reviewed by an administrative court in accord with the administrative rules. It’s also possible to demand compensation for possible damages according to the provisions of the Commercial and Civil Codes. In conclusion, it’s necessary to mention the possibility for interested parties to gain so-called above-limit public orders in the water management, power, transport, and telecommunications industries. If you believe the principal violated the law, you can submit a request for arbitration to the European commission, contingent upon the agreement of all involved parties.