Overview of Maltese legislation relating to public procurement

Luca Amato is a senior associate within the Commercial and Corporate Law department of Fenech & Fenech Advocates

Public procurement is an extensive area of law that is tightly regulated at both European Union and domestic level.

As a broad body of law spread across different legal texts, it is helpful to take a holistic look at how the different laws and the areas they address are categorised.

The local framework is built upon the following EU directives that have been amended over time:

• the Public Procurement Directive (2014/24/EU);
• the Utilities Directive (2014/25/EU);
• the Concessions Directive (2014/23/EU);
• the Public Sector Remedies Directive (89/665/EEC), as amended by Directive 2007/66/EC;
• the Utilities Remedies Directive (92/13/EEC), as amended by Directive 2007/66/EC;
• Directive 2009/81/EC on defence and sensitive security procurement;
• the e-Invoicing Directive (2014/55/EU)

As an EU member state, Malta has the obligation to transpose EU directives into Maltese law, which it has duly done over the years.

The main legislation covering public procurement in Malta is the Public Finance Management Act (Chapter 601, Laws of Malta), which sets out the general structure for regulation and management of public finances. The detail is however contained in subsidiary legislation to the Act which has been drafted to largely reflect the EU texts and thus comprehensively contains the local public procurement regime:

• The Public Procurement Regulations (S.L. 601.03) transpose the provisions of the Public Procurement Directive. These regulations inter alia: (i) establish the office of the Director of Contracts as the relevant entity responsible for regulation, administration and monitoring of public procurement activities in Malta; (ii) outline the list of public contracting authorities that are to be regulated by, and must thus follow, prescribed public procurement procedures; (iii) establish a number of committees for the better administration of public procurement in Malta; (iv) establish the Public Contracts Review Board as the body competent to hear complaints raised by competing bidders and other persons having an interest in public contracts; (v) establish the Commercial Sanctions Tribunal which shall hear and determine issues relating to the blacklisting of operators; (vi) perhaps most crucially, outline the various methods of procurement that may be undertaken by contracting authorities, choice of participant and award criteria, blacklisting and remedies available to bidders. It should be noted that, considering the wide-ranging nature of these regulations, this text tends to be the most relevant document when discussing public procurement in Malta;
• The Public Procurement of Entities operating in the Water, Energy, Transport and Postal Services Sectors Regulations (S.L. 601.05) transpose the provisions of the Utilities Directive. They largely copy the Public Procurement Regulations in terms of format and content but are specifically addressed towards contracting entities operating in the water, energy, transport and postal services sectors;
• The Concession Contracts Regulations (S.L. 601.09) transpose the provisions of the Concessions Directive Concession contracts are contracts for works or services which entail the transfer of operational risk to the concessionaire (meaning there would be no guarantee that the investments and costs made by the concessionaire would be recouped) in exchange for the right to exploit the works and services entrusted to the concessionaire. They are thus typically awarded for large scale public construction projects (works) or the administration of public services such as toll roads. The regulations establish the relevant public bodies, award criteria, remedies, and so on;
• The Public Procurement of Contracting Authorities or Entities in the fields of Defence and Security Regulations (S.L. 601.07) transpose the Defence and Security Services Directive. As with S.L. 601.05, they are substantially similar to the Public Procurement Regulations and indeed several provisions of the latter are directly referenced in these regulations;
• The Electronic Invoicing in Public Procurement Regulations (S.L. 601.10) transpose the provisions of the e-Invoicing Directive, outlining the core elements that need to be included in an electronic invoice with the aim of creating a European standard document. Notably, operators are still allowed to derogate from the regulations and provide invoice in paper format.

While the above regulations are the most significant when it comes to local public procurement, there are also several other regulations that address certain specific areas and are worth mentioning.

The Emergency Procurement Regulations (S.L. 601.08) provide a regime for procurement of supplies, services or works which become necessary due to an unforeseen surge in the use of medical supplies or which are otherwise necessary due to issues of national health, security or strategic importance. Accordingly, it is only the Ministry for Health’s procurement arm (CPSU) and the Civil Protection Department that may procure under these regulations, and even then, such contract awards may not be higher than €135,000 in estimated value.

The Procurement of Property Regulations (S.L. 601.08) provides a framework for certain types of procurement of immovable property by contracting authorities, to the extent that such is not regulated under other laws (such as those relating to expropriation).

The Cleaner and More Energy-Efficient Road Transport Vehicles Regulations (S.L. 601.06) transposes the provisions of Directive 2009/33/EC and obliges contracting authorities to require certain energy-efficient technical specifications when procuring road transport vehicles.

In a similar fashion, the Competitive Bidding Rules for Renewable Sources of Energy Installations (Capacity Between 400kwp And Less Than 1000kwp) Regulations govern how contracting authorities will purchase renewable energy from the market.

Finally, it should be noted that the Director of Contracts has issued general rules governing both tendering and dynamic purchasing systems, both of which are periodically amended and regulate public procurement to some extent.

This article is Part I of a series of articles on public procurement in Malta.