Last Updated on Thursday, 17 February, 2022 at 11:13 am by Andre Camilleri
Luca Amato is a senior associate within the Corporate and Commercial Law department of Fenech & Fenech Advocates
Public procurement refers to the process by which public authorities purchase works, goods and services from the private sector. This is done through different types of competitive procedures (tenders) which are regulated by Maltese law based on EU legislation. There are several procedures because different scenarios require different solutions and a one-size-fits-all approach would not adequately address all scenarios. The common theme to all procedures, however, is that these are competitive processes that should in principle guarantee transparency, fairness and equal opportunity to private economic operators. This article will examine three such procedures, namely the open procedure, restricted procedure and competitive procedure with negotiation.
In principle, a call for tenders should, unless otherwise allowed in terms of the Public Procurement Regulations, be carried out through the “open procedure”. It is thus the standard and most common public procurement method. Under this procedure, any interested economic operator (supplier) may submit an offer in response to a call for tenders. The minimum time-limit for submission of the tender is 35 days from publication, although this may be shortened where a prior information notice has been published, where there is a “state of urgency duly substantiated” or if tender submissions will be accepted in electronic rather than paper format. In any event, the period for submission cannot be less than 15 days from publication.
The open procedure is a one-stage procurement process. In practice, this means that any economic operator can see an advertised contract notice, request (or download) the procurement documents and submit a tender. All tenders must be evaluated in line with the methodology and criteria set out in the procurement documents. Given the straightforward nature of this procedure, it is particularly useful for run of the mill contracts that attract a considerable number of participants and are not too complex in nature. The disadvantage is that such an open procedure could attract poor quality bids and it also doesn’t allow for the bid to be further discussed or refined.
The “restricted procedure” is a two-stage process. The first stage is when the contracting authority issues a call for competition with the pertinent information and requirements. At this stage any economic operator may submit a request to participate and the period for submission shall be at least 30 days, though this may be shortened to at least 15 days in urgent cases. The second, when the contracting authority invites shortlisted economic operators to submit the tender. Again, the period for submission of the tender will be at least 30 days, though this may be shortened to at least 10 days in urgent cases.
In certain cases, contracting authorities may limit the number of operators they invite to tender to a minimum of five applicants, provided that they indicate, in the contract notice or in the invitation, the objective and non-discriminatory criteria or rules they intend to apply, the minimum number of candidates they intend to invite and, where appropriate, the maximum number. Where, however, the number of candidates meeting the selection criteria is below the minimum number, the contracting authority may nevertheless continue the procedure by inviting only those candidates who meet the selection criteria.
The restricted procedure is useful in case of contracts of a somewhat more complex nature and where it is anticipated that there will be many applicants who would need to be shortlisted through a first stage. It thus restricts the number of operators who will proceed to tender (also considering that the request to participate is subject to a fee) thus improving the quality of the bids. The disadvantage to suppliers is that the initial call for competition might not always contain the necessary detail to allow the supplier to make an informed decision as to whether to express an interest to participate.
The “competitive procedure with negotiation” is a special procurement procedure that must be specifically requested by the contracting authority and approved by the Director of Contracts and is allowed in the following exceptional instances:
- where the needs of the contracting authority cannot be met without adaptation of readily available solutions;
- where the works, supplies or services include design/innovative solutions;
- where the contract cannot be awarded without prior negotiations because of specific circumstances related to the nature, the complexity or the legal and financial make-up or because of the risks attaching to them;
- where the technical specifications cannot be established with sufficient precision by the contracting authority with reference to a standard European Technical Assessment, common technical specification or technical reference;
- where, in response to an open or a restricted procedure, only irregular or unacceptable tenders were submitted.
The procedure is a two-stage process whereby an economic operator submits a request to participate and, if shortlisted, can proceed to submit the tender. Deadlines for the submission of both the request to participate and the tender shall be 30 days, though they may be shortened to 15 and 10 days respectively in urgent cases. Like the restricted procedure, the contracting authority may limit the number of participants.
The distinguishing feature of this procedure is the element of negotiation. Contracting authorities will negotiate the initial and subsequent tenders submitted (except for the final tender) with the relative tenderers, although the minimum requirements and award criteria will not be subject to negotiation. Where necessary, the Authority will inform all tenderers in writing of any changes to the technical specifications or other procurement documents. Following these changes, tenderers will be allowed to modify and re-submit amended tenders. Once the contracting authority intends to conclude the negotiations, it will inform the remaining tenderers and set a common deadline to submit any new or revised tenders. It will verify that the final tenders are in conformity with the minimum requirements, assess the final tenders on the basis of the award criteria and then proceed to award the contract.
This article is part of a series of articles on public procurement in Malta.