6th October 2016

New Public Procurement Act comes into force. Ministry for Regional Development offers workshops for users

On 1 October 2016, new Act No. 134/2016 Coll., on Public Procurement, became effective. The Ministry for Regional Development of the Czech Republic published recommendations for the application of the new act and offers workshops for users of public procuremenr legislation. Read also frequently asked questions (and answers) about the new act. The Ministry answers your quieries related to the new act at dotazynzzvz@mmr.cz.

The act should reduce administrative burden for clients and suppliers and bring more transparency. It is newly possible to disqualify candidates that have, in the past three years from the commencement of the procedure, committed serious or permanent errors in fulfilling previous contractual relations with any contracting authority that resulted in an early termination of the contractual relation, compensation of damage or other comparable sanctions. In addition, it is also possible to disqualify a candidate that operates as a joint stock company and has not issued exclusively shares in the book-entry form. an analysis by Deloitte says. Also, the act introduces a new tender procedure, the “procedure for innovative partnership”, facilitating cooperation between contracting authorities and the private sector in innovations and research. The new legislation introduces the so-called “light regime”, allowing for more flexibility in public procurement including concession contracts for services in health and social care, hotel and restaurant services or legal services, for example. Read more details (in English).

The new Public Procurement Act assumes that tender procedures which started before 1 October will be brought to completion under the current Public Procurement Act, as will potential later reviews of such tender procedures. Newly commenced procedures, however, will have to be conducted in accordance with the new Public Procurement Act. Under the new Public Procurement Act,awarding authorities are provided with a tool that gives them greater influence over the course of tender procedures, and thus their results. Their greater autonomy is tied to greater responsibility, bnt attorneys-at-law write

An article by the Hospodarske noviny daily gives details in Czech.

The current state of affairs is illustrated in an online discussion between the head of the EconLab think-tank and the Finance Minister on the fact that ČEZ energy supplier broke the public procurement law 144 times. 

Also, authors of this article say that currently, although anonymous shares were prohibited by law in 2014, there are 9 301 companies with anonymous shares (owner is anonymous) in the Czech Republic. (This includes owners of 51% of the company, too.) This kind of companies tend to gain 30-70% higher profits on average from public contracts than companies with transparent ownership structure, according to the analysis (in Czech). 

Click also on results of a survey on perceived transparency of the new act published by pravniprostor.cz/Otidea/the Czech News Agency CTK. Out of 250 respondents - public institutions - more than half does not perceive the new law as more transparent, compared with 35,7% who do consider it as more transparent than the previous law. More detials here (in Czech).

In an interview for the Czech Redio, lawyer Adéla Havlová comments on the new public procurement act and says that as for expert services, criteria of quality (rather than the lowest price) will dominate. 

Members of the American Chamber of Commerce in the Czech Republic