The most important changes to the Public Procurement Act

Czech Republic: An amendment to the Public Procurement Act will come into force on 1 January 2014, after which public contracts in a volume of up to CZK 2 million (for goods and services) or up to CZK 6 million (for construction works) will again qualify as small-scale contracts. The amendment also addresses the issue of tenders which repeatedly resulted in the submission of only one single bid.

The first day of January 2014 is linked in the public eye with a ground-breaking change of the Czech legal system. The fact that a completely overhauled Civil Code and the new Corporations Act both come into force on that day almost makes one forget that the new year will bring other important changes in their own right, some of which have been expected with high hopes. Among them is the Senate’s executive order No. 341/2013 Coll., amending the Public Procurement Act.

Aside from a number of minor, rather technical modifications, this executive order also includes several important changes. Above all, it returns the threshold for small-scale public contracts to its original (higher) value, and public contracts for goods and services will thus again be capped, as of 1 January 2014, at CZK 2’000’000 (not including VAT); the threshold for small-scale construction contracts will be lifted back to CZK 6’000’000.

A direly awaited change concerns the introduction of a rule of „single-bid public contracts”. Currently, contracting authorities are (with few exceptions) required to cancel all contract awarding procedures if there is only one bid to evaluate. This has in the past not seldom led to situations in which the contracting authority was unable to award performances which could only be handled by a single contractor in the market, due to their highly specific nature. Under the new rule, contracting authorities will still have to cancel the tender if only one bid is submitted that is fit for evaluation, but if they then organize a new tender for a similar scope of performance and again receive only one bid, they may evaluate it and enter into the contract for performance with the single bidder / contractor.

David Fechtner, Attorney-at-law

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