Order for the Law on Public Orders

The breadth of the project makes it impossible to discuss in any detail the solutions to be implemented by the new law. That is why I will concentrate on the presentation of the main assumptions of the new law and the basic changes introduced to the system of public orders. I will also present a few new particular solutions provided for in the draft of the new Act.

Law substitutes the Act

The currently binding Act on Public Orders has so far been amended about twenty times and this has resulted in it being unclear and incoherent. That is why it was decided that a new act should be introduced to replace it. According to its authors, the new act will fully regulate the issue of public orders and encompass the solutions contained so far in the executory ordinances to the Act. The use of the word "Law" in the name of the new Act is aimed at underlining the complex regulation of the issues and an attempt to create the codification of public orders.

Compliance with European law

The authors of the draft underline that one of the basic reasons for the preparation of the new act is the necessity to adapt Polish law to European Union regulations. The draft has also encompassed a few solutions unknown so far to the Polish system of public orders, such as concessions for building work, attestation (issuance of a certificate confirming the compliance of the procedures, applied by the ordering party with the Act and European Union law) and conciliation proceedings (examination of the dispute by the arbiters accredited by the European Commission).

Increased thresholds

The new Law on Public Orders retains, as a rule, the currently applied procedures of granting orders. The granting of an order can take place by way of an unlimited tender, limited tender, negotiations with an announcement, negotiations without an announcement, price enquiry, free market orders, and a totally new solution: electronic auction. According to the draft of the law, the basic forms of determining orders will be an unlimited tender and a limited tender, which will have equal validity in the new regulations. The possibility of granting an order in another manner will be subject to the limits determined in detail in the Act. The draft introduces new, higher values for the orders, on which the application of the specific manner and procedures for granting orders depends. That concerns, for instance, the threshold, below which simplified procedures will apply (EUR 60,000, against the currently binding Eur 30,000). A stricter procedure is introduced, at the same time, concerning orders exceeding Eur 5 mln with regard to supplies and Eur 10 mln - with regard to construction. In the event of the above amounts being exceeded, it will be obligatory to examine the terms of the order, as well as the control of the correctness of conducting the tender procedure before the conclusion of the agreement. Moreover, an observer appointed by the President of the Office of Public Orders, will have to participate in the commission's work.

Special proceedings

The new law also contains detailed provisions, related to the proceedings, which, due to the subject of the order, are different in nature when compared to the general principles of granting a public order. The new regulations will cover the principles of organizing a competition, issuance of a concession for building work, making sector orders and making specific orders.

Competition - a controversial matter

The competition is meant as a public promise, in which the ordering party promises a reward for execution and transfer of the right to given work, selected by the competition commission, in particular with regard to spatial development, town-planning design, architectural and building planning and data processing. The reward for winning the competition can be, in particular, an invitation to negotiations. No regulation of the draft of the new Law on Public Orders has evoked such emotion and discussion as the competition. The new law abolishes the existing obligation to organize a competition in the case of granting a public order for creative design work, of a value exceeding the equivalent of EUR 25,000. Moreover, it will be possible to order, by way of a tender (which means - without a competition), design and implementation services, which encompass the preparation of architectural design as well. According to the Chamber of the Architects, the abolition of the obligation to organize competitions will result in a situation, where the decisive factor during the selection process will only be the cost of design preparation and not the design's quality. As a result, architects are currently trying to influence the Office of Public Offers, so that the new draft of the law is obliged to reinstate competitions for design work.

Concession for building work

A new, interesting institution, which already functions in EU law and which is being introduced to Poland, is the practice of concessions for building work. The concession is a kind of an order, in which, in return for the performance of specific construction work, the concessionary obtains the right to operate/utilize such projects. Due to the specific nature of such kinds of order, the provisions make it possible to conduct a detailed verification of the entity, to which such concession is granted.

Summary

Building work constitutes a wide-ranging subject for tenders for public orders. Practically every large construction company regularly participates in tenders, conducted within the system of public orders. Because of this, it is hard to overestimate the significance of the system of public orders for the functioning of the building sector. The existing practice of public orders provides too many examples of circumvention and abuse of the provisions of the Act. From this perspective, the intention of accepting the new law, one of whose assumptions is to create a system which ensures the actual transparency and impartiality of the procedures, should be regarded as rightful. However, it will not be possible to assess their effectiveness before those new regulations come into existence and are applied in practice.

Piotr Łaska

The author is a legal advisor

at the law firm Lovells