Public procurement

With the amendments to PPA, effective 01.07.2006, the competent body, to lodge an appeal against public procurement award procedures is the Commission on Protection of Competition. CPC is an independent specialized state body seated in Sofia, which is assigned implementation of the competition legislation.

Appeals before CPC

Pursuant to Art.120, Para 1 of PPA, any decision, action or omission to take action by the contracting authority in a public procurement award procedure until conclusion of the contract or the framework agreement shall be appealable as to the legal conformity thereof before CPC, i.e. only acts of the contracting authority issued in the course of the procedure are appealable before the Commission - starting from the date of the decision to initiate the procedure until the conclusion of the public procurement award contract or framework agreement, only referring to their legal conformity.

Acts issued on behalf of the contracting authority by an entity, which is officially authorized to organize and conduct the public procurement award procedure, are also appealable before CPC.

The already concluded public procurement contract or framework agreement, which are private legal acts and only a civil court could rule on their validity, are not appealable before CPC. On the other hand, it is possible to appeal against clauses in the draft contract, insofar as it is part of the tender documentation, approved by the decision for initiation of the procedure.

The appeal does not suspend the public procurement award procedure unless CPC imposes an interim measure of suspension.

 Per the latest amendments to PPA, effective 01.01.2009, concerning public procurement award procedures initiated after this date, each interested party may bring an action for establishing nullity of a public procurement, as well as to claim damages sustained as a result of violations of the law upon the conduct of a public procurement award procedure, according to the procedure established by the Civil Procedure Code.

A contract is null and void when concluded:

- without conduct of a public procurement procedure if there is a ground for such procedure,

- prior to the time limit for appeal against the decision on selecting the contracting authority,

- prior to entering into force of the order on the request for imposition of an interim measure and upon established violation of the public procurement award procedure.

Under the Concessions Act

Pursuant to Article 83, Para 1 of CA, any decision, action or omission to act by a body, the commission or an official in the concession granting procedure is subject to appeal regarding its legal conformity before the Commission on Protection of Competition. Unlike PPA, CA widens the circle of officials, whose acts are appealable. An appeal does not suspend the concession granting procedure, unless an interim measure is imposed.

The appeal is submitted to the Commission on Protection of Competition, with a copy to the grantor, for a decision for initiating a concession granting procedure and, respectively, a copy to the body organizing the procedure for the decisions on:

- selection of the first ranked concessionaire, or:

- requiring the commission to eliminate the established irregularities and subsequently to perform a new rating, or

- termination of the procedure.

Each interested party may file a claim for establishing the nullity of a concession agreement, as well as a claim for compensation for damages, suffered as a result of violation of the law in the course of conduct of a concession granting procedure according under the rules and procedures of the Civil Procedure Code.

Time limit for appeal before CPC

According to Para 2 of Art.120 of PPA, any interested party may lodge an appeal within ten days after being notified of the relevant decision or action or, if not notified, after the date of learning or after the date on which the time limit for executing the respective action expired. With the amendments to the Public Procurement Act, effective 01.07.2006, the legislator provides an opportunity to each interested party to lodge an appeal before CPC, however the term “interested party” is not defined. Under CPC practices, the interested parties are different depending on the nature of the contracting authority’s act.

When appealing against a decision for initiation of the procedure, all parties could have a stake in its appeal, including those who have not bought documentation for acceptance in the procedure. In an open procedure, the decision on selection of a contractor affects both the interests of the rejected /if any/ and of the ranked tenderers except for the selected public procurement contractor, that is why it could be appealed by each of the abovementioned parties.

In cases when the contracting authority declines tender or application of tenderer, when the tender or the application are submitted after expiration of the time limit for their submittal, this action is appealable by the respective candidate or tenderer.

An example for omission, which is appealable, is when a tenderer requests information from the contracting authority relating to the documentation and the latter does not reply within the set three-day period.

From the examples given, which are not exhaustive, a conclusion could be drawn that the interested parties within the meaning of Article 120 PPA are all parties, which have an interest in concluding a public procurement contract or which are endangered by the alleged violation.

With regard to the acts of the contracting authority appealable before CPC, it should be noted that the memorandum on the work of the tender commission is not subject to individual appeal as far as it is not an individual administrative act of the contracting authority, but an act of its supporting body.

The ten-day period for appeal against any act, actions or omissions of the contracting authorities, in the course of the public procurement award procedure is preclusive, i.e. the right to appeal of any interested party is precluded upon expiry of this period.

In cases when an appeal is lodged with CPC relating to a procedure according to the order of PPA, respectively under OSSPP, after the established period, then this appeal turns to be procedurally inadmissible. The date of which it should be established whether the ten-day period for appeal is observed is considered the date of the postal stamp on the envelope if the appeal is posted, respectively the date of its filing at CPC’s records filing office, provided it is submitted personally by the appellant. An appeal could be sent both by post, by e-mail with digital signature, and by fax. The appeal is lodged with CPC, while the appellant is required to send a copy of the appeal to the contracting authority whereof the decision, action or omission is appealed.

An appeal cannot be lodged after concluding the public procurement contract, the wording of the indicated provision not referring to cases where the public procurement contract or the framework agreement awarding is concluded in violation of the law.

In cases when the awarding of a public procurement contract or framework agreement is concluded with the selected contractor(s)/tenderer(s) prior to the expiry of ten-day appeal period, envisaged by the law and the appeal is lodged with CPC within this period, the Commission considers the appeal admissible, notwithstanding the concluded contract or framework agreement. In such cases, upon legally non-conforming concluded contract or framework agreement and upon establishing violations in the conducting of the public procurement award procedure, the commission revokes the appealed act of the contracting authority, establishes the illegal action or omission respectively, and returns the procedure of the last lawful step.

In cases when the public procurement awarding contract or the framework agreement are concluded prior to the expiry of the ten-day appeal and when no violations are established in the course of conducting the procedure, CPC leaves the appeal without consideration.

Period for appeal against the decision for initiation of the procedure

The period for appeal against the provisions, contained in the notice, starts at the time of its publication due to the circumstance that since this moment all interested parties are considered notified of their content. In cases when the appealed provisions are part of the documentation and they are not present in the notice, then the ten-day period for appeal against these provisions starts from the moment of purchase or familiarization with the documentation.

According to Art.83, Para 2 of CA, any interested party may lodge an appeal within ten-day time limit of the promulgation or the notifying in other way of the respective act. When there is no notifying, the interested party may lodge an appeal within ten-day period from:

1. the date of learning, but not later than the expiry of the ten-day period for appeal against the decision for selection of concessionaire, or

2. the expiry of the period for performing an action, which is legally established or requested by the candidates or tenderers, or

3. the expiry of the timeframe for issuing the respective act.

The ten-day time limit for appeal against any decision, action or omission of a body, of the commission or of an official in the concession granting procedure is preclusive, i.e. the right to appeal of any interested party is precluded after expiry of the time limit.

Content of the appeal

The appeal must be lodged in writing in Bulgarian language. It must contain the requisites, specified in Article 121, Para 2 of PPA, respectively in Article 85, Para 2 of CA, namely: naming the authority wherewith the appeal is lodged; name, registered office and managing address, and court registration data on the appellant in case of a legal person; address and identity data on the appellant if a natural person; name, address and court registration data on the contracting authority; data about the public procurement and the decision, action or omission which is appealed; the complaints and the demands of the appellant; signature of the person, lodging the appeal, or of the authorized representative. The evidence in possession of the appellant and documentary proof of stamp duty payment must be attached to the appeal.

The amount of the duty for initiating procedure with CPC is in conformity with Article 1, Items 7 and 8 of Fees and Charges Tariff, collected by CPC under LPC, PPA and CA. When the public procurement award procedure is initiated under the rules of PPA, the amount of the stamp duty is BGN 850. When the procedure is initiated under the rules of OSSPP, the amount of the stamp duty is BGN 600. In cases when the value of the public procurement exceeds the thresholds fixed under Art. 45а of PPA and the contracting authorities are obliged to send the public procurement notices to the European Commission, the stamp duty amounts to BGN 1 700. When the subject of appeal is an act within a concession granting procedure, the fee for initiating the procedure with CPC is BGN 850, while in cases under Art. 29, Para 1 of the Rules for Implementation of the Concession Act (RICA) it is BGN 1700.

For fees: BNB Headquarters, 1 Alexander Battenberg Square, IBAN: BG32 BNBG 9661 30 00101701; BIC: BNBG BGSD, or in cash at the pay-desk of the Commission.

For money deposits (guarantees)

IBAN BG67 BNBG 9661 33 00 1017 01, BIC Code of BNB: BNBG BGSD

Upon payment of stamp duty for initiating procedure for a lodged appeal, the commission has no legal obligation to return the deposited stamp duty by the appellant as far as the payment of a stamp duty is an obligatory condition for initiating a procedure relating to an appeal, lodged under the order of PPA. PPA does not provide for return of paid stamp duty. In the general legal act providing for this – The Law on State Fees and in particular its Art.4b, establishes the obligation to return only the undue fees, paid upon request of the interested party.

Preliminary control

The steps taken in the phase of preliminary control are identical for the appeals both under PPA and CA.

The appeals lodged with CPC are registered by an ingoing number. After the entry of the appeal, on the same day a copy of it is sent by fax to the contracting authority, the grantor and the body, which conducts the concession granting procedure with a letter, signed by the Chief Secretary of CPC. It is obligatory, by this letter, to notify the contracting authority, the grantor and the body, which conducts the concession granting procedure, not only of the lodged appeal, but also on the contained request for imposing an interim measure, if there is such. The same letter provides an opportunity to the contracting authority, the grantor and the body, which conducts the concession granting procedure, to present an opinion within three-day period in cases when the appellant requests imposition of an interim measure.

Presentation of an opinion under the request for an interim measure on the part of the contracting authority, the grantor and the body, which conducts the concession granting procedure, is not obligatory for them. However, it is in their interest, because when considering the request the commission takes into account both the reasons and the evidence in the possession of the appellant and the reasons and the evidence in the possession of the contracting authority, the grantor and the body, which conducts the concession granting procedure, regarding the request for imposing an interim measure.

After lodging the appeal with CPC and sending a copy of the appeal to the contracting authority, the grantor and the body, which conducts the concession granting procedure, the Chief Secretary performs a preliminary control to examine whether the appeal contains the required requisites required by law.

If the appeal does not contain the required requisites, as well as if there is not an attached to it documentary proof of payment of duty for initiating the procedure with CPC then, with a letter signed by the Chief Secretary of CPC, a three-day period is given for the appellant to eliminate the irregularities in the appeal.

Within three-day period from lodging of the appeal, in cases when the appeal complies with the requirements of the law related to the requisites contained in it, or after the elimination of the irregularities in the appeal, the Chairperson of CPC initiates proceedings and determines the rapporteur for the file.

The Commission on Protection of Competition does not initiate proceedings when:

- the appeal is lodged after the expiry of the ten-day period under Art. 120, Para 2 of PPA, respectively under Art. 83 of CA,

- the irregularities are not eliminated within the legally established three-day period,

- no document of stamp duty payment was submitted for initiating procedure,

- the appeal is lodged after concluding of the public procurement awarding contract,

- the appeal is withdrawn before initiating proceedings with CPC.

In cases when the appellant does not eliminate the irregularities in the appeal, it is returned by an order of the Chairperson of CPC. This order is appealable before a three-member panel of the SAC (Supreme Administrative Court) within seven-days of communicating it.

After initiating the file and appointing a rapporteur, who is a member of the commission, the Director of PPC (Public Procurement and Concessions Directorate) determines the members of the working group, which supports the rapporteur in clarifying the facts. The working group, which is part of the specialized administration of CPC /PPC Directorate/ examines the circumstances related to the appeal, guided by the case rapporteur.

Interim measure

Pursuant to Art.121, Para 3 of PPA, respectively Art. 86, Para 2 of CA, paralle to the appeal a request for imposing an interim measure “suspension” of the procedure is filed. In cases when the request for imposing the measure is received after the lodging of the appeal but on the same day, CPC assumes that the request is made simultaneously with the appeal.

CPC has to rule on the request within seven-day period of initiating the case. The Commission delivers its ruling at a closed meeting.

CPC may impose interim measure “suspension” on public procurement award procedure only after a reasoned request from the appellant. When ruling on the request, the Commission evaluates the unfavorable consequences of the delay of the procedure and the possibility of serious impairment of the public interest or of the interests of the parties. According to CPC practices, the allegations contained in the appeal regarding the legal non-conformity of conducting the appealed procedure cannot be a reason when making request for imposing an interim measure. The appellant has to present concrete arguments relating to the request for imposing an interim measure, which CPC is to assess during the review of the request.

In cases when CPC allows imposing of an interim measure, the appellant is obliged, within five-day period of the communication, to post security amounting to of one percent of the value of the procurement for procedures under PPA and OPP (Ordinance on Public Procurement) and five percent of the higher of the prognostic values on the investment for the period of the concession or of the proceeds from the operation for the period of the concession, but not more than BGN 500 000, as cash deposit to the account of CPC or as a bank guarantee. The Commission determines the amount of the security of up to BGN 500 000, when the value of the public procurement or of the prognostic values of the investment for the period of the concession or of the income from the operation for the period of the concession can not be assessed.

In cases when the appellant posts the security determined by CPC or the bank guarantee after the expiry of five-day period, then the measure is considered not imposed.

The interim measure is considered imposed as of the date of posting the security, i.e. as of the date of presenting a document for a cash deposit made to the account of CPC or bank guarantee. When CPC rejects the imposing of an interim measure, the parties are notified of the delivered ruling, and in case of imposing an interim measure under PPA, besides the parties, the Public Procurement Agency is also notified on the day of imposing.

The ruling of CPC for imposing or not imposing an interim measure is appealable before the SAC within seven-day period from its communication to the parties. The appealed ruling suspends neither the proceedings with CPC nor the execution of an imposed interim measure.

As to appealing the decisions of the Commission before the SAC, it should be taken into account that CPC is not obliged to notify the parties to the procedure whether the decision is appealed before the competent court.

The parties are notified by letter about the issued decision and they may receive a transcript of it by filing a free text application in writing at the records keeping office of the Commission and pay stamp duty of the amount, determined according to the fee tariff, collected by the Commission. Upon receiving the transcript of the ruling, the parties are obliged to present a letter of attorney in case a representative of the tenderer is receiving the transcript.

When CPC allows imposing of an interim measure and it will be imposed after the posting of required security, the security is subject to return after an order of the chairperson of CPC within seven-days from entry into force of the decision, which revokes the imposed interim measure, or after entering into force of the decision for granting the lodged appeal. Upon rejection of the appeal, the security posted is transferred as revenue into the national budget.

The decision of CPC is appealable before the SAC through CPC. Imposing or not imposing an interim measure does not affect the review of the appeal in merits.

Conducting the investigation

In the course of investigation of the proceedings, initiated by CPC, written and oral evidence /witness/ and expert opinions are admitted. The expert opinion is utilized mostly when the case concerns the technical part of the procedure and CPC does not have available experts with specialized knowledge in the specific field of expertise. CPC may order expert opinions in cases when such an expertise is requested by the parties or, if not requested, CPC has ruled that such is needed. When an expert opinion is requested, CPC delivers its decisions on the request by a memorandum, which admits or does not admit the use of an expert opinion. The decisions of the memorandum is not appealable as it does not obstruct the course of the proceedings and it is not specified in a special law. The parties to the proceedings are notified of the decision issued.

Assistance

The parties to the proceedings, the state bodies and officials are obliged to render assistance to CPC in the course of discharge of its lawful duties. In this regard upon failure to present the required information within the set period or upon presenting incomplete or incorrect information, the provisions of Art.127а, Para 1 of PPA applies - natural persons are liable to a fine and the legal persons are liable to a pecuniary penalty, respectively.

Any evidence collected in the proceedings may not be disclosed in case they represent a manufacturing, commercial or other secret, protected by law. If they contain data representing classified information, the procedure prescribed by the Protection of Classified Information Act applies.

In case that the provided information represent a manufacturing, commercial or other secret, protected by law, parties to the procedure before CPC have to prepare and submit this information as separate attachments, marking each page as “confidential”.

CPC cannot determine at its own discretion which documents are confidential. The documents, which are marked as confidential, are placed in a separate folder and they are not provided to the other parties in the initiated proceedings regarding the lodged appeal when familiarizing with the evidence collected under the case.

Session

Upon completion of the investigation, an open meeting is set under the rules and procedures of CPC (Civil Procedure Code), where the parties are summoned to be present if they wish so, as well as to provide additional explanations if needed. When summoning the parties, the seven-day period under Art.41, Para 5 of CCP does not apply. The legislation empowers the parties to use legal protection.

Upon completion of the investigation under the case file and before the open meeting, the parties are offered an opportunity to familiarize themselves with the evidence, collected in the file.

The parties to the proceedings oblige to submit all of their evidence not later than the day before the meeting for reviewing the appeal.

The sessions of the Commission are considered regularly convened, if at least five of CPC members are present. The Commission adopts decisions by open vote and a majority of four votes. If less than seven members are participating in the meeting and a majority of four votes can not be reached, it is accepted that the appeal is left without action or that the request to impose an interim measure is declined.

The open session starts with an investigation whether there are any grounds for a member of the commission to ask to be struck off the list upon the presence of circumstances provided in the law (he/she being authorized by any of the parties, or he/she being employed or in civil legal relationship with any of the parties, or due to other reasons upon which he/she might be considered as interested in the outcome of the proceedings) , after that the meeting starts by resolving the preliminary issues as to the regularity of the procedure. The parties to the procedure may be asked questions in the order, determined by the chairperson. When the circumstances concerning the appeal are considered clarified, the chairperson gives the opportunity to the parties to state their opinions. After clarifying the dispute regarding the factual and legal side, the chairperson closes the session.

CPC Decision

In cases when CPC reviews the appeal under PPA or OSSPP (Ordinance on Small-scale Public Procurement) in merits, the Commission, renders a decision in closed session, whereby:

- leaves the appeal without consideration or

- revokes the legally non-conforming decision of the contracting authority or ascertains the legally non-conforming action or omission and returns the case for continuation of the public procurement award procedure as from the last legally conforming decision or action. In this case, CPC may give mandatory instructions on the progress of the public procurement award procedure.

- Following the new amendments to the PPA as of 01.01.2009, CPC reviews in a close session the appeal in merits, adopts a decision on revoking the legally non-conforming decision for initiation of the public procurement award procedure.

In cases when CPC reviews the appeal in merits under the CA, the Commission, meeting behind closed doors, renders a decision whereby:

- leaves the appeal without consideration, or

- revokes the legally non-conforming decision of the contracting authority or ascertains the legally non-conforming action or omission, respectively, and returns the case file for continuation of the public procurement award procedure as from the last legally conforming decision or action.

- when the decision for selection of concessionaire is appealed and an interim measure is not imposed, the Commission on Protection of Competition:

- leaves the appeal without consideration, or

- establish the legal non-conformity of the decision, and under these circumstances the concluded concession agreement remains valid and the interested parties are entitled to seek compensation under the rules and procedures of the Civil Procedure Code.

The decision of CPC is evidenced in writing. It contains the name of the issuing body; the factual and legal grounds for its issuance, reasons, dispositive part; the body before which and the period within which the decision may be appealed .

CPC rules on the appeal within two-month period of initiation of the proceedings. This set period is instructive, i.e. upon objective circumstances CPC may pronounce after its expiry.

The decision of CPC, together with its reasons, is prepared and announced to the parties in the proceedings not later than fourteen days of ruling the appeal.

The decision of CPC is appealable before a three-member panel of the SAC within fourteen-day of notifying the parties to the procedure. The ruling of the court is final.

The rules and procedures for obtaining a transcript of the Decision of CPC is the same as those for obtaining a transcript of the Determinations of the Commission.

Obligation of the contracting authority to notify CPC of a concluded contract

According to Art. 122d, Para 3 of PPA, when proceedings is initiated with CPC and an interim measure is not imposed, the contracting authority is obligated to notify CPC if the said authority concludes a public procurement contract before the Commission pronounces on the appeal. In cases under Para 3, when there is a concluded contract, CPC leaves the appeal without consideration or ascertains the legal non-conformity of the decision, action or omission of the contracting authority. In such a case the concluded contract subsists and the interested parties have the right to seek compensation according to the procedure established by the Civil Procedure Code.

The contracting authorities have no right to conclude a contract before the expiry of the set period for appeal of the decision on selecting a contractor in cases when there is not an appeal lodged or when there is an appeal lodged, but there is no request for imposing an interim measure.

When an appeal is lodged against the decision on selecting a contractor and there is a request for imposing an interim measure, the contracting authority concludes a contract within one-month of entering into force of the ruling, which rejects the request for imposing an interim measure.

In cases when CPC ascertains the legal non-conformity of a decision, action or omission, the law provides an opportunity to any interested party to bring an action for establishment of nullity of the public procurement contract and furthermore – to claim compensation for damages sustained as a result of violations of the law upon the conduct of a public procurement award procedure, per the procedure established by the CCP. The action for establishment of nullity is a constitutive claim; it is not barred by statute of limitations.

Termination of proceedings:

PPA and CA also govern the cases when CPC terminates the initiated proceedings by a ruling. CPC terminates the initiated proceedings:

- upon ascertainment that the appeal is inadmissible – overdue appeal, i.e. the appeal lodged out of the ten-day period, envisaged by law or no interest in the appeal is manifested,

- in cases when a natural-person appellant has died or if the legal-person appellant has been dissolved,

- upon withdrawal of the appeal lodged at CPC by the appellant.

The determinations of CPC, which terminate initiated proceedings under the case file, are appealable before the SAC under the same procedure as the rulings on a request for imposing an interim measure, i.e. within seven-day period from notifying the parties.

Opportunity for the contracting authorities

According to Art.121, Para 8 of PPA, respectively Art.85, Para 4 of CA, the contracting authority or the respective body may remedy on its own the violation, alleged in the appeal until CPC rules on the appeal, as the appealed act may be revoked by a subsequent one for termination of the procedure. In such cases, CPC assumes that a new legal fact occurs in the course of the proceedings, which has not existed as of the date of termination of the initial appeal, and therefore the legal conformity of the appealed act should not be considered. Due to the stated reasons, the initiated proceedings under the case file should be terminated, taking into account the absence of a legally disputable issue, which determines the absence of legal interest on the part of the appellant.

Regarding all unsettled issues relating to the procedure of appeal with CPC, the rules and procedures for appealing individual administrative acts governs. The circumstances and rules to appeal under the law respectively apply for public procurements, specified by the Ordinance on the Small-scale Public Procurement.

2. Legal base:

- Public Procurement Act;

- Ordinance on Small-scale Public Procurement;

- Public Procurement Act Implementing Rules;

- Concessions Act;

- Concessions Act Implementing Rules;