The Principles of Fair Competition in Public Procurement Proceedings

Author: Mirna Pavletic-Zupic,PhD, Attorney-at-Law,
September 2015

The value of procurement of various works and services by public authorities accounts a significant percent of the Croatia’s and the EU’s GDP. The important notions of the  Public Procurement Act, establish the legal and institutional background for protection of competition in the public procedure procedures, along with available legal remedies. This is mainly a result from the fact that the legal rules on procurement consist of the procurement directives adopted by the European Commission which have been incorporated by reference into the Public Procurement Act (hereinafter: PPL) which is to the great extent aligned with the EU acquis: Directive 2004/17 / EC, Directive 2004/18 / EC, Directive 2005/75 / EC, Commission Directive 2005/51 / EC, Directive 2007/66 / EC, Directive 2009/81 / EC. [1]

In conducting public procurement procedures, contracting authorities are required in respect of all economic operators to respect the principles established under the Law on Public Procurement, and the principle of free movement of goods, the principle of freedom of establishment and the principle of freedom to provide services and the principles deriving therefrom, such as the principle of competition, the principle of equal treatment, the principle of non-discrimination, the principle of mutual recognition, the principle of proportionality and the principle of transparency. Contracting authorities are obliged to act in a manner that enables efficient public procurement and economical use of funds for public procurement [2]

Undistorted Competition in the Public Procurement Context
Competition concerns in procurement, focus on the possibility of horizontal agreements on collusion between competitors, and abuse of a dominant position, through predatory pricing or similar anticompetitive restreints on the relevant market.

Competition protection issues in the context of procurement, therefore, relate to primarily in  meeting the relevant legal standards of proof required in front of the relevant authorities or in the courts proceedings, considering the fact of the entitlement of an economic operator, who as a natural or legal person or association of such persons who offers execution of works or delivery of goods or services, not to be excluded from the public procurement processes, which is also established in the Croatian PPA.[3]

Contracting authorities are: Republic of Croatia, and governmental bodies, self-government units, legal persons established for a specific purpose, provided that they are financed from the state or the public budget in excess of 50%, or if the control over their operations is carried out by state authorities, and more than half of the members of their  supervisory board or board of directors is appointed by the state bodies.[4]

Utility sector contracting entities are public authorities carrying out activities of gas, heat or electricity companies if they are dominated by the contracting authorities.[5]

The offer shall not be improper, unacceptable or inappropriate, which would mean that it was not made in accordance with the requested documentation, and among other things contrary to  the provisions of competition or inadequate because of other formal reasons such as (delayed, fraud, missing other formal requirements, or if it does not fit the needs of the contracting authority specified in the description of the procurement or to  the technical specifications or has some other deficiency  that clearly does not meet the needs of the contracting authority with respect to the requested subject of procurement).[6]

The course of an open public procurement procedure
The contracting authority which intends to conclude a public contract or a framework agreement in the open public procurement procedure is obliged to publish a contract notice, namely a public invitation to tender. From the date of publication of the contract notice the contracting authority is obliged to make available the tender documents and any possible additional documents relating to the open public procurement procedure,  unlimited and in a fully electronically  form in the Electronic Public Procurement Gazzette of the Republic of Croatia. In calls for tender should be indicated the  Internet site where the documentation is available, or other ways to obtain or request  those documents.

During the period for the submission of bids, the economic operators may request clarifications and changes related to the bidding documents, and the contracting authority is obliged to response to such requests, and to make available othe same on the same web site on which are also available the primary documents, without specifying details of the applicant in question.

Provided that the request is submitted in a timely manner, the contracting authority is obliged to response and make it available at least throughout the sixth day before the day on which the deadline for the submission of bids in the public procurement procedure of great value expires, or  in the case of  public procurement procedure of small value – not later than on the fourth day before the day on which the deadline for the submission of bids expires.

The request is timely if it is delivered to the contracting authority at the latest on the eighth day before the day on which the deadline expires for the submission of bids in the public procurement procedure of great value, or at the latest on the sixth day before the day on which deadline expires for the submission of bids in the public procurement procedure of small value.

However, if for any reason the tender documents or any supporting documents were not made available, or if the contracting authority did not provide its response in a timely manner,  or where the bids could only be made after a construction site visit, or after an immediate inspection of the documents supporting the tender documents, the contracting authority shall extend a deadline for the submission of bids in a manner appropriate to the needs to all economic operators – bidders concerned, allowing them to be aware of all the information needed to produce their bids.

Furthermore, if the contracting authority, during the tender submission deadline, undertakes to change the tendering documentation, it shall ensure the availability of amendments of the same to all interested economic operators,  in the same manner and at the same web site as well as the basic documentation is provided, as well as to  ensure that economic operators have at least  15 days for the submission of ammended tenders in public procurement procedure of great value, and ten days in the public procurement procedure of small value.

If necessary, the contracting authority is obliged to amend or correct the invitation to tender. After the expiry of the deadline for the submission of bids, the placed bids cannot be changed. Upon recepience, the contracting authority examines and evaluates the bids submitted and makes a decision on the selection, according to the selection criteria specified in the contract notice and tender documents.[7]

The Conclusion
As the anticompetitive conduct affecting the outcome of the procurement process could have a value of a particularly pernicious infringement, the issue of a major importance,  particularly given the relatively short deadline for lodging of appeals before the Commision for Supervision of Public Procurement, is to predict all the arguments that indicate a meaning, severity and the impacts of the anticompetitive harm in question.


[1] Public Procurement Act (NN 90/11,83/13,143/13,13/14; PPA)

[2] Art. 3

[3] Art. 14(1)

[4] Art. 5(1)

[5] Art. 6 (1,2)

[6] Art. 29,67,68

[7] Art. 31