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Legal alert no. 41

On the past August 31th, it was published, in the Portugal Official Gazette, the Decree-Law no. 111-B/2017, which amends the Public Contracts Code and transposes the following Directives:

  1. Directive 2014/23/UE, of the European Parliament and of the Council of 26th February 2014 on the award of concession contracts;
  2. Directive 2014/24/UE, of the European Parliament and of the Council of 26th February 2014 on public procurement and repealing Directive 2004/18/EC;
  3. Directive 2014/25/UE, of the European Parliament and of the Council of 26th February 2014 on procurement by entities operating in the water, energy, transport and postal services sectors and repealing Directive 2004/17/EC;
  4. Directive 2014/755/UE, of the European Parliament and of the Council of 26th February 2014 on electronic bills on public contracts.

The amendments introduced aims to streamline of the pre-contractual procedures of public contracts and the enhancement of the transparency of those procedures, resulting in a higher level of efficiency concerning the public expense and allowing the access, by economic operators, to those pre-contract procedures.

Regarding the intention of making the regime in force more flexible, we highlight the following:

  1. The creation of the legal figure of partnership for innovation, as a new procedure that allows the acquisition of innovative products or services, when that is not possible through the acquisition of products or services already available on the market;
  2. The pre-contractual procedure for public contracts becomes faster, as it can be seen by the decrease of both the minimum deadlines for presenting applications and proposals, regarding procedures with value lower than the european thresholds, and the deadlines of the direct award and the previous consultation procedures, and the possibility, given to contracting authorities, of fixing the criterion of the abnormally lowest price in a justified way;
  3. The establishment that the value of the collateral, as a variable value, must not exceed 5% of the contract value;
  4. The promotion of the participation of small and medium-sized companies on the pre-contractual procedures regarding public contracts. Given the changes operated by Decree-Law no. 111-B/2017, contracting authorities may predict batch contracts on the procedure documents. Also, contracting authorities must justify their decision of not celebrating a batch contract, in case of pre-contractual procedures regarding public contracts of acquisition or leasing of supplies or services with value higher than 135.000€ and public contracts of public works with value higher than 500.000€.

There were adopted several measures regarding the need of transparency on pre-contractual procedure for public contracts, such as:

  1. The creation of a previous consultation procedure for awarding public contracts of public works with value between 30.000€ and 150.000€ and public contracts of supplies and services acquisitions with value between 20.000€ and 75.000€. According to these procedure, three entities, at least, must be invited to the presentation of proposals, which decreases the use of the direct award procedure;
  2. The establishment of the legal figure of preliminary consultation, which translates into the possibility, given to contracting authorities, of informal consulting the market before initiating a pre-contractual procedure;
  3. The provision, by contracting authorities, of the procedure documents on an pre-contractual electronic platform, free of costs;
  4. The creation of the manager’s contract position, who is responsible for accompanying, in a permanent way, the contract’s execution.

Regarding disputes resolution, the Decree-Law no. 111-B/2017 establishes that disputes between citizens, companies and public entities must be solved preferably in arbitration centers.

This Decree-Law enters into force in January 1st of 2018, and it is not applied to pre-contractual procedures of public contracts initiated before the mentioned date. Also, this Decree-Law is not applied to the extensions, express or implied, of the execution of public contracts initiated before January 1st of 2018.

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