RESTRICTED
WORLD TRADE WT/WGTGP/W/12
16January 1998
ORGANIZATION(98-0137)
Original: English Working Group onTransparency in
Government Procurement
NATIONAL PROCEDURES AND PRACTICES ONTRANSPARENCY IN
GOVERNMENT PROCUREMENT
Communication from theCzech Republic
Introduction
With reference totheagreement reached atthelastmeeting oftheWorking Group onthe
proposal fromtheChair thatdelegations would provide information ontheirnational practices relating
tothetransparency ingovernment procurement theCzech Republic intends tocontribute tothestudy
phase oftheWorking Group.
Information onnational legislation andprocedures
Public procurement intheCzech Republic isgoverned byActNo.199/1994 Coll. onPublic
Procurement, inthewording ofActNo.148/1996. When drafting theAct,itwasdrawn bothon
domestic sources (i.e.Building Procurement Code of1991) andforeign legalregulations, particularly
the"Model LawofProcurement", designed bytheCommission forInternational Law(UNCITRAL),
andECDirectives onPublic Procurement from 1993 (Nos. 93/36, 93/37 and93/38).
According totheAct,theregular manner ofpublic procurement isthatthecontract isawarded
onthebasis ofapublic tender inwhich anunlimited number ofinterested parties canparticipate,
provided theymeettheterms stipulated bytheActandthetender. Where suchmethod isused, the
contractingauthorityconcludesacontractwiththeparticipantwhosebidwasselectedasthemostsuitable.
TheActalsoprovides for"other methods ofpublic procurement", suchasprocurement on
thebasisofinvitations issued toseveral parties, simplified procurement, procurement incases ofsmall-
scale contracts andprocurement onthebasis ofaninvitation issued toasingle party. Theabove-
mentioned methods maybeusedonlyincases specifically listed bytheAct.
General rules onhowpublic notice isgiven
Apublic tender, theterms thereof, changes thereto orcancellation thereof shallbeannounced
bythecontracting authority intheCommercial Bulletin ("Obchodní vìstník").
Thenotice ofthepublic tender mustnotbepublished inanyother waypriortotheirpublication
intheCommercial Bulletin, andthecontent thereof must notbedisclosed toanyperson.
Prequalification
Thecontractingauthoritymaystipulateinitsannouncementofapublictenderthatitshallrequire
proof ofapplicants 'qualifications, tobeestablished bymeans ofprequalification proceedings. IntheWT/WGTGP/W/12
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prequalification proceedings, thecontracting authority shall select applicants whobysatisfying
qualification requirements prove theircapability toexecute thepublic procurement.
Thecontractingauthoritymustrequestinthequalificationdocumentationparticularlytherelevant
licences andspecify themanner inwhich further prerequisites (e.g.technical andmaterial basenecessary
forexecution ofthepublic procurement, thenumber ofstaffofrelevant specialised professions decisive
forexecution ofthepublic procurement) aretobedocumented. Moreover, thecontracting authority
muststatethetime-limit forandplace ofpresentation ofthequalification documentation, aswellas
thetime-limit fornotification oftheresults ofevaluation.
Thetime-limitfornotificationoftheresultsoftheprequalificationproceedingsmustend25days
prior totheexpiry ofthetime-limit forreceipt ofbidsatthelatest.
Basedontheoutcomeoftheprequalificationsproceedings,thecontractingauthorityshallexclude
applicants whofailtosatisfy thequalification requirements. Only those applicants whohavemetthe
qualification requirements maysubmit bids.
Tender procedures anddocuments
- Public tender (open procedure)
Thenotice ofthepublic tender must bepublished intheCommercial Bulletin. Contracting
authorities areobliged topublish thetender notice iftheamount thefuture monetary liability arising
fromacontract relating torealestate, withtheexception oflease, orasetofmachinery andequipment
forming aseparate functional unit,isinexcess Kc20,000,000, orinexcess ofKc5,000,000 inother
cases. Tender notices must contain thefollowing elements:
- Definition ofthescope ofexecution ofthepublic procurement;
- thetimeandplace ofexecution ofthepublic procurement;
- qualification requirements forproof ofsuitability ofapplicants;
- themethod ofbidevaluation;
- standardrequirementsfordeterminationofthebidprice,includingthetermsofpayment;
- thetime-limit forthereceipt ofbidsandtheplace where envelopes containing bids
shallbeopened;
- thetime-limit ofeffectiveness ofthebids;
- theplace towhich thebidsaretobedelivered andthetimewhen theycanbesubmitted
inperson;
- thename, registered office, telephone number, telex orfacsimile numbers ofthe
contracting authority;
- anotice stating thetimeofviewing oftheplace ofexecution ofthepublic procurement
orthetimewhen documentation canbeviewed, ifanysuchviewing isenvisaged, and
provided suchdocumentation isnotincluded inthedocumentation accompanying the
invitation totender;WT/WGTGP/W/12
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- requirement ofanysecurity required andspecification oftheamount thereof.
- Invitation toseveral parties
Thecontracting authority mayconclude acontract onthebasis ofawritten invitation made
tonolessthanfiveinterested parties inthecaseofpublic procurements where thepecuniary value
ofthecontract isinexcess ofKc2,500,000, excluding VAT, forrealestate withtheexception ofa
lease, orasetofmachinery orequipment constituting aseparate functional unit, orinexcess of
Kc500,000 inother cases.
Conclusion ofacontract onthebasis ofawritten invitation sentbythecontracting authority
toparties interested inthepublic procurement whose pecuniary value isinexcess oftheamount
mentioned above, shallalsobepermissible intheevent:
- Ofanurgent need, asdecided bytheGovernment oftheCzech Republic;
- ofaspecialized public procurement;
- thatapublic tender waspreviously organized andcancelled;
- thatapublication oftheterms ofthetender could jeopardise astatesecret, defence
andsecurity ofthestateortheproperty ofthecontracting authority.
Thecontracting authority shallsendaninvitation forsubmission ofbidsunder (a),(c)and
(d)toaminimum ofthree parties interested inthepublic procurement andunder (b),toallinterested
parties whoexecute suchspecialized public procurement intheCzech Republic.
Intheevent ofinvitation toseveral parties, thecontracting authority shall setidentical
requirements forallparties interested inthepublic procurement, andstatethecriteria forevaluation
oftheirbids, i.e.theconsideration ofthelowest amount, orthemostsuitable bidonthewhole. The
contracting authority shallnotify allapplicants oftheselection ofthemost suitable bid.
Thetime-limitforsubmissionofbidsshallnotbeshorterthan14days.Ifthepublicprocurement
isawarded intheevent oftheurgent need, theGovernment mayresolve toapply areduced time-limit.
- Simplified award ofcontract
Thecontracting authority isobliged torequest bidsfromaminimum ofthreeinterested parties
inthecaseofpublic procurement where thepecuniary value ofthecontract isinexcess ofKc100,000,
excluding VAT, butdoesnotexceed thelimits setoutfortheinvitation toseveral parties.
Thecontracting authority must specify therequirement of:
- Determination ofthebidprice depending ontheplace ofexecution ofthepublic
procurement;
- time-limit forexecution andother terms relating tothepublic procurement.
Thecontracting authority shallevidence anyinvitation made byawritten record.WT/WGTGP/W/12
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- Small-scale public procurement
Inthecaseofpublic procurement whose future pecuniary value doesnotexceed Kc100,000,
excluding VAT, thecontracting authority maydecide toaward thepublic procurement directly aprice
customarily charged intheplace ofexecution. Ifthecontracting authority decides toaward thecontract
inthismanner, itshalldraw onmarket information andonitsexperience.
- Invitation toasingle candidate
Conclusion ofacontract onthebasis ofawritten invitation forsubmission ofabid,sentby
thecontracting authority toasingle candidate interested inthepublic procurement, shallbepermissible
onlyinthecaseof:
- Anurgent need, where human livesorhealth arethreatened, when there isadisaster,
natural catastrophe oranimminent threat ofextensive damage;
- aspecialized public procurement incases where onlyoneparty interested inthepublic
procurement canexecute it;
- asupplementary orrepeated public procurement provided itdoesnotexceed 50per
centoftheprice oftheoriginal procurement andprovided theinvitation bythe
contracting authority iseffected within 12months oftheexecution ofthepublic
procurement;
- apartial renovation oftheobject oftheoriginal public procurement, ifachange of
applicant would result inthecontracting ofauthority having toprocure execution of
apublic procurement ofdifferent technical parameters, which execution would lead
totechnical incompatibility ordifficulties inoperation andmaintenance;
- where publication oftheterms ofthetender could jeopardise astatesecret, defence
andsecurity ofthestate;
- where awinner ofanarchitectural competition pertaining totheobject ofexecution
ofthepublic procurement reaches anagreement withthecontracting authority that
shalldrafttheproject documentation;
- execution fortheState Material Reserves.
Theapplicant must present hisbusiness licence prior toconclusion ofthecontract.
Qualification ofapplicants andclarification
Applicants mustdemonstrate intheirbidsthattheyarequalified toexecute therelevant public
procurement. Thecontracting authority mayrequire initsinvitation totender thatother prerequisites
forexecution oftherelevant public procurement bemet.
Thequalification requirements forexecution apublic procurement aremetbytheapplicant:
- Whohastherelevant licence toengage inbusiness, provided suchlicence isrequired
under special legalregulations;
- against whose property nobankruptcy procurement hasbeenissued;WT/WGTGP/W/12
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- whoowes notaxaccording totherecords keptbyauthorities;
- whohasnotbeendulysentenced foracriminal actrelated tohisobject ofbusiness,
orforeconomic crime orcrime against property;
- against whom nodisciplinary measures havebeentaken under special legalregulations
governing theperformance oftherelevant specialized activity.
Theapplicantshallprovethathesatisfiesthequalificationrequirementsbysubmittinghislicence
toengage inbusiness andanaffidavit. Theapplicant withwhom acontract istobeconcluded shall
prove hisqualification byanextract from theCommercial Register (notolder than90days) andby
anextract from theCriminal Register (notolder thatsixmonths).
Further prerequisites forexecution ofapublic procurement include, butarenotlimited to:
- Atechnical andmaterial basenecessary forexecution ofthepublic procurement;
- thenumber ofstaffofrelevant specialized professions decisive forexecution ofthe
public procurement;
- alistofsignificant procurements delivered bytheapplicant inrecent years.
Further prerequisites forexecution ofapublic procurement shallbeoutlined bythecontracting
party intheinvitation totender orqualification documentation. Applicants mayrequest additional
information from thecontracting authority astohowtheyshould prove theattainment offurther
prerequisites uptoseven daysprior totheexpiry ofthetime-limit setforbidding; suchinformation
must beprovided toallapplicants.
Anyapplicant isobliged tonotify thecontracting authority ofanychanges which occur after
thesubmission ofhisbidandwhich concern thedatarequired bythecontracting authority asproof
ofhisqualifications.
Ifanapplicant failstoprove hisattainment ofanyoneofthequalification requirements or
failstonotify anychanges inqualifications, thecontracting authority shallexclude suchapplicant from
anyfurther participation insubsequent proceedings concerning thepublic procurement. Thedecision
toexclude anapplicant shallbecommunicated thereto without delay.
Time-limits
Time-limit forthereceipt ofbidsmeans theperiod within which bidsmaybesubmitted. The
time-limit forthereceipt ofbidsshallnotbeshorter than36calendar days. Thistime-limit shallstart
running onthedayofpublication ofthepublic tender intheCommercial Bulletin andshallendon
thedayandthehourwhen theenvelopes containing bidsareopened. Theterms ofthepublic tender
shallstipulate thedateandhouroftheopening oftheenvelopes containing thebids.
Time-limit ofeffectiveness ofbidsmeans theperiod oftimeforwhich theapplicants arebound
bytheirrespective bids. Thecontracting authority shallstipulate thisperiod oftimeincalendar years
inthenotice ofthepublic tender. Thetime-limit ofeffectiveness ofthebidsassetforthintheterms
ofthepublic tender shallbethesame forallapplicants, anditshallbeextended withrespect tothe
applicants ranking first,second andthirdintheevaluation uptilltheconclusion ofthecontract. The
termofeffectiveness ofthebidswithout extension shallnotexceed 90calendar years; itshallstartWT/WGTGP/W/12
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running onthedayofopening oftheenvelopes containing thebidsandendonthedayofdispatch
ofnotices regarding theselection ofthemost suitable bids.
Transparency ofdecisions oncontract awards
- Method ofbidevaluation
Bidsshallbeevaluated bymeans ofasingle criterion orseveral criteria, anditshallbestated
whatmethod shallbeusedtoarrive attheorder ofbids.
Intheevent oftheevaluation ofbidsbymeans of:
- Asingle criterion, thebidsshallbeevaluated according tothebidprice;
- several criteria, thecontracting authority shallapply, inaddition tothebidprice, some
ofthefollowing criteria depending onthenature ofpublic procurement: requirements
ofquality, terms ofdelivery, qualifications ofapplicants, quality guarantees, operation
andmaintenance requirements.
Ifthecontracting authority optsforevaluation bymeans ofseveral criteria, itshalllistthese
individual criteria intheterms ofthetender according topriority attached tothem.
- Manner ofsubmission ofbids
Bidsshallbesubmitted inperson orbyregistered mail, inwriting, insealed envelopes marked
"tender", withtheedges oftheflapsstamped bytheapplicants 'seals.
Thebidsmust bedelivered tothecontracting authority before theendofthetime-limit for
receipt ofbids. Eachinterested party maysubmit onlyonebid;should abreach ofthese duties occur,
thecontracting authority shallbeobliged toexclude suchapplicant from thetender.
- Receipt ofbidsandopening ofenvelopes containing bids
Thecontracting authority isobliged tomake surethattheenvelopes containing thedelivered
bidsaremarked withaserial number, dateandhourofdelivery, andthatthebidsareentered, together
withtheabove data,inthelistofbids. Ifabidisdelivered inperson, thecontracting authority shall
issuetotheperson inquestion areceipt ofdelivery bearing thedatalisted inthefirstsentence herein.
Inaddition tothecontracting authority, thefollowing parties areentitled toparticipation at
theopening oftheenvelopes containing bids:
- Applicants whose bidshavebeendelivered tothecontracting authority within thetime-
limitforreceipt ofbids;
- representatives oftheauthority incharge ofsurveillance;
- representatives oftheMinistry ofFinance;
- representatives oftheauthority fromwhose budget thepublic procurement isfinanced
infullorinpart,ifsuchauthority isnotidentical withthecontracting authority.WT/WGTGP/W/12
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Thecontracting authority shallappoint acommission comprising atleastthree members to
opentheenvelopes containing bids. Thecommission shallopenthebidsonebyoneaccording totheir
serial numbers andcheck thecompleteness ofeachbidwithaviewtotherequirements prescribed by
thecontracting authority intheterms ofthetender. Ifthecommission discovers afteropening the
envelope thatthebidisnotcomplete withaviewtothenotice ofthetender, thebidisexcluded from
further assessment andevaluation; suchexclusion ofanybidisannounced totheattendees. The
contracting authority shallexclude therespective applicant fromfurther participation inthepublic tender
without delay.
Thecommission shalldraw uparecord ontheopening ofenvelopes containing bids. This
record shallbesigned bythemember ofthecommission. Therecord shallnotbemade public but
applicants shallbeentitled toviewtherecord. Acopyoftherecord shallbeprovided toanyauthority
whose representatives areentitled toattend theopening ofenvelopes.
- Evaluation ofbids
Thecontracting authority shallestablish acommission composed particularly ofpersons with
education andexperience relevant tothenature ofpublic procurement inquestion. Thecommission
shallhaveaminimum offivemembers. There shallalways bearepresentative ofthecontracting
authority onthecommission.
Thecommission shallcommence itsactivity byreceiving fromthecontracting authority those
bidswhich satisfies theterms ofthetender withregard tocompleteness, checked upon theopening
oftheenvelopes containing bids.
After thecommission reviews thebidstoestablish whether theircontent isinaccordance with
terms ofthetender andwhether theapplicant proceeded incompliance withprinciples ofprotection
ofeconomic competition, thecommission shallpropose tothecontracting authority which bidsfailing
tosatisfy theabove requirements beexcluded from thetender.
Anapplicant excluded fromthetender mayrequest thatthecontracting party statethereason
forhisdecision toexclude him. Thecontracting authority shalladvise therelevant applicant ofits
decision without delay.
After assessing, and,asthecasemight be,excluding bids,thecommission shallevaluate the
remaining bidsbythepublished method ofevaluation. Thecommission shallsettheorder ofindividual
bidsdepending ontheresults ofitsevaluation.
Thecommission shalldraftareport ontheassessment andevaluation ofbids, which report
shallcontain:
- Dataonthecomposition ofthecommission;
- anoverview ofbidsreceived bythecommission from thecontracting authority for
assessment, which overview shallinclude thenames oftherespective applicants;
- theresult oftheassessment ofindividual bids;
- theconclusion from theassessment conducted byanyexperts invited;
- alistofbidswhose exclusion wasproposed tothecontracting authority afterthe
commission conducted itsassessment;WT/WGTGP/W/12
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- alistofbidsevaluated bythecommission;
- abriefdescription ofthemethod usedtoevaluate thebids;
- theresults ofevaluation ofindividual bids;
- theorder ofbidsaccording totheresults ofevaluation.
Thereport ontheassessment andevaluation ofbidsshallbesigned byallmembers ofthe
commission andsubmitted tothecontracting authority together with alltheprevious tender
documentation. Thecontracting authority shallthenmake itpossible foranyapplicants whose bid
were assessed andevaluated toviewthereport athisrequest.
- Decision bythecontracting authority onthemost suitable bid
Thecontracting authority isobliged todecide ontheselection ofthemostsuitable bidbased
ontheassessment andevaluation ofthebidsbythecommission. Ifthecontracting authority 'sdecision
ontheselection ofthemost suitable biddoesnotcorrespond totheorder ofbidsasdetermined by
thecommission, thecontracting authority isobliged tojustify itsdecision inwriting.
Thecontracting authority isobliged tonotify allapplicants, unless theyhavebeenexcluded
from thetender, ofitsdecision onselection ofthemostsuitable bid,including dataontheapplicant
selected andthebidthereof.
Thecontracting authority shall statedataontheapplicant ranking second andthird inits
notification ofselection ofthebid(name oftheapplicants, theirregistered offices, iftheyarelegal
entities theirdomiciles andplaces ofbusiness, iftheyarephysical entities). Thenotification ofselection
ofthemost suitable bidshallinclude information onthepossibility toraiseobjections.
- Documentation ofthepublic tender andpublication ofresults ofpublic tenders
When holding apublic tender, thecontracting authority shallfillin"Public Tender Registration
Sheet" andsendittothesupervisory authority within 15daysofconclusions ofcontract. ThePublic
Tender Registration Sheet contains thefollowing information:
- Contracting authority (name, address);
- manner ofaward ofpublic procurement (public tender, invitation toseveral parties,
invitation toasingle candidate);
- totalnumber ofbidsreceived;
- highest bidprice;
- lowest bidprice;
- selected applicant (name, address);
- object ofpublic procurement (unit, number ofunits);
- place anddistrict ofexecution (name, code);WT/WGTGP/W/12
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- price (Kc);
- dateofexecution ofcontract relating tothepublic procurement.
Thecontracting authority isobliged topublish thename oftheapplicant withwhom acontract
wasconcluded andthebidprice thereof, intheCommercial Bulletin within 30daysofconclusion of
contract.
Thecontracting authority shallpreserve thetender documentation, including allbidssubmitted
byapplicants foraperiod offiveyears.
System ofremedies regarding public procurement
TheOfficefortheProtectionofEconomicCompetitionperformssurveillanceoverthecompliance
withtheAct. Thissurveillance takes theform ofreview ofapplicants totheprocedures employed
bythecontracting authority.
- Objections totheprocedures employed bythecontracting authority
Anyparticipant, or,asthecasemight be,anyparticipant inaprequalification procedure, may
raiseanobjection toindividual procedures employed bythecontracting authority.
Objections arefiledtothecontracting authority inwriting nolaterthanseven daysfollowing
thedelivery ofanotice ofprocedures employed bythecontracting authority, ornolaterthanseven
daysofdelivery ofanotice regarding theselection ofthemost suitable bid.
- Review ofprocedures employed bythecontracting authority bythebody ofsurveillance
Thecontracting authority 'sdecision onobjections maybereviewed bythebodyofsurveillance
i.e.bytheOffice fortheProtection ofEconomic Competition. Proceedings before thebody of
surveillance areinitiated upondelivery ofaproposal forreview ofthecontracting authority 'sdecision
onobjections, unless thebody ofsurveillance instigates proceedings onitsowninitiative.
Theproposal isfilednolaterthanseven daysfromthedelivery ofthecontracting authority 's
decision.
Iftheproposal isfiledwithin theprescribed time-limit, thetime-limit forthereceipt ofbids
ceases running from thedateonwhich theproposal islodged tillthedatewhen thedecision onthe
proposal enters intoforce. Thecontracting authority mustnotcomplete itsassessment andevaluation
ofbids, orconclude thecontract. Thecontracting authority isobliged toadvise other applicants of
thefact.
Where aproposal forreview ofthecontracting authority 'sdecision regarding selection ofthe
most suitable bidisfiled, thebody ofsurveillance examines theapplication and:
- Cancels thecontracting authority 'sdecision, ifitfindstheproposal wellfounded, and
changes thecontracting authority withmaking anewselection, or,where appropriate,
withnewly defining thepublic procurement inquestion;
- rejects theproposal andupholds thedecision issued bythecontracting authority, where
noviolation oftheActisestablished.WT/WGTGP/W/12
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Inother cases theOffice shallexamine theprocedures employed bythecontracting authority
anddecide thatthesaidprocedures:
- Constitute noviolation oftheAct,andreject theproposal; or
- constitute aviolation oftheAct,andcharge thecontracting authority withmaking
changes, or,asthecasemight becancel thetender.
TheOffice decides ontwodifferent levels. Anappeal canbefiledagainst thedecision ofthe
body ofsurveillance, theChairman oftheOffice decides onsuchappeals.
- Decision onsuitsfiledagainst decisions oftheOffice
Thelawfulness ofadecision oftheOffice maybeexamined bycourt. Such judicial review
fallsunder thejurisdiction oftherelevant High Courts.
Proceedings areinstigated solely byvirtue ofaproposal, labelled intheciviljudicial code
as"suit". Asuitmust befilednolaterthantwomonths afterthedelivery ofthedecision issued by
theadministrative body inthelastinstance.
Thesuitdoesnothaveasuspensive effect ontheenforceability ofthechallenged decision.
There isnoother remedy available against thecourt ruling.