Since the 30th of June 2017, the regulations on public procurement have changed. All contracts opened as of that date are therefore subject to the new European legislation for public procurement.
What is the goal of the public procurement legislation?
Firstly, this legislation serves to help government agencies select the right contractor, suppliers or service providers. Secondly, the legislation provides contractors, suppliers and service providers with guarantees that the companies are weighed against each other and that there is no favoritism in the allocation of public contracts.
This procedure for public procurement is based on two principles:
- For suppliers, the ensuing fair competition is the most important advantage. They can compete for public contracts and based on this process, the contract is awarded.
- The biggest advantage for government agencies is that they will receive and compare different quotes. This allows them to find the most advantageous price and the quote that best meets the criteria.
Another important part of the public procurement procedure is that all terms must be set in advance. The government agency therefore writes a comprehensive specification, where all requirements are explained. Suppliers then respond with an equally extensive and binding quote. When the contract has been awarded, the company must also carry it out based on those agreements and prices.
In order to guarantee fair competition, a number of rules have also been set when it comes to conflicts of interest. You can read more about that here.
Who does the public procurement legislation apply to?
This legislation applies to three major sectors.
1. Classic sectors
The classic sectors are the classic authorities: the state, regions, municipalities, public social welfare centers, church boards and intermunicipal collaborations, but also legal entities such as non-profit organizations that have a specific public interest purpose. These non-profit organizations may not be of a commercial or industrial nature and must be financed for 50% by the government (or their board must be composed by more than 50% of representatives of the public sector, or be subject to government supervision).
2. Special sectors
The special sectors are a few specific sectors, namely: water, energy, transport and postal services.
3. Private sector
The public procurement legislation can also apply in the private sector, when private persons have work carried out that is subsidized for more than 50% by the government. Consider, for example, a private hospital that has subsidized work carried out.
The public procurement procedure therefore also applies for local authorities and a number of people are involved therein. Here, you can read more about the different roles of the city council, the college of mayor and aldermen and the municipal secretary, and later also about the supervision of decisions by the municipality.
If several local authorities jointly issue one government contract, then other rules apply. You can read more about that here.
What used to be known as an "contract center" is now described as a "purchasing center" and those rules fall under the centralized purchasing activities. In short, you can appeal to a wholesaler or intermediary for the realization of your public contract. More information.
There is an additional condition for a public works contract: the contractor must be recognized. That recognition is granted when the contractor can offer sufficient guarantee to perform the work qualitatively. More information.
Executing a public contract
Once the contract has been awarded to a supplier, a number of requirements for the execution of the public contract must be taken into account.
Guarantee
The contractor must reserve 5% of the contract amount as guarantee for the complete and proper execution of the contract. More information.
Leading official
A person responsible for the contract must be appointed within the local authority. This leading official takes on the management and control of the execution. More information.
Execution period
The contractor must comply with the execution that was established. Only in exceptional cases can it be extended. More information.
Right of amendment
It may happen that the contractual conditions have to be changed during the execution of the contract. There are a number of rules and conditions for this, defined in a royal decree.
Payment
In order to proceed with the payment, two conditions must be met: the contracting authority must draw up an official report and the contractor must submit a claim. Advances are possible in certain cases.
Responsibilities of the executor
In addition to taking care of the correct execution of the contract, the contractor still has a number of responsibilities.
Action tools
If the execution of the contract does not take place correctly, an official report must be drawn up and financial sanctions can be imposed. More information.
Delivery
All information about the provisional and final delivery of the contract can be found here.