The cabinet has submitted a long-awaited legislative proposal to the House of Representatives aimed at strengthening legal protection in public procurement procedures. The objective is to create a better balance in the relationship between contracting authorities and tenderers when disputes arise.
What stood out is that it has already been sixteen years since the Senate adopted an important legislative proposal on legal protection in public procurement. Time really does fly. In January 2010, the legislative proposal implementing the European Remedies Directive was adopted by the Senate, and at the time my colleague Per van der Kooi and I wrote a blog about it.
Now there is once again a proposal on the table that intervenes in the way disputes in public procurement procedures are handled.
The reason for the legislative proposal is the observation that entrepreneurs often experience their legal position in public procurement practice as weak. This is particularly true for smaller companies, for whom taking the step to court is not always easy or desirable. At the same time, contracting authorities must be able to continue procuring efficiently, without prolonged uncertainty. The legislative proposal seeks to bring these interests together.
The core of the legislative proposal is procedural in nature. It is not so much about a substantive reassessment of evaluation criteria or award methodologies, but rather about how and when objections can be raised and how those objections must be handled.
In essence, the legislative proposal contains the following amendments:
What truly distinguishes this legislative proposal, in my view, is the way in which the suspensive effect of complaints is regulated. For the first time, it is laid down in law that a timely submitted complaint is not without obligation, but has consequences for the progress of the procurement procedure (Articles 4.26e, 4.26g and 4.27e). This prevents the procurement procedure from being continued unabated in the meantime.
If a complaint about the procurement procedure is submitted in a timely manner to the complaints desk, the contracting authority must set the time limits in such a way that effective complaint handling is possible (Articles 4.26d and 4.26e). If the complaint is then submitted to the Public Procurement Experts Committee and that committee decides to take the complaint into consideration, the procurement procedure will, in principle, be suspended (Article 4.27e). Only in cases of compelling reasons of general interest may suspension be waived, and this too requires an explicit statement of reasons (Article 4.27e(3)).
A similar regime applies to complaints against an award decision. If a complaint is submitted within ten days after dispatch of the award decision, it must be ensured that at least ten days remain within the standstill period after the decision on that complaint (Article 4.26g). If that is not possible, the standstill period is interrupted, so that the complaint must first be decided on substantively before final award can take place.
Just like in 2010, the central question once again is how legal protection can be organised effectively without unnecessarily delaying procurement procedures. The legislative proposal shifts the focus towards structured, early-stage complaint handling and, in doing so, lays down clear procedural rules of the game.
Whether this will, in practice, lead to less escalation and greater trust between public authorities and entrepreneurs will become apparent in the coming years. What is clear, in any event, is that the legislator is once again making an explicit choice: legal protection in public procurement deserves renewed attention.
For any questions, please contact Menno de Wijs, lawyer specialising in Public Procurement Law.
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