Public procurement in Poland

The Polish market of public contracts is growing rapidly – several large-scale infrastructural projects are underway. Our Japanese desk follows market developments as they occur and informs clients about forthcoming investment projects that they may find interesting. Our clients appreciate this service very much as deadlines for filing tender documents are short and only early awareness of a tender enables clients to get their bids ready before the submission deadline.

For example:

  • In 2014-2020, the total value of intended investment projects only in the railway sector will amount to PLN 58.6 billion;
  • Only in 2014, investments in the development and modernisation of the seaport infrastructure  is to exceed PLN 259 million, in 2015 – over PLN 309 million and in 2016 – over PLN 168 million. There is a plan to build or refurbish wharfs, depots and warehouses as well as roads and railroad lines. The value of work contracted for 2014 has already exceeded PLN 190 million.

The principles for concluding remunerated contracts between private entities and public finance sector entities or other entities financed from public resources are regulated by the Public Procurement Act dated 29 January 2004, which applies to supply and construction work as well as service contracts. Entities obligated to use public contract award procedures are state and local authorities, bodies governed by public law, associations formed by one or more of such bodies or so-called public bodies as well as companies operating in the water, energy, transport and postal services.

Basic principles of the Polish public procurement procedure are: fair competition, equal treatment of contractors, impartiality and objectivity of persons involved in award procedures, public nature of award procedures and primacy of open and restricted procedures. The Polish public procurement market is fully open to foreign interested companies.  Any national or even European preference is forbidden. Please note, however, that the mentioned tenderis not subject to GPA (the multilateral Agreement on Government Procurement). This means that potentially the contracting authority may set other participation criteria for EU companies than for bidders outside the EU. It may also prohibit non-EU companies from submitting offers.

 

Tender documentation and translation

The terms of participation in proceedings (“ITB”) are set out by the contracting authority (the client) in the tender notice. They should be set in a manner ensuring equal treatment of contractors and fair competition as well as assuring that the contracting authority will award the contract to the bidder having specific experience with the order being the subject of public procurement proceedings.

In an open tender procedure a draft contract is provided by the client and it constitutes an integral part of the tender documentation. The draft contract can be amended by the contracting authority only and its wording cannot be negotiated. The bidder is obliged to agree to a wording of the draft contract when submitting the offer. The winning bidder is obliged to conclude the contract of the same wording as provided in the tender documentation. That is why any comments to the draft contract have to be made before the date of submission of tenders only.

As soon as the tender proceedings are announced we will review the tender documentation and procure a translation of the legal part of the documentation. The translation would be provided jointly with the checklists and our comments with suggested actions.

We will provide you with a timetable of successive actions to be taken during the procedure and will make sure that this timetable is kept. We see our role as the coordinator of the processes of verification of tender documentation: we will make sure that all the deadlines imposed by the contracting authority will be kept and we also will verify the technical translation and review of the documentation to be made by your technical consultant.

We believe that technical specifications should be reviewed and translated by your technical advisor. Technical documentation involves professional technical vocabulary specificity. As the precise translation of tender documentation is the key to your success in the proceedings, we suggest that you use technical translators. We can review the translated technical parts of the tender documentation for their compliance with the legal part of the specification.

According to Polish law a bidder is entitled to ask questions concerning the tender documentation. These questions encompass any doubts and objections the bidder might have toward the documentation. The contracting authority is permitted to provide individual explanations or answers to questions posed by other possible bidders in respect of tender documentation. Such answers and explanations are also presented by the contracting authority on its website.

The contracting authority is obliged to provide the bidder with explanations or information provided that the request for an explanation of the documentation was received by the contracting authority not later than by the end of the day, on which half the time limit allowed for submitting tenders expires.

 

Tender participation criteria

The checklist of tender participation criteria will be drafted by us and provided as soon as the tender documentation is reviewed. According to the Public Procurement Law the tender participation criteria must be fair and equal to all potential bidders. They should also be adequate for its scope and value to the current tender subject.

Within our assistance at this stage of the proceedings we will provide you with all guidelines, information and drafts of documents to validly prove your ability to take part in the proceedings as set forth by the contracting authority. You will obtain a necessary checklist in the form of tables and we will monitor the process of gathering information and documents in order to meet the deadline.

 

Draft contract

The draft contract constitutes a part of the tender documentation. It is drafted by the contracting authority and is available to bidders together with the tender notice and specification of essential terms of a tender.

If the tender is won the bidder is obliged to sign the contract with the same wording and provided in the tender documentation. For that reason all comments and requests for potential amendments in the draft contract should be made during the first half of the time limit for submitting offers, starting from publishing the tender notice. After that date bidders may request amendments and ask questions but the contracting authority is not obliged to answer these queries.

After having obtained and translated the draft contract we will draft our comments to the contract in the form of a table for your information. Whenever we see the need to request amendments or to ask questions to the contracting authority, we will indicate the provisions requiring amendment and we will draft a letter to the contracting authority. We will provide you with relevant explanations of the applicable laws and the impact of the provisions given by the contracting authority on your rights and obligations in case winning the tender.

 

Drafts of required documents and declarations

We will draft all necessary declarations and POAs to be attached to the offer. We will make sure that the form of documents is compliant with law and with the expectations of the contracting authority. We will consider all answers and explanations of the contracting authority as well as potential amendments to the tender documentation. Whenever possible – we will provide you with both language version documents.

Should you decide to use the consortium structure for your bidding – we will draft a consortium agreement and the POA to consortium leader.

We recommend considering granting the POA to a person readily available in Poland during the time of proceedings. Whilst preparing the offer we will give such a person clear and precise instructions concerning the form of the offer: which pages should be signed, which initialed, which may be certified copies and which must be submitted in the original.

After providing you with the English translation of the attachments to the offer, the tables of experience and of personnel, we will expect you to complete the tables according to the contracting authority instructions. We will assist you and be open to consult any table entry, if needed. Afterwards, we will check the completed tables for their compliance with the tender documentation and will procure the Polish translation of the tables.

We will also expect you to complete the remuneration details in the offer form. We will provide you with the English version of the offer form and make sure that all the details of your offer are properly repeated in the Polish version of the offer, which will be binding on the contracting authority.

We will check the final version of the offer together with all attachments for their completeness and correctness (form of documents and their contents).

We can also assist you with submitting the offer, if required (send or bring the offer directly to the contracting authority).

 

Administration assistance

We can become your service agent for the time of the tender proceedings starting from the date of tender announcement. In such case all correspondence from the contracting authority addressed to you will be sent to our office. This will help us to react to each situation in the tender quickly.

Please note that all correspondence from the contracting authority will be drafted in Polish. We will immediately forward the letters from the contracting authority to you together with the English translation of the correspondence. We will also provide you with all necessary guidelines concerning the contracting authority decisions and requests.

Actions and decisions taken by the contracting authority during the course of a proceeding to award a public procurement contract can be challenged by way of an appeal submitted to the National Appeals Chamber within 10 days from the act or omission. In any case we believe an appeal should be submitted, we will provide you with the information on argumentation and the deadline to make a decision on submitting the appeal.

If an appeal is lodged, the contracting authority is not permitted to conclude a contract until the National Appeals Chamber passes its judgment. The parties and participants of the appeal procedure may lodge a complaint to the regional court against the National Appeal Chamber judgment.

We will always await your instructions and we will follow your decision concerning filing the appeal and formulating the objections included therein.

 

Process of preparing the offer

From our experience we believe that as time is of the essence in any procurement procedure and the date of issuance of certain documents is very important, the preparation of the offer and of required translations should be systematic and parallel: any time the required document is ready its translation should be simultaneously procured. Especially since some documents will probably need to be translated twice: from Japanese to English and from English to Polish. We will organize required translations assuring that the offer is ready on time.

 

Bidding structure issues

Please take into consideration that it is very important to establish the bidding structure at the earliest stage of the tender. The Public Procurement Law rule is that the public procurement contact can be awarded only to the bidder who won the tender, that is the bidder who submitted the best offer. The open tender procedure, regardless of complicated formal requirements, is possibly the simplest procedure because it only involves the submission of offers by the deadline indicated by the contracting authority and the selection of the best offer.

From this perspective please be aware that should you consider to establish a new daughter company for the purpose of performing the contract, this company should be involved in the procedure from the beginning. It is not possible, considering the legal restrictions, to change the bidding structure after the offer is submitted, that is to transfer the rights and obligations of a bidder to another entity.

The same rule applies to consortia. Whenever the companies form a consortium they must remain in the consortium frame for the entire duration of contract performance.

Taking into account all the formalities which must be met before submitting the offers and the documents that need to be obtained, it is highly advisable that the bidding structure is established immediately after publishing the tender notice.

If required, we can offer you the purchase of one of our already existing limited liability companies registered in Poland (a shelf company). Such a transaction can be effected within three days.

Nevertheless, we suggest that you commence your inter-company decision process in order to determine your bidding structure and your policy in case this tender is restricted as regards non-EU companies or due to formalities to be fulfilled by a bidder, or, finally, due to the tax implications, such as tax fillings obligations, corporate income tax or VAT implications.

You may wish to know, that pursuant to EU and Polish VAT laws, services directly related to real estate located in Poland would most likely be taxable in Poland. In particular, services consisting of engineering and construction, development of industrial infrastructure, supervision or coordination of construction works and alike would trigger VAT in Poland, typically at the rate of 23%.