Amended Romanian Public-Private Law Punishes Tender Contestation Losers

04.22.2011 By Bostan Radu

Companies will no longer have to provide a 2% guarantee in order to contest a Romanian tender for a public-private partnership contract, but a guarantee of 1% of the contract's estimated value will be a condition for participation.

Companies will no longer have to provide a 2% guarantee in order to contest a Romanian tender for a public-private partnership contract, but a guarantee of 1% of the contract's estimated value will be a condition for participation.

Also, companies filing contestations with the National Settlement Council (CNSC) will have to concede a fixed amount plus a percentage of the contract value to the state, should their complaint be dismissed. This sum will be taken from the participation guarantee submitted by the company and will only be refunded if the company challenges the Council's ruling and wins.

These new rules have been set by the Government in an emergency ordinance amending the Law on public-private partnerships (PPP), after the European Commission warned Romanian authorities that the law violates community legislation.

In case the tender has been challenged, the state may sign the PPP contract only after a decision by the CNSC. The Council may appoint an independent expert to solve any technical or financial problems. The public authority running the tender is required to answer any CNSC request and transmit any relevant documents to solve the contestation.

If the plaintiff wins the challenge and the public body fails to abide by CNSC's ruling, the institution's manager will be fined 20% of minimum wage per day.

However, the ordinance says CNSC may reject a contestation as groundless, belated, "lacking interest" or object, as having been filed by someone without relevant authority, or in case of any other issue of procedure or substance. The challenging company is not refunded its fee.

According to the act, these changes are needed because the European Commission's Internal Market and Services Directorate General has warned Romanian authorities that the current PPP law, which entered force in October 2010, is contrary to EU norms.