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The
Government
procurement
Review
Third Edition
Editors
Jonathan Davey and Amy Gatenby
Law Business Research
The Government
Procurement Review
The Government Procurement Review
Reproduced with permission from Law Business Research Ltd.
This article was first published in The Government Procurement Review - Edition 3
(published in May 2015 – editors Jonathan Davey and Amy Gatenby).
For further information please email
[email protected]
The
Government
Procurement
Review
Third Edition
Editors
Jonathan Davey and Amy Gatenby
Law Business Research Ltd
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i
Acknowledgements
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ii
CONTENTS
Editors' Preface
��vii
Jonathan Davey and Amy Gatenby
Chapter 1
AUSTRALIA��1
Geoff Wood and Anne Petterd Chapter 2
AUSTRIA��14
Philipp J Marboe and Nina Lassner
Chapter 3
BELGIUM��26
Dirk Lindemans, Frank Judo, Aurélien Vandeburie
and Stijn Maeyaert
Chapter 4
BRAZIL��38
Massami Uyeda Junior and Rodnei Iazzetta
Chapter 5
CANADA��52
Theo Ling and Jonathan Tam
Chapter 6
EUROPEAN UNION��66
Clare Dwyer and Michael Rainey
Chapter 7
FINLAND��82
Toni Malminen
Chapter 8
FRANCE��95
Romaric Lazerges
Chapter 9
GERMANY��111
Olaf Otting and Udo H Olgemöller
iii
Contents
Chapter 10
GHANA��122
Divine Kwaku Duwose Letsa
Chapter 11
GREECE��139
Irene Economou
Chapter 12
INDIA��157
Sunil Seth and Vasanth Rajasekaran
Chapter 13
ITALY��168
Filippo Bucchi, Maria Vittoria La Rosa and Gabriella Ungaro
Chapter 14
LUXEMBOURG��183
Benjamin Marthoz
Chapter 15
MALTA��201
Adrian Delia and Matthew Paris
Chapter 16
MEXICO��212
Javier Arreola E and Vanessa Franyutti J Chapter 17
PORTUGAL��225
Paulo Pinheiro, Rodrigo Esteves de Oliveira,
Catarina Pinto Correia and Ana Marta Castro
Chapter 18
ROMANIA��238
Oana Gavrilă and Mariana Sturza
Chapter 19
RUSSIA��250
Olga Revzina and Lola Shamirzayeva
Chapter 20
SOUTH AFRICA��261
Andrew Molver and Michael Gwala
Chapter 21
SPAIN��277
Raquel Ballesteros
iv
Contents
Chapter 22
SWEDEN��290
Ulf Djurberg and Natali Phalén
Chapter 23
SWITZERLAND��301
Astrid Waser, Marcel Meinhardt Chapter 24
TAIWAN��312
Pauline Wang and Claire C Lin
Chapter 25
TURKEY��326
Okan Gündüz and Burçak Ünsal
Chapter 26
UNITED KINGDOM��337
Amy Gatenby, Bill Gilliam and Clare Dwyer
Chapter 27
UNITED STATES��352
David S Gallacher
Appendix 1
ABOUT THE AUTHORS��369
Appendix 2
CONTRIBUTING LAW FIRMS’ CONTACT DETAILS��387
v
EDITORS’ PREFACE
We are delighted to introduce this, the third edition of The Government Procurement
Review. It brings even wider geographic coverage than the second edition, now covering
six continents and 27 national chapters (including the EU chapter).
The political and economic significance of government procurement is plain.
Government contracts are of considerable value and importance, often accounting for
10 to 20 per cent of GDP in any given state. Government spending is often high-profile
and has the capacity to shape the future lives of local residents.
Even as the economic climate improves, it is perhaps no surprise that, with austerity
the watchword throughout the developed economies, governments seek to demonstrate
more effective, better-value purchasing; nor that many suppliers view government
contracts as a much-needed revenue stream offering relative certainty that they will be
paid. A concern to simplify procurement procedures and increase opportunities for small
and medium-sized enterprises is also prevalent, particularly in the EU.
The World Trade Organization’s revised Agreement on Government Procurement
(GPA) now covers the 28 EU Member States, Armenia, Canada, Hong Kong (China),
Iceland, Israel, Japan, Korea, Liechtenstein, the Netherlands with respect to Aruba,
Norway, Singapore, Switzerland, Chinese Taipei and the United States. Montenegro and
New Zealand were invited to accede to the GPA on 29 October 2014. Eight other
states have started the process of acceding (Albania, China, Georgia, Jordan, the Kyrgyz
Republic, Moldova, Oman and Ukraine).
In last year’s preface, we mentioned potential new, protectionist clouds on
the procurement horizon with the European Parliament having approved measures
that would prevent firms from bidding for larger public contracts unless their home
country allows reciprocal access to EU firms. While the European Parliament viewed
these measures as encouraging third countries to reciprocate in opening markets, some
(including the International Chamber of Commerce) feared it would have the opposite
effect, provoking trade wars. It seems, for the moment at least, that these proposals are
not proceeding, which in the authors’ view is to be welcomed.
vii
Editors’ Preface
Regardless of these possible difficulties, we expect that the principles of
transparency, value for money and objectivity enshrined in the UNCITRAL Model
Law on Public Procurement and in the national legislation of many states will continue
gradually to have a positive effect.
The biggest single development internationally in the period since the second
edition is undoubtedly the adoption of new EU directives and progress towards the
required national implementation, Member State by Member State. The New Directives
cover, respectively, mainstream public sector and utilities procurement (replacing the
2004 directives) and concessions, an area previously only partly covered by the EU regime.
The new directives have been described as effecting evolution rather than revolution, but
cynics, pointing to the lengthening of the directives and the addition of new procedures,
query whether the originally stated aims of simplification and ‘flexibilisation’ (a word
that could only have been invented in Brussels!) have really been achieved.
At the time of writing, only the United Kingdom has implemented the mainstream
directive, with the deadline for transposition being 18 April 2016.
Incidentally, when reading chapters regarding European Union Member States,
it is worth remembering that the underlying rules are set in the directives at EU level.
Readers may find it helpful to refer to both the European Union chapter and the relevant
national chapter, to gain a fuller understanding of the relevant issues. As far as possible, the
authors have sought to avoid duplication between the EU chapter and national chapters.
Some national authors have reported significant increases in challenges to contract
award decisions, and this is certainly the experience in the United Kingdom. While it
is clear that there are considerable variations between jurisdictions in the willingness or
ability of suppliers to challenge, it seems to us that the increased risk of challenge can
help hold awarding authorities to account and is likely to encourage greater compliance
with national procurement rules. It may be that, in jurisdictions where bringing
procurement challenges is either difficult or expensive, further measures are needed to
amplify this effect.
Finally, we wish to take this opportunity to acknowledge the tremendous efforts
of the many contributors to this third edition as well as the tireless work of the publishers
in ensuring that a quality product is brought to your bookshelves in a timely fashion. We
hope you will agree that it is even better than previous editions, and we trust you will
find it to be a valued resource.
Jonathan Davey and Amy Gatenby
Addleshaw Goddard LLP
London
May 2015
viii
Chapter 23
SWITZERLAND
Astrid Waser, Marcel Meinhardt 1
IINTRODUCTION
Public procurement in Switzerland is regulated at both the federal and cantonal levels.
At the federal level, the Federal Act on Public Procurement (FAPP) and the Federal
Ordinance on Public Procurement (FOPP) are the key procurement acts. At the regional
and local levels, the Intercantonal Agreement on Public Procurement (IAPP) and
the cantonal public procurement laws are the main legislation in the field of public
procurement. This chapter mainly focuses on the regulation at the federal level, as there
are numerous different regulations at both the cantonal and even communal level.
The national legislative acts are complemented by international framework
agreements such as the World Trade Organization’s Agreement on Government
Procurement of 15 April 1994 (GPA) and the bilateral Agreement between the European
Union and Switzerland on certain aspects of public procurement of 21 June 1999. As
Switzerland is not a member of the European Union, the EU procurement directives do
not apply.
Compliance with the procurement rules is secured, on the one hand, by the
appeal courts (see Section IX, infra) and, on the other hand, by the Swiss Competition
Commission (the ComCo), which, according to the Federal Act on the Internal Market
(FAIM), can make recommendations and opinions for authorities and file appeals if it
considers that a decision unduly restricts access to the market, and thus disregards the
procurement rules. Government procurement policy for Switzerland is set at the federal
and regional levels by respective legislative bodies. The Federal Procurement Conference
is the strategic body for the procurement of goods and services and coordinates and
harmonises procurements, at the federal level.
1
Astrid Waser and Marcel Meinhardt are partners at Lenz & Staehelin.
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Switzerland
The aim of the procurement rules is to enhance the efficient use of public funds by
increasing competition and by awarding contracts to the most commercially advantageous
bid. The fundamental principles governing procurement procedures are the principle of
equal treatment of domestic and foreign tenderers and the principle of transparency.
Tenders are evaluated based on a number of criteria such as deadlines, quality, price,
operating costs, customer service, aesthetics and environmental sustainability.
II
YEAR IN REVIEW
Following a change in the financing of health-care services, it is being discussed whether
private hospitals that offer services financed by (basic) health insurance are subject to
procurement law. Proponents argue that private hospitals also fulfil a public task with
respect to services financed by basic health insurance, namely the provision of public
health care, and are, therefore, subject to public procurement law. According to a recent
decision of the Health and Welfare Administration of the Canton of Berne, private
hospitals in the Canton of Berne are subject to procurement law. It remains to be seen
whether this decision will be confirmed by case law and other cantons. As regards
enforcement practice, the ComCo – on the basis of its competence to supervise the
compliance of the Confederation, the cantons and the communes with the FAIM – has
intervened in public procurement cases. In June 2014, the ComCo ruled that an
entity offering IT services owned by cantons and communes is only subject to public
procurement law if it is not under sufficient competitive pressure from the market.
According to recent case law at federal level, eligibility criteria have to be interpreted
in an objective manner. The awarding authority may not change the interpretation of
eligibility criteria in the course of a tendering process. In the case at hand, the awarding
authority had reduced the necessary minimum experience and, according to the court,
thereby violated procurement law.
Regarding procedural questions, the Federal Supreme Court held that appeals
against sanctions (e.g., exclusions due to competition law infringements) imposed by
cantonal authorities may only be appealed to the Federal Supreme Court in certain
limited circumstances. This decision has been criticised as it limits the possibility of
having a sanction (and not the procurement decision) reviewed by a federal instance.
III
SCOPE OF PROCUREMENT REGULATION
i
Regulated authorities
The FAPP regulates most public sector entities. Article 2 FAPP enumerates the federal
level contracting authorities that are directly subject to procurement law. The list
contains entities both with and without legal personality. A list of entities can be found
in Appendix 1/Annex 1 of the GPA. However, some entities founded after the GPA
being signed may also be subject to public procurement. Therefore, it remains unclear
which public entities are covered by federal law. The same applies with respect to public
entities on the cantonal level.
Public and private law organisations that provide water, energy, transportation or
telecommunication services in Switzerland are explicitly regulated. They are subject to
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Switzerland
federal procurement law if they are majority-owned or controlled by the Confederation,
or if they render (public) services that are in the common interest of the people in
Switzerland and have special and exclusive rights that have been granted to them by the
competent authority.
For certain actions and under specific circumstances, private entities are also
subject to public procurement law. If private parties act in place of contracting authorities
for procurements (as in Article 2d FOPP), they are subject to the same legal requirements
as public entities.
ii
Regulated contracts
In Switzerland, work contracts (i.e., contracts for building and civil engineering work),
supply contracts (i.e., contracts for the supply of moveable goods, in particular by
purchase, lease, rent or hire) and service contracts are governed by procurement rules.
These contracts, however, only fall under the procurement rules if the public entity is the
purchaser of goods or services.
The provisions of the FAPP will only apply if the estimated value of the public
contract to be awarded reaches the following threshold values (without VAT):
a
supplies: 230,000 Swiss francs;
b
services: 230,000 Swiss francs;
c
construction works: 8.7 million Swiss francs; and
d
supplies and services on behalf of utilities (according to Article 2, Paragraph 2 FAPP)
and for contracts awarded by the automobile services of the Swiss Post for its
passenger transport business in Switzerland: 700,000 Swiss francs.
For entities specified in Article 2, Paragraph 2 FAPP (as specified in Article 2a FOPP),
the FAPP will only apply if the estimated value of the public contract to be awarded
attains the following threshold values (without VAT):
a
supplies and services in the telecommunications sector: 960,000 Swiss francs;
b
supplies and services in the railway sector: 640,000 Swiss francs;
c
supplies and services in the electricity sector: 766,000 Swiss francs;
d
works in the telecoms or railway sectors: 8 million Swiss francs; and
e
works in the electricity sector: 9.575 million Swiss francs.
If an open or selective procedure does not lead to offers that fulfil the qualification criteria
or in cases of unforeseeable urgency, the awarding entity may contract a supplier directly
and without an invitation to tender. It can also do so if the relevant values (without VAT)
are below 150,000 Swiss francs for works and services or below 50,000 Swiss francs
for supplies.
The Federal Department of the Environment, Transport, Energy and
Communications can exempt (partial) sectors from being subject to public procurement
law if it finds that there is effective competition in the market. So far, it has exempted
partial sectors in the telecommunications sector (fixed net communication, mobile
communication, internet access, data communication) and the railway traffic sector
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Switzerland
(railway freight on standard gauge).2 In addition, defence procurements (procurement of
weapons, munitions, war materials, construction of fighting and command infrastructure
for overall defence and the army) are exempt from the legislation.
Generally, changes to the awarded project are not allowed. The awarding entity is
bound to conclude a contract with the tendered specifications. A material change to the
project would require a new tender. Specifications and immaterial changes are allowed
as long as it remains certain that the same tenderer would still have been awarded the
contract. Similar rules apply to changes after the contract has been signed. However,
if options or possible changes have been foreseen in the procurement process already
and have been included in the tender, the contracting entity is allowed to exercise such
options and to implement such changes.
IV
SPECIAL CONTRACTUAL FORMS
i
Framework agreements and central purchasing
Swiss public procurement law does not explicitly regulate framework agreements. It
is, however, undisputed that they are compatible with the law. In practice, they enjoy
great popularity, as they have the advantage that several tenders can be bundled in one,
which results in a reduction of tender procedures. Often, framework agreements only
contain general conditions for the planned procurement and provide for a duty to
supply on the bidder’s side. However, they often do not include purchase obligations for
the contracting entity. For the calculation of the relevant threshold, the sum of single
transactions planned under a framework agreement is relevant.
If a framework agreement has been awarded to one supplier, the individual
transactions thereunder do not need to be publicly tendered again. If, however, similar
framework agreements have been concluded with several suppliers, the individual
transactions are still subject to a tender process within the group of bidders that have
concluded such framework agreements.
Other means to introduce more flexibility for the contracting authority in the
procurement processes are dialogues, negotiations or a combination of a basic contract
with one or several options.
Awarding entities are also allowed to procure jointly with other authorities or
to use centralised purchasing. If a contracting authority subject to federal procurement
law jointly procures with an entity subject to cantonal procurement law, federal law will
apply to the entire procurement procedure, if the contracting authority subject to federal
law bears the highest share of the financing.
ii
Joint ventures
Instead of buying, a public entity is always allowed to produce the relevant goods,
services or works itself. Public procurement law does not apply in such cases. If, for such
purposes, a public entity joins forces with another public entity, public procurement law
2
Annex 1 to the Ordinance of the Federal Department of the Environment, Transport, Energy
and Communications on the exemption of public procurement law (SR 172.056.111).
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Switzerland
still does not apply as long as the supplier is controlled by public entities and does not, in
principle, supply entities that do not hold a controlling stake. Control can also be held
jointly by several public entities. The criteria developed by the European Court of Justice
(ECJ) in Teckal 3 can be used as guidance for the assessment.
Cases of privatisation (i.e., outsourcing of services, works or the supply of goods
to a privately held entity) are not specially regulated. They are subject to the general
procurement rules.
The same is true for PPPs. Although usually long-term and often complex, PPPs
are viewed as ordinary procurements of supplies, services or constructions. A court
case confirmed the principle of one-time procurement, meaning that a PPP partner
that has been selected according to the FAPP is not again subject to procurement
laws when sub-contracting. However, the contracting authority must ensure that its
PPP partner obliges its sub-contractors to comply with requirements such as labour
protection regulations.
V
THE BIDDING PROCESS
iNotice
Article 8 of the FOPP provides for a central publication organ for all procurements
under federal law (www.simap.ch). Under their respective laws, the majority of cantons
and a number of municipalities also use this platform for publication purposes;
therefore, it contains the bulk of public tenders in Switzerland. The platform is also used
for the publication of tender awards. In addition, the platform contains bidder profiles
and standard forms for bidder data, which represents a step towards a fully electronic
tendering process, from the invitation to tender to the submission and selection of bids.
iiProcedures
The FAPP prescribes three different award procedures. In the open procedure, awarding
authorities make a public tender in which any interested bidder may participate
(Article 14 FAPP). In the selective procedure, the awarding authorities submit a public
tender and formulate qualification criteria (according to Articles 9 and 10 FAPP) that
bidders must fulfil to be admitted to submit a tender (Article 15 FAPP). These two
procedures are available to all tenders.
In the negotiated procedure, the contracting authority negotiates a contract
directly with a supplier of its choice (Article 16 FAPP). This procedure is only available
to awarding authorities under certain circumstances, for example:
a
if no offers resulted from an open or selective procedure;
b
if no bidder fulfilled the pre-qualification criteria;
c
if only coordinated offers were made;
d
if, for technical or artistic reasons, or for reasons related to intellectual property,
only one bidder can be considered; or
e
if, in cases of urgency, an open or selective procedure is not possible.
3
Teckal decision of the ECJ in case C-107/98 of 11 November 1999.
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Switzerland
Furthermore, the fourth award procedure, the invitation procedure, is only
mentioned in the FOPP. According to case law the invitation procedure is possible under
the same requirements as the negotiated procedure. In the invitation procedure, the
contracting authority has the possibility to determine which suppliers will be allowed to
submit an offer. If possible, the contracting authority invites at least three suppliers. This
procedure is only available in very limited circumstances.
The regional and the federal contracting authorities are currently developing
electronic procurement platforms, which shall allow electronic procurements in
the future.
iii
Amending bids
The principle of equal treatment prohibits a bid being amended after submission.
Unintentional mistakes such as calculation or typing errors can be corrected if this does
not lead to an undue disadvantage to concurring bidders.
According to Article 25 FOPP, the awarding entity can adjust the bids to make
them comparable with each other. Within this process, certain amendments of the bid are
admissible. In addition, federal procurement law provides, under certain circumstances,
for a possibility to negotiate the submitted bids with the bidders (Article 20 FAPP and
Article 26 FOPP). Within this process, the bid can be amended. Cantonal law does not
allow such negotiations.
VIELIGIBILITY
i
Qualification to bid
The contracting authority has the right to request the tenderer to provide evidence of its
financial, commercial and technical capacity. These eligibility criteria and the evidence
required to prove these criteria will be announced in the invitation to tender or in the
tender documentation (Article 9 FAPP).
Under certain limited circumstances, parties may be disqualified from bidding.
For example:
a
if they do not or no longer meet the eligibility criteria;
b
if they have provided the contracting authority with false information;
c
if they have not paid taxes or social security contributions:
d
if they have failed to comply with health and safety regulations, terms and
conditions of employment of workers or the equal treatment of men and women;
e
because of competition law infringements (e.g., cartels); or
f
in the case of an insolvency proceeding.
In addition, the contracting authority will remove bids containing substantial
formal defects from the procedure (Article 19, Paragraph 3 FAPP).
Only the selective procedure provides for a selection or short-listing of the bidders
that fulfil the qualification criteria established by the contracting authority. According
to Article 15, Paragraph 4 FAPP, the contracting authority can reduce the number of
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Switzerland
tenderers if otherwise the tender could not be processed in an efficient way. However,
even when limiting the number of participants, the contracting authority must guarantee
an effective competition between the bidders.
ii
Conflicts of interest
According to Article 21a FOPP, the contracting authority must exclude bidders from
a given procedure if they were involved in the preparation of the procurement process
and if their advantage therefrom cannot be balanced otherwise, provided the exclusion
does not bear the risk of elimination of effective competition among the bidders.
A suitable means to balance any competitive advantage may be the sharing of all relevant
information on the preparation of the tender, the publishing of the names of the persons
involved in the preparation and the prolongation of the deadlines for the preparation of
the bids.
iii
Foreign suppliers
The FAPP states as one of its fundamental principles that the contracting authority will
ensure equal treatment of domestic and foreign tenderers in all phases of the procedure
(Article 8, Paragraph 1, letter a FAPP).
The FAPP specifies in this respect that it only applies to foreign tenderers from
General Agreement on Tariffs and Trade contracting states to the extent that these states
grant reciprocal rights in relation to public procurements; and third countries, to the
extent that Switzerland has entered into corresponding contractual agreements with
them, or the Federal Council has established that there will be no discrimination against
Swiss tenderers in the country concerned.
VIIAWARD
i
Evaluating tenders
The contracting authority has an obligation to publish the order of the awarding criteria
and their weighting. If qualification criteria apply, they must relate to the supply, service
or work being procured, so that the contracting authority can narrow down the tenderers
to those who are capable of offering the required quality. The tenders must be evaluated
on the basis of the published awarding criteria. As contracts must be awarded to the
most commercially advantageous bid, the awarding criteria will include aspects such as
deadlines, quality, price, profitability, operating costs, customer service, expediency of
the service, aesthetics, environmental sustainability and technical value.
According to the Federal Supreme Court, the use of ‘public voting’ (i.e., consultation
of public opinion – as in a case concerning the construction of a town hall) is allowed
as a legitimate awarding criteria.4 It referred to the criterion of functionality and held
that the criterion of public voting fulfilled a legitimate function if it reduces the risk of
a project being rejected in a public referendum at a later stage.
4
Cf BGE 138 I 143, E 4.2 f.
307
Switzerland
ii
National interest and public policy considerations
Certain public policy considerations are established as preconditions for the participation
in a tender procedure. The FAPP (Article 8, Paragraph 1, letters b and c) mentions in
this respect compliance with the terms and conditions of employment of workers at the
place of performance, as well as equal treatment of men and women in respect of salary.
Other national interest and public policy considerations can be integrated
as awarding criteria. Federal procurement law mentions sustainability in general and
environmental sustainability in particular (Article 21 FAPP and Article 27 FOPP).
In addition, the government promotes sustainable procurements, and has
included it in its overall strategy. Furthermore, there is a special Ecological Procurement
Service, which is part of the Federal Office for Environment.
Such aspects must in principle be related to the goods or services procured.
However, in a recent decision, the Federal Supreme Court allowed the use of socially or
ecologically motivated awarding criteria with no direct connection to the public contract
provided there is a law providing this.5
In addition, such aspects must not discriminate against non-local and in particular
foreign bidders. For example, travel or transport distance can only be evaluated if this
does not advantage local bidders. In addition, the geographical location or the origin
of a bidder can only be taken into account in exceptional cases if there are compulsory
objective reasons that can justify their inclusion (e.g., if knowledge about local peculiarities
is needed for a certain task).6
VIIIINFORMATION FLOW
In its annexes, the FOPP lists a minimum set of information that must be provided in
the procurement process. The contracting authority provides the bidders with the tender
documentation and informs them at the same time where models, samples and additional
documentation can be reviewed or collected. In addition, the contracting authority must
answer questions with respect to the tender documentation within a short period. As
answers to such questions must not give an undue advantage to any bidder, contracting
authorities often choose to disclose both questions and answers to all bidders.
After the assessment of the bids, the contracting authority will communicate
its decisions, incorporating a reasoned summary, by way of publication or by way of
formal service.
If requested to do so, the contracting authority must promptly disclose to the
unsuccessful tenderers:
a
the award procedure applied;
b
the identity of the successful tenderer;
c
the price of the successful bid or the highest and lowest prices of the bids included
in the award procedure;
5
6
Cf BGE 140 I 285, E. 7.
Cf decisions of the Federal Supreme Court 2P.46/2005 and 2P.47/2005 E 5.1.
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d
e
the essential reasons why the bid was not considered; and
the determining characteristics and advantages of the successful bid.
An exception to the duty to inform applies if doing so would be committing a breach
of federal law, if the disclosure would not be in the public interest, or if the justified
commercial interests of the tenderers would be adversely affected or fair competition
between them would be prejudiced.
Within the procurement process, the awarding authority will protect the
confidential nature of all information provided by the tenderer (Article 8, Paragraph 1,
letter d FAPP). However, the official secrecy of the awarding authority is limited by its
duty to publish its award decision (Article 8, Paragraph 1, letter d in connection with
Article 23, Paragraphs 2 and 3 FAPP and Article 28 FOPP).
IXCHALLENGING AWARDS
The unsuccessful tenderers have the possibility to challenge the awards. According to
case law, a contracting authority is not allowed to sign a contract before it has become
clear that no party filed a complaint or, if a complaint was filed, before the Federal
Administrative Court decided not to grant suspensive effect to such a complaint. This
means that if suspensive effect is granted to a complaint, the contracting authority is
prevented from concluding the contract. The chances of the unsuccessful tenderers to be
attributed the contract if the appeal is won are intact.
After the contracting authority has signed a contract, the contract is valid
and cannot be terminated even in cases where the appeal is successful. The Federal
Administrative Court can only determine the extent to which the contested order is in
breach of federal law. The only remedy available thereafter is a claim for damages for the
costs in connection with the procurement procedure and the appeal process.
Regarding timescales, in the case that an appeal to the Federal Administrative
Court is linked to a request for provisional measures to give suspensive effect to the
appeal, the Court will rule on the provisional measures in a relatively short time. The
length of the proceeding for the material decision depends on the complexity of the case
and on the procedural motions by the parties.
iProcedures
In addition to the final decision of an awarding entity (including discontinuation of
the award procedure), a number of interim decisions can be appealed. Article 29 FAPP
contains a non-exhaustive list (including the invitation to tender, the decision on the
selection of participants in the selective procedure and exclusions). According to the
APA,7 an appeal against other separately notified interim decisions is permitted if they
may cause a non-redressable prejudice; or if granting the appeal would immediately
bring about a final decision and, thus, would obviate significant expenditure in time or
money in prolonged evidentiary proceedings.
7
Federal Act on Administrative Procedure of 20 December 1968, as amended (SR 172.021).
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Anyone who has participated or has been refused participation in proceedings
before the lower instance, who has been specifically affected by the contested decision
and who has a legitimate interest in the revocation or amendment of the decision, has
a right of appeal (Article 48, Paragraph 1 APA).
An appeal against decisions issued by a contracting authority subject to the FAPP
may be submitted to the Federal Administrative Court. It must be filed within 20 days
of notification of the awarding entity’s decision. An (earlier) publication of the decision
on the internet platform, simap.ch, is equivalent to a personal notification and will be
relevant for the calculation of the limitation period. Appeals against interim decisions
must be brought forward immediately.
Appeals do not have suspensive effect. However, the Federal Administrative Court
can be requested by means of provisional measure to grant suspensive effect (Article 28,
Paragraph 2 FAPP).
Decisions of the Federal Administrative Court can be appealed under certain
limited circumstances to the Federal Supreme Court. Such appeals must be filed within
30 days of notification of the decision.
Remedies against decisions of cantonal or local procurement authorities are
provided for in the cantonal legislation. The cantons are, however, obliged to provide for
at least one legal remedy to an independent authority. On the cantonal level, an appeal
must be filed within 10 days from the date of publication.
ii
Grounds for challenge
In the appeal, the appellant may contend that there has been a violation of federal law,
including the exceeding or abuse of discretionary powers (Article 49, letter a APA).
Another ground for appeal is an incorrect or incomplete determination of the legally
relevant facts of the case (Article 49, letter b APA). Inadequacy is explicitly excluded as
a ground for appeal in public procurement matters (Article 31 FAPP).
iiiRemedies
In the event that the appeal is held to be justified and the contract has already been
entered into, the Federal Administrative Court will only determine the extent to which
the contested order is in breach of federal law. The only remedy available thereafter is
a claim for damages for the costs in connection with the procurement procedure and the
appeal process.
It is therefore essential that, in an appeal procedure, suspensive effect is granted
(i.e., that the awarding entity is prohibited from concluding the relevant contract). Only
in such a case can the court order new tenders or attribute the award to another tenderer.
When confronted with the question of whether to grant suspensive effect to
an appeal in a public procurement matter, the Federal Administrative Court primarily
considers the chances of success of a review petition. If the chances are given, it
undertakes a balance of interests whereby the interest of the public to implement the
decision awarding a contract as swiftly as possible is given considerable importance.
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XOUTLOOK
The revised GPA of 6 April 2014 does not yet apply to Switzerland. There are amendments
to the federal and regional regulations that need to be made before the revised GPA can
be ratified by Switzerland. The amendment procedures are currently ongoing.
While the consultation procedures for the revision of the federal regulations
(FAPP and FOPP) are planned to start in April 2015 and to end in July 2015, the
consultation procedure for regional regulations (IAPP) ended in December 2014.
The consultation draft of the revised IAPP (d-IAPP) includes, inter alia, the
following changes: firstly, the attribution of concessions and the transfer of public tasks
are explicitly subject to public procurement law; secondly, under certain circumstances it
is possible for contracting authorities in cantonal procurements to enter into negotiations
with tenderers – until now, negotiations were not allowed at cantonal level; and thirdly,
according to the d-IAPP, the right to file appeals shall be organised exclusively in the
intercantonal agreement and will be given either to the ComCo (as until now) or to
the new intercantonal organ for public procurement law. This amendment has been
criticised by the ComCo as it would weaken or abolish its right to intervene in cantonal
procurement procedures. Moreover, the d-IAPP contains a standardised amount of
dispute value (150,000 Swiss francs) after which a bidder can appeal cantonal awards.
The revision process at federal and at cantonal level will be continued in the course
of this year.
Furthermore, Parliament has concerned itself with the question of geographic
repartition of contracts awarded under the FAPP with respect to the different language
regions in Switzerland. According to an evaluation of all tenders of the Federal
Office for Construction and Logistics in 2011, bids from the German-speaking part
(82 per cent of all bids) and contracts awarded to them (80 per cent of all contracts) are
over-represented in relation to the size of the region within Switzerland. In response to
parliamentary interventions on this issue, the Federal Council has ordered the Federal
Procurement Conference to identify why, despite the federal administration’s efforts
in this respect, little change was detected in the geographic repartition. A study has
shown that language barriers constitute only one of several reasons for this. The Federal
Council has given instructions to implement some of the study’s recommendations;
for example, a duty to admit offers in all three official languages and, with regard to
the invitation procedure, an obligation to invite at least one bidder from a different
language region if possible. The instructions will be implemented during the revision of
the procurement law. Further recommendations of the study have been evaluated by the
Federal Procurement Conference.
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Appendix 1
ABOUT THE AUTHORS
ASTRID WASER
Lenz & Staehelin
Dr Astrid Waser is a partner in the competition and regulated market group in Zurich.
She specialises in all aspects of competition (antitrust) law, public procurement law and
media and telecoms law. Dr Waser also advises on regulatory issues in connection with the
gas and electricity industry. She advises in non-contentious matters, and represents clients
before Swiss authorities and courts, in particular in merger filings, cartel investigations
and infringement procedures of the Swiss Competition Commission as well as in public
procurement procedures. Dr Waser publishes on Swiss and European competition law,
as well as public procurement law, and is a regular speaker at conferences and seminars.
MARCEL MEINHARDT
Lenz & Staehelin
Dr Marcel Meinhardt is a leading expert in competition law and is renowned for his
broad, first-rate practice. He specialises in all areas of Swiss and European merger control
work and competition law, particularly in the postal services, insurance, banking,
automobile, energy, media, retail, construction, pharmaceuticals, ticketing and IT
sectors. Dr Meinhardt also advises on regulatory issues including public procurement
and energy law. Dr Meinhardt advises in contentious and non-contentious matters, and
has acted in high-profile cases both in competition and public procurement cases. He
heads the Lenz & Staehelin competition and regulated practice group.
369
About the Authors
LENZ & STAEHELIN
Bleicherweg 58
8027 Zurich
Switzerland
Tel: +41 58 450 80 00
Fax: +41 58 450 80 01
[email protected]
[email protected]
[email protected]
www.lenzstaehelin.com
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