Public contracts - Bulgaria
The basic document on public-private partnership in Bulgaria is the Public Procurement Law (PPL). It deals with the use of public funds in procuring works from economic operators.
The Law guarantees openness and transparency, free and fair competition, equality and prevention of discrimination in public procurement procedures. It deals with the procurement processes for:
- the supply of goods;
- the provision of services;
- construction (including building or engineering), and the execution of design of building works.
Specialised public procurement which is carried out outside the remit of this Law under the so-called "offset" programmes, and the assignment of activities in areas such as defence and security, when such activities are subject to classified information and have to be accompanied by special security measures.
The Ministry of Economy, Energy and Tourism regulates the procurement process, keeps a register and monitors offset public procurement.
Types of public procurement
When public contracts have a value equal to or higher than those set out in the Regulation of the European Commission issued pursuant to Article 69 of the Directive on coordinating the procurement procedures of entities operating in the water, energy, transport and postal services sectors and Article 78 of the Directive on the coordination of procedures for the award of public works contracts, public supply contracts and public service contracts, contracting authorities must also submit for publication, except in the Republic of Bulgaria, the following documents in the Official Journal of the European Union:
- prior notice or notice of the publication of a prior information notice on a buyer profile;
- prior notice - invitations;
- notices of launching a procedure;
- information on contracts or framework agreements awarded;
- information on design contests;
- simplified public procurement notices in dynamic sup0ply systems.
The conditions and methods of awarding public contracts, set out in the PPL, must be implemented in the case of public procurement contracts with the following values before VAT:
- for construction over BGN 2 150 000 and if the order is to be completed outside the country, over BGN 6 000 000;
- for supplies over BGN 180,000 and if the order is to be completed outside the country, over BGN 250 000;
- for services over BGN 110 000 and if the order is to be completed outside the country, over BGN 250 000;
- design contest: over BGN 110 000.
The conditions and methods of awarding small public contracts, set out in the Ordinance on the award of small public contracts, must be implemented in the case of public procurement contracts with the following values before VAT:
- for construction: less than or equal to BGN 2 150 000 and if the order is to be completed outside the country, less than or equal to BGN 6 000 000;
- for supplies: less than or equal to BGN 180,000 and if the order is to be completed outside the country, less than or equal to BGN 250,000;
- for services: less than or equal to BGN 110,000 and if the order is to be completed outside the country, less than or equal to BGN 250,000;
- design contest: over BGN 110 000.
Public contracts can be awarded through open procedures, restricted procedures, competitive dialogue or negotiated procedure.
Open procedures mean that all interested parties may submit an offer.
Restricted procedure means that offers can only be submitted by candidates that have been invited to do so by the purchasing authority after prior selection.
Competitive dialogue is a procedure whereby every interested party may apply to participate, and the awarding authority enters into dialogue with candidates who have been pre-selected to determine one or more offers conforming with the authority's requirements, after which candidates with suitable proposals are invited to submit bids.
Negotiated procedures can be:
- with publication of a contract notice ;
- without publication of a contract notice ;
Competitive dialogue and negotiated procedures are only used in circumstances explicitly provided for in the law and which correspond to the conditions of the applicable directives.
Small public contracts are awarded by open competition or invited negotiation.
Open procedure is a means of awarding small public procurement contracts where all interest parties may submit a tender.
Invited negotiation is a procedure used with small public contracts where the contracting authority negotiates the terms of the contract with one or more operators of its choice.
Design contests are held to enable the contracting authority to select a plan or design selected by a jury after being put out to tender with or without the award of prizes, mainly in the fields of town and country planning, architecture, engineering or data processing.
Contracting authorities may not conduct small public procurement award procedures, but have to take at least 3 bids containing technical and financial offers, unless this is objectively impossible, if the contracts have the following value (exclusive of VAT):
- for construction: from BGN 45,000 to 200,000 and if the order is to be completed outside the country, from BGN 500,000 to 1,500,000;
- for supplies or services: from BGN 15,000 to 50,000 and if the order is to be completed outside the country, from BGN 50,000 to 100,000;
Contracting authorities have the right not to collect 3 bids, if the value of the order, excluding VAT is:
- for construction: less than BGN 45,000 and if the order is to be completed outside the country, less than BGN 500,000;
- for supplies or services: less than BGN 15,000 and if the order is to be completed outside the country, less than BGN 50,000;
Auction procedure: step-by-step guidelines
Contracting authorities send a prior information notice of all public procurement or framework agreement procedures they intend to open over the next twelve months in the State Gazette and the Public Procurement Agency (PPA) for entry in the Public Procurement Register, or publish them in the purchaser's profile if their value is in excess of the thresholds set out in Article 23 of the PPL.
The contracting authority takes a decision to open the procedure for the award of a public contract. Both the decision and the notice are sent to the PPA for entry in the Public Procurement Register. The contract notice is then published in the Official Journal of the European Union and in the Bulgarian State Gazette in the cases required by the PPL.
The contracting authority appoints a commission to conduct the public procurement procedure. The Commission considers the offers made, assesses them against the previously notified conditions, and rates the bidders by the degree to which their offers conform with the previously notified conditions. The Commission then drafts a report of how it considered, evaluated and scored the offers.
The contracting authority selects the winner by evaluating the offers under one of the following criteria set out in the notice:
- lowest price only;
- most economically advantageous tender.
The awarding authority then, within 5 business days of the commission completing its deliberations issues a justified decision, notifying the ranking or the bidders and the bidder selected for the award. The contracting authority then enters into a written public procurement agreement with the winner.
Appeals may be submitted by any interested party within 10 days of being notified of a particular decision or action, and if they have not been notified, from the date on which they found out or on which the deadline for the action in question expires. Appeals must be submitted in Bulgarian.
Every interested party may submit a claim to declare the public procurement contract void/invalid in accordance with the Code Procedure Code. A contract is void, if it was made:
- without a public procurement procedure despite the fact that one should have been conducted;
- before the deadline for appeals against the award of contract had expired;
- before a decision to apply for a provisional measure has taken effect, and where the public procurement procedure has been infringed.
National public procurement authorities
The minister of the economy, energy and tourism is responsible for public procurement policy. The Minister has a special body, the Public Procurement Agency (PPA), which is effectively responsible for all activities relating to the drafting of legislative proposals, implementing directives, the methods of their application and keeping a national Public Procurement Register. The register kept by the agency is a public, free database of:
- decisions to open or terminate public procurement procedures, or to extend the deadline for bids or applications by bidders;
- notices requiring entry in the register;
- information on public contracts awarded;
- Information on public contracts completed;
- other information.
Proper application of the legislation, which is done by checking the contracting authorities, is verified by the Public Financial Inspection Agency and the Bulgarian National Audit Office.
When bidding to participate in a public procurement procedure, bidders have to conform strictly with the conditions notified by the contracting authority. Each bidder may submit a single offer, in Bulgarian, in a sealed non-transparent envelope delivered in person by the bidder or an authorised representative, or by recommended post with receipt of delivery. The bid price should be placed in a separate non-transparent envelope with the text "Предлагана цена" (Bid price) in an envelope containing the bid.
The PPL also provides for electronic bidding provided the conditions of the Electronic Documents and Electronic Signature Law are met.
The validity period of bids is the period in which bidders are bound by the terms of their bids.
In the case of offset public contracts, these are drafted by the Ministry of the Economy and Energy and submitted to the Investment Offset Programmes Department of the Offset Sector of the Directorate for Economic Policy. Offset programme proposals must be promptly registered here and published on the ministry's website.
Special public procurement contracts and offset programmes are awarded based on particular criteria which are set out in the offset programme bid assessment procedures.
For a special public procurement contract to be awarded in the form of an offset programme, certain requirements must be met. The contractor and/or the main subcontractor may be foreign persons, but the contract has to have a value of over BGN 5 million, in which case it is subject to a review by the Ministry of the Economy and Energy, or over BGN 10 million excluding VAT.
The Offset Sector of the Economic Policy Directorate's Investment Offset Department reviews bids from companies that meet the criteria.
The procedures conducted in Bulgaria are set out in the PPL, the Ordinance on the award of small public contracts and the NSOP.
The Bulgarian Development Bank offers long-term credits and helps small and medium-sized enterprises by implementing European finance programmes.
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