Public procurement means purchasing of goods, contracting for provision of services, contracting for public works, and granting of works and service concessions by the contracting authority, and contracting for works by the concessionaire of a works concession.
Within Estonia, public procurement procedures, the rights and obligations of subjects involved in public procurement and their liability, and the procedure for the exercise of state supervision and the settlement of appeals is provided for by the Public Procurement Act.
In organising a public procurement, the transparent, purposeful, and economical use of financial resources of the contracting authority, the equal treatment of the participants, and effective use of existing competition in public procurements must be ensured. The public procurement general principles must be adhered to in every instance, also in case of contracting for the provision of services and granting of service concessions according to simplified procedure.
Types of public procurement
Procurement procedure types are as follows:
- Open procedure, in which every interested person compliant with the requirements stipulated in the Act may submit a tender.
- Restricted procedure, in which any interested person may submit a request to participate in the procurement procedure, but the tender may be submitted only by those candidates chosen by the contracting authority on the basis of the objective and non-discriminatory criteria to whom the contracting authority submits the tender invitation.
- Competitive dialogue, whereby any interested person may submit a request to participate in the procurement procedure and whereby the contracting authority conducts a dialogue with the selected candidates, with the aim to develop one or more suitable solutions capable of meeting the contracting authority's needs. The contracting authority submits the tender invitation to the candidates chosen as a result of the dialogue and selects the successful tender.
- Negotiated procedure with prior publication of contract notice, in which any interested person may submit a request to participate in the procurement procedure and the contracting authority submits the tender invitation to at least three candidates chosen by it and negotiates the tenders with them in order to select the successful tender.
- In case of negotiated procedure with prior publication of contract notice , the contracting authority negotiates the terms of the public contract with one or more interested persons at its own choice, having previously submitted the contract documents to them.
Specific conditions relating to the requirements of different procurement procedures are provided for in the Public Procurement Act.
Tender procurement: step-by-step instructions
Processing of tenders includes the following stages:
- Acceptance and opening of tenders. Tenders shall be opened at the place and time specified in the contract notice, contract documents or in the proposal to submit the tender by the contracting authority. The contracting authority shall enable the tenderers or their authorised representatives to be present at the opening of tenders.
- Verification of compliance of tenders. The contracting authority shall verify whether the submitted tenders comply with the requirements stipulated in the contract notice, contract documents or tender invitation. The contracting authority shall verify only the tenders submitted by qualified tenderers.
- A tender with an abnormally low value. If a tenderer has submitted a tender for which the value according to the contracting authority is abnormally low, the contracting authority shall require a relevant written explanation from the tenderer.
- Evaluation of tenders. Tenders shall be evaluated according to the criteria specified in the contract notice, contract documents or in the proposal to submit the tender. In the evaluation of tenders the contracting authority may not use information other than what is submitted in the tenders.
- Deciding and notification of the decision.
- Award and amendment of the public contract. The procurement contract shall be concluded with the successful tenderer upon acceptance by the contracting authority.
Types of public contracts
There are three types of public contracts:
- Public construction works contract.
- Public things contract.
- The public service contract is used to contract for the services referred to in the Act.
Public procurement authorities
Public procurements are arranged by government offices, town or rural municipalities, legal persons governed by public law, non-governmental organisations, and, in certain cases, legal entities governed by private law (for example, when acting in the public interest).
The authority generally responsible for public procurements is the Ministry of Finance, namely its public procurement and state aid department.
Submission of tenders
When declaring an open, limited or negotiated procurement procedure or initiating competitive dialogue, the contracting authority publishes a procurement notice.
Procurement notices are published in the Public Procurement Register, which contains all documents related to procurement, including announcements, results, and outcomes of disputes. The contracting authority is responsible for accuracy of data submitted to the register.
When a tender procedure has been negotiated without prior publication of a notice, the contracting authority has to submit documents to one or several interested parties of its own choosing.
The contracting authority collects procurement documents containing the procurement contract’s terms and other requirements. Excluded from the procedure are bankrupt tenderers/business owners, those who are winding up their business or whose state tax obligations have not been met. All tenderers are provided with the same information (e.g. through the Internet).
A procurement does not have be organised if the procurement is being done on the basis of an international agreement essentially in accordance with the requirements of the Treaty establishing the European Community, on the basis of a special procedure of an international organisation or on the basis of the international agreement related to the location of military units.