Public contracts are governed primarily by the Public Procurement Act. During public procurement procedures, the national procedure must apply to bidders settled in the European Union and to Community goods.
Types of public procurement
The Community and national limits for public procurement are published by the Public Procurement Council in the Public Procurement Bulletin.
The Public Procurement Act distinguishes the following five basic types of public procurement: open, invited, procedure via negotiations launched with an announcement, frame contract, competitive dialogue.
- The open public procurement procedure, for which any interested party may submit a bid.
- The public procurement procedure by invitation, for which those selected by the tenderer may submit a bid.
- The public procurement procedure by negotiation, where the tenderer negotiates the contract conditions with one or more bidders that it has selected.
- The competitive dialogue, where the tenderer holds dialogue with the applicants that it has selected to participate, in order to define more clearly the subject of the public procurement, and the contract type and conditions. It then asks for a bid. A procedure by negotiation may be started without announcement if
- the estimated value of the purchase of goods or services does not reach twenty five million forints or the estimated value of the building investment does not reach one hundred and fifty million forints;
- the publicly announced exceptionally favourable terms of the purchase available for anybody exist only for a short time, and the consideration for it is significantly lower than the market prices, and the use of these favourable terms would fail in the case of application of the procedure pursuant to this part;
- the public purchase is made or a foreign representation.
In addition to the above, the Act also regulates the types of procedure relating to special public procurement. These include procedures relating to framework agreements, accelerated procedures, construction concessions and architectural design.
Depending on the value of the public procurement, a public procurement procedure system is distinguished that reaches the Community limit, the national limit.
In connection with the organisations that it directs, the government may order a centralised procedure for public procurement, deciding upon its personal and material scope, the organisation authorised to put out the tender, and opportunities for becoming involved with the procedure. Detailed rules of the simplified procedure are defined in separate legislation.
Tendering procedure: step-by-step guide
Publication of the public procurement plan
The inquirers and the organisation authorised to make an inquiry during the centralised public procurement must make an annual summarised public procurement plan on the public procurements planned for the given year at the beginning of the financial year, by the day of 31 March at the latest. The inquirer must electronically record its public procurement plan on its own website, if any, or if it does not have a website then at the centralised public procurement portal of the central procurement organisation.
For public procurement procedures that have a value equal to or greater than the Community limit, the announcement prepared on the basis of the tenderer's public procurement plan must be sent via the Public Procurement Council to the Office for Official Publications of the European Communities, where it is published in the TED database. After its appearance in the database, the announcement is also published in the Public Procurement Bulletin by the Public Procurement Council.
There is a monitoring function linked to the publication of announcements in the Public Procurement Bulletin. The Public Procurement Council must be paid a checking fee for checking the notice and publishing it in the Public Procurement Bulletin and in the Official Journal of the European Union, as well as an editorial fee for publication.
Initiation of procedures
The open procedure starts with a call for tenders, which the tenderer is obliged to publish by means of the announcement. The tenderer is obliged to prepare documentation that includes the draft contract, among other things.
In accordance with the requirements defined in the call for tenders, the bidder must prepare and submit his bid. The bid must be submitted in writing and sealed, and before the deadline for submitting bids.
Further progress of the procedure
The tenderer is obliged to inform the bidder of all decisions. The bidders must be invited to the announcement of results.
If the public procurement procedure is successful, the contract must be concluded in writing in accordance with the call for tenders, the documentation and the content of the bid.
The law refers to the process of invitation and negotiation that starts with the publication of the announcement as a two-stage procedure, and this is also the case for competitive dialogue. These procedures consist of a participation stage (call for tenders, registration, evaluation, announcement of results) and a bidding stage.
Those subject to a public procurement process may submit an appeal to the Public Procurement Arbitration Board which operates alongside the Public Procurement Council.
Types of agreement concluded on the basis of public procurement procedures
There are 3 types of agreement concluded on the basis of public procurement procedures:
- Construction investment agreements must be concluded in the event of planning and performance activities relating to construction investments.
- Contracts for the acquisition of goods must be used when buying or selling products, leasing them on, renting them out or for other forms of acquisition involving buying, selling and renting.
- Contracts for the acquisition of services include contracts aimed at the provision of services.
National public procurement authorities
The Public Procurement Council, among other things, assists in shaping public contract policy, contributes to the development and propagation of lawful behaviour in public procurement, monitors compliance with the legal provisions, keeps records of public procurement tenders and tenderers, prepares guidelines to promote the application of the public procurement rules, publishes and inspects announcements, performs monitoring and legal-remedy functions, keeps registers of names, and maintains international contacts.
The Public Procurement Act clearly defines the requirements for public procurement bids.
It lays down the formal requirements for bids, the deadline for submitting bids and the rules relating to adherence to the bid, and to submission, opening and evaluation of bids.
According to the Act, bids must be submitted in writing and sealed, by hand or by post to the address given in the call for tenders, and before the deadline for submitting bids, in accordance with the form and content requirements set out in the call for tenders.
The Public Procurement Bulletin is the official publication of the Public Procurement Council and also an official source of announcements on Hungarian public contract procedures together with the EU's Official Journal (OJ). The Public Procurement Bulletin is published electronically three times a week.
The Public Procurement Gazette is a special monthly journal of the Public Procurement Authority which provides information for the operators of the public procurement market (inquirers, bidders, official public procurement advisers, control bodies, training and education organisers etc.) and for those interested in public procurements on the actual changes in legislation, and helps them in the interpretation of the public procurement law.