Publications

“High standards of professional work.” (IFLR1000, 2017)

23.12.2019

Buyers of construction services facing choice

The weekly magazine Dienas Bizness published the opinion of PRIMUS DERLING partner Kristīne Gaigule-Šāvēja on the current wording of the Public Procurement Law, which does not provide for the exclusion of companies, which are subject to investigations or suspected of unauthorized activity, from procurements.

At present, the Public Procurement Law does not contain provisions that would entitle public procurers to disqualify those who might be involved in the implementation of unauthorized agreements, which means that it will not form grounds for disqualifying a tenderer from the procurement.
According to the applicable legal framework, public procurers will have the right to exclude a tenderer only after the decision of the Competition Council has taken effect.

Latvian regulations currently do not provide for the exclusion of tenderers on the grounds of suspected professional misconduct, and they are not consistent with how such situations are treated in Europe.

Latvia is currently facing the challenge of reviewing mandatory exclusion criteria for public tenderers, aligning them with the findings of the ECJ and the legal interests of tenderers.

According to the Court of Justice of the European Union, reasonable suspicion would be sufficient for the contracting authority to exclude a particular company from the procurement procedure due to a professional misconduct.

One of the ways Latvia could proceed with in revising the exclusion provisions might be similar to the Lithuanian approach, whereby the procurement authorities approach the competition authorities and ask whether there is a breach of the competition rules in the particular situation and circumstances.

In cartel cases, particular evidence, rather than just suspicion, of involvement has been and will be required.

Purchasers need to be equipped with specific information permitting to support their claims or adopted decisions.

The responsibility of designers in Latvia does not really work, but all responsibility, including design errors, is in most cases claimed from the constructor.

The contractor must also include in the price the risks associated with identifying and remedying project errors so that they do not incur losses on a particular project, which cannot be done in full without additional calculations and in-depth analysis of the design.  Such an approach is inconsistent with FIDIC’s internationally recognized allocation of risks among construction parties.

The full article is available in the 17 December 2019 issue of Dienas Bizness.