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The basis of public procurement law

The Federal Procurement Act of 2018 regulates the awarding of public contracts in Austria.

The principles of public procurement law are free and fair competition, respect for fundamental freedoms under European Union law, non-discrimination, equal treatment and transparency. Awarding must also be done to authorised, reliable and efficient operators at reasonable prices. The environmental impact of services must also be taken into account.

Consideration may be given to the employment of women, people undergoing training, the long-term unemployed, people with disabilities and older workers, and to measures designed to implement other social policy considerations. When designing and implementing a procurement procedure, care should also be taken to ensure that SMEs can participate.

The provisions of a procurement procedure may not have the purpose of excluding that procurement procedure from the scope of application of the Federal Procurement Act or of circumventing the application of provisions of the Federal Procurement Act, or of artificially restricting competition.

Public sector clients

  • Supply and service contracts, competitions, centralised AGs in accordance with Annex III (§ 12 para 1 no. 1 and para 2 no. 1)  144.000 euros
  • Service contracts in accordance with Annex XVI (§ 12 para 1 no. 2)     750.000 euros
  • All other supply and service contracts, competitions, other AGs (§ 12 para 1 no. 3 and para 2)     221.000 euros
  • For construction contracts (§ 12 para 1 no. 4)    5.548.000 euro

List of central contracting authorities

  1. Federal Chancellery
  2. Federal Ministry for the Civil Service and Sport
  3. Federal Ministry for Europe, Integration and Foreign Affairs
  4. Federal Ministry of Labour, Social Affairs, Health and Consumer Protection
  5. Federal Ministry of Education, Science and Research
  6. Federal Ministry for DIGITAL and ECONOMIC AFFAIRS
  7. Federal Ministry of Finance
  8. Federal Ministry of  Interior
  9. Federal Ministry of Defence
  10. Federal Ministry for Sustainability and Tourism
  11. Federal Ministry of Constitutional Affairs, Reforms, Deregulation and Justice
  12. Federal Ministry for Transport, Innovation and Technology
  13. AIT Austrian Institute of Technology GmbH
  14. Austrian Federal Procurement Agency, BBG
  15. Austrian Federal Computing Centre, BRZ

Sector Contracting Authorities

Sector contracting authorities are all organisations engaged in sectoral activities, such as postal services or the operation of electricity or gas networks. (§§ 170–175 Federal Procurement Law 2018).

  • Supply and service contracts, competitions (§ 185 para 1 no. 2 and para 2)   443.000 euros
  • Service contracts in accordance with Annex XVI (§ 185 para 1 no. 1)   1.000.000 euros
  • For construction contracts (§ 185 para 1 no. 3)    5.548.000 euros

Irrespective of the threshold values from the EU Directive, there are various other value limits ("sub-thresholds") in law, which are relevant for the selection of special types of processes.

The best known is the direct awarding limit. Below this value threshold, contracts can be awarded without a formal awarding procedure. The threshold value regulation will raise this limit to 100,000 euros by 31.12.2020.

he calculation of the estimated contract value always refers to the total value excluding VAT, but including all options and contract renewals. If necessary, any premiums or payments to candidates or bidders that have already accrued during the awarding procedure or competition must be taken into account. The estimate is based on the date on which the award procedure was initiated.

Where the contracting authority consists of several separate organisational units, the estimated value of the contract shall be taken into account for all the organisational units, unless the unit concerned is responsible for its own procurement or for certain categories of procurement. Therefore, the awards of different federal ministries cannot be added together, even though they are formally organisational units of a common legal entity (federal government).

The choice of the calculation method used must not have the purpose of circumventing application of Federal Procurement Law. Without objective reasons, a contract may not be subdivided in such a way that it remains below the upper threshold.

Where a service consists of several lots, each of which is the subject of a separate contract, the estimated contract value shall be the estimated total value of all lots. Contrary to the Federal Procurement Act of 2006, all and not only similar services (in contrast to supply services) of a procurement project must now be added together.

Commercial or technical aspects, such as the need for uniform execution and a clear guarantee, are decisive. It is not allowed to circumvent Federal Procurement Law by separating services or by dividing up the total services put out to tender.

The restriction that a tenderer may be awarded only a certain maximum number of lots is now permissible. If no lot has been awarded, the contracting authority must document this in the invitation to tender or in the award note.

There are several types of procedure under public procurement law.

The standard procedures, which may always be chosen, are as follows:

  • The open procedure, in which an unlimited number of contractors are publicly invited to submit tenders,
  • The restricted procedure with prior publication, in which an unlimited number of contractors are publicly invited to submit requests to participate and subsequently selected suitable candidates are then invited to submit tenders.

In addition, there are a number of special procedures which may only be chosen under certain conditions:

  • The restricted procedure without prior publication, in which a limited number of suitable contractors are invited to submit tenders,
  • The negotiated procedure with prior publication, in which an unlimited number of contractors are publicly invited to submit requests to participate. Only then are selected suitable candidates invited to submit tenders. In this procedure, the content of the contract can be negotiated.
  • The negotiated procedure without prior publication, in which a limited number of suitable contractors are invited to submit tenders. In this procedure, the content of the contract may be negotiated.
  • The competitive dialogue, in which an unlimited number of contractors are publicly invited to submit requests to participate. The contracting authority then selects suitable candidates to conduct a dialogue with them on all aspects of the contract. The aim of the dialogue is to identify a solution which corresponds to the call for tenders. On the basis of the dialogue, the participants will be invited to submit tenders.
  • The innovation partnership, in which an unlimited number of contractors are publicly invited to submit applications for participation. On the basis of the requests to participate, suitable applicants are invited to submit offers for the development of an innovative product, construction or service. In this procedure, the content of the contract can be negotiated. The contract includes the development and acquisition of innovative services.
  • The direct awarding, in which a service, where appropriate after obtaining tenders or non-binding price information, is obtained freely from a preselected suitable contractor for consideration,
  • The direct awarding with prior publication, where an unlimited number of contractors are informed of the intention to award a contract. After one or more tenders have been received, a service can be obtained formally from a selected suitable contractor against payment.

In addition to contracts, framework agreements can also be concluded or dynamic procurement systems be set up. These are special constructions under procurement law. Individual contracts can then be awarded on the basis of these instruments without the need for a (new) regular awarding procedure.

Since 18.10.2018, communication between the contracting authority and contractors in the above-threshold area has to be carried out electronically. This means that communication must be handled completely electronically from the announcement to the submission of offers.

The contracting authority may transmit information electronically or make it available electronically. Information shall be deemed to have been made available as soon as the recipient is able to access the data and has been informed thereof.

This requires appropriate technical solutions that meet the legal requirements - especially with regard to data security.

Mag. Wolfgang Pointner, Leiter der Rechtsabteilung BBG

We know the market and handle projects efficiently. Above all however, reliability regarding procurement law is the success factor for the BBG.

For general initial information on public procurement law, you can contact the experts in our Centre of Competence in Awarding free of charge.

Awarding Competence Centre

Mon – Thu: 9:00 – 15:30
Fri: 9:00 – 13:30

Hotline: +43 1 245 70-440
E-Mail: vergabekompetenzcenter(at)bbg.gv.at

 

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