Measures aimed at improved legal protection in public procurement

On 12 February 2021, the State Secretary presented a proposal to the House of Representatives for accessible and improved legal protection in public procurement. The measures relate to:

  1. the preparation and implementation of the procurement procedure;
  2. the handling of complaints;
  3. access to the courts; and
  4. accountability and monitoring.

This blog provides a brief overview of the measures. In addition, we explain the status of the entry into force of the measures.

1. Preparation and implementation of the procurement procedure

In the first place, the State Secretary wants to give entrepreneurs more influence on the preparation and implementation of procurement procedures through the follow-up programme Beter Aanbesteden, drawn up jointly with VNO-NCW/MKB-Nederland (Confederation of Netherlands Industry and Employers/Dutch Federation of Small and Medium-Sized Enterprises) and VNG (Association of Netherlands Municipalities). In this way, the State Secretary wants to prevent complaints as much as possible and improve complaint handling. It is expected that this programme will be continued in the first quarter of 2021. Budget has also been set aside for the 2022-2024 period.

A second measure is the restriction of the extreme application of forfeiture of rights clauses. A forfeiture of rights clause often stipulates that a tenderer forfeits its right to complain or to take legal action against an award decision if it fails to ask questions in time. In extreme cases, a tenderer must even initiate legal proceedings prior to submission of the tender. Although courts took a strictly formal approach to this issue for a long time, that practice is slowly changing. Judges also adopt an increasingly critically approach to this kind of drastic forfeiture of rights clauses: see, for instance, this judgment of the Court of The Hague.

By means of an amendment to the Proportionality Guide, State Secretary Keijzer intends to further limit excessive application of forfeiture of rights clauses. The Draft Decision on the amendment of the Proportionality Guide was sent to the Senate and the House of Representatives on 12 February 2021, which took note of the letter on 23 February 2021. The amended Proportionality Guide includes the following:

“It is disproportionate to let the failure to ask a question automatically result in the forfeiture of the right to address the issue at a later time, but contractors should nevertheless take a proactive approach. It is important that tenderers present questions and complaints as early as possible. A contracting authority or special sector company must balance the interests. It may be proportionate in certain cases to still answer questions after the term set for that purpose, for example if the question could lead to a material change in the contract.”

Once the Senate and the House of Representatives have expressed their views on the draft proposal, it is expected to enter into force on 1 July 2021 or 1 January 2022.

2. Complaint handling

The next important measure is to make it compulsory for each contracting authority to set up an independent complaints desk and to professionalise the handling of complaints.

For that purpose the State Secretary will draw up a bill to include the obligation to set up a complaints desk and the corresponding minimum requirements in the Public Procurement Act. That will take some time, as there is no specific bill on the table yet.

In order to professionalise the handling of complaints, the State Secretary proposes to update the ''Complaint Handling in Public Procurement'' advice and converting it into a guide to be distributed via Pianoo and the VNG. The State Secretary has not indicated when this revision will take place.

Looking at the content of the complaints, the State Secretary identifies two variants: firstly, the complaints that relate to the design of a tender, and secondly, the complaints that relate to selection or award decisions.

The State Secretary wishes to give design complaints a suspensive effect: if a complaint that has been submitted in a timely manner is not settled before the deadline for registration of the tender procedure, the contracting authority must extend the registration period. That will give entrepreneurs the opportunity to take the outcome of their complaint into account when submitting a tender. If the entrepreneur disagrees with the complaint handling by the complaints desk, proceedings may be instituted before the Committee of Tendering Experts (Commissie van Aanbestedingsexperts) (CVAE). The State Secretary wants to include in the bill to amend the Public Procurement Act that the procurement procedure will be extended by a 14-day period as soon as that Committee considers a design complaint. As in the current situation, an opinion expressed by the Committee is not binding. The bill will stipulate, however, that a contracting authority must state reasons for deviating from an opinion issued by the Committee. If a design complaint is filed, the procedure is therefore likely to be delayed by at least three weeks.

The State Secretary is furthermore proposing to suspend the 20-day statutory standstill period in European public procurement procedures during the handling of complaints if a (timely) complaint is filed about an award decision. A statutory period will then apply during which the minimum number of days that the remaining standstill period must last is determined after the handling of the timely complaint. This will ensure that there is sufficient time for an entrepreneur to initiate preliminary relief proceedings if he disagrees with the outcome of the complaint handling. At present, entrepreneurs are often forced to initiate preliminary relief proceedings in order to safeguard their rights.

To ensure that these measures can take effect, the State Secretary will submit a bill to amend the 2012 Public Procurement Act. That bill has yet to be drafted. It is therefore expected that it will take some time before these amendments are implemented.

3. Going to court

In cooperation with the Ministry of Justice and Security and legal experts, the State Secretary wishes to investigate whether the information deficit of tenderers can be improved. A pilot under the Ministry of Justice and Security's Experimentenwet rechtspleging (Administration of Justice Experiments Act) will possibly be used. All actions in this area have yet to be commenced. The process is therefore expected to take many years.

In addition, the State Secretary wishes to include in the bill a stricter substantiation requirement for the selection or award decision. This should lead to better substantiated decisions that give entrepreneurs a better understanding as to why they have not been awarded the contract. This way the State Secretary hopes to prevent more complaints and legal proceedings.

Courts currently have hardly any possibilities of annulling an agreement (after preliminary relief proceedings) once it has been concluded. It is therefore of little use for a losing entrepreneur to initiate proceedings on the merits or to file an appeal. The State Secretary is therefore proposing, as a second point for attention, to add a fourth ground for annulment to Section 4.15 of the Public Procurement Act, which offers the possibility to annul a contract already concluded in the event of gross violations of the Public Procurement Act. However, it is doubtful whether such a provision will actually help entrepreneurs (see this blog). This bill - and the accompanying explanatory memorandum - have not yet been drafted either.

4. Accountability and monitoring

Finally, an annual monitoring and accountability system for the handling of complaints will be introduced for contracting authorities. The State Secretary has also indicated that a follow-up evaluation of the system of legal protection in public procurement will be carried out two years after the introduction of the proposed legislative amendments.

Effects in practice

The package of measures Improved Legal Protection in Public Procurement is a comprehensive package, aimed at all phases of the procurement process. But there is still a long way to go before the various measures take effect in practice. Contracting authorities are nevertheless advised to think about and prepare for the impact of the measures on their organisations. This may concern the handling of complaints and the setting up of a complaints desk, but also to the proactive provision of information to tenderers in award decisions.

Contracting authorities and other parties can find for more information on sustainable procurement, tendering and the submission of tenders at innovationpartnership.info.

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Contact details

Martijn van de Hel

T +31 20 238 20 02
M +31 6 21 210 853

Diederik Schrijvershof

T +31 20 238 20 03
M +31 6 81 364 318