New public procurement law and operator selection

This entry will focus on The problem of the mode of selection of the operator of railroad passenger services, which has its origins in the recent entry into force of the provisions of the Law of September 11, 2019. - Public Procurement Law ("newzp"). In my opinion, the legislator, when introducing the provisions of the new Public Procurement Law, did not take into account (as I do not think this was intentional) that there was an elimination of the possibility of using the tender procedure for the selection of a rail operator.

Until December 12, 2020, organizers were allowed to directly conclude service contracts for provincial rail passenger services of a public utility nature without meeting specific conditions and restrictions as to scope. The vast majority of provinces took advantage of this opportunity and thus secured the continuity of service provision for subsequent years - until December 14, 2030 at the most.

Currently, the possibility of direct contracting has been significantly reduceda, which is due to a number of legal changes regarding the opening of the market for domestic passenger rail services. This possibility still exists, among other things, in the event of transportation disruptions or for smaller orders. The principle, however, is already to make the selection of a rail operator in accordance with the rules of competition.

The catalog of permissible modes of selecting an operator is defined in Article 19 (1) of the Law of December 16, 2010 on public mass transport ("uptz"), according to which it may: (1) pursuant to the Act of September 11, 2019. - Public Procurement Law (i.e., the "new public procurement law"), or (2) the Act of October 21, 2016 on the concession contract for works or services, or (3) in direct mode (with, as indicated above, the use of this mode has been limited). It is also possible for the organizer to carry out transportation in the form of a local government budgetary establishment. Thus, in terms of competitive modes, the organizer has - as a rule - a choice between the public procurement mode and the concession procedure.

In rail transport, the selection of operators in competitive modes has so far been rarely used. This was due to a number of factors, the most important of which were the limited circle of potential contractors, the lack of experience in organizing proceedings with such a subject, and - perhaps most importantly - the existing possibility of free direct contracting. Restricting the possibility of direct contracting, however, dramatically changes the situation and will, as it were, force organizers to use competitive procedures.

Theoretically, the restriction on the possibility of direct contracting should not be so severe, since the other modes listed in Article 19(1)(1) of the uptz remain at the organizers' disposal. However, the matter is not so simple, since the provisions of the new PPL do not apply to contracts for public passenger transport services by rail or metro (Article 11(1)(10) of the new PPL). The introduction of the exemption in question was due to the alignment of national public procurement laws with the regulation contained in Article 10(i) of EU Directive 2014/24/EU of February 26, 2014. In the previous Public Procurement Law, an analogous exemption was not included. It is also worth noting that the exemption does not apply to all modes of transport, including bus transport.

In a typical situation, this exemption from the Public Procurement Law could be seen as advantageous, as it would generally give greater freedom in the conduct of proceedings. However, a tender concerning the subject matter covered by the exemption would not be a proceeding conducted under the Public Procurement Law (this is the prevailing view in case law issued under the previous Public Procurement Law, examples include the KIO's decision of November 25, 2011, ref. KIO 2452/11). Thus, this would not be a proceeding conducted under one of the procedures for selecting an operator, a closed catalog of which is specified in Article 19(1) of the uptz.

Thus, it seems that in the current state of the law, it is not possible to select a rail passenger service operator through a competitive bidding process, as this would contradict the provisions of the uptz (Article 19) and the new PPL (Article 11(1)(10)). Such a situation seems incompatible with the desire to open the rail freight market to competition, which seems extremely difficult without holding tenders.

In my opinion, the root of the problem is the lack of substantive alignment of Article 19(1) of the uptz with the provisions of the new PPL. The legislature limited itself to a technical amendment to Article 19(1)(1) of the uptz to update the Public Procurement Law's designation, failing to recognize that the exemption contained in Article 11(1)(10) of the new PPL will, when juxtaposed with the strictly defined modes of selecting an operator in Article 19(1) of the uptz, limit the possibility of competitive rail transport proceedings to the concession mode, which will not always be adequate given the nature of the contract. In doing so, it would be controversial to rely solely on the provisions of EU Regulation No. 1370/2007 of October 23, 2007 in organizing the tender procedure. (in particular, Article 5(3) of this legal act), since neither the EU nor the national legislator treats these regulations as self-consistently and comprehensively creating rules for awarding contracts.

If the above interpretation is correct, public transport organizers have been put in a difficult situation, which was probably not foreseen by the Polish legislator when adopting the new Pzp. The legal regulations contained in several pieces of legislation (the new pzp, the uptz, Directive No. 2014/24/EU, Regulation No. 1370/2007), when read separately, retain their meaning, but their juxtaposition makes it - at least literally - impossible to make sense of them. the most relevant competitive mode, which is competitive bidding, has been excluded for rail transport. The problem could be rectified by expanding the catalog of permissible modes for selecting an operator in rail transport to include a tender conducted under the exclusion of the provisions of the new PPL. 

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