Spain publishes guidance for low value contracts

Spain’s current public procurement law imposes strong transparency requirements for most contracts below the financial thresholds, restricting the use of non-transparent procedures to contracts value at below €15,000 (services) or €40,000 (works) only. My take is that overall this is a positive step and one that I regret Portugal not following.

That does not mean the move is painless or without difficulties. To clarify the requirements and operational implications of the move, Spain’s Procurement Regulator Body (something Portugal should have copied too…) published its first ever binding guidance specifically on Art 118 of the Spanish Public Contracts Law.

The guidance makes a very restrictive interpretation of the grounds enabling the use of the non-transparent procedure, from the requirements (deemed as cumulative) to the potential loopholes of contract splitting or recurrent yearly contracts with the exact same object. Julio Gonzales has a few extra comments (in Spanish) on the Global Politics and Law blog.

Public Contracts Regulations 2015 - Regulation 32

Regulation 32 - Negotiated procedure without prior publication

In the previous legal regime the negotiated procedure was divided into procedures with or without publication. The old negotiated procedure with publication has been effectively upgraded to competitive procedure with negotiation we analysed in Regulation 29. In Regulation 32 we can find the rules regulating the negotiated procedure without prior publication instead.

As argued by Albert earlier today, Regulation 32 transposes Directive 2014/24/EU Article 32 by reshuffling the paragraph or section order but without really changing the content significantly. This procedure is still an exceptional procedure, to be used only in the specific circumstances set for by Regulation 32, and the whole draft emphasises this exceptional nature. Personally, I think that the grounds for use should have been included in Regulation 26 and do not understand neither the cross-reference of Article 26(6) to Article 32, nor the idea of including most but not all grounds for use in Regulation 26. For consistency sake, it would have been preferable for all grounds for use for all procedures to be in the same place (Regulation 26/Article 26) or with each procedure.

In general, the negotiated procedure can be used in case of preceding failure by a more transparent procedure or more substantive grounds: urgency, production of art, lack of competition for technical reasons or protection of intellectual property rights. Except for the first case, all others require a bullet proof justification by the contracting authority that this procedure needs to be used and not any other. It is tempting for contracting authorities to claim lack of competition or protection of intellectual property rights (particularly if a competitive dialogue or innovation partnership were used successfully in the past), but as Albert cautioned, please check the Fastweb case (C-19/13) for the Court of Justice's view on the use of this procedure.

Sections 5, 7 and 9 extend the grounds for use of the procedure to other situations such as additional deliveries of supplies (maximum of three years), after design contests or additional works and services that are similar to the original one (maximum of three years). They do not provide particular difficulty as they were already included in the 2006 version of the contract regulations albeit they are now much clearer and easier to understand. Regulation 16 of the Public Contracts Regulations 2006 was convoluted to say the least.

How do you run the procedure itself?

Well, that is for contracting authorities to find out by themselves. Regulation 32 contains a grand total of 0 words about running the procedure. Just remember that the principles of transparency, equal treatment and non-discrimination are still applicable.