A new Spanish Public Procurement Law has been approved

On 19 October 2017 the Spanish Congress approved a reform of Public Procurement Law (“PPL”) aiming to modernize it and adapt it to the European Directives on public procurement.

The reform of the PPL is influenced by the “Europe 2020 strategy”. Through public procurement, it aims to achieve smarter, sustainable and integrated growth within the European Single Market.

The EU adopted Directives 2014/24/EC on public procurement; 2014/25/EC on procurement by entities operating in the water, energy, transport and postal services sectors; and 2014/23/EC on the award of concession contracts. These directives inspired the reform.

The main novelties of the reform evolve around the incorporation of the criteria for best price-quality value, social and environmental obligations, publicity and electronic means, new ways to prove solvency, the elimination of public-private partnership and management of public services contracts, the creation of the innovation partnership and the open simplified procedures, the extension of the grounds of appeal in the Special Appeal on Public Procurement and the general simplification of procurement proceedings, among others.

According to the text of the new PPL, the law will come into force four months after its publication, namely, 20 February 2018.

These are some of the most relevant novelties:

• From an institutional point of view, procurement boards can only be integrated by career staff. Likewise, an independent Procurement Regulation and Supervision office will be created; this office will be dependent on the Ministry of Economy and will replace the CNMC in the supervision of public procurement.
• Furthermore, the Administration can launch preliminary market consultations and request the collaboration of undertakings in order to better prepare a tender. Also, from now on, the undertakings that participate in the preparation of documents for a tender will not be excluded from bidding automatically. The Administration will only exclude them if there is no other means to guarantee equal treatment among the bidding undertakings.
• Local Administrations and Autonomous Cities can now create their own purchasing networks. Other local administrations can adhere to those networks.
• With regard to contracts, the reform eliminates the public-private- partnership and the management of public services contracts and the latter will now be called concession of services contract. Likewise, the thresholds to qualify as minor contracts have been lowered to 40,000 € for works contracts (formerly 50,000 €) and 15,000 € for supply and services contracts (formerly 18,000 €). In the concession of services contract, the administration will now transfer the risk to the concessionaire in exchange for a price. In addition to the aforementioned, the new text has introduced numerous novelties in relation to the contracts regulated in the PPL.
• In relation to the procedure, the most relevant novelty is the elimination of the negotiated procedure without publicity motivated by its lack of transparency. On the other hand, from now on, any undertaking can participate in the restricted procedure.
• The new law creates an open simplified procedure that will be published in the contractor’s profile, will not require provisional guarantee and, in general, the offer will be presented in a single envelope.
• One of the main novelties of the PPL is the creation of the innovation partnership procedure aimed at developing new innovative products, services or works, with its subsequent purchase by the Administration. This procedure will consist of 2 phases, one for R+D and the other for delivery, each phase having its own particular rules.
• In relation to awarding criteria, the Administration will now give more importance, amongst many other new criteria, to the proposal that encompasses the best price-quality value. In addition, when contracting, special attention will be given to the new social and environmental criteria laid down in the law.
• From the subcontracting view point, the use of electronic invoices will now be mandatory in contracts where the price exceeds 5,000 €. Similarly, the Administration will have the ability to pay the subcontracted party directly if this is mentioned in the terms and conditions of the tender.
• The Administration will also control that subcontracting undertakings do not enter into payments default, creating the obligation of registering the subcontractors’ invoices in an electronic register.
• In relation to the presentation of offers, the use of the European Single Procurement Document will be mandatory for several procedures.
• Flexible solvency requirements will be introduced; under certain circumstances SMEs of less than 5 years will not need to present a list of contracts of equal or similar nature for previous years.
• In relation to the Special Appeal on Public Procurement, the grounds of appeal are extended, its application will still not be mandatory and it is expressly laid down that it will be free for the claimant. Likewise, changes have been made in relation to deadlines and thresholds.
• It is important to mention that the new text includes numerous changes in relation to general deadlines and thresholds in several areas regulated by the law.
• In conclusion and in relation to publicity obligations and electronic means, the general rule will now be the publication of all relevant tender documentation in the contractor’s profile, guaranteeing unlimited, direct, complete and free access to all interested undertakings.

If you would like to discuss the changes that the PPL will bring in further detail and its possible repercussions, please contact one of our experts listed below or your usual Osborne Clarke contact.