SmartTender Lawyers

During the period of martial law, SmartTender lawyers continue to actively investigate and analyze decisions made by the Permanent Administrative Board of the AMCU. Today we bring to your attention the first part of the material on the review of the Board's decisions adopted in May (more than 350 of them were adopted), of which the lawyers have selected the ten most interesting ones.

This material will consider decisions on complaints regarding the implementation of the provisions of Article 17 of the Law of Ukraine “On Public Procurement” (hereinafter referred to as the Law), and complaints about the unlawful cancellation of the procurement procedure.

Decision on the complaint regarding the cancellation of the procurement procedure based on force majeure

Purchase ID: UA-2021-12-29-007218-c

Decision № 4769-р/пк-пз from 26.05.2022

According to the protocol on the decision of the authorized person from 09.03.2022 № 1 the customer decided to recognize the tender as not having taken place due to the impossibility of procurement due to force majeure, according to paragraph 1 of part five of Article 32 of the Law.

In the explanation of the complaint, the customer noted that the further need for this procurement was absent due to the following reasons:

- on January 24, 2022, martial law was imposed in Ukraine in connection with Russia's military aggression against Ukraine;
- the Ministry of Internal Affairs in the Cherkasy region organized around-the-clock duty to protect the customer's institution.

Before making a decision, the AMCU board refers to the letter of the Ministry of Economy dated 22.04.2022 № 3304-04 / 16796-06 "Regarding the changes made to the order of procurement during martial law". The Ministry of Economy notes the following: “In addition to the above, we inform customers who have started 4 procurement procedures before the introduction of martial law in Ukraine but do not have the opportunity to complete such procurement procedures due to circumstances beyond their control. According to the fifth part of Article 32 of the Law, the customer has the right to recognize the tender as not having taken place, if the procurement has become impossible due to force majeure. In this case, in the protocol, the customer may indicate among the grounds for such a decision the introduction of a state of emergency by the Decree of the President of Ukraine "On the state of emergency in certain regions of Ukraine" from 23.02.2022 № 63/2022 and the introduction of a military regime in Ukraine status by the Decree of the President of Ukraine of 24.02.2022 № 64/2022 "On the imposition of martial law in Ukraine" (as amended) ".

At the same time, in the protocol on the decision-making by the authorized person dated 09.03.2022 № 1 there is no information on the grounds for the impossibility of procurement due to force majeure. In particular, there is no information on the introduction of the legal regime of the state of emergency by the Decree of the President of Ukraine "On the introduction of the state of emergency in certain regions of Ukraine" from 23.02.2022 № 63/2022 and the introduction of the legal regime of martial law in Ukraine № 64/2022 "On the imposition of martial law in Ukraine" (as amended).

The customer has not proved and documented the legality of recognizing the tender as not having taken place, for the above reasons. Thus, the board considers that the procedure was canceled in violation of the Law.

Advice to customers: despite all the obvious circumstances, we recommend that you take seriously the justification for recognizing the tender as not having taken place due to the impossibility of procurement due to force majeure. Namely, in your organizational and administrative documents on the adoption of such a decision indicate the specific regulations based on which you make such a decision, with the appropriate arguments and causation.

The AMCU confirmed that the error in the terms of reference is not a reason to cancel the procurement procedure

Purchase ID: UA-2021-12-15-001774-b

Decision №4377-р/пк-пз from 03.05.2022

The complainant noted that according to the protocol decision of the authorized person, the customer made a technical error in the formation of the terms of reference, which can not be corrected, and this is interpreted as a violation of public procurement legislation, which can not be eliminated, and therefore the tender should be canceled.

In addition to explaining the merits of the complaint, the customer added that taking into account the request of the responsible person for the technical part of the documentation on the installation of necessary equipment at IFNMU (according to Table №1), which was not specified in the procurement documentation, the customer decided to cancel procurement procedures due to the impossibility of eliminating violations that have arisen due to identified violations of legislation in the field of public procurement, which cannot be eliminated by paragraph 2 of Part 1 of Art. 32 of the Law.

According to the complainant, as can be seen from the minutes of the authorized person – the customer single-handedly found an error in the terms of reference and gave this error a kind of interpretation as a violation of the law that arose in the field of public procurement.

However, the customer did not specify exactly the impossibility of eliminating violations that have arisen due to violations of public procurement legislation. He also did not describe such violations of the legislation in the field of public procurement, which cannot be eliminated, and what exactly are the violations of the legislation in the field of public procurement by the customer.

The decision of the AMCU board on this complaint was standard for such situations and corresponds to the practice that has been developing for two years: the customer has not proved the legitimacy of the cancellation of the procurement procedure on the above grounds. Participants and other members of the purchasing community were aware that the above situation was not uncommon and was challenged in 99% of cases.

However, in this decision, the AMCU Board decided, for the first time in recent practice, not to limit itself to the wording "The customer has not proved and documented", and added the following: "It should be noted that procurement in connection with the impossibility of eliminating the identified violations of legislation in the field of public procurement. Under such conditions, the customer did not prove and did not document the existence of violations that arose due to violations of the law in the field of public procurement, with a description that can not be eliminated.

The above confirms the growing tendency of the appellate body to more carefully consider complaints, in particular in the part of a more detailed description of the motivating part of the decision.

In essence, we recommend that customers carefully check the terms of reference of the procurement at the stage of preparation of documentation and/or at the stage of submission of proposals.

Participants are advised to more boldly appeal the decision to cancel the purchase on the grounds described above.

Decision on the complaint regarding the participant's tax debt

Purchase ID: UA-2022-01-21-009606-b

Decision № 4391-р/пк-пз from 04.05.2022

The complainant stated that the customer had wrongly chosen the winner of the participant who had a tax debt.

According to paragraph 1 of section III of the documentation, the proposal is submitted by uploading the necessary documents required by the customer in this tender documentation, namely: information on the bidder's compliance with the requirements specified in Article 17 of the Law.

As part of the proposal of the participant of SE "B", there is a certificate that at the time of submission of the proposal in SE "B" is not enough own funds to repay the entire tax debt. However, SE "B" repays the debt as cash flows to the company's account. SE "B" guarantees that this debt in no way affects the production activities of the enterprise. Also in the proposal of SE "B", there is information that SE "B" has current arrears of taxes and fees (mandatory payments), namely as of 02.02.2022 VAT – UAH 579077.48, and takes measures regarding repayment.

Under Clause 13 of Part 1 of Article 17 of the Law, the Customer decides to refuse the bidder to participate in the procurement procedure and is obliged to reject the bidder's tender offer or refuse to participate in the negotiated procurement procedure (except for the cases specified in paragraphs 2, 4, 5 Article 40 of the Law) if the participant in the procurement procedure has arrears of taxes and fees (mandatory payments) unless such participant has taken measures to install and defer such arrears in the manner and under the conditions specified by the legislation of the country of registration such a participant.

The complainant emphasizes that the participant of SE "B" did not provide in the proposal documents that would indicate the implementation of measures to installment and deferral of such debt following applicable law, and therefore the customer was obliged to reject the proposal of SE "B".

At the same time, the AMCU board in its decision cites all the documents submitted by SE "B", which relate to the confirmation of the absence of grounds for a refusal to participate under paragraph 13 of Part 1 of Art. 17 of the Law and emphasizes that the documentation does not contain separate requirements for the need to provide the participant in the proposal documents to confirm the implementation of measures to installment and deferral of such debt in the manner and under the conditions specified by the legislation of the country of registration. Thus, the complainant was denied the satisfaction of the complaint, including in this part.

Invisible "trap" in the tender documentation to confirm paragraph 6 of Part 1 of Art. 17 of the Law

Purchase ID: UA-2021-11-16-013871-a

Decision №4576-р/пк-пз from 12.05.2022

According to the tender review protocol, the reason for rejecting the complainant proposed that the bid of the bidder did not provide information that the official (official) of the bidder who signed the bid was not wanted. Given the above, the said participant does not meet the requirements established by the first paragraph of the third part of Article 22 of the Law.

The complainant considers the decision of the customer to reject his proposal in connection with the above to be illegal and unfounded.

The complainant notes that the Law stipulates that a participant in pursuance of paragraph 6 of the first part of Article 17 of the Law must confirm the following circumstances:

- an official of the participant was convicted of a criminal offense committed for selfish motives;
- such a criminal record has not been legally expunged or revoked.

The complainant emphasizes that the conditions for confirmation by the participant that his official is not wanted are not provided for in paragraph 6 of the first part of Article 17 of the Law or any other normative legal act.

In explaining the merits of the complaint, the customer notes that he, referring to the first paragraph of the third part of Article 22 of the Law, notes that this provision of the Law does not prohibit the customer from specifying other information requirements and the need to justify the inclusion of such information.

It should be noted that the terms of the tender documents were set out as follows: “the bidder in compliance with the requirements of Article 17 (confirmation of lack of grounds) must provide the following information: Information in any form has not been convicted of a criminal offense committed for selfish motives (in particular, related to bribery, fraud and money laundering), has no outstanding or outstanding criminal record and is not wanted".

After analyzing the conditions of the tender documentation and the availability of a general certificate confirming the absence of grounds under paragraph 6 of part 1 of Article 17 of the Law, the Board decided that the above certificate does not contain information that the official (official) of the procurement participant who signed the tender not wanted. In this connection, the complainant's proposal was lawfully rejected by the customer on the above grounds, and therefore there are no grounds to satisfy the complaint in this part.

Given the described decision, we recommend that participants carefully study the terms of the tender documents, as the customer may prescribe additional requirements. For example, they may not be provided by the requirements of Article 17 or other provisions of the Law, but are indicated by the customer by Part 3 of Article 22 of the Law, and therefore must be confirmed in the tender offer.

Decision on the complaint against related parties by paragraph 7 of Part 1 of Art. 17 of the Law

Purchase ID: UA-2022-02-09-003706-b

Decision № 4729-р/пк-пз from 25.05.2022

According to paragraph 7 of part 1 of Article 17 of the Law, the customer decides to refuse the bidder to participate in the procurement procedure and is obliged to reject the tender offer of the bidder or refuse to participate in the negotiated procurement procedure (except for paragraphs 2, 4, 5 of part second article 40 of the Law) if the tender offer is submitted by a participant of the competitive procurement procedure or the participant in the negotiated procedure is a participant who is related to other participants in the procurement procedure and/or authorized person (persons) and/or manager the customer.

The connection of the persons is not always obvious or it can be proved within the framework of the appeal to the AMCU, but in this situation, the complainant managed to do so.

Thus, the complainant stated that the customer had to reject the tender offer of the winner (hereinafter – Entrepreneur N.), as there are grounds established by part one of Article 17 of the Law. Namely, the winning bidder does not comply with paragraph 7 of part 1 of Article 17 of the Law, as the bid of the winner is submitted by the bidder, who is a related party to other bidders. In support of the fact that the winner and Participant 3 (hereinafter – Entrepreneur O.) are related parties, the complainant states the following.

The complainant notes that the winner's proposal includes a passport of a citizen of Ukraine, according to the records of which the marriage with Entrepreneur O. was registered in Entrepreneur N. and these participants have a common place of registration.

The second reason to confirm the connection of persons is the documents provided to confirm compliance with the qualification criteria by the winner, namely the Agreement № 10 from 01.09.2021 on the provision of services for maintenance, service, parking, repair of vehicles, and medical examination of drivers funds, concluded with Entrepreneur O. The complainant concludes that this indicates a stable economic relationship between these participants in the procurement procedure.

In addition, the complainant notes that having analyzed the submitted tender proposal of Entrepreneur O., he noticed that it lacked the documents required by the customer in the tender documentation. From this, the complainant concluded that Entrepreneur O. submitted his proposal, not to conclude a procurement contract but to ensure the required number of participants for the auction.

That is, the complainant, having analyzed the tender offer of the winner and Entrepreneur O., noticed signs of connection of persons (family relations between two participants and the existence of stable economic relations).

The AMCU Board notes that the winner's proposal includes:

- passport, on page 10 of which there is a note on the registration of marriage with an individual whose name coincides with the data of Entrepreneur O. and date of birth 1969 and the place of residence – st. Ts., 4b;
- Agreement № 10 "On the provision of services for technical inspection, maintenance, parking, repair of vehicles and medical examination of drivers of vehicles" concluded with Entrepreneur O.

At the same time, as part of the tender offer of Entrepreneur O., there is a passport with the date of birth 1969 and a note about the place of residence – st. Ts., 4b – in the same locality as the winner.

According to paragraph 20 of the first part of Article 1 of the Law, a related person is a person who, for the Law, meets, in particular, a natural person or his family members who exercise control over a participant in the procurement procedure.

Control is understood as the possibility of exercising a decisive influence on the economic activity of the participant in the procurement procedure.

For the Law, family members are considered to be spouses, children, parents, siblings, grandparents, grandchildren, adoptive parents, adopted children, as well as other persons, provided that they reside with and maintain a joint relationship with a related person. farms.

Based on this, the AMCU board established the connection between the person, namely the winner and Entrepreneur O., and noted that the customer is obliged to reject the winner's proposal, taking into account the grounds specified in paragraph 1 of Article 31 of the Law.

Given the above, we recommend that customers check for the presence of certain signs of connection of persons among the participants by paragraph 7 of part 1 of Article 17 of the Law. In turn, participants are advised not to forget that in the case of joint participation in the procurement procedure by participants who are related parties under the Law, there is a possibility of prosecution for anticompetitive concerted actions under paragraph 4 of Part 2 of Art. 6 and item 1 of Art. 50 of the Law of Ukraine "On Protection of Economic Competition", which further closes the way for such participants to participate in procurement procedures for 3 years.

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