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Gabriella Fribiczer, PPC

Structure and Functions of a Central Public Procurement Institution – the Public Procurement Council , Hungary. Gabriella Fribiczer, PPC. Regional Conference on “Public Procurement Reform in West Balkan” Pristina, 16-17 September 2008. OVERVIEW. I. STRUCTURE OF PPC II. LEGAL BASIS

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Gabriella Fribiczer, PPC

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  1. Structure and Functions of a Central Public Procurement Institution – the Public Procurement Council, Hungary Gabriella Fribiczer, PPC Regional Conference on “Public Procurement Reform in West Balkan” Pristina, 16-17 September 2008

  2. OVERVIEW I. STRUCTURE OF PPC II. LEGAL BASIS III. FUNCTIONS OF PPC IV. REVIEW PROCEDURES

  3. I. INSTITUTIONAL SET-UP STRUCTURE OF PPC

  4. PUBLIC PROCUREMENT COUNCIL (PPC) I. • PPC was established in 1995 (at the same time thatthe first PP Act came into force) • aim: enforcing the objectives of the PP Act • centralized, autonomous body • subordinated only to theParliament • must report to the Parliament every year • central budgetary organ • the Council convenes 7 to 8 times every year

  5. PUBLIC PROCUREMENT COUNCIL (PPC) II. • the PPC is constituted of 19 members: - President - 6 members responsible for the enforcement of the basic principles and public interest - 6 members representing the general interest of the contracting entities - 6 members representing the general interest of the tenderers • PPC members are not employed full-time (except the President) • the mandate of the PPC members is for not less than a two year term

  6. PUBLIC PROCUREMENT COUNCIL (PPC) III. The President of the PPC • is elected with a two-thirds quorum for a five year term of service by the members of the Council (may be re-elected once) • employed full-time • independent • civil servant • entitled to salary and other benefits as due to senior state secretaries

  7. STRUCTURE OF PPCSECRETARIAT • standing structure of PPC, led by the Secretary General • in charge of coordinating the activity of the Council, preparing and implementing the CPP’s decisions; • employing civil servants

  8. STRUCTURE OF PPCUNITS OF THE SECRETARIAT • Legal Unit: • giving legal advice (help-desk) • preparing draft recommendations, briefings • administering the list of conciliators • Unit of International Relations and Training: • international representation(ACPC, PPN, EU Lab, etc.) • coordination and control of pp training • Editorial Board: • publishing and transmitting pp notices • Economic Analysis Group: • management and analysis of statistics

  9. STRUCTURE OF PPCARBITRATION BOARD • operates alongside the PPC • set up also in 1995 • first instance public procurement review body • independent, administrative • permanent „quasi-judicial” body • ”tribunal” entitled to make a reference to the ECJ (request for preliminary ruling)

  10. STRUCTURE OF PPCARBITRATION BOARD • efficient operation of the Board is provided from the budget of the PPC • the Board consists of public procurement commissioners • the chairperson and the vice-chairperson of the Board are elected from the public procurement commissioners by the two-thirds of the members of the Council in attendance, for a five-year term(possibility of re-election is not restricted)

  11. PUBLIC PROCUREMENT COMMISSIONERS I. • number of commissioners (staffoftheBoard) is determinedbythe PPC • commissioners are appointed and recalled by the PPC • they are full-time civil servants • strict rules on conflict of interestes related to the contracting entities and the tenderers

  12. JUDICIAL REVIEW Municipal Court Municipal Court of Appeals Ordinary Civil Courts (ineffectiveness + damages) – will change in the future („one court for all” concept)

  13. II. LEGAL BACKGROUND

  14. PP LEGISLATION • the former PP Act : Act XL of 1995 • present PP Act: Act CXXIX of 2003 - entered into force on 1st of May 2004 as a general rule;

  15. PP LEGISLATION • implementation of Directives 2004/17 and 2004/18: 15th January, 2006 • implementation of Directive 2007/66: planned from 1st of January 2009 and partially from 1st of June, 2009

  16. THE PP ACT IN FORCE • all the essential rules on award procedures and on review procedures, as well as on the operation of the PPC can be found in this one Act • however: certain topics (e.g. centralised procurements, order of publication, tender notices) are regulated in secondary legislation (governmental and ministerial decrees)

  17. III. FUNCTIONS OF PPC

  18. FUNCTIONS OF PPC • preparing recommendations clarifying recurring problems in applying pp law • briefings on practical issues are issued by the President • help-desk: giving oral and written opinions to contracting entities and tenderers • non of these are legally binding • briefings and recommendations are published in the PP Bulletin

  19. FUNCTIONS OF PPC • initiating the modification of PP legislation, involved in the consultation process • maintaining international relations • maintaining records (database) on public procurement

  20. FUNCTIONS OF PPC - TRAINING Training activities: first: participation in training and ‘further training’ of contracting entities and tenderers, later (from 2004): coordination and supervision of training activities in the field of public procurement.

  21. FUNCTIONS OF PPC - TRAINING • from 1997: training of trainers programme with the support of World Bank • training institutions were selected (University of Economy), manual was elaborated and published • 20 trainers were trained • trainers participated several trainings in the organisation of the PPC (mainly local government officers at county seats)

  22. FUNCTIONS OF PPC - TRAINING • later on (from 2000-2003): 2-3 day-long workshops – target group: local government officials who had already acquired competences in public procurement; aim: providing more extensive knowledge • in 2002-2003: in cooperation with Budapest Business School (an institution for higher education): 72 hour training course focusing on public procurement (also case-studies)+ legal and financialknowledge

  23. FUNCTIONS OF PPC - TRAINING • since 2004: max. 500 (220) hour long PP training is organized by different organizations/ accredited, state-approved training, certification in the end (requested more and more often by contracting entities when hiring pp people) • members and staff of the PPC is present during the exams monitoring the quality of training • supervision through setting out professional and examination criteria

  24. FUNCTIONS OF PPC - TRAINING • in the framework of coordination and supervision of PP training: PPC publishes information related to pp training activities (information on workshops, trainings together with their duration, trainers involved), as well as information about the results of the exams • PPC contacts any training organisation if detects any problems concerning the quality of the training

  25. FUNCTIONS OF PPC - TRAINING • training of civil servants by the Hungarian Public Administration Office – PPC participated in the elaboration of the training materials and in the selection of trainers • several universities offer public procurement courses (part of the training, e.g. Faculty of Law) or special courses – PPC participates in the elaboration of the programmes and training materials • members and staff of PPC participating at pp events (workshops, trainings) as a speaker/trainer when requested

  26. FUNCTIONS OF PPC • administering lists: • contracting entities • approved contractors • Official Public Procurement Consultants • publishing the Official Journal of the PPC: the Public Procurement Bulletin

  27. MONITORING ACTIVITY President/Members of PPC • ex officio proceedings initiated by the President or the Members of PPC • possibility for the President to require information from any contracting entities

  28. CONTROL OF NOTICES • notices related to public procurement has to be published through the PPC • before notices are forwarded or published, the Editorial Board revises all of them both regarding their form and content • strict time limits apply for this control activity

  29. CONTROL OF NOTICES • if the notice breaches PP law, it is sent back for reconsideration • notices sent back to the Editorial Board with the same content are forwarded or published, but the PPC is also informed • members of the PPC are entitled to initiate ex officio proceeding of the Arbitration Board

  30. CONTROL OF AMENDMENT/ PERFORMANCE OF CONTRACTS • contracting authorities shall publish a notice in the PP Bulletin regarding the amendment and the execution (completion) of the contract • two model notices: • one for modification • one for execution

  31. CONTROL OF AMENDMENT/ PERFORMANCE OF CONTRACTS • PP Act sets out strict conditions for amending the contract -> ‘events not foreseeable’ • the Arbitration Board has the right to settle legal disputes regarding the amendment/ performance of the contract concluded in a public procurement procedure • any interested party may initiate the procedure of the Arbitration Board based upon the information published

  32. CONTROL OF AMENDMENT/ PERFORMANCE OF CONTRACTS • in addition, should emerge the suspicion of a violation of law, the PPC shall forward the notice to bodies generally controlling pp • these controlling bodies (e.g. State Audit Office, Government Control Office) may initiate the ex officio proceeding of the Arbitration Board within one year of the infringement

  33. CONTROL OF NEGOTIATED PROCEDURES WITHOUT PRIOR PUBLICATION OF A NOTICE • PP Act obliges CAs to send the contract notice, along with the information and documents justifying the application of this procedure to the Chairman of the PP Arbitration Board • if the Chairman finds that the application of this procedure was unfounded, he/she initiates the ex officio review procedure of the Arbitration Board

  34. CONTROL OF NEGOTIATED PROCEDURES WITHOUT PRIOR PUBLICATION OF A NOTICE • the Chairman has 15 days to take this decision • if the panel of the Commissioners finds that the application was unlawful, it sets aside of the decision of the CA concerning the choice of procedure (except the contract has already been concluded) • in the latter case the Board imposes a fine (up to the 30 % of the value of the contract)

  35. STATISTICAL OBLIGATIONS • PPC is obliged to report to the Parliament and fulfill statistical obligations towards the EU • sources: • Centralized publication ->contract award notices • PP Act obliges CEs to prepare an annual statistical summary, in a prescribed format, about their annual pps. This summary shall be communicated to the Council not later than May 31st following the year in question.

  36. SOME STATISTICS FOR 2008 • the overall value of public procurement: 1521,3 billion HUF above the national thresholds (no information about low-value procurements yet) • 4957 procedures above the thresholds • 11 bids submitted as an average • 6% (value) won by foreign tenderers

  37. IV. REVIEW PROCEDURES

  38. PROCEDURE OF THE ARBITRATION BOARD May be initiated • upon application or • ex officio (two types)

  39. EX OFFICIO PROCEDURES Ex officio procedures may be initiated by organisations defined in the PPA: • Members or the President of the PPC • the State Audit Office • the Government Control Office • the Public Administration Office of the county or Budapest • the Hungarian State Treasury (in respect of the use of tied subsidy or addressed subsidy granted to local governments) • the parliamentary commissioners • the entity providing subsidy for public procurements; • the entity authorized to conduct public procurement procedures in the scope of centralised public procurement

  40. DECISIONS OF THE ARBITRATION BOARD IN 2007 • rejection (appeal unfounded): 318 • the case was terminated: 148 • appeal founded: 227 • pending proceedings: 58

  41. NUMBER OF REVIEW PROCEDURES IN 2007 • number of review procedures: 751 (decrease: in 2005: 1091, 2006: 858) • among these: upon the initiative of the Chairperson of the Arbitration Board: 109

  42. PUBLICATION OF THE DECISIONS AND THE RULINGS • both the decisions of the Arbitration Board and the rulings of the courts shall be published in the Public Procurement Bulletin (official organ of the PPC) • as the Bulletin is published on the Internet as well, the decisions and the rulings are also available there, free-of-charge

  43. THANK YOU FOR YOUR ATTENTION www.kozbeszerzes.hu fribiczer.gabriella@kozbeszerzesek-tanacsa.hu

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