Joint fulfillment of conditions of participation by consortium and limits of guarantee criteria – important KIO ruling
One of the recent cases heard by the National Board of Appeals, in which our law firm represented the Appellant – a large contractor in the construction industry – concerned a public procurement procedure for the expansion and reconstruction of a wastewater treatment plant and the construction of a sewage and water supply system.
The subject of the appeal were both the conditions for participation in the procedure and the bid evaluation criteria adopted by the contracting authority. According to the Appellant, these solutions violated the provisions of the Public Procurement Law, leading to an unjustified restriction of competition and an actual narrowing of the circle of contractors capable of carrying out the investment.
Joint fulfillment of the conditions for participation by the consortium
One of the key elements of the dispute was the issue of demonstrating the fulfillment of participation conditions by contractors jointly bidding for the contract. The contracting authority assumed that technical experience and performance capabilities must be met independently by each of the consortium members.
Such a construction in practice significantly restricted access to the proceedings, eliminating contractors implementing complex infrastructure investments in a partnership model. In particular, it affected smaller and medium-sized companies, which – in line with the realities of the construction market – often combine their competencies in consortia to jointly meet the technical and organizational requirements of large projects.
The National Board of Appeals shared the argumentation of the Appellant, indicating unequivocally that the provisions of the PPL do not impose an obligation on consortium members to individually meet all technical conditions by each of them. On the contrary – the legislator has provided for the possibility of jointly demonstrating experience if it was gained in the same composition of contractors.
The Chamber’s position remains consistent with previous NAC case law and market practice, in which consortia play an important role in increasing the competitiveness of proceedings. The settlement confirms that contractors can effectively combine their potentials, without the risk of elimination already at the stage of verification of the conditions for participation.
Bid evaluation criterion for warranty period
The second major issue in the case was the evaluation of the criterion for the warranty and guarantee period. The contracting authority formulated it in an open-ended manner, leaving contractors fully free to declare the length of the warranty period.
In the Appellant’s opinion, this construction of the criterion encouraged the offering of extremely long, in practice unrealistic warranty periods. These declarations, although scored, would not translate into real value for the contracting authority, and at the same time could lead to an increase in the cost of investment implementation or generate risks of disputes at the stage of contract execution.
The National Board of Appeals found that the criterion constructed in this way violated the principle of proportionality and the principle of fair competition. Consequently, the Chamber ordered the contracting authority to introduce a maximum permissible warranty period, indicating 72 months as a value that corresponds to real technical possibilities and market standards.
The introduction of this limit increased the transparency of the procedure, reduced the risk of bid manipulation and protected the interests of the contracting authority against unjustified increases in investment costs.
Significance of the ruling for the public procurement market
The ruling of the National Board of Appeals is an important example of the protection of the principles of fair competition, equal treatment of contractors and proportionality of conditions imposed in public procurement procedures.
This settlement confirms the permissibility of a more flexible approach to assessing the capabilities of consortia, strengthening the position of smaller and medium-sized companies and countering the practice of excessive “point preference” for bids through declarations detached from market realities.
For procurers, this means greater predictability and rationality in proceedings, and for contractors – more transparent and fair rules of competition. In a broader perspective, the ruling promotes more effective use of public funds and more efficient implementation of infrastructure investments of key importance for the development of local communities.
If you are interested in the details of the case (e.g., reference) – you are welcome to contact directly Jedrzej Witaszczak, legal counsel and manager in the public procurement team: j.witaszczak@dsk-kancelaria.pl
