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УПРАВЛЕНИЕ РАЗВИТИЕМ ИНТЕГРИРОВАННЫХ ЭКОНОМИЧЕСКИХ
СИСТЕМ
YRK.339.9
EEK: 65
Kosinski E
LEGAL GUARANTEES OF ECONOMIC COMPETITION IN THE PUBLIC PROCUREMENT UNDER INTERNATIONAL LAW REGULATIONS. THE 1994 GOVERNMENT
PROCUREMENT AGREEMENT1
Abstract: this publication constitutes an attempt to assess legal guaranties of competition between contractors in broadly perceived process of granting public procurement, which means not only entering into a contract subject to the specific legal regime, concluded by a public purchaser, or possible private purchaser subordinated to that legal regime, with a contractor (contractors) in order to satisfy its demand for certain goods or services, but also a due course of the whole process of granting public procurement, perceived as a sequence offactual and legal actions beginning with the moment of public announcement of a procurement, sending an invitation for submitting offers or sending invitation to negotiate for selection of an offer of a given contractor, up till final fulfilment of all obligations of the parties under the public procurement contract. The most important in this context is to indicate mutual co-relations between competition and fair competition in area of public procurement system and to point other major principles of the public procurement process, such as non-discrimination rule, transparency, impartiality and objectiveness rule, legality rule, openness, rule of written form, primate of using tender mode (competitive mode, in another words it is a rule of extraordinary application of non-competitive modes or primate of granting public procurement in a tender mode). All of those rules constitute together components of the guarantee of genuine competition within the whole process of granting a public procurement. This work starts a series of publications which tend to analyze legal safeguards of competition within the public procurement legal system under all different sets of regulations, including international law, the European Union regulations and the Polish internal state regulation.
1. Introduction
The essay is the first part of the series of publications which are to tend to analyze legal safeguards of competition within the public procurement legal system under all different sets of regulations, at all various levels, including international law in the subject area, the European Union regulations and the Polish internal state regulation of the public procurement2.
An appropriate and rational legal regulation of acquisitions undertaken by public entities recently has become the crucial factor which influences economic development and social welfare of
modern state. Moreover, the global economic crisis increases the necessity of seeking the most effective system of organising such purchases. It is naturally connected with an amount of public funds involved in many public projects, like big constructions or huge military spending (for example, in 2015 USA spent 597.5 bn. dollars, 3.3% of GDP; China spent 145.8 bn. dollars, 1.2% of GDP; Saudi Arabia spent 81.8 bn. dollars, 12.9% of GDP; Poland spent 10.3 bn. dollars, 2.1% of GDP)3.
Noteworthy, legal regulation of public procurement and antitrust regulation (competition protection law) are perceived as equally relevant in
1 This article has been prepared as a result of Author's participation in the Russian Federation scientific project entitled "Programmed and aimed managemed of the complex development of the Arctic area of the Russian Federation" („Программно-целевое управление комплексным развитием Арктической зоны РФ"); participant of the scientific project financed by the Russian Science Fund No. 14-38-00009, realized by the World Economy and Regional Industrial Policy Department of Peter the Great St. Petersburg Polytechnic University in St. Petersburg, Russian Federation; the code of the State Scientific and Technical Information (ГРНТИ, Государственный Рубрикатор Научно-Технической информации): 06.52.35; the Head of the project: Professor Iwan-ter Viktor Viktorovych, Doctor of Economic Sciences; 3-year project (2014-216); the area of knowledge, main code of the qualifica-tor: 08- Human and Social Sciences, 08-155 - Forecasting of the socio-economic development, state regulation of the economy and management of the socio-economic processes; competition of 2014 titled „Anew conduct of the fundamental scientific reaserch and inquiery reaserch, created jointly by universities' laboratories and laboratories of scientific organizations".
2 See: Eryk Kosinski, Prawne gwarancje wolnej konkurencji w systemie zamówien publicznych w Polsce (in:) Marcin Sma-ga, Mateusz Winiarz, Dyscyplina finansów publicznych. Doktryna, orzecznictwo, praktyka, Warszawa 2015, p. 297 ff.
3 See: The Military Balance 2016. The annual assessment of global military capabilities and defence economics, The International Institute for Strategic Studies,https://www.iiss.org/en/publications/military%20balance/issues/the-military-balance-2016-d6c9 (25.05.2016).
terms of competition on the market1. It may be said that in fact the main goal of regulation of public procurement is to guarantee a competition between entities struggling for acquisition of goods and services from the public sector. In such terms, other goals of the public procurement legal regulations have secondary importance and in fact they circulate around the main goal. Therefore, secondary goals cannot remain contradictory to the main goal. As a consequence, it seems that public procurement law belongs to the same group of legal regulations as competition law (antitrust regulation). It is rightly underlined in the literature that "Antitrust policy aims at preventing companies from abusing market power, restraining free trade and/or forming anti-competitive agreements. Its objective is to foster competition in the interest of consumer welfare"2.
As for the purpose of this essay, the public procurement shall be understood as the whole process of purchasing goods, services, labour etc. by public entity, finalized after a public tender by conclusion of an appropriate agreement (contract). This process includes preliminary announcement about planned public procurement organised by a certain public institution, announcement about an acquisition, technical specifications of tender, formal conclusion of a public procurement contract of and its fulfilment (till the very moment when all mutual obligations of parties expire). That means a public procurement in broad meaning (public procurement sensu largo)3.
1 Stefan E. Weishaar, Cartels, Competition and Public Procurement, Cheltenham, UK, Northampton, MA, USA, 2013, p. 1.
2 Panagiotis N. Fotis, Competition Policy and firm's damages (in:): Joseph E. Harrington Jr, Yannis Katsoulacos, Recent Advantages in the Analysis of Competition Policy and Regulation, Cheltenham, UK - Northampton, MA, USA, 2012, p. 116.
3 In Poland the term "public procurement" is defined as subordinated to the specific legal regime contract, which is concluded by public purchaser or private purchaser subject to that regime, named a Tendering Authority, with a Supplier (named originally in Polish "a Performer"), in order to satisfy its demand for certain goods (commodities or services) - see art. 2 point 12 of the 2004 Public Procurement Act (act of 29 January 2004 on public procurement; consolidated version Official Journal of the Polish Republic of 2013, sec. 907 with further amendments). According to the European Union law, there is a division between a public tender and a public contract. According to the art. 1 sec. 2 of the Directive of the European Parliament and of the Council 2014/24/UE of 26 February 2014 on public procurement and repealing Directive 2004/18/EC (Official Journal of the European Union L 94, 28.3.2014, p. 65) the public procurement (franc. la passation d'un marché publics; niem. öffentliche Auftragsvergabe) defines as "the acquisition by means of a public contract of works, supplies or services by one or more contracting authorities from economic operators chosen by those contracting authorities, whether or not the works, supplies or services are intended for a public purpose". Furthermore, the term ofpublic contracts (franc. marchés publics; niem öffentliche Aufträge) is defined by art. 2 sec. 1 point 5 of Directive 2014/24/UE as " contracts for
Public procurement can be also perceived as
a form of spending public funds, where tendering
institutions intend to spend public money as to
achieve certain economic effects (acquisition of
goods, services, supplies, constructions) in a com4
petitive environment .
Taking all abovementioned remarks into account, it can be stated that legal regulation of public procurement constitute a part of general regulation of competition on the market (free market-protective function). Other functions have secondary meaning, for example economic effectiveness (value for money), anti-crime policy (general fight against bribery), promotion of economic development (industrial policy), achieving certain social aims (social welfare, like general employment policy, stimulation of disabled persons' employment, post-prison employment, young people employment, etc.), or environment protection aims (pro-ecological policy). This concept may be supported by the broad acceptance of variety of tasks put before competition law besides maximising of economic effectiveness before, such as for instance European integration, social welfare, or industrial policy5 .
2. Competition
The concept of competition unquestionably belongs to the most ambiguous concepts of law, economy and others scientific areas6. What is more, lawyers and economists understand this concept in different ways7.
pecuniary interest concluded in writing between one or more eco-
nomic operators and one or more contracting authorities and having
as their object the execution of works, the supply of products or the provision of services". So, obviously there is a difference in terminology between Polish and the EU regulations. Consequently, a harmonization of terminology seems to be required.
4 Leon Kieres in: Maciej Guzinski, red., Zamówienia pub-liczne jako przedmiot regulacji prawnej, Wroclaw 2012, p. 12.
5 Maximising of economic effectiveness is recognized as the main aim ofpublic procurement regulations by Marek Szy dlo. Vide: Prawna koncepcja zamówienia publicznego, Warszawa 2014, p. Iff. There are different approaches in the literature as far as aims of public procurement regulations concerned. For example, Michal Wiel-onski in: Europejskie prawo zamówien publicznych jako narz^dzie polityki spoleczno-gospodarczej, Warszawa 2013, p. 80, writes: „generally, public procurements have to ease pathologies connected with forced sequestration of money of owners and giving them bureaucratic management". Further, on p. 87 this author points out that public procurements constitute a manner of accomplishment of public expenditure.
6 See among others: Friedrich August von Hayek, The Meaning of Competition (in:) Individualism and Economic Order, The University of Chicago Press, Chicago,Third Impression 1958, pp. 92-94.
7 See consideration about concept of competition in: Marice E. Stucke, What is competition?, (in:) Daniel Zimmer, ed., The Goals of Competition Law, Cheltenham, UK - Northampton, MA, USA, 2012, p. 27. See additionally: Moritz Lorenz, Introduction to EU Competition Law, Cambridge 2013, p. 1 ff
The term "competition" is derived from Latin. The initial meaning of "competition" was "common search"1. However, nowadays competition is perceived as rivalry between (among) organisms, animals, groups etc. for territory, niche, resources, goods, female/male partner, prestige, respect, prizes, social status, group status, leadership. Competition is the opposite term to cooperation2. In the economy competition means rivalry between salesmen aspiring to achieve such goals as growth of income, shares in market or sales volume by diversification elements of marketing composition: price, product, strategy of distribution and promotion, and efforts of two or more subjects acting separately to assure themselves change with third party by offering the best conditions3.
Robert H. Bork in his fundamental work „The Antitrust Paradox: A Policy at War with Itself' (1978) described five possible meaning of competition. Firstly, competition can be perceived as a rivalry process. Secondly, competition can be understood as a state of lack of restrictions of doing business. Next, competition is a state of market where an individual purchaser or seller does not affect price of buying or selling goods. Fourthly, competition can be perceived as a state of atomisation of sections of a market. According to the last conception, competition is a state when interest of a consumer is fully protected (without intervention of a court)4.
According to some economists there is no need to define the term of competition. More important is to describe all the crucial features of competition. Great Polish economist professor Adam Noga pointed at such characteristics as a fear towards competitors as a motivation to act more effectively, lack of space for all entrepreneurs within a certain sector of economy, selection of entrepreneurs and adjustment to the needs of consumers, etc5. Robert Bork and Ward S. Bowman has written that the most important feature of competi-
1 See: Grupa Lizbonska, Granice Konkurencji, Warsaw 1996, p. 5 i p. 13. According to the Latin dictionary, verb 'competo' (competo, competere, competivi, competitus) means "apply for, fight together, meet in the same time, agree, candidate together, be eligible". See: Slownik lacinsko-polski. Wedlug slownika Hermana Mengego i Henryka Kopii, opracowal Kazimierz Kumaniecki, Warszawa 1986, p. 102, and AbleMe-dia English-Latin Latin-English Dictionary by William Whitaker, http://ablemedia.com/ctcweb/showcase/ word-sonline.html (20.02.2016).
2 Competition, Wikipedia, http://en.wikipedia.org/wiki/ Competition (25.05.2016).
3 Mirriam-Webster On-line Dictionary, http://www.merriam-webster.com/dictionary/competition (20.05.2016).
4 „... a state of affairs in which consumer welfare cannot be increased by moving to alternative state of affairs through judicial decree". Robert Bork, The Antitrust Paradox A Policy at War with Itself, New York 1978, p. 58 ff.
5 Adam Noga, Pi^ta fala konkurencji, Roczniki Kole-
gium Analiz Ekonomicznych, Warszawa 2003, z. 11, p. 138.
tion is" the essential mechanism of competition and its prime virtue that mere efficient firms take business away from the less efficient'6 .
However, from the juridical point of view, strict describing the concept of competition seems to be crucial. An accurate definition of competition circumscribes an area of state intervention in term of antitrust. It delineates the borders of public interest at stake7.
Depending on economic ideas, we can perceive competition from many perspectives, starting from perfect competition (also known as symmetric competition or pure competition) to imperfect competition (also known as asymmetric competition) and monopolistic competition. In 1940s and 1950s, there was born the new theory of workable competition and effective competition in the economy8. German economists from from the Freiburg Ordoliberal School have created concept of so-called "complete competition" (vollständiger Konkurrenz; vollständiger Wettbewerb), which is fact is similar to the perfect competition9 .
Having shortly analyzed the concept of competition, it is necessary to approach the term of "free competition", which is often used in literature. The concept of free competition can be seen as a phenomenon of full and unrestricted competition on the market (which is similar to the perfect competition) or, on the other hand, may signify freedom to compete10. Generally speaking, when approaching
6 Robert H. Bork, Ward S. Bowman, The Crisis in Antitrust, Columbia Law Review Vol. 65, No. 3, 1965, p. 364.
7 See: Elzbieta Modzelewska W^chal, Ustawa o ochronie konkurencji i konsumentöw. Komentarz, Warszawa 2002, p. 14-15. See further considerations in: Eryk Kosinski, Rodzaje i zakres sekt o-rowych wyl^czen zastosowania ogolrych regul ochrony konkurencji, Poznan 2007, p. 55 ff; Pinar Akman, The Concept of Abuse in EU Competition Law. Law and Eonomic Approaches, Oxford and Portland, Oregon, 2012, p. 25 ff.
8 The workable competition theory was developed by John Maurice Clark (see his publication: Toward a Concept of Workable Competition, The American Economic Review 1940, Vol. 30, Nr 2, p. 241 ff).Moreover, in 1961 he introduced the effective competition theory - see: Competition as a Dynamic Process, Washington D.C. 1961, p. IX ff). See additionally: Michaela Drahos, Convergence of Competition Laws and Policie in the European Community. Germany, Austria and Netherlands, The Hague - London - Boston 2001, pp. 40-41; Simon Bishop, Mike Walker, Economics of E.C. Competition Law: Concepts, Application and Measurment, London - Dublin - Hong Kong 1999, p. 13 ff; F.A. von Hayek, supra, p. 92 ff.
9 See more information about those theories in: Liza Lovdahl Gormsen, A Principled Approach to Abuse of Dominance in European Competition Law, Cambridge 2010, p. 20 ff; and: Maher M. Dabbah, International and Comparative Competition Law, Cambridge 2010, p. 20 ff.
10 See: Leopold Caro, Liberalizm i kapitalizm, Wloclawek 1937, pp. 6-7; Karol Sobczak, Wolnosc gospodarc-za a regulacje, Zycie Gospodarcze 1997, Nr 29, p. 60. See considerations on free competition in: Ewa Przeszlo, Zasada konkurencji w ustawie - Prawo zamöwien publicznych, (w:) Granice wolnosci gospodarczej w systemie spolecznej gospodarki rynkowej. Ksi^ga jubileuszowa z okazji 40-lecia pracy nauko-wej prof. dr hab. Jana Grabowskiego, Katowice 2004, p. 217-
free competition the idea of freedom is prerequi-site.„Freedom in common terms means owning pe r-sonal spiritual space (in internal sense), and additionally lack of any personal coercion, lack of restrictions from the government and other authorities together with social customs and natural conditions (in outer sense). In other words, freedom is perceived as a lack of external restrictions, both physical and psychological, imposed by other people (...) the idea of freedom generates necessity of elimination of obstacles and behaviours which restrict an individual in terms of his/her choices and actions"1.
It has to be marked that competition does not enjoy in any country such position (such extent of protection) as freedom of doing business (economic freedom). Moreover, nowhere competition (free competition) does constitute determinant of public interest or such legally protected public interest as freedom of doing business. The only one state, in which constitution guarantee the freedom of competition is Mexico. Mexican Constitution of 1917 (Constitution Politica de las Estados Unidos Mexicanos) in art. 28 prohibits creating monopoly, granting tax exemptions, price speculations, or any other actions which restrict competition in production, industry, trade and services, concluding an agreement between producers, manufacturers, merchants, carriers, providers of services, aiming at competition restrictions or forcing consumers to pay unreasonable prices, and generally prohibits achieving exclusive and undue benefits by one or more individuals at the expense of entire society or certain social class. What is interesting, art. 28 is located in Section I of Constitution of Mexico titled "Individual guaranties" (Chart of liberties and civil rights)2.
3. Safeguards of competition in the Government Procurement Agreement
The first level of regulation that ought to be considered in term of legal regulation of public procurement is international law. In the area of public procurement generally there is only one set of regulation, namely the 1994 Government Procure-
218.
1 Ewa Kozerska (in:) Ewa Kozerska, Piotr Sadowski, Andrzej Szymanski, ed., Wolnosc w uj^ciu historycznym i prawnym. Wybrane zagadnienia, Toruñ 2010, p. 6.
2 Legal regulation of competition law which is set in art. 28 of the Constitution of Mexico shall be regarded as being quite extensive. Nevertheless, more detailed regulation was introduced by the Mexican Federal Act of 24 December 1992 on Economic Competition (Ley Federal de la Competencia Económica) Diario Oficial de la Federación of 24.12.1992 r. (English version: http://r0.unctad.org/en/substites/cpolicy/laws; 24.05.2016). See: Eduardo Pérez Motta, Heidi Claudia Sada Correa, Competition Policy in Mexico (in:) David Lewis, ed., Building New Competition Law Regimes. Selected Essays, Cheltenham, UK - Northampton, MA, USA, 2013, p. 3 ff.
ment Agreement (further: the GPA, or: the Agreement).
The Government Procurement Agreement (GPA) is a multilateral (in fact plurilateral) international agreement signed under the auspices of the World Trade Organisation (WTO), former General Agreement of Tariffs and Trade (GATT), in Marrakech (Morocco) in April 1994. The Agreement came into force in January 19963 .
The precedent of the GPA was the Tokyo Round Code on Government Procurement 1979 which was signed during Tokyo Round of negotiation over GATT (came into force in 1981). Tokyo Round Code on Government Procurement was novelised 1987 Revised Tokyo Round Code on Government Procurement 1987 (this version came into force in 1988).
At present, the Revised Government Procurement Agreement is in force. Works over the novelisation started of GPA started in February 1997 and Revised Agreement came into force in April 20144
Among Parties of the GPA are European Union and all others EU-members states, including Poland. In total, GPA has 46 signatories - members of WTO. Then 29 countries have observer status, remaining within so-called the Agreement Committee. Towards 9 countries with observer status there is the process of accession to the Agreement pending (Albania, Australia, China, Georgia, Jordan, Kyrgyz Republic, Moldova, Oman, Tajikistan)5.
At present, there are following countries as parties to the GPA: Armenia (2011, 2015)6, Austria (1996), Belgium (1996), Bulgaria (2007), Canada (1996, 2014), Cyprus (2004), Croatia (2013), Czech Republic (2004), Denmark (1996), Estonia (2004), European Union (Revised GPA 2014), Finland (1996), France (1996), Germany (1996), Greece (1996), Hong-Kong (China; 1997, 2014), Hungary (2004), Iceland (2001, 2014), Ireland (1996), Israel (1996, 2014), Italy (1996), Japan (1996, 2014), Latvia (2004), Lithuania (2004), Republic of Korea (South Korea; 1997, 2013), Lichtenstein (1997, 2014), Malta (2004), Montenegro (2015, 2015), the Netherlands (with respect to the island of Aruba; 1996), New Zealand (2015, 2015), Norway (1996, 2014), Poland (2004), Portugal (1996), Romania (2007), Singapore (1997, 2014), Slovak Republic
3 See web page of World Trade Organisation (WTO): https://www.wto.org/english/tratop_e/gproc_e/gp_gpa_e.htm (25.05.2016).
4 Text of the Agreement in: Official Journal of the European Union L 68, 7.3.2014, p. 4.
5 See WTO official webpage, supra.
6 Those given dates are dates of entry into force, consecutively: GPA of 1994, and then GPA Revised Version. If a given country did not ratify yet Revised GPA, there is only date of entry into force of 1994 GPA given.
(2004), Slovenia (2004), Spain (1996), Sweden (1996), Switzerland (1996, pending), Chinese Taipei (2009, 2014), United Kingdom (1996), United States (1996, 2014), and Ukraine (2016, 2016).
So, hence not that many countries are parties to GPA (in comparison with, for example, United Nations member countries), it is called "plurilateral" treaty, instead of "multilateral" treaty. Strikingly, there is no any country of Latin America, nor there is any African country as a party to GPA now.
There are following countries with observer status in the GPA Committee: Albania (since 2001), Argentina (1997), Australia (1996), Bahrain (2008), Cameroon (2001), Chile (1997), China (Peoples Republic of China, 1997), Colombia
(1996), Costa Rica (2015), Georgia (1999), India (2010), Indonesia (2012), Jordan (2000), Kyrgyz Republic (1999), Malaysia (2012), Moldova (2000), Mongolia (1999), Oman (2001), Panama
(1997), Pakistan (2015), Russian Federation (2013), Saudi Arabia (2007), Seychelles (2015), Sri Lanka (2003), Tajikistan (2014), Thailand (2015), The Former Yugoslav Republic of Macedonia (2013), Turkey (1996), and Viet Nam (2012).
According to the preamble of the Agreement the main goals of the Treaty is to achieve greater liberalisation, together with an development, expansion and improvement of international trade. This goal shall be reached by counteracting any protection of domestic suppliers of goods and services and any discrimination of foreign suppliers, goods and services. Therefore, it may be said that the main task of this regulation is to promote competition among contractors in the process of public procurement.
A fulfilment of competition principle takes place by multiple legal regulations of the Agreement. To achieve this certain mechanism were implemented:
- open tendering rule (defined as "a procurement method whereby all interested suppliers may submit a tender", art I (m) of the GPA),
- selective tendering rule (defined as "a procurement method whereby only qualified suppliers are invited by the procuring entity to submit a tender"; art. I (q) of the GPA, art. IX secs. 6-8 of the GPA)1,
regulations of a valuation of the tender and general ban on division of tender (art. II par. 68), non-discrimination rule (art. IV secs. 1-2 of the GPA),
- national treatment rule (art. IV sec. 2 of
1 See: Andrzej Panasiuk, System zamôwien publicz-nych w Polsce, Warszawa 2004, p. 299, and pp. 300-303.
the GPA)2,
- requirement of transparent and impartial conduct of procurement (art. IV sec. 4 of the GPA),
- rules of origin (art. IV sec. 5 of the GPA),
- prohibition of any offset obligations (art. IV sec. 6 of the GPA),
information duties and transparency rules (art. VI titled "Information on the Procurement System", art. IX titled "Qualification of Suppliers", art. XVI titled "Transparency of Procurement Information", art. XVII "Disclosure of Information"), including duty to publish a formal information (notice) about intended public procurement (together with regulation of minimum content of such information, art. VII sec. 2 of the GPA; art. VII titled "Notices") - "a notice of intended procurement in the appropriate paper or electronic medium" (papers and media are listed in Appendix III to the GPA); a separate duty to publish a formal information (notice) about planned public procurement each fiscal year as for the future year ("notice of planned procurement", art. VII secs. 4-5 of the GPA); duty to inform about decisions of procuring entity ("A procuring entity shall promptly inform any supplier that submits a request for participation in a procurement or application for inclusion on a multi-use list of the procuring entity's decision with respect to the request or application", art. IX secs. 14-15 of the GPA); duty to promptly make available tender documentation to ensure that interested suppliers have sufficient time to submit responsive tenders, to provide, on request, the tender documentation to any interested supplier; and to reply to any reasonable request for relevant information by any interested or participating supplier (provided that such information does not give that supplier an advantage over other suppliers, art. X sec. 10 of the GPA); duty to promptly inform participating suppliers of the procuring entity's contract award decisions (on the request of a supplier in writing, art. XVI sec. 1 of the GPA), and duty to publish a notice in the appropriate paper or electronic medium about all awards granted by procuring entity (with minimum content of such information, art. XVI sec. 2 of the GPA),
precise regulation of conditions, assessment criteria and grounds of possible exclusions of any supplier from the tender (art VIII secs. 1-4 of the GPA),
- precise rules on qualification of suppliers (including registration systems and qualification procedures (art. IX sec. 1-3),
- rules on selective tendering (art. IX secs.
2 Non-discrimination rule and national treatment rule are described as basic principles of the Agreement concerning participation of foreign subjects in a process. Ibidem, p. 296.
4-6 of the GPA),
regulation of technical specifications and tender documentation (art. X of the GPA); according to the art. X sec. 1 of the GPA procuring entity shall not prepare, adopt or apply any technical specification or prescribe any conformity assessment procedure with the purpose or the effect of creating unnecessary obstacles to international trade, and according to art. X sec. 5 of the GPA procuring entity shall not seek or accept, in a manner that would have the effect of precluding competition, advice that may be used in the preparation or adoption of any technical specification for a specific procurement from a person that may have a commercial interest in the procurement,
- strict regulation on permissibility of limited tendering ("Provided that it does not use this provision for the purpose of avoiding competition among suppliers or in a manner that discriminates against suppliers of any other Party or protects domestic suppliers", art. XIII sec. 1 of the GPA),
- rules on permissibility of conducting negotiations by procuring entity (art. XII of the GPA),
- rules on electronic auctions, including information duties of procuring entities (art. XIV of the GPA),
- guaranties of honesty, impartiality, confidentiality of offers in the process of treatment of tenders (art. XV, secs. 1-3 of the GPA)
- limited rule of written form (submission sec. 4 of the GPA; on
the request of a supplier duty to inform participating suppliers of the procuring entity's contract award decisions, art. XVI sec. 1 of the GPA; etc.)
- regulation of rules on choosing the best offer ("Awarding of Contracts", art. XV, secs. 4-7 of the GPA); according to art. XV sec. 5 of the GPA "Unless a procuring entity determines that it is not in the public interest to award a contract, the entity shall award the contract to the supplier that the entity has determined to be capable of fulfilling the terms of the contract and that, based solely on the evaluation criteria specified in the notices and tender documentation, has submitted: the most advantageous tender, or where price is the sole criterion, the lowest price",
- rules on time periods, including deadlines
- right to the court - "Each Party shall provide a timely, effective, transparent and non-discriminatory administrative or judicial review procedure through which a supplier may challenge: a breach of the Agreement, or where the supplier does not have a right to challenge directly a breach of the Agreement under the domestic law of a Party, a failure to comply with a Party's measures implementing this Agreement, arising in the context
of a covered procurement, in which the supplier has, or has had, an interest. The procedural rules for all challenges shall be in writing and made generally available" (art XVIII sec. 1 of the GPA); and if the review authority in the first instance is not a court (any administrative body), its decisions must be a subject to the proper court review (art. XVIII sec. 6); additionally, states have to provide for rapid interim measures to preserve the supplier's opportunity to participate in the procurement. Such interim measures may result in suspension of the procurement process. The procedures may provide that overriding adverse consequences for the interests concerned, including the public interest, may be taken into account when deciding whether such measures should be applied. Just cause for not acting shall be provided in writing, and where a review body has determined that there has been a breach or a failure, corrective action or compensation for the loss or damages suffered, which may be limited to either the costs for the preparation of the tender or the costs relating to the challenge, or both (art. XVIII sec. 7 of the GPA).
All the above-mentioned regulations have either direct, or indirect strong influence on a real level of competition among suppliers in the process of public procurement.
However, it must be noted that the Agreement contains certain guaranties, which allow the states - parties to the Agreement - to limit the competition in public procurement. Firstly, there are certain derogations referring to developing countries (art. V of the GPA). Secondly, there is a general exclusion for arms, ammunition or war materials, and to procurement indispensable for national security or for national defence purposes (art. III sec. 1 of the Agreement)1 . And, thirdly, states may always provide for special measures in case when necessary to protect public morals, order or safety; necessary to protect human, animal or plant life or health; necessary to protect intellectual property; or relating to goods or services of persons with disabilities, philanthropic institutions or prison labour. Those measures cannot be applied in a manner that would constitute a means of arbitrary or unjustifiable discrimination between Parties where the same conditions prevail or a disguised restriction on international trade (art III sec. 2 of the GPA).
Summary
As underlined at the very beginning, this essay is the first part of the series of publications which tend to analyze legal safeguards of competition within the public procurement legal system under all different sets of regulations, at all various
1 Noteworthy, this terminology rests undefined in dictionary of the Agreement in art. I.
of tender in writing, art XV
(art. XI of the GPA),
levels, including international law in the subject area, the European Union regulations and the Polish internal state regulation of the public procurement.
It deserves a strong stress that now-a-days legal regulation of acquisitions conducted by public entities are the crucial factor which influences economic development and social welfare.
Secondly, it must be emphasised that International Law in the subject area is limited generally to the 1994 Government Procurement Agreement (GPA) and its Revised Version of 2014.
The Agreement does not decree the competition as a general principle (see art. IV of the GPA titled "General Principles"). However, the principle of competition can be easily conceived from the entire text of the Agreement, like non-discrimination principle, rules on public tender procedures, priority of open tender and selective ten-
der, restricted permissibility of limited tendering, information duties of procuring entities and transparency rules, prohibition of any offset obligations, etc.
It must be underlined that the concept of competition is not same as the concept of "fair competition" which is present for example in the Polish law. In fact, "fair competition" delimits range of free competition by its reference to ethics and law.
What is improper, in my opinion, is really not very vast range of countries which are parties to the Agreement. Nevertheless, it must be noted, that at present some countries are negotiating accession to the Agreement (viz. 9 countries). So, the GPA in the future, if the trend will be sustained, may have much greater influence on public procurement system globally then it has now.
LITERATURE
1. Akman Pinar, The Concept of Abuse in EU Competition Law. Law and Economic Approaches, Oxford and Portland, Oregon, 2012
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