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AmCham Romania News Key Messages at the AmCham Romania Conference "Competition in Public Procurement: Competition Risks and Practical Remedies" - 6th Edition

Key Messages at the AmCham Romania Conference "Competition in Public Procurement: Competition Risks and Practical Remedies" - 6th Edition

by AmCham Romania September 25, 2023

The American Chamber of Commerce in Romania (AmCham Romania), in partnership with the Romanian Competition Council and the National Authority for Public Procurement, organized the 6th edition of the conference "Competition in Public Procurement: Competition Risks and Practical Remedies," part of a series of initiatives through which AmCham Romania supports an open and constructive dialogue between decision-makers and the business environment.

The conference on September 6, 2023, brought together professionals from the AmCham community and representatives of regulatory and supervisory authorities in the field of public procurement and competition. It provided a platform for know how and best practices exchanges, with the common goal of contributing to improving the quality of the regulatory framework and increasing compliance levels in the market.

In the opening of the conference, Alexandru Reff, Country Managing Partner, Deloitte Romania & Moldova | President of the AmCham Competition & State Aid Committee, emphasized that "this year's edition of the Competition in Public Procurement conference consolidates the tradition of this annual meeting and the partnership of AmCham Romania with the two relevant authorities, the Competition Council and ANAP. Public procurement and competition are closely linked, and their correct understanding by all parties involved is essential for economic development. Transparency and equity in public procurement ensure a healthy competitive environment, where suppliers have equal opportunities to participate, enhancing trust in public institutions and attracting investors. Our conference supports these objectives through the diversity and complexity of the addressed topics. Certainly, we owe the impact of this initiative to the valuable content prepared and presented by colleagues within the AmCham working group, to whom we extend our thanks."

The President of the Competition Council, Bogdan Chirițoiu, and the President of the National Authority for Public Procurement, Iuliana Feclistov, addressed remarks during the conference, offering informed perspectives and responses to questions related to competition rules and practical aspects of public procurement, such as subcontracting, standardization, and the use of innovative public procurement procedures, including innovation partnership, solution contests, and competitive dialogue.

The conference was moderated on behalf of AmCham Romania by Livia Zamfiropol, Partner, DLA Piper, and Deputy Chair of the AmCham Competition and State Aid Committee, and, on behalf of the Competition Council, by the Director of the Cartels Directorate, Irina Elena Popovici.

"For this year's edition of the conference, we approached topics of current interest, aspects that either require increased regulatory attention or clarifications for the efficient use of public and European funds allocated through public procurement procedures. In particular, we consider necessary accelerating the harmonization of the legislative framework that incentivizes the use of innovative public procurement tools and supports Romania's objectives to catch up with the EU average regarding EU funds sourced investments. Among these, centralized procurements, and practical aspects of using third-party supporters in public procurement procedures, lotting of public procurement contracts to facilitate SMEs' access to public procurement procedures," emphasized Livia Zamfiropol.

Regarding the lotting of public procurement contracts, Adrian Coman, Senior Managing Associate - Reff & Associates, and Deputy Chair of the AmCham Structural Funds and Public Procurement Committee, highlighted the positive impact of this regulation regarding SMEs' access to public procurement awarding procedures. "The allocation of contracts into lots significantly improved competition in public procurement and, very importantly, led to the consolidation of the SME segment in Romania, which is beneficial for the overall national economy, and an objective to which the EU committeed to. Specifically, according to data reported by ANAP, although the proportion of the number of procedures divided into lots is relatively stable in recent years, a majority of these are awarded to SMEs. Considering that the value of these contracts is increasing, we believe it is important to maintain such a framework that encourages competition and access of as many companies as possible to public procurement procedures, along with the need for a future impact analysis to highlight the economic and financial benefits resulting from such an approach, both from the perspective of the authorities and contracting entities, as well as the private sector."

The need to promote innovative procurements for the efficient use of public funds, resilience, and economic recovery, as well as to ensure an appropriate response to current social, economic, and technological challenges, was highlighted by Oana Vodă, Counsel, Dentons. "Innovative procurements are a priority of the European Commission, also being a strategic tool for achieving the objectives of the dual green and digital transition, as assumed through the PNRR. In this context, it is necessary for Romania's public procurement framework to reflect these European practices and perspectives. The high level of complexity and challenges related to the conduct and implementation of innovative procurements currently place Romania at the bottom of the EU ranking that reflects the strategic use of public procurement for innovation in the digital economy (25th out of 30). To recover these gaps and to support economic development objectives based on high-value-added activities that integrate research, development, and innovation, implementation of the directions of action established by the new national strategy in the field of public procurement needs to be a priority. These includeestablishing  a center of expertise on strategic procurements and strengthening the expertise of public procurement advisors, expanding the use of innovative procurements in priority areas such as education, digitalization, transportation, health, facilitating the transfer of best practices between the public and private sectors, committing to national objectives regarding the use of innovation criteria in tender documentation, as well as updating the online guide with dedicated sections and models of specific documentation for innovative procurements." A similar approach is needed regarding centralized procurements, qualified as a public policy tool capable of bringing clear benefits, such as generating economies of scale, reducing transaction costs, and increasing efficiency in the use of public funds. Although promoted at the European level through public procurement directives and dedicated funding programs, and at the national level through a specific legislative framework, limited practical experience and the lack of a functional centralized procurement platform place Romania below the European level in this regard. In this context, the new national strategy in the field of public procurement includes the consolidation of centralized procurements as the main pillar. Thus, providing dedicated guidance, promoting the use of the ONAC IT platform, and increasing the administrative capacity of contracting authorities are necessary steps to reach the maximum potential of the centralized procurement tool.

Among the practical issues regarding participants in public procurement procedures, aspects related to the use of third-party supporters and subcontracting in public procurement procedures were presented.

Concluding a comprehensive presentation of the relevant legal provisions, ways for third-party supporters to participate, and qualification requirements for which support can be granted, Elena Iacob, Partner, Zamfirescu, Racoți, Vasile & Partners, emphasized the contribution that the third-party supporter institution has in encouraging competition, as well as the risks in affecting competition. "The use of third-party supporters is recommended as a way to facilitate access for multiple bidders to public procurement procedures, both from the perspective of meeting requirements regarding economic and financial conditions and cumulating technical capacities, especially in the case of complex contracts, avoiding the level of complexity becoming a competition barrier. However, it is not a risk-free formula; the most frequent risks are generated by subcontractors or third-party supporters participating in multiple bids submitted in the same tender, which can distort competition or create a context for coordinating competitors' behavior in the market."

In the presentation dedicated to the incidence of subcontracting in public procurement, Răzvan Pele, Counsel, DLA Piper, reviewed the applicable provisions and the ways in which a bidder can protect themselves against the risks arising from using subcontractors. "Considering that the complexity of procurement procedures often leads companies to resort to subcontractors, and at the same time, both competition and public procurement legislation offer limited guidance regarding the implications of using subcontractors, we recommend maximum attention in protecting bidders against the risks arising from this type of contracting. Any indications of competition distortion can lead to exclusion from the public procurement procedure, which is why, on the one hand, it is necessary to establish the need for subcontracting based on objective criteria, from the announcement stage of the procedure, as well as the coordinates of independent conduct in situations not covered by the subcontracting agreement, through means such as signing a confidentiality agreement or agreeing on clauses that establish obligations in case the subcontractor intends to participate with other bidders."

During the discussions, AmCham Romania also drew attention to the need to avoid overregulation and to maintain an appropriate balance between regulation and the stimulation of innovation and competition in the field of public procurement.

The 6th edition of the AmCham Romania conference Competition in Public Procurement: Competitive Risks and Practical Remedies"" once again confirmed the need and relevance of substantive dialogue between the business community and regulatory institutions in support of sustainable economic development, with collaboration continuing through a series of future events.

>> Romanian: Mesajele cheie din cadrul conferinței "Concureța în Achiziții Publice: Riscuri Concurențiale și Remedii Practice"

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