10th edition iclg to: public procurement 2018 published and reproduced with kind permission by...

The International Comparative Legal Guide to:

A practical cross-border insight into public procurement

Published by Global Legal Group, with contributions from:

39 Essex ChambersAnderson Mōri & TomotsuneAshurst LLPBarentsKrans N.V.Borenius Attorneys LtdEisenberger & Herzog Rechtsanwalts GmbHFaskenFried, Frank, Harris, Shriver & Jacobson LLPGürlich & Co.Legance – Avvocati AssociatiLeinemann Partner Rechtsanwälte mbBLenz & Staehelin

Mamo TCV AdvocatesMannheimer Swartling Advokatbyrå ABMichailopoulos & AssociatesMorais Leitão, Galvão Teles, Soares da Silva & AssociadosNorton Rose Fulbright Canada LLPRamón y Cajal Abogados, S.L.P.SCP Bignon LebrayStibbeTaciana Peão Lopes & Advogados AssociadosVASS LawyersWikborg Rein Advokatfirma AS

10th Edition

Public Procurement 2018

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Further copies of this book and others in the series can be ordered from the publisher. Please call +44 20 7367 0720

DisclaimerThis publication is for general information purposes only. It does not purport to provide comprehensive full legal or other advice.Global Legal Group Ltd. and the contributors accept no responsibility for losses that may arise from reliance upon information contained in this publication.This publication is intended to give an indication of legal issues upon which you may need advice. Full legal advice should be taken from a qualified professional when dealing with specific situations.

The International Comparative Legal Guide to: Public Procurement 2018

General Chapters:

Country Question and Answer Chapters:

1 EU Public Procurement Rules – Euan Burrows & Edward McNeill, Ashurst LLP 1

2 The Implications of Brexit for Public Procurement – Kelly Stricklin-Coutinho & Rose Grogan, 39 Essex Chambers 10

3 Austria Eisenberger & Herzog Rechtsanwalts GmbH: Ulrike Sehrschön 15

4 Belgium Stibbe: David D’Hooghe & Arne Carton 24

5 Canada Norton Rose Fulbright Canada LLP: Martin G. Masse & Erin E. Brown 31

6 Czech Republic Gürlich & Co.: JUDr. Richard Gürlich, Ph.D. & Mgr. Kamila Janoušková 38

7 England & Wales Ashurst LLP: Euan Burrows & Edward McNeill 45

8 Finland Borenius Attorneys Ltd: Ilkka Aalto-Setälä & Henrik Koivuniemi 58

9 France SCP Bignon Lebray: Kévin Holterbach & Jean-Baptiste Dubrulle 66

10 Germany Leinemann Partner Rechtsanwälte mbB: Dr. Thomas Kirch & Jörg Mieruszewski 75

11 Greece Michailopoulos & Associates: Greg Michailopoulos & Marios Markatos 84

12 Italy Legance – Avvocati Associati: Filippo Pacciani & Ada Esposito 93

13 Japan Anderson Mōri & Tomotsune: Reiji Takahashi & Makoto Terazaki 106

14 Malta Mamo TCV Advocates: Franco B. Vassallo & Joseph Camilleri 114

15 Mozambique Taciana Peão Lopes & Advogados Associados: Taciana Peão Lopes & Rita Donato 123

16 Netherlands BarentsKrans N.V.: Joost Fanoy & Joris Bax 133

17 Norway Wikborg Rein Advokatfirma AS: Line Camilla Werner & Alf Amund Gulsvik 141

18 Portugal Morais Leitão, Galvão Teles, Soares da Silva & Associados: Margarida Olazabal Cabral & Ana Robin de Andrade 148

19 Romania VASS Lawyers: Iulia Vass & Bianca Bello 157

20 South Africa Fasken: Lara Bezuidenhoudt & Bontle Pilane 169

21 Spain Ramón y Cajal Abogados, S.L.P.: Pablo Silván Ochoa & Carlos Melón Pardo 175

22 Sweden Mannheimer Swartling Advokatbyrå AB: Johan Carle & Sven Vaxenbäck 182

23 Switzerland Lenz & Staehelin: Astrid Waser & Benoît Merkt 188

24 USA Fried, Frank, Harris, Shriver & Jacobson LLP: James J. McCullough & Michael J. Anstett 196

Contributing EditorsEuan Burrows & Edward McNeill, Ashurst LLP

Sales DirectorFlorjan Osmani

Account DirectorOliver Smith

Sales Support ManagerToni Hayward

Sub EditorJenna Feasey

Senior EditorsCaroline CollingwoodSuzie Levy

Chief Operating OfficerDror Levy

Group Consulting EditorAlan Falach

Publisher Rory Smith

Published byGlobal Legal Group Ltd.59 Tanner StreetLondon SE1 3PL, UKTel: +44 20 7367 0720Fax: +44 20 7407 5255Email: [email protected]: www.glgroup.co.uk

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ISBN 978-1-911367-91-8ISSN 1757-2789

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EDITORIAL

Welcome to the tenth edition of The International Comparative Legal Guide to: Public Procurement.This guide provides corporate counsel and international practitioners with a comprehensive worldwide legal analysis of public procurement laws and regulations.It is divided into two main sections:Two general chapters. These chapters cover the EU Public Procurement Rules and the implications of Brexit for public procurement. Country question and answer chapters. These provide a broad overview of common issues in public procurement laws and regulations in 22 jurisdictions.All chapters are written by leading public procurement lawyers and industry specialists and we are extremely grateful for their excellent contributions.Special thanks are reserved for the contributing editors Euan Burrows and Edward McNeill of Ashurst LLP for their invaluable assistance.Global Legal Group hopes that you find this guide practical and interesting.The International Comparative Legal Guide series is also available online at www.iclg.com.

Alan Falach LL.M. Group Consulting Editor Global Legal Group [email protected]

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Chapter 23

Lenz & Staehelin

Astrid Waser

Benoît Merkt

Switzerland

information about the content of official documents. The FoIA interacts with the Federal Act on Data Protection of June 19, 1992 as amended (FADP), which governs, inter alia, the protection and processing of personal data by federal bodies.Further relevant national laws to public procurement are (i) the Federal Cartel Act of October 6, 1995 as amended (CartA) which prohibits, inter alia, unlawful agreements between competitors in the context of procurement contracts as well as the abuse of a dominant position, and (ii) the Federal Act Against Unfair Competition of December 19, 1986 as amended (AUC).

1.3 How does the regime relate to supra-national regimes including the GPA, EU rules and other international agreements?

Switzerland ratified the GPA, EU-CH AAGP, and the EFTA Agreement (see also question 1.1). In order to fulfil the obligations resulting from the GPA, the FAPP and the IAPP were implemented. However, since Switzerland has a monist legal system, the domestic and the international law systems form a unity. The ratified treaties therefore enter into force in domestic Swiss law and are directly applicable if the terms of the relevant provisions are sufficiently clear to be self-executing. In addition, the provisions of the supra-national regimes serve as an interpretative aid for Swiss authorities and courts in order to ensure that the provisions of the national legislation are interpreted in accordance with the international agreements.

1.4 What are the basic underlying principles of the regime (e.g. value for money, equal treatment, transparency) and are these principles relevant to the interpretation of the legislation?

The FAPP aims at an efficient use of public funds by increasing competition between tenderers. Contracts will be awarded to the most commercially advantageous bid. The procurement procedure follows the principles of equal treatment of domestic and foreign tenderers and transparency. Furthermore, the contracting authority will only award a contract to a tenderer who will guarantee compliance with health and safety regulations as well as employment regulations, including equal treatment of men and women.

1.5 Are there special rules in relation to procurement in specificsectorsorareas?

The FAPP applies neither to the procurement of weapons, munitions

1 Relevant Legislation

1.1 What is the relevant legislation and in outline what does each piece of legislation cover?

The principal legislative acts regulating federal public procurements in Switzerland are (i) the Federal Act of Public Procurement of December 16, 1994 as amended (FAPP), and (ii) the Federal Ordinance of Public Procurement of December 11, 1995 as amended (OPP). Whereas the FAPP sets forth the general framework, the OPP contains detailed provisions to execute the FAPP and further stipulates the procedure for public procurements not covered by the FAPP. The main legislative acts for the procurements of regional and local authorities are (i) the Intercantonal Agreement on Public Procurement of November 25, 1994/March 15, 2001 (IAPP), and (ii) the cantonal public procurement regulations.These acts are complemented by international framework agreements such as the Government Procurement Agreement of April 15, 1994 (GPA), the Bilateral Agreement between the European Community and Switzerland on certain aspects of public procurement of June 21, 1999 (EU-CH AAGP), the Convention establishing the European Free Trade Association of January 4, 1960 as amended (EFTA Agreement) as well as certain national acts such as the Federal Act on the Internal Market of October 6, 1995 (FAIM). These framework agreements and certain national acts do not lead to a harmonisation of the public procurement laws. They do, however, contain minimal standards to be respected during the public procurement process.The following chapter will focus principally on federal law, due to the numerous and different cantonal and even municipal regulations in the Swiss Confederation.

1.2 Are there other areas of national law, such as government transparency rules, that are relevant to public procurement?

There are diverse areas of national law that are relevant to public procurement. The FAIM regulates minimum standards for cantonal and communal procurements, and provides, in particular, that the procurement procedures have to be non-discriminating, public and subject to appeal.With regard to government transparency rules, according to article 6 of the Federal Act on Freedom of Information in the Administration of December 17, 2004 as amended (FoIA), any person has, in principle, the right to inspect official documents and to obtain

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2.5 Aretherefinancialthresholdsfordeterminingindividual contract coverage?

The relevant threshold values (without VAT for each single assignment) in terms of article 6 of the FAPP which are valid from January 1, 2016 until December 31, 2017 are as follows:■ for supply and services: CHF 230,000;■ for works: CHF 8.7 million; and■ for supplies and services procured by a contracting authority

defined in article 2 (2) of the FAPP or by the Swiss Post for its activities in the public transport sector: CHF 700,000.

The relevant threshold values (without VAT) for entities specified in article 2a of the OPP are as follows:■ for supplies and services in the telecommunications sector:

CHF 960,000;■ for supplies and services in the railway sector: CHF 640,000;■ for supplies and services in the electricity sector: CHF

766,000;■ for works in the telecommunications or railway sectors: CHF

8 million; and■ for works in the electricity sector: CHF 9.575 million.In order to contract to a supplier directly and without invitation to tender, the relevant values (without VAT) have to be below the following thresholds:■ for works and services: CHF 150,000; and■ for supplies: CHF 50,000.In addition, for areas and sectors not covered by international agreements (see question 1.1), the following thresholds apply (article 36 of the OPP): ■ for works and services: CHF 150,000; and■ for supplies: CHF 50,000.

2.6 Are there aggregation and/or anti-avoidance rules?

Articles II of the GPA, 7 of the FAPP, and 14 to 15a of the OPP provide detailed rules regarding the calculation of the contract value (including aggregation and anti-avoidance rules) in order to determine the applicable thresholds and procedures.

2.7 Are there special rules for concession contracts and, ifso,howaresuchcontractsdefined?

Article 2 (7) of the FAIM stipulates that the transfer of the usage of cantonal or communal monopolies to private entities is to be made through a public tender procedure. It is contested in literature whether this provision stipulates an obligation to procure according to public procurement law. According to the Federal Supreme Court, it has to be differentiated between concessions that (only) award an exclusive right and concessions that are combined with synallagmatic contracts with which the state (also) procures goods or services. In the first case, the authority does not procure but rather offers services or rights. Hence, procurement law does not apply. If, in the latter case, the goods or services are of a certain importance and usually the object of a public procurement procedure, public procurement law may apply.Apart from this explicit rule in the FAIM, there are no specific general public procurement rules for the award of concession contracts.

or war materials, nor to the construction of fighting and command infrastructure for overall defence and the army (article 3 (1)(e) FAPP). A definition of the term “war materials” can be found in the Federal Act on War Materials of December 13, 1996, as amended. Please refer to question 4.1 for further information on excluded areas and exemptions.

2 Application of the Law to Entities and Contracts

2.1 Which public entities are covered by the law (as purchasers)?

The FAPP (article 2) enumerates the public authorities which are subject to the law. The list contains entities both with and without legal personality. Appendix 1/annex 1 of the GPA has a conclusive list of awarding authorities, although entities founded after the contract signing may also be subject to public procurement. Explicitly regulated are contracting authorities in the water, energy, transport and telecommunications sectors. Despite the fact that there is a list of awarding authorities mentioned in the acts (FAPP, the OPP and in appendix 1/annex 1 of the GPA), it remains unclear which public entities are covered by federal law. The same holds true with respect to public entities on the cantonal level.

2.2 Which private entities are covered by the law (as purchasers)?

Private entities are, for certain actions and under specific circumstances, also subject to public procurement law. In particular, if private parties act in place of contracting authorities for procurements (article 2d OPP), they have to meet the same legal requirements. In addition, actions such as the provision of public services in the area of production, transport or distribution of electrical power by private parties are also subject to public procurement law.

2.3 Which types of contracts are covered?

Under Swiss public procurement law, the following types of contracts are covered:■ works contracts, i.e. contracts for building and civil

engineering work;■ supply contracts, i.e. contracts for the supply of movable

goods, in particular by purchase, lease, rent or hire; and■ service contracts, i.e. contracts for the rendering of services.It is important to note that the above types of contracts are only covered if the public entity appears as a purchaser or receiver of services.

2.4 What obligations do purchasers owe to suppliers established outside your jurisdiction?

In terms of equal treatment, suppliers enjoy, in principle, National Treatment and Most Favoured Nation Treatment within the scope of the relevant international agreements (see also questions 1.1 and 1.4) or in cases where the foreign state in question grants reciprocal rights.Exceptions to the principle of National Treatment and Most Favoured Nation Treatment have to be determined on a case-by-case basis within the boundaries of the existing legal framework.

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Only the “selective procedure” provides for a selection or “short-listing” of the bidders which fulfil the qualification criteria established by the contracting authority. According to article 15 (3) of the FAPP, the contracting authority can reduce the number of tenderers if the tender could not otherwise be processed in an efficient way. However, even when limiting the number of participants, the contracting authority has to guarantee an effective competition between the bidders.

3.4 What are the rules on evaluation of tenders? In particular, to what extent are factors other than price taken into account (e.g. social value)?

The tenders have to be evaluated based on the published awarding criteria. Other than the price, the contracting authority may set up further criteria such as quality, utility, technical values, creativity, sustainability, customer service, etc. The weighting of the price in this basket of criteria lies to a certain extent in the discretion of the contracting authority and depends on the circumstances, i.e. in complex matters, less weight might be given to the price than in cases of more standardised goods. The contracting authority has to publish the order of the awarding criteria and the respective weighting. If qualification criteria apply, they have to relate to the respective supply, service or work being procured, so that the contracting authority can narrow down the tenderers to those who are capable of offering the required quality. However, criteria that are discriminatory or unrelated to the supply, service or work to be procured are not allowed.

3.5 What are the rules on the evaluation of abnormally low tenders?

According to article 25 (4) of the OPP, the contracting authority may request further information from the tenderer filing an abnormally low tender, e.g. regarding the calculation method, in order to assess whether there is a reason for exclusion (article 11; see question 3.3). If such information is not provided or presented inconclusively by the tenderer, the contracting authority may exclude such tenderer. The OPP, however, does not define “abnormally low” tenders. As a rule, tenders which range below production costs or which differ noticeably from the other tenders should be verified. Abnormally low tenders are not automatically excluded by law and should be examined on a case-by-case basis. In a recent cantonal public procurement case, the Federal Supreme Court also accepted the inclusion of plausibility of the price as awarding sub-criteria.

3.6 What are the rules on awarding the contract?

According to article 21 (1) of the FAPP, the contracts are awarded to the most economically favourable offer. The most economically favourable offer is evaluated taking into account a number of criteria, in particular, deadlines, quality, price, operating efficiency, operating costs, customer service, expedience of the performance, aesthetics, environmental sustainability, technical value and training of apprentices within the meaning of a basic vocational training. The last criterion, however, applies only outside the scope of international agreements. The contracting authorities have to determine a catalogue of awarding criteria and their degree of relevance, and must publish them in the tender documentation. Contracts for broadly standardised goods may also be awarded solely on the basis of the lowest price (article 21 (3) FAPP).

2.8 Are there special rules for the conclusion of framework agreements?

In Switzerland, there are no special rules for the conclusion of framework agreements. Framework agreements qualify as public procurements if the single contracts to be concluded under the framework agreements qualify as public procurements. For calculation of the thresholds, the sum of the single transactions contemplated under the framework agreement is relevant.

2.9 Are there special rules on the division of contracts into lots?

Under Swiss public procurement law, the division of contracts into lots is permissible, provided that the contracting authority explicitly refers to the lots in the public tender. The public procurement law provides for detailed rules for the division of contracts into lots.

3 Award Procedures

3.1 What types of award procedures are available? Please specify the main stages of each procedure and whether there is a free choice amongst them.

Swiss public procurement law provides for four main award procedures: the “open”; the “selective”; the “negotiated”; and the “invitation procedure”.In the “open procedure”, any interested bidder may submit a tender (article 14 FAPP). In the “selective procedure”, any interested bidder may apply to participate in the procedure, but only those bidders who meet the qualification criteria may submit a tender (article 15 FAPP). In the “negotiated procedure”, the contracting authority negotiates a contract directly with a supplier of its choice (article 16 FAPP). In the “invitation procedure”, the contracting authority determines which suppliers will be allowed to submit a tender. If possible, the contracting authority invites at least three suppliers (article 35 OPP).

3.2 What are the minimum timescales?

The contracting authority has to set the deadlines in a way which allows the suppliers to examine the documentation and to submit an offer (article 19 OPP).The minimum timescales are:■ in an open procedure, 40 days for the submission of an offer;

and■ in a selective procedure, 25 days for the submission of a request

for participation and 40 days for the submission of an offer.The deadline for the submission of offers can (under the conditions set out in the GPA) be reduced. As a rule, the deadline should amount to at least 24 days and may not be less than 10 days.

3.3 What are the rules on excluding/short-listing tenderers?

The FAPP contains a non-exhaustive list of reasons for exclusion (articles 11 and 19 (3)). Reasons for exclusion include false information of tenderers to the contracting bodies, the failure to pay taxes and social security contributions, the violation of essential formal conditions and competition law infringements (e.g. cartels).



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4 Exclusions and Exemptions (including in-house arrangements)

4.1 What are the principal exclusions/exemptions?

The FAPP contains a list of procurements for which the FAPP does not apply (article 3). Such procurements include (i) contracts to institutions for disabled persons, charities and penal institutions, (ii) contracts granted within the framework of agricultural or food aid programmes, and (iii) contracts which are awarded on the basis of an international treaty between WTO contracting states or Switzerland and third countries in respect of an objective to be achieved and jointly funded.In addition, a contracting authority can refrain from applying the FAPP if it is necessary for the protection of public decency, public order, public health, or intellectual property rights.

4.2 How does the law apply to “in-house” arrangements, including contracts awarded within a single entity, within groups and between public bodies?

The FAPP does not specifically regulate “in-house” arrangements. Authorities are free to choose between making and buying. The FAPP does not apply to real “in-house” arrangements whereby a contract is made between the contracting authority and a body belonging to, or being controlled by, the same public entity as the contracting authority. The FAPP, however, will apply if the “in-house” supplier also offers its goods or services for a non-insignificant part to third parties, and therefore participates as a competitor in the market, or if third parties have a shareholding interest in the supplier.In cases of “in-state” procurement, i.e. if a public entity procures from a different public body, the application of the FAPP can be exempted; in particular, if such other public body providing goods or services is controlled by a public entity and does not participate as a competitor in the market.In practice, the criteria developed by the European Court of Justice in Teckal have been applied.

5 Remedies

5.1 Does the legislation provide for remedies and if so what is the general outline of this?

The FAPP defines several (final and interim) decisions which can be independently contested by way of appeal. The non-exhaustive list in article 29 of the FAPP includes (i) the award of contract or discontinuation of the award procedure, (ii) the invitation to tender for the contract, (iii) the decision on the selection of participants in the selective procedure, and (iv) exclusions (according to article 11 FAPP).Appeals against these decisions have to be brought forward immediately. Their unlawfulness cannot be pleaded at a later point in the procedure.Appeals do not, in principle, have suspensive effect. However, the Federal Administrative Court can be requested by means of a provisional measure to grant suspensive effect.According to the Federal Act on Administrative Procedure of December 20, 1968 (APA), as amended, an appeal against other separately notified interim orders is permitted if (i) they may cause

3.7 Whataretherulesondebriefingunsuccessfulbidders?

The contracting authority has to communicate its decision to the bidders, and must include a reasoned summary of its decision. In addition, an unsuccessful bidder has the right to request the contracting authority to provide further information on the award procedure, such as the identity of the successful bidder, the price or the highest and lowest prices of the bids, the essential reasons why the bid was not considered and the determining characteristics and advantages of the successful bid (article 23 (2) FAPP). This information can only be refused in cases where there are justified reasons to withhold certain information. The contracting authority may provide this information in a written statement or invite the unsuccessful bidders for an oral debriefing, which in practice is often seen.

3.8 What methods are available for joint procurements?

The OPP provides in article 2c conflict rules for joint procurements from contracting authorities subject to federal law and as such are subject to cantonal law. If a contracting authority subject to federal law bears the highest share of the financing, federal law will apply to the entire procurement procedure.If different thresholds apply to the contracting authorities that are subject to the FAPP or the OPP, then the lower thresholds will apply.

3.9 What are the rules on alternative/variant bids?

According to the OPP, variant bids are bids with which the object of the procurement procedure can be reached in an alternative manner than envisaged by the contracting authority (article 22a). This recently introduced provision has the purpose of facilitating innovative solutions. Different pricing systems are not viewed as variant bids.Tenderers are free to hand in additional variant bids. In exceptional cases, the contracting authority can limit or exclude this possibility but has to give a reason for this restriction.

3.10 Whataretherulesonconflictsofinterest?

The FAPP does not provide for any rules on conflicts of interest. However, general principles of constitutional and administrative law, according to which members of the administration must recuse themselves if they have a personal interest or could be regarded as lacking impartiality, apply to public procurements.

3.11 What are the rules on market engagement and the involvement of potential bidders in the preparation of a procurement procedure?

According to article 21a OPP, the contracting authority shall exclude a previously involved tenderer if the hereby resulting competitive advantage cannot be compensated by other means and such exclusion does not harm the competition between the tenderers. Therefore, previous involvement may be permitted, inter alia, if (i) the advantage in knowledge is marginal, (ii) the involvement was of subordinate nature, (iii) the tendered service can only be procured from a few providers, or (iv) previous involvement and advantage in knowledge have been disclosed in the procurement documents.



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After the contracting authority has signed a contract, such a contract is normally valid and cannot be terminated even in cases where the appeal is successful. The Federal Administrative Court can only determine the extent to which the contested order is in breach of federal law. The only remedy available thereafter is a claim for damages for the costs in connection with the procurement procedure and the appeal process.With respect to continuing obligations, it is currently disputed in doctrine whether a court can order a contracting authority, which signed a contract during an appeal, to terminate the agreement and to start a new tender procedure. So far, this question has not yet been decided by the Federal Supreme Court.

5.7 What is the likely timescale if an application for remedies is made?

In cases where an appeal to the Federal Administrative Court is linked to a request for provisional measures to give suspensive effect to the appeal, the Court will rule on the provisional measures in a relatively short time. The length of the proceeding for the material decision depends on the complexity of the case and on the procedural motions by the parties.

5.8 What are the leading examples of cases in which remedies measures have been obtained?

For a successful claim and the obtention of remedies, the Federal Administrative Court has to grant suspensive effect. Suspensive effect is, however, not granted very often. The Federal Administrative Court primarily considers the chances of success of a review petition. If the chances are given, it undertakes a balance of interests. According to its legal practice, the interest of the public to implement the decision in awarding a contract as swiftly as possible is given considerable importance. Based on this practice, the Federal Administrative Court did not grant suspensive effect to an appeal against the award of railway technology for the Gotthard base tunnel (worth approximately CHF 1.7 billion). The appellant withdrew his petition and the Federal Administrative Court did not issue a material decision. However, in some major cases relating to the Gotthard base tunnel, suspensive effect has been granted, even if it led to considerable delay and high additional costs.

5.9 What mitigation measures, if any, are available to contracting authorities?

The Federal Administrative Court has the possibility to suspend a proceeding with the consent of the parties in order for the parties to mediate or to settle their case. In a recent public procurement case, the Federal Administrative Court suspended a proceeding for settlement negotiations which, however, did not result in an agreement.

6 Changes During a Procedure and After a Procedure

6.1 Does the legislation govern changes to contract specifications,changestothetimetable,changesto contract conditions (including extensions) and changes to the membership of bidding consortia pre-contract award? If not, what are the underlying principles governing these issues?

Swiss public procurement law is based on the assumption that the

a non-redressable prejudice, or (ii) granting the appeal would immediately bring about a final decision, and would therefore obviate significant expenditure in time or money in prolonged evidentiary proceedings.

5.2 Can remedies be sought in other types of proceedings or applications outside the legislation?

In doctrine, it is disputed whether the remedies provided by the FAPP are conclusive or whether civil claims based on culpa in contrahendo are possible. As an informal remedy, a complaint to the supervisory authority of the contracting authority can be made (article 71 APA).

5.3 Before which body or bodies can remedies be sought?

Appeals against decisions issued by a contracting authority subject to the FAPP may be submitted to the Federal Administrative Court. Decisions of the Federal Administrative Court can only be appealed to the Federal Supreme Court if the estimated value of the contract exceeds the threshold determined in the FAPP and if a legal issue of fundamental importance is in question.Remedies against decisions of cantonal or local procurement authorities are provided for in the cantonal legislations. The cantons are, however, obliged to provide for at least one legal remedy to an independent authority. The cantonal decision can then be appealed to the Federal Supreme Court, although the court’s power to review may be very restricted, depending on whether the threshold is reached.

5.4 What are the limitation periods for applying for remedies?

An appeal to the Federal Administrative Court needs to be filed within 20 days from the notification of the ruling (article 30 FAPP). If the decision is published on the internet platform SIMAP before the tenderers are personally informed about the outcome of the procedure, the date of publication thereon will be relevant for the limitation period. An appeal to the Federal Supreme Court needs to be filed within 30 days.On a cantonal level, an appeal has to be filed within 10 days from the date of publication (article 15 (2) IAPP). An appeal to the Federal Supreme Court needs to be filed within 30 days.

5.5 What measures can be taken to shorten limitation periods?

The limitation period for filing an appeal can be shortened by the unsuccessful bidder which submits an appeal before the lapse of the appeal period. An appeal in the field of public procurement has no automatic suspensive effect. Suspensive effect has to be requested by the appellant (see question 5.1). If suspensive effect is not granted or not requested by the appellant, the contracting authority can enter into a contract with the successful bidder.

5.6 What remedies are available after contract signature?

According to case law, a contracting authority is not allowed to sign a contract before it has become clear that no party filed a complaint or, if a complaint was filed, before the Federal Administrative Court decided not to grant suspensive effect to such a complaint.



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that these hospitals provide public health (which is a public task) and are in this respect publicly funded through health insurance. In another case, the Swiss Competition Commission held that an IT-service provider, whose shares are held by public institutions, is not subject to procurement law as long as the shareholders (i) act neutrally to competition, and (ii) do not apply the in-house-privilege for their procurements in this sector.

7.2 Are there special rules in relation to PPPs and what are the principal issues that arise in relation to them?

There are no special rules that apply to PPPs. PPPs, although usually long-term and often complex, are viewed as ordinary procurements of supplies, services or works. A court case confirmed the principle of one-time procurement, meaning that a PPP-partner that has been selected according to the FAPP is not again subject to procurement laws when sub-contracting. However, the contracting authority has to ensure that its PPP-partner obliges its sub-contractors to comply with requirements such as labour protection regulations.

8 Enforcement

8.1 Is there a culture of enforcement either by public or private bodies?

There are no actual enforcement bodies in Switzerland. However, according to article 9 (2bis) of the FAIM, not only can the Swiss Competition Commission make recommendations to the judicial authorities (see also question 7.1), but it can also file an appeal if it considers that a decision unduly restricts the access to the market.

8.2 What national cases in the last 12 months have confirmed/clarifiedanimportantpointofpublicprocurement law?

In a recent case, the Federal Supreme Court had to assess whether compliance with the constitutional principle of competition neutrality of the state constitutes a public procurement principle, the non-fulfilment of which could lead to an exclusion of such non-compliant tenderer. In this case, a private tenderer put forward that another publicly owned tenderer subsidised its offered services with public funds. The Federal Supreme Court confirmed that the price calculation of the publicly owned tenderer was not cost-covering and, therefore, a competitive distortion was sufficiently established. This could lead to an exclusion of the publicly owned tenderer.Furthermore, the Federal Supreme Court clarified its legal practice regarding the transfer of the usage of cantonal or communal monopolies to private entities. It held that a transfer of a concession for the monopoly of poster advertising does not fall under public procurement law. Regarding the concession process, it stated that only some key principles (i.e., public invitation to tender and non-discrimination rules in relation to persons having their domicile or registered seat in Switzerland) were applicable. It also follows that the concession must not be awarded to the most economically favourable tender.The Federal Supreme Court also had to assess an award to a tenderer not fulfilling the qualification criteria. It held that if the contracting authority does not exclude such tenderer despite serious deficiency, the law has been heavily misapplied. However, exclusion is not warranted if the unfulfilled qualification criteria are minor and if such exclusion would be regarded as disproportionate.In a recent case, the Federal Supreme Court also dealt with qualification criteria and stated that a tenderer, which cannot provide

project described in the invitation to tender will remain materially the same during the entire procurement process. However, on the federal level, the FAPP allows for pre-contract award negotiations provided that reference to the negotiations is made in the invitation to tender, or none of the bids submitted appears to be the most commercially advantageous under the terms of article 21 (1) of the FAPP. Furthermore, the contracting authority can conduct a new procurement procedure if there are material changes to the project (article 30 (3) OPP).Changes to the membership of bidding consortia are possible but only under restrictive conditions. In particular, changes in the membership of bidding consortia may not lead to a better evaluation of the tender offer.

6.2 What is the scope for negotiation with the preferred bidderfollowingthesubmissionofafinaltender?

After the contract has been awarded, the contracting authority is not bound to conclude a contract with the preferred bidder (no obligation to contract). However, if the contracting authority does so, it has to conclude the contract with the specifications as described in the invitation to tender and as offered by the tenderer. It is allowed to make more detailed specifications as long as they do not change the project. Deviations from the original project are only allowed if they are immaterial. Deviations are deemed immaterial as long as it remains certain that the same tenderer would still have been awarded the contract.

6.3 To what extent are changes permitted post-contract signature?

After a contract has been signed, similar rules apply to changes that have applied to changes before signature. This also applies to a prolongation of a contract for the performance of a continuing obligation. However, the contracting authority is allowed to exercise options or possible changes that had been mentioned in the procurement process already.

6.4 To what extent does the legislation permit the transfer of a contract to another entity post-contract signature?

As the authority is only authorised to sign with the supplier to which the contract has been awarded, the contract cannot be transferred to another entity without a new procurement procedure and a new award in favour of this entity.

7 Privatisations and PPPs

7.1 Are there special rules in relation to privatisations and what are the principal issues that arise in relation to them?

There are no special rules that apply to privatisations. If, in the case of an outsourcing, a private entity is contracted to provide services or supply goods, such a contract is subject to procurement law. If, on the other hand, a private entity performs a public task (that might be publicly funded), it can also be subject to procurement law (see also question 2.2). Exceptions are made for commercial and industrial activities. It has been discussed that private hospitals are subject to public procurement law in the area of the services that are covered by (basic) health insurance. The reasoning behind this was



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2017, the Federal Council passed its draft law and the corresponding dispatch. The Swiss parliament is now in the process of deliberating the ratification of the revised GPA together with the revision of the FAPP.In addition, it is to be expected that the three latest EU directives (Directive 2014/23/EU on the award of concession contracts, Directive 2014/24/EU on public procurement and Directive 2014/25/EU on procurement by entities operating in the water, energy transport and postal services sectors) will have an influence (indirectly) on the interpretation and development of Swiss procurement law.

9.2 Are any measures being taken to increase access to public procurement markets for small and medium-sized enterprises and other underrepresented categories of bidders?

According to a study, bids from the German-speaking part of Switzerland are overrepresented in relation to the size of the region. As a reaction to a parliamentary intervention on this issue, the Federal Council has ordered the Federal Procurement Conference (FPC) to identify the reasons why, despite the federal efforts in this respect, only minimal change in the geographic repartition was detected. The FPC has formulated several recommendations in order to promote multilingualism in public procurement on a federal layer. In addition, the proposal for the revised OPP prescribes that in tender invitation procedures, at least one offer out of three shall be from a supplier coming from a different economic, and if possible, different language area.

9.3 Have there been any regulatory developments which are expected to impact on the law and if so what is the timescale for these and what is their likely impact?

Apart from the contemplated revision of the public procurement legislation, as described above, there are no other major regulatory developments which are expected to impact procurement laws.

AcknowledgmentThe authors would like to thank their colleague, Patrick Sattler, for his assistance in the preparation of this chapter.

conclusive evidence that the qualification criteria is met at the time of the offer submission, must be excluded if such non-fulfilment is considered as serious deficiency (and not just a bagatelle).The fiscal administration of the canton of Berne publicly tendered the business liability insurance for all institutions and affiliated companies of the canton of Berne. In its tender documentation, the fiscal administration stated that it will accept only offers from regulated insurance companies (qualification criteria). The appellant claimed before the Federal Supreme Court that unregulated insurance agents and brokers should also be admitted. However, the Federal Supreme Court considered such qualification criteria justified due to customer protection reasons and dismissed the appeal.The Federal Supreme Court had to decide if an awarding criterion was discriminatory according to article 5 of the FAIM. The City of Zurich had added “plausibility” as a sub-category to the “price” criteria for the evaluation of tenders for a construction project. Points could be subtracted for implausible calculations or statements from the tenderer in the evaluation of the offer. The Federal Supreme Court ruled in favour of the City of Zurich as it came to the conclusion that the use of “plausibility” criteria was allowed if it helped in the objective evaluation of the offer made by the tenderer. It can, for example, relate to the soundness of a timeframe for the completion of a project. In the case at hand, the Federal Supreme Court decided that the City of Zurich rightly made use of its municipal autonomy by setting its own objective criteria it deemed necessary to evaluate the tenders’ quality and did not violate the discrimination prohibition.

9 The Future

9.1 Are there any proposals to change the law and if so what is the timescale for these and what is their likely impact?

The revised GPA was signed by the Swiss Federal Council on March 21, 2012. It will enter into force once it has been ratified by the Swiss parliament. It is planned that such ratification will take place after the provisions of the revised GPA have been transferred to national law.The aim of the legislators is to align the cantonal procurement law and the federal procurement law. The consultation process for the revised FAPP was completed by July 1, 2015. On February 15,



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Astrid WaserLenz & Staehelin Brandschenkestrasse 24 8027 Zurich Switzerland

Tel: +41 58 450 80 00Email: [email protected]: www.lenzstaehelin.com

Benoît MerktLenz & Staehelin Route de Chêne 30 1211 Geneva 6 Switzerland

Tel: +41 58 450 70 00Email: [email protected]: www.lenzstaehelin.com

With over 200 lawyers, and offices located in Zurich, Geneva and Lausanne, Lenz & Staehelin is the largest law firm in Switzerland. It has a long-standing international practice and is ranked amongst the leading firms in all areas of business law. Its clients include national and foreign individuals and corporations, based in Switzerland or abroad.

The competition and regulated market group of Lenz & Staehelin has an outstanding track record in high-profile cases in Switzerland. It represents governmental bodies and businesses with respect to questions of Swiss public procurement law. In addition, Lenz & Staehelin advises its Swiss and global clients on all aspects of competition law, is involved in major, often multijurisdictional merger filings, and offers a wide range of transactional and regulatory work; in particular, in media, telecom, healthcare and energy matters. The members of this group represent their clients before the Swiss Competition Commission, the courts, and administrative bodies.

Dr. Astrid Waser is a partner in the competition and regulated market group in Zurich. She specialises in all aspects of competition (antitrust) law, public procurement law and media and telecoms law. Astrid Waser also advises on regulatory issues in connection with the gas and electricity industry. She advises in non-contentious matters and represents clients before Swiss authorities and courts; in particular, in public procurement procedures as well as in merger filings, cartel investigations and infringement procedures of the Swiss Competition Commission. Astrid Waser publishes on public procurement law as well as on Swiss and European competition law, and is a regular speaker at conferences and seminars.

Head of the competition law practice group of Lenz & Staehelin in Geneva, Dr. Benoît Merkt is a leading expert in this field, and is renowned for his first-rate practice. He specialises in all areas of Swiss and European merger control work and competition law, notably in the banking and finance, energy, high-tech, infrastructures (electricity), consumer goods, chemical, luxury goods, motor-car distribution, public broadcasting and retail sectors. He has been responsible for a large number of merger notifications to the Swiss Competition Commission and has coordinated multi-jurisdictional merger filings. Benoît Merkt advises in contentious and non-contentious matters and has acted in high-profile cases on alleged abuses of dominant positions, vertical restraints, cartels and public procurement.


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