The Government procurement

Review

Law Business Research

Third Edition

Editors

Jonathan Davey and Amy Gatenby

The GovernmentProcurement Review

The Government Procurement ReviewReproduced with permission from Law Business Research Ltd.

This article was first published in The Government Procurement Review - Edition 3(published in May 2015 – editors Jonathan Davey and Amy Gatenby).

For further information please emailNick.Barette@lbresearch.com

The Government Procurement

Review

Third Edition

EditorsJonathan Davey and Amy Gatenby

Law Business Research Ltd

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i

The publisher acknowledges and thanks the following law firms for their learned assistance throughout the preparation of this book:

ADAMS & ADAMS

ADDLESHAW GODDARD LLP

AEQUITAS LEGAL

ALLEN & OVERY

ARAP, NISHI & UYEDA ADVOGADOS

BAHAS, GRAMATIDIS & PARTNERS

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BENTSI-ENCHILL, LETSA & ANKOMAH

BIRD & BIRD LLP

HANNES SNELLMAN ATTORNEYS LTD

HERBERT SMITH FREEHILLS

LEE AND LI, ATTORNEYS-AT-LAW

LENZ & STAEHELIN

LIEDEKERKE

MNKS

NADER, HAYAUX & GOEBEL, SC

SETH DUA & ASSOCIATES

SETTERWALLS ADVOKATBYRÅ AB

ACKNOWLEDGEMENTS

Acknowledgements

ii

SHEPPARD, MULLIN, RICHTER & HAMPTON LLP

ŢUCA ZBÂRCEA & ASOCIAŢII

ÜNSAL GÜNDÜZ ATTORNEYS AT LAW

VIEIRA DE ALMEIDA & ASSOCIADOS

WOLF THEISS ATTORNEYS-AT-LAW

iii

Editors' Preface ..................................................................................................viiJonathan Davey and Amy Gatenby

Chapter 1 AUSTRALIA ...............................................................................1Geoff Wood and Anne Petterd

Chapter 2 AUSTRIA .................................................................................14Philipp J Marboe and Nina Lassner

Chapter 3 BELGIUM ................................................................................26Dirk Lindemans, Frank Judo, Aurélien Vandeburie and Stijn Maeyaert

Chapter 4 BRAZIL ....................................................................................38Massami Uyeda Junior and Rodnei Iazzetta

Chapter 5 CANADA .................................................................................52Theo Ling and Jonathan Tam

Chapter 6 EUROPEAN UNION ..............................................................66Clare Dwyer and Michael Rainey

Chapter 7 FINLAND ................................................................................82Toni Malminen

Chapter 8 FRANCE ..................................................................................95Romaric Lazerges

Chapter 9 GERMANY ............................................................................111Olaf Otting and Udo H Olgemöller

CONTENTS

iv

Contents

Chapter 10 GHANA ..................................................................................122Divine Kwaku Duwose Letsa

Chapter 11 GREECE ................................................................................139Irene Economou

Chapter 12 INDIA ....................................................................................157Sunil Seth and Vasanth Rajasekaran

Chapter 13 ITALY .....................................................................................168Filippo Bucchi, Maria Vittoria La Rosa and Gabriella Ungaro

Chapter 14 LUXEMBOURG ....................................................................183Benjamin Marthoz

Chapter 15 MALTA ...................................................................................201Adrian Delia and Matthew Paris

Chapter 16 MEXICO ................................................................................212Javier Arreola E and Vanessa Franyutti J

Chapter 17 PORTUGAL ...........................................................................225Paulo Pinheiro, Rodrigo Esteves de Oliveira, Catarina Pinto Correia and Ana Marta Castro

Chapter 18 ROMANIA .............................................................................238Oana Gavrilă and Mariana Sturza

Chapter 19 RUSSIA ...................................................................................250Olga Revzina and Lola Shamirzayeva

Chapter 20 SOUTH AFRICA ...................................................................261Andrew Molver and Michael Gwala

Chapter 21 SPAIN .....................................................................................277Raquel Ballesteros

v

Contents

Chapter 22 SWEDEN ...............................................................................290Ulf Djurberg and Natali Phalén

Chapter 23 SWITZERLAND ...................................................................301Astrid Waser, Marcel Meinhardt

Chapter 24 TAIWAN ................................................................................312Pauline Wang and Claire C Lin

Chapter 25 TURKEY ................................................................................326Okan Gündüz and Burçak Ünsal

Chapter 26 UNITED KINGDOM ...........................................................337Amy Gatenby, Bill Gilliam and Clare Dwyer

Chapter 27 UNITED STATES .................................................................352David S Gallacher

Appendix 1 ABOUT THE AUTHORS .....................................................369

Appendix 2 CONTRIBUTING LAW FIRMS’ CONTACT DETAILS ...387

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EDITORS’ PREFACE

We are delighted to introduce this, the third edition of The Government Procurement Review. It brings even wider geographic coverage than the second edition, now covering six continents and 27 national chapters (including the EU chapter).

The political and economic significance of government procurement is plain. Government contracts are of considerable value and importance, often accounting for 10 to 20 per cent of GDP in any given state. Government spending is often high-profile and has the capacity to shape the future lives of local residents.

Even as the economic climate improves, it is perhaps no surprise that, with austerity the watchword throughout the developed economies, governments seek to demonstrate more effective, better-value purchasing; nor that many suppliers view government contracts as a much-needed revenue stream offering relative certainty that they will be paid. A concern to simplify procurement procedures and increase opportunities for small and medium-sized enterprises is also prevalent, particularly in the EU.

The World Trade Organization’s revised Agreement on Government Procurement (GPA) now covers the 28 EU Member States, Armenia, Canada, Hong Kong (China), Iceland, Israel, Japan, Korea, Liechtenstein, the Netherlands with respect to Aruba, Norway, Singapore, Switzerland, Chinese Taipei and the United States. Montenegro and New Zealand were invited to accede to the GPA on 29 October 2014. Eight other states have started the process of acceding (Albania, China, Georgia, Jordan, the Kyrgyz Republic, Moldova, Oman and Ukraine).

In last year’s preface, we mentioned potential new, protectionist clouds on the procurement horizon with the European Parliament having approved measures that would prevent firms from bidding for larger public contracts unless their home country allows reciprocal access to EU firms. While the European Parliament viewed these measures as encouraging third countries to reciprocate in opening markets, some (including the International Chamber of Commerce) feared it would have the opposite effect, provoking trade wars. It seems, for the moment at least, that these proposals are not proceeding, which in the authors’ view is to be welcomed.

Editors’ Preface

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Regardless of these possible difficulties, we expect that the principles of transparency, value for money and objectivity enshrined in the UNCITRAL Model Law on Public Procurement and in the national legislation of many states will continue gradually to have a positive effect.

The biggest single development internationally in the period since the second edition is undoubtedly the adoption of new EU directives and progress towards the required national implementation, Member State by Member State. The New Directives cover, respectively, mainstream public sector and utilities procurement (replacing the 2004 directives) and concessions, an area previously only partly covered by the EU regime. The new directives have been described as effecting evolution rather than revolution, but cynics, pointing to the lengthening of the directives and the addition of new procedures, query whether the originally stated aims of simplification and ‘flexibilisation’ (a word that could only have been invented in Brussels!) have really been achieved.

At the time of writing, only the United Kingdom has implemented the mainstream directive, with the deadline for transposition being 18 April 2016.

Incidentally, when reading chapters regarding European Union Member States, it is worth remembering that the underlying rules are set in the directives at EU level. Readers may find it helpful to refer to both the European Union chapter and the relevant national chapter, to gain a fuller understanding of the relevant issues. As far as possible, the authors have sought to avoid duplication between the EU chapter and national chapters.

Some national authors have reported significant increases in challenges to contract award decisions, and this is certainly the experience in the United Kingdom. While it is clear that there are considerable variations between jurisdictions in the willingness or ability of suppliers to challenge, it seems to us that the increased risk of challenge can help hold awarding authorities to account and is likely to encourage greater compliance with national procurement rules. It may be that, in jurisdictions where bringing procurement challenges is either difficult or expensive, further measures are needed to amplify this effect.

Finally, we wish to take this opportunity to acknowledge the tremendous efforts of the many contributors to this third edition as well as the tireless work of the publishers in ensuring that a quality product is brought to your bookshelves in a timely fashion. We hope you will agree that it is even better than previous editions, and we trust you will find it to be a valued resource.

Jonathan Davey and Amy GatenbyAddleshaw Goddard LLPLondonMay 2015

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Chapter 23

SWITZERLAND

Astrid Waser, Marcel Meinhardt 1

I INTRODUCTION

Public procurement in Switzerland is regulated at both the federal and cantonal levels. At the federal level, the Federal Act on Public Procurement (FAPP) and the Federal Ordinance on Public Procurement (FOPP) are the key procurement acts. At the regional and local levels, the Intercantonal Agreement on Public Procurement (IAPP) and the cantonal public procurement laws are the main legislation in the field of public procurement. This chapter mainly focuses on the regulation at the federal level, as there are numerous different regulations at both the cantonal and even communal level.

The national legislative acts are complemented by international framework agreements such as the World Trade Organization’s Agreement on Government Procurement of 15 April 1994 (GPA) and the bilateral Agreement between the European Union and Switzerland on certain aspects of public procurement of 21 June 1999. As Switzerland is not a member of the European Union, the EU procurement directives do not apply.

Compliance with the procurement rules is secured, on the one hand, by the appeal courts (see Section IX, infra) and, on the other hand, by the Swiss Competition Commission (the ComCo), which, according to the Federal Act on the Internal Market (FAIM), can make recommendations and opinions for authorities and file appeals if it considers that a decision unduly restricts access to the market, and thus disregards the procurement rules. Government procurement policy for Switzerland is set at the federal and regional levels by respective legislative bodies. The Federal Procurement Conference is the strategic body for the procurement of goods and services and coordinates and harmonises procurements, at the federal level.

1 Astrid Waser and Marcel Meinhardt are partners at Lenz & Staehelin.

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The aim of the procurement rules is to enhance the efficient use of public funds by increasing competition and by awarding contracts to the most commercially advantageous bid. The fundamental principles governing procurement procedures are the principle of equal treatment of domestic and foreign tenderers and the principle of transparency. Tenders are evaluated based on a number of criteria such as deadlines, quality, price, operating costs, customer service, aesthetics and environmental sustainability.

II YEAR IN REVIEW

Following a change in the financing of health-care services, it is being discussed whether private hospitals that offer services financed by (basic) health insurance are subject to procurement law. Proponents argue that private hospitals also fulfil a public task with respect to services financed by basic health insurance, namely the provision of public health care, and are, therefore, subject to public procurement law. According to a recent decision of the Health and Welfare Administration of the Canton of Berne, private hospitals in the Canton of Berne are subject to procurement law. It remains to be seen whether this decision will be confirmed by case law and other cantons. As regards enforcement practice, the ComCo – on the basis of its competence to supervise the compliance of the Confederation, the cantons and the communes with the FAIM – has intervened in public procurement cases. In June 2014, the ComCo ruled that an entity offering IT services owned by cantons and communes is only subject to public procurement law if it is not under sufficient competitive pressure from the market.

According to recent case law at federal level, eligibility criteria have to be interpreted in an objective manner. The awarding authority may not change the interpretation of eligibility criteria in the course of a tendering process. In the case at hand, the awarding authority had reduced the necessary minimum experience and, according to the court, thereby violated procurement law.

Regarding procedural questions, the Federal Supreme Court held that appeals against sanctions (e.g., exclusions due to competition law infringements) imposed by cantonal authorities may only be appealed to the Federal Supreme Court in certain limited circumstances. This decision has been criticised as it limits the possibility of having a sanction (and not the procurement decision) reviewed by a federal instance.

III SCOPE OF PROCUREMENT REGULATION

i Regulated authorities

The FAPP regulates most public sector entities. Article 2 FAPP enumerates the federal level contracting authorities that are directly subject to procurement law. The list contains entities both with and without legal personality. A list of entities can be found in Appendix 1/Annex 1 of the GPA. However, some entities founded after the GPA being signed may also be subject to public procurement. Therefore, it remains unclear which public entities are covered by federal law. The same applies with respect to public entities on the cantonal level.

Public and private law organisations that provide water, energy, transportation or telecommunication services in Switzerland are explicitly regulated. They are subject to

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federal procurement law if they are majority-owned or controlled by the Confederation, or if they render (public) services that are in the common interest of the people in Switzerland and have special and exclusive rights that have been granted to them by the competent authority.

For certain actions and under specific circumstances, private entities are also subject to public procurement law. If private parties act in place of contracting authorities for procurements (as in Article 2d FOPP), they are subject to the same legal requirements as public entities.

ii Regulated contracts

In Switzerland, work contracts (i.e., contracts for building and civil engineering work), supply contracts (i.e., contracts for the supply of moveable goods, in particular by purchase, lease, rent or hire) and service contracts are governed by procurement rules. These contracts, however, only fall under the procurement rules if the public entity is the purchaser of goods or services.

The provisions of the FAPP will only apply if the estimated value of the public contract to be awarded reaches the following threshold values (without VAT):a supplies: 230,000 Swiss francs;b services: 230,000 Swiss francs;c construction works: 8.7 million Swiss francs; andd supplies and services on behalf of utilities (according to Article 2, Paragraph 2 FAPP)

and for contracts awarded by the automobile services of the Swiss Post for its passenger transport business in Switzerland: 700,000 Swiss francs.

For entities specified in Article 2, Paragraph 2 FAPP (as specified in Article 2a FOPP), the FAPP will only apply if the estimated value of the public contract to be awarded attains the following threshold values (without VAT):a supplies and services in the telecommunications sector: 960,000 Swiss francs;b supplies and services in the railway sector: 640,000 Swiss francs;c supplies and services in the electricity sector: 766,000 Swiss francs;d works in the telecoms or railway sectors: 8 million Swiss francs; ande works in the electricity sector: 9.575 million Swiss francs.

If an open or selective procedure does not lead to offers that fulfil the qualification criteria or in cases of unforeseeable urgency, the awarding entity may contract a supplier directly and without an invitation to tender. It can also do so if the relevant values (without VAT) are below 150,000 Swiss francs for works and services or below 50,000 Swiss francs for supplies.

The Federal Department of the Environment, Transport, Energy and Communications can exempt (partial) sectors from being subject to public procurement law if it finds that there is effective competition in the market. So far, it has exempted partial sectors in the telecommunications sector (fixed net communication, mobile communication, internet access, data communication) and the railway traffic sector

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(railway freight on standard gauge).2 In addition, defence procurements (procurement of weapons, munitions, war materials, construction of fighting and command infrastructure for overall defence and the army) are exempt from the legislation.

Generally, changes to the awarded project are not allowed. The awarding entity is bound to conclude a contract with the tendered specifications. A material change to the project would require a new tender. Specifications and immaterial changes are allowed as long as it remains certain that the same tenderer would still have been awarded the contract. Similar rules apply to changes after the contract has been signed. However, if options or possible changes have been foreseen in the procurement process already and have been included in the tender, the contracting entity is allowed to exercise such options and to implement such changes.

IV SPECIAL CONTRACTUAL FORMS

i Framework agreements and central purchasing

Swiss public procurement law does not explicitly regulate framework agreements. It is, however, undisputed that they are compatible with the law. In practice, they enjoy great popularity, as they have the advantage that several tenders can be bundled in one, which results in a reduction of tender procedures. Often, framework agreements only contain general conditions for the planned procurement and provide for a  duty to supply on the bidder’s side. However, they often do not include purchase obligations for the contracting entity. For the calculation of the relevant threshold, the sum of single transactions planned under a framework agreement is relevant.

If a  framework agreement has been awarded to one supplier, the individual transactions thereunder do not need to be publicly tendered again. If, however, similar framework agreements have been concluded with several suppliers, the individual transactions are still subject to a tender process within the group of bidders that have concluded such framework agreements.

Other means to introduce more flexibility for the contracting authority in the procurement processes are dialogues, negotiations or a combination of a basic contract with one or several options.

Awarding entities are also allowed to procure jointly with other authorities or to use centralised purchasing. If a contracting authority subject to federal procurement law jointly procures with an entity subject to cantonal procurement law, federal law will apply to the entire procurement procedure, if the contracting authority subject to federal law bears the highest share of the financing.

ii Joint ventures

Instead of buying, a  public entity is always allowed to produce the relevant goods, services or works itself. Public procurement law does not apply in such cases. If, for such purposes, a public entity joins forces with another public entity, public procurement law

2 Annex 1 to the Ordinance of the Federal Department of the Environment, Transport, Energy and Communications on the exemption of public procurement law (SR 172.056.111).

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still does not apply as long as the supplier is controlled by public entities and does not, in principle, supply entities that do not hold a controlling stake. Control can also be held jointly by several public entities. The criteria developed by the European Court of Justice (ECJ) in Teckal 3 can be used as guidance for the assessment.

Cases of privatisation (i.e., outsourcing of services, works or the supply of goods to a privately held entity) are not specially regulated. They are subject to the general procurement rules.

The same is true for PPPs. Although usually long-term and often complex, PPPs are viewed as ordinary procurements of supplies, services or constructions. 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 must ensure that its PPP partner obliges its sub-contractors to comply with requirements such as labour protection regulations.

V THE BIDDING PROCESS

i Notice

Article  8 of the FOPP provides for a  central publication organ for all procurements under federal law (www.simap.ch). Under their respective laws, the majority of cantons and a  number of municipalities also use this platform for publication purposes; therefore, it contains the bulk of public tenders in Switzerland. The platform is also used for the publication of tender awards. In addition, the platform contains bidder profiles and standard forms for bidder data, which represents a step towards a fully electronic tendering process, from the invitation to tender to the submission and selection of bids.

ii Procedures

The FAPP prescribes three different award procedures. In the open procedure, awarding authorities make a  public tender in which any interested bidder may participate (Article 14 FAPP). In the selective procedure, the awarding authorities submit a public tender and formulate qualification criteria (according to Articles 9 and 10 FAPP) that bidders must fulfil to be admitted to submit a  tender (Article  15 FAPP). These two procedures are available to all tenders.

In the negotiated procedure, the contracting authority negotiates a  contract directly with a supplier of its choice (Article 16 FAPP). This procedure is only available to awarding authorities under certain circumstances, for example:a if no offers resulted from an open or selective procedure;b if no bidder fulfilled the pre-qualification criteria;c if only coordinated offers were made;d if, for technical or artistic reasons, or for reasons related to intellectual property,

only one bidder can be considered; ore if, in cases of urgency, an open or selective procedure is not possible.

3 Teckal decision of the ECJ in case C-107/98 of 11 November 1999.

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Furthermore, the fourth award procedure, the invitation procedure, is only mentioned in the FOPP. According to case law the invitation procedure is possible under the same requirements as the negotiated procedure. In the invitation procedure, the contracting authority has the possibility to determine which suppliers will be allowed to submit an offer. If possible, the contracting authority invites at least three suppliers. This procedure is only available in very limited circumstances.

The regional and the federal contracting authorities are currently developing electronic procurement platforms, which shall allow electronic procurements in the future.

iii Amending bids

The principle of equal treatment prohibits a  bid being amended after submission. Unintentional mistakes such as calculation or typing errors can be corrected if this does not lead to an undue disadvantage to concurring bidders.

According to Article 25 FOPP, the awarding entity can adjust the bids to make them comparable with each other. Within this process, certain amendments of the bid are admissible. In addition, federal procurement law provides, under certain circumstances, for a possibility to negotiate the submitted bids with the bidders (Article 20 FAPP and Article 26 FOPP). Within this process, the bid can be amended. Cantonal law does not allow such negotiations.

VI ELIGIBILITY

i Qualification to bid

The contracting authority has the right to request the tenderer to provide evidence of its financial, commercial and technical capacity. These eligibility criteria and the evidence required to prove these criteria will be announced in the invitation to tender or in the tender documentation (Article 9 FAPP).

Under certain limited circumstances, parties may be disqualified from bidding. For example:a if they do not or no longer meet the eligibility criteria;b if they have provided the contracting authority with false information;c if they have not paid taxes or social security contributions:d if they have failed to comply with health and safety regulations, terms and

conditions of employment of workers or the equal treatment of men and women;e because of competition law infringements (e.g., cartels); orf in the case of an insolvency proceeding.

In addition, the contracting authority will remove bids containing substantial formal defects from the procedure (Article 19, Paragraph 3 FAPP).

Only the selective procedure provides for a selection or short-listing of the bidders that fulfil the qualification criteria established by the contracting authority. According to Article 15, Paragraph 4 FAPP, the contracting authority can reduce the number of

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tenderers if otherwise the tender could not be processed in an efficient way. However, even when limiting the number of participants, the contracting authority must guarantee an effective competition between the bidders.

ii Conflicts of interest

According to Article 21a FOPP, the contracting authority must exclude bidders from a given procedure if they were involved in the preparation of the procurement process and if their advantage therefrom cannot be balanced otherwise, provided the exclusion does not bear the risk of elimination of effective competition among the bidders. A suitable means to balance any competitive advantage may be the sharing of all relevant information on the preparation of the tender, the publishing of the names of the persons involved in the preparation and the prolongation of the deadlines for the preparation of the bids.

iii Foreign suppliers

The FAPP states as one of its fundamental principles that the contracting authority will ensure equal treatment of domestic and foreign tenderers in all phases of the procedure (Article 8, Paragraph 1, letter a FAPP).

The FAPP specifies in this respect that it only applies to foreign tenderers from General Agreement on Tariffs and Trade contracting states to the extent that these states grant reciprocal rights in relation to public procurements; and third countries, to the extent that Switzerland has entered into corresponding contractual agreements with them, or the Federal Council has established that there will be no discrimination against Swiss tenderers in the country concerned.

VII AWARD

i Evaluating tenders

The contracting authority has an obligation to publish the order of the awarding criteria and their weighting. If qualification criteria apply, they must relate to the 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. The tenders must be evaluated on the basis of the published awarding criteria. As contracts must be awarded to the most commercially advantageous bid, the awarding criteria will include aspects such as deadlines, quality, price, profitability, operating costs, customer service, expediency of the service, aesthetics, environmental sustainability and technical value.

According to the Federal Supreme Court, the use of ‘public voting’ (i.e., consultation of public opinion – as in a case concerning the construction of a town hall) is allowed as a  legitimate awarding criteria.4 It referred to the criterion of functionality and held that the criterion of public voting fulfilled a legitimate function if it reduces the risk of a project being rejected in a public referendum at a later stage.

4 Cf BGE 138 I 143, E 4.2 f.

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ii National interest and public policy considerations

Certain public policy considerations are established as preconditions for the participation in a tender procedure. The FAPP (Article 8, Paragraph 1, letters b and c) mentions in this respect compliance with the terms and conditions of employment of workers at the place of performance, as well as equal treatment of men and women in respect of salary.

Other national interest and public policy considerations can be integrated as awarding criteria. Federal procurement law mentions sustainability in general and environmental sustainability in particular (Article 21 FAPP and Article 27 FOPP).

In addition, the government promotes sustainable procurements, and has included it in its overall strategy. Furthermore, there is a special Ecological Procurement Service, which is part of the Federal Office for Environment.

Such aspects must in principle be related to the goods or services procured. However, in a recent decision, the Federal Supreme Court allowed the use of socially or ecologically motivated awarding criteria with no direct connection to the public contract provided there is a law providing this.5

In addition, such aspects must not discriminate against non-local and in particular foreign bidders. For example, travel or transport distance can only be evaluated if this does not advantage local bidders. In addition, the geographical location or the origin of a bidder can only be taken into account in exceptional cases if there are compulsory objective reasons that can justify their inclusion (e.g., if knowledge about local peculiarities is needed for a certain task).6

VIII INFORMATION FLOW

In its annexes, the FOPP lists a minimum set of information that must be provided in the procurement process. The contracting authority provides the bidders with the tender documentation and informs them at the same time where models, samples and additional documentation can be reviewed or collected. In addition, the contracting authority must answer questions with respect to the tender documentation within a short period. As answers to such questions must not give an undue advantage to any bidder, contracting authorities often choose to disclose both questions and answers to all bidders.

After the assessment of the bids, the contracting authority will communicate its decisions, incorporating a  reasoned summary, by way of publication or by way of formal service.

If requested to do so, the contracting authority must promptly disclose to the unsuccessful tenderers:a the award procedure applied;b the identity of the successful tenderer;c the price of the successful bid or the highest and lowest prices of the bids included

in the award procedure;

5 Cf BGE 140 I 285, E. 7.6 Cf decisions of the Federal Supreme Court 2P.46/2005 and 2P.47/2005 E 5.1.

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d the essential reasons why the bid was not considered; ande the determining characteristics and advantages of the successful bid.

An exception to the duty to inform applies if doing so would be committing a breach of federal law, if the disclosure would not be in the public interest, or if the justified commercial interests of the tenderers would be adversely affected or fair competition between them would be prejudiced.

Within the procurement process, the awarding authority will protect the confidential nature of all information provided by the tenderer (Article 8, Paragraph 1, letter d FAPP). However, the official secrecy of the awarding authority is limited by its duty to publish its award decision (Article 8, Paragraph 1, letter d in connection with Article 23, Paragraphs 2 and 3 FAPP and Article 28 FOPP).

IX CHALLENGING AWARDS

The unsuccessful tenderers have the possibility to challenge the awards. 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. This means that if suspensive effect is granted to a complaint, the contracting authority is prevented from concluding the contract. The chances of the unsuccessful tenderers to be attributed the contract if the appeal is won are intact.

After the contracting authority has signed a  contract, the contract is 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.

Regarding timescales, in the case that 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.

i Procedures

In addition to the final decision of an awarding entity (including discontinuation of the award procedure), a number of interim decisions can be appealed. Article 29 FAPP contains a non-exhaustive list (including the invitation to tender, the decision on the selection of participants in the selective procedure and exclusions). According to the APA,7 an appeal against other separately notified interim decisions is permitted if they may cause a  non-redressable prejudice; or if granting the appeal would immediately bring about a final decision and, thus, would obviate significant expenditure in time or money in prolonged evidentiary proceedings.

7 Federal Act on Administrative Procedure of 20 December 1968, as amended (SR 172.021).

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Anyone who has participated or has been refused participation in proceedings before the lower instance, who has been specifically affected by the contested decision and who has a legitimate interest in the revocation or amendment of the decision, has a right of appeal (Article 48, Paragraph 1 APA).

An appeal against decisions issued by a contracting authority subject to the FAPP may be submitted to the Federal Administrative Court. It must be filed within 20 days of notification of the awarding entity’s decision. An (earlier) publication of the decision on the internet platform, simap.ch, is equivalent to a personal notification and will be relevant for the calculation of the limitation period. Appeals against interim decisions must be brought forward immediately.

Appeals do not have suspensive effect. However, the Federal Administrative Court can be requested by means of provisional measure to grant suspensive effect (Article 28, Paragraph 2 FAPP).

Decisions of the Federal Administrative Court can be appealed under certain limited circumstances to the Federal Supreme Court. Such appeals must be filed within 30 days of notification of the decision.

Remedies against decisions of cantonal or local procurement authorities are provided for in the cantonal legislation. The cantons are, however, obliged to provide for at least one legal remedy to an independent authority. On the cantonal level, an appeal must be filed within 10 days from the date of publication.

ii Grounds for challenge

In the appeal, the appellant may contend that there has been a violation of federal law, including the exceeding or abuse of discretionary powers (Article  49, letter a  APA). Another ground for appeal is an incorrect or incomplete determination of the legally relevant facts of the case (Article 49, letter b APA). Inadequacy is explicitly excluded as a ground for appeal in public procurement matters (Article 31 FAPP).

iii Remedies

In the event that the appeal is held to be justified and the contract has already been entered into, the Federal Administrative Court will 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.

It is therefore essential that, in an appeal procedure, suspensive effect is granted (i.e., that the awarding entity is prohibited from concluding the relevant contract). Only in such a case can the court order new tenders or attribute the award to another tenderer.

When confronted with the question of whether to grant suspensive effect to an appeal in a public procurement matter, 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 whereby the interest of the public to implement the decision awarding a contract as swiftly as possible is given considerable importance.

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X OUTLOOK

The revised GPA of 6 April 2014 does not yet apply to Switzerland. There are amendments to the federal and regional regulations that need to be made before the revised GPA can be ratified by Switzerland. The amendment procedures are currently ongoing.

While the consultation procedures for the revision of the federal regulations (FAPP and FOPP) are planned to start in April 2015 and to end in July 2015, the consultation procedure for regional regulations (IAPP) ended in December 2014.

The consultation draft of the revised IAPP (d-IAPP) includes, inter alia, the following changes: firstly, the attribution of concessions and the transfer of public tasks are explicitly subject to public procurement law; secondly, under certain circumstances it is possible for contracting authorities in cantonal procurements to enter into negotiations with tenderers – until now, negotiations were not allowed at cantonal level; and thirdly, according to the d-IAPP, the right to file appeals shall be organised exclusively in the intercantonal agreement and will be given either to the ComCo (as until now) or to the new intercantonal organ for public procurement law. This amendment has been criticised by the ComCo as it would weaken or abolish its right to intervene in cantonal procurement procedures. Moreover, the d-IAPP contains a  standardised amount of dispute value (150,000 Swiss francs) after which a bidder can appeal cantonal awards. The revision process at federal and at cantonal level will be continued in the course of this year.

Furthermore, Parliament has concerned itself with the question of geographic repartition of contracts awarded under the FAPP with respect to the different language regions in Switzerland. According to an evaluation of all tenders of the Federal Office for Construction and Logistics in 2011, bids from the German-speaking part (82 per cent of all bids) and contracts awarded to them (80 per cent of all contracts) are over-represented in relation to the size of the region within Switzerland. In response to parliamentary interventions on this issue, the Federal Council has ordered the Federal Procurement Conference to identify why, despite the federal administration’s efforts in this respect, little change was detected in the geographic repartition. A  study has shown that language barriers constitute only one of several reasons for this. The Federal Council has given instructions to implement some of the study’s recommendations; for example, a duty to admit offers in all three official languages and, with regard to the invitation procedure, an obligation to invite at least one bidder from a  different language region if possible. The instructions will be implemented during the revision of the procurement law. Further recommendations of the study have been evaluated by the Federal Procurement Conference.

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ABOUT THE AUTHORS

ASTRID WASERLenz & StaehelinDr 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. Dr 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 merger filings, cartel investigations and infringement procedures of the Swiss Competition Commission as well as in public procurement procedures. Dr Waser publishes on Swiss and European competition law, as well as public procurement law, and is a regular speaker at conferences and seminars.

MARCEL MEINHARDTLenz & StaehelinDr Marcel Meinhardt is a  leading expert in competition law and is renowned for his broad, first-rate practice. He specialises in all areas of Swiss and European merger control work and competition law, particularly in the postal services, insurance, banking, automobile, energy, media, retail, construction, pharmaceuticals, ticketing and IT sectors. Dr Meinhardt also advises on regulatory issues including public procurement and energy law. Dr Meinhardt advises in contentious and non-contentious matters, and has acted in high-profile cases both in competition and public procurement cases. He heads the Lenz & Staehelin competition and regulated practice group.

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LENZ & STAEHELINBleicherweg 588027 ZurichSwitzerlandTel: +41 58 450 80 00Fax: +41 58 450 80 01astrid.waser@lenzstaehelin.commarcel.meinhardt@lenzstaehelin.comroman.kern@lenzstaehelin.comwww.lenzstaehelin.com