The Public Procurement Act 2022 has entered into force: On June 9, 2022, the Danish Parliament passed an act amending the Public Procurement Act, the Act on the Complaints Board for Public Procurement, and the Act on the Obtaining of Tenders in the Construction and Civil Engineering Sector (the "Tender Act").
The most significant changes are reviewed below.
Access to documents
For tenders or information from tenders, access to documents under the Public Information Act is restricted to those who are entitled to appeal to the Complaints Board for Public Procurement regarding the case to which the request for access to documents relates, and to the mass media.
Mandatory grounds for exclusion
Previous voluntary grounds for exclusion now become mandatory grounds for exclusion
If the applicant or tenderer has committed serious misconduct in the course of their professional activities that casts doubt on their integrity, this will now constitute a mandatory ground for exclusion. All contracting authorities are therefore obliged to exclude an applicant or tenderer from participating in a procurement procedure if this ground for exclusion is applicable.
Before the amendment, this was a voluntary ground for exclusion.
New mandatory ground for exclusion
The amendment to the law also introduces a new mandatory ground for exclusion.
The contracting authority will now be obliged to exclude companies from a tendering procedure if the company is established in a country that is included on the EU's list of non-cooperative tax jurisdictions and which is not part of the WTO's Government on Procedurement Agreement or other trade agreements that oblige Denmark to open up the market for public contracts.cooperative tax jurisdictions and which is not part of the WTO's Government Procurement Agreement or other trade agreements that oblige Denmark to open up the market for public contracts to tenderers in that country.
Longer maximum exclusion period
The exclusion period is increased from 4 years to 5 years (for mandatory grounds for exclusion) and from 2 years to 3 years (for voluntary grounds for exclusion).
New process regarding documentation of reliability ("self-cleaning")
In future, the contracting authority will also be required to obtain an advisory opinion from the Competition and Consumer Authority when assessing the reliability of an economic operator.
Prior to the amendment, it was the contracting authority itself that assessed the reliability of the documentation submitted. It should also be noted that the opinion is only indicative, but it is to be expected that the contracting authority will largely base its decision on the indicative opinion.
Requirements for the use of persons undergoing training
In future, contracting authorities must include a requirement in the contract that persons undergoing training must be employed in the performance of certain public contracts.
The specific contacts subject to this requirement are specified in a notice issued in connection with the requirement for the use of persons undergoing training.
It follows that the requirement must be included in public works contracts that meet the following criteria:
- Performed in Denmark
- The contract has a minimum duration of 6 months from contract signing to delivery.
- The contract value must exceed the threshold value for public works contracts in the Public Procurement Act.
In addition, this also applies to public service contracts that meet the following criteria:
- Performed in Denmark
- The service contract has a minimum duration of 6 months from contract signing to delivery.
- The contract value is at least DKK 5 million.
- These include repair and maintenance services, installation services, transport services (except waste transport), and cleaning services.
It follows from the explanatory notes to the bill that the purpose of introducing this requirement is to support the training of the workforce of the future. With this amendment to the law, the aim is therefore also to create more apprenticeships.
Mandatory tendering system
A provision is inserted enabling the Minister for Business Affairs to lay down rules on how electronic tendering is to be conducted. If deemed appropriate, this may involve the establishment of a common electronic platform which all contracting authorities will, as a starting point, be required to use.
The contracting authority's option to terminate the contract
The amendment to the law expands the contracting authority's ability to terminate the contract as a result of the supplier's exclusion.
The contracting authority will be able to terminate a contract or framework agreement if, during the term of the contract or framework agreement, the supplier becomes subject to one of the grounds for exclusion and cannot document its reliability.
Prior to this amendment, it was only possible for the contracting authority to terminate the contract if the supplier was subject to one of the grounds for exclusion already at the time of the award of the contract.
This therefore represents a fairly significant change in the right to terminate the contract.
The introduction of a "buy green or explain" principle
The amendment to the law introduces a provision whereby the Minister for Industry, Business and Financial Affairs may lay down rules stipulating that contracting authorities which, in connection with the implementation of tenders under the Public Procurement Act, do not take environmental or climate considerations into account must state the reasons for this in their tender documentation.
The purpose of giving the Minister of Business the authority to issue regulations rather than laying down rules directly in the law is that this authority can be used, for example, to support the dynamic development of green requirements in tenders as better opportunities for green procurement arise.
The "divide or explain principle"
If a contracting authority does not offer separate sub-contracts, it must state the reasons for this in the tender documentation. Failure to comply with this requirement has not previously been subject to sanctions.
The Act on the Complaints Board for Public Procurement now includes a rule stating that a contracting authority may be fined 1% of the value of the tendered contract or framework agreement (up to a maximum of DKK 100,000) if the contracting authority has not provided a reason for not dividing the contract or framework agreement into sub-contracts.
If you, as a contractor or tenderer, have any questions about what these new rules mean for your business, or would like further advice on public procurement law, please contactattorney and partner Søren Hammer Westmarkorattorney Cristine Ussing.
