Hungary: Recent amendment to Public Procurement Act

The Hungarian Parliament recently adopted an amendment (“Amendment”) to the Public Procurement Act (“PPA”). The Amendment concerns several topics which have great impact on future public procurements. The most important amendments include:

• Certain contracting authorities are required to invite at least three tenderers to submit offers for all procurements with a value over HUF 1,000,000 (approx. EUR 3,200) but under the national public procurement threshold.
• The government may grant individual exemptions from the PPA for subsidised procurements, if “the PPA would not serve the aim of efficient use of public funds”.
• A contracting authority may choose to follow procedures for procurements with values exceeding the EU thresholds even if its procurement value reaches only the lower national limits.
• The general deadline for electronic procedures is postponed to 31 December 2017 and the deadline for centralized procurements is postponed to 1 February 2017.
• Economic operators will be excluded from tenders for 90 days if they: seriously breach PPA provisions in the performance of agreements concluded under public procurement procedure and the breach is established by a binding decision of the Public Procurement Dispute Board or a court.
• External capacity providers may provide references or experts only if the external capacity provider also takes part in the performance of the contract in a measure that ensures the required expert knowledge and experience. The contracting authority will examine the performance of contracts to ensure that the above criteria are met.
• Deadlines to submit certificates on exclusion grounds and selection criteria have been changed from five working days to an “appropriate” deadline prescribed by the contracting authority.
• The contracting authorities may deem the award procedure unsuccessful if only one offer is submitted in the procedure, or if certain supervisory bodies establish that a serious infringement has occurred during the procedure and the contracting authority has no opportunity to remedy the infringement.
• The so-called “four bidders' procedures” under the national procurement regime now require five tenderers and are no longer eligible for supply and service contracts.
• Direct payment of subcontractors will not be applicable under service contracts. Detailed rules regarding direct payments to subcontractors under works contracts may be determined in a separate government decree.
• The 50% limit for the involvement of subcontractors in service contracts is abolished. Such limit can only be applied with works contracts and even up to 65% of the contract value.
• The de minimis amendments to contracts will not apply in cases where different public procurement rules should have been applied due to the new value (especially, if the contract was concluded under national procurement procedure and the amended value exceeds the EU threshold).

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