Pursuant to Art. 222 paragraph. 4 of the Act of September 11, 2019, Public Procurement Law (hereinafter referred to as: “PPL”), the Ordering Party is obliged to inform about the amount allocated for financing the contract before opening the bids.
Above the amount may be a real obstacle to concluding a contract even for a contractor whose offer is the only one in the procedure, or is the lowest price of all submitted offers. The amount earmarked for financing the contract reflects the financial capacity of the Employer in connection with the published public procurement procedure, the lack of appropriate funds makes it impossible to conclude the procedure and award the contract. However, contractors repeatedly ask the Ordering Party to increase the amount allocated for financing the contract. The question arises as to whether contracting authorities are required to grant such a request and, if so, in what case.
Pursuant to Art. 255 item 3 of the PPL, the awarding entity shall cancel the procedure if the price of the best offer or the tender with the lowest price exceeds the amount that the awarding entity intends to spend on financing the contract, unless the awarding entity may increase this amount to the price of the best offer. In the light of the above, increasing the amount earmarked for financing the contract is the sole and autonomous right of the Ordering Party, which may not be interfered by any other entity. Nevertheless, it may happen that a given Contractor obtains information that the Ordering Party has adequate funds, as it saved them in other parts of a given procedure.
The jurisprudence of the National Appeal Chamber (hereinafter referred to as “KIO”) also clearly indicates that the Contractors may not decide for the Employer to allocate funds for the implementation of a given contract, even if they have information about the alleged savings or it seems economically rational goodbye. As indicated in the jurisprudence of the National Appeal Chamber, which remains up-to-date on the basis of the currently applicable PPL: “The contracting authority is the administrator of funds and the decision-maker regarding the spending of these funds, but the decision to increase the amount allocated does not have to be externalized in a formal way.
The contracting authority is not obliged to search for sources of financing in excess of the amounts initially secured in order to select the most advantageous offer and to prevent cancellation of the procedure. Participants in the procedure and contractors cannot expect the contracting authority to transfer funds allocated to the implementation of other parts of the contract or funds saved in the course of the procedure. It is also unfounded to expect that the contracting authority will prove that its financial capacity does not allow for an increase in funds “- judgment of the National Appeals Chamber of March 14, 2018, KIO 351/18. To sum up, the Ordering Party is the only decision-maker as to the expenditure of the given funds – the Ordering Party is not obliged to seek separate sources of financing or to transfer funds between the various parts of the procedure. Importantly, the contracting authority does not have to prove in any way that it is not able to increase the amount allocated for financing the contract and that the appropriate funds are simply not there. Contractors, in turn, cannot oblige the Ordering Party to increase the amount allocated for financing the contract, at best they can only appeal to the Ordering Party in this respect.
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