Taking Counsel: Control measures for competition assurance as adopted in public procurement procedures

  • 2009-09-17
  • By Darius Miniotas [Jurevicius, Bartkus & Partners]
On July 22, 2009 the Parliament of the Republic of Lithuania adopted amendments to the Law on Public Procurement of the Republic of Lithuania ("the Law") which came into effect starting Sept. 1, 2009. The amendments were adopted in order to make public procurement more transparent, efficient, to stimulate a more rational use of funds for public procurement, to improve and ensure fair competition and to reduce the possibilities for corruption in public procurement.

The investigation performed by the Competition Council of the Republic of Lithuania demonstrated that in certain cases several undertakings, or a group of associated undertakings, conclude prior agreements, prohibited by the Law on Competition, and participate in the public procurement procedures as allegedly independent suppliers and only imitate competition as the winners are already determined by the concluded agreements. In order to prevent such activities, certain control measures were introduced by the aforementioned amendments.

In implementing the control measures of competition assurance, while carrying out a public procurement, the adopted amendments supplemented the requirements for the content of public procurement documents. The Law established that the documents of public procurement must include information on economic operators that the supplier is associated with, and to provide a confirmation that in case one or more of the indicated economic operators that the supplier is associated with takes part in the tender or provides a separate proposal for the tender, the supplier in that case acts independently and they shall be treated as competitive parties. In addition, the Law laid down the requirement for the supplier to provide a declaration that it does not take part in any illegal transactions or agreements, defined in the Law on Competition of the Republic of Lithuania, which shall be treated as infringements on the law. In the event it is established that such a declaration by the supplier is false, the respective supplier may be eliminated from the public procurement procedures. Moreover, in order to prevent possible agreements prohibited by the competition law, the contracting authority has a right to reject the proposal from a supplier who has committed a serious professional misconduct, which is directly related to the infringements of competition law, and for which economic sanctions have been applied to the undertaking concerned.

Implemented control measures shall contribute to the improvement of fair competition in the public procurement sector, and clearly demonstrate that infringements on competition law are treated as seriously as criminal offences.

Darius Miniotas is an associate advocate at Jurevicius, Bartkus & Partners, a member of Baltic Legal
Solutions, a pan-Baltic integrated legal network of law firms including Glikman & Partnerid in Estonia and Kronbergs & Cukste in Latvia, dedicated to providing a quality "one-stop shop" approach to clients' needs in the Baltics.