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Union, principally financed by the EU
A joint initiative of the OECD and the European
Structure and Functions of a
Central Public Procurement
Institution – the Public
Procurement Council, Hungary
Gabriella Fribiczer, PPC
Regional Conference on “Public Procurement Reform in West Balkan”
Pristina, 16-17 September 2008
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OVERVIEW
I. STRUCTURE OF PPC
II. LEGAL BASIS
III. FUNCTIONS OF PPC
IV. REVIEW PROCEDURES
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I.
INSTITUTIONAL SET-UP
STRUCTURE OF PPC
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PUBLIC PROCUREMENT
COUNCIL (PPC) I.
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PPC was established in 1995 (at the same
time that the first PP Act came into force)
aim: enforcing the objectives of the PP
Act
centralized, autonomous body
subordinated only to the Parliament
must report to the Parliament every year
central budgetary organ
the Council convenes 7 to 8 times every
year
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Union, principally financed by the EU
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PUBLIC PROCUREMENT
COUNCIL (PPC) II.
the PPC is constituted of 19 members:
- President
- 6 members responsible for the enforcement of
the basic principles and public interest
- 6 members representing the general interest of
the contracting entities
- 6 members representing the general interest of
the tenderers
 PPC members are not employed full-time
(except the President)
 the mandate of the PPC members is for not
less than a two year term
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PUBLIC
PROCUREMENT
COUNCIL (PPC) III.
The President of the PPC
 is elected with a two-thirds quorum for a
five year term of service by the members
of the Council (may be re-elected once)
 employed full-time
 independent
 civil servant
 entitled to salary and other benefits as
due to senior state secretaries
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STRUCTURE OF PPC
SECRETARIAT
standing structure of PPC, led by
the Secretary General
 in charge of coordinating the
activity of the Council, preparing
and implementing the CPP’s
decisions;
 employing civil servants
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STRUCTURE OF PPC
UNITS OF THE
SECRETARIAT
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Legal Unit:
• giving legal advice (help-desk)
• preparing draft recommendations, briefings
• administering the list of conciliators
Unit of International Relations and Training:
• international representation (ACPC, PPN, EU
Lab, etc.)
• coordination and control of pp training
Editorial Board:
• publishing and transmitting pp notices
Economic Analysis Group:
• management and analysis of statistics
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STRUCTURE OF PPC
ARBITRATION BOARD
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operates alongside the PPC
set up also in 1995
first instance public procurement
review body
independent, administrative
permanent „quasi-judicial” body
”tribunal” entitled to make a
reference to the ECJ (request for
preliminary ruling)
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STRUCTURE OF PPC
ARBITRATION BOARD
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efficient operation of the Board is provided
from the budget of the PPC
the Board consists of public procurement
commissioners
the chairperson and the vice-chairperson of
the Board are elected from the public
procurement commissioners by the twothirds of the members of the Council in
attendance, for a five-year term (possibility of
re-election is not restricted)
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PUBLIC
PROCUREMENT
COMMISSIONERS I.
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number of commissioners (staff of
the Board) is determined by the PPC
commissioners are appointed and
recalled by the PPC
they are full-time civil servants
strict rules on conflict of interestes
related to the contracting entities
and the tenderers
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JUDICIAL REVIEW
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Municipal Court
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Municipal Court of Appeals
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Ordinary Civil Courts
(ineffectiveness + damages) –
will change in the future („one
court for all” concept)
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II.
LEGAL
BACKGROUND
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PP LEGISLATION
the former PP Act : Act XL of
1995
 present PP Act: Act CXXIX of
2003 entered into force on 1st of May
2004 as a general rule;
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PP LEGISLATION
implementation of Directives
2004/17 and 2004/18: 15th
January, 2006
 implementation of Directive
2007/66: planned from 1st of
January 2009 and partially from
1st of June, 2009
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THE PP ACT IN
FORCE
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all the essential rules on award
procedures and on review
procedures, as well as on the
operation of the PPC can be found
in this one Act
however: certain topics (e.g.
centralised procurements, order of
publication, tender notices) are
regulated in secondary legislation
(governmental and ministerial
decrees)
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III.
FUNCTIONS OF PPC
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FUNCTIONS OF
PPC
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preparing recommendations
clarifying recurring problems in
applying pp law
briefings on practical issues are
issued by the President
help-desk: giving oral and written
opinions to contracting entities and
tenderers
non of these are legally binding
briefings and recommendations are
published in the PP Bulletin
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FUNCTIONS OF
PPC
initiating the modification of
PP legislation, involved in the
consultation process
 maintaining international
relations
 maintaining records
(database) on public
procurement
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FUNCTIONS OF PPC TRAINING
Training activities: first:
participation in training and
‘further training’ of contracting
entities and tenderers, later
(from 2004): coordination and
supervision of training activities
in the field of public
procurement.
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FUNCTIONS OF PPC TRAINING
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from 1997: training of trainers
programme with the support of World
Bank
training institutions were selected
(University of Economy), manual was
elaborated and published
20 trainers were trained
trainers participated several trainings
in the organisation of the PPC
(mainly local government officers at
county seats)
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FUNCTIONS OF PPC TRAINING
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later on (from 2000-2003): 2-3 day-long
workshops – target group: local
government officials who had already
acquired competences in public
procurement; aim: providing more
extensive knowledge
in 2002-2003: in cooperation with Budapest
Business School (an institution for higher
education): 72 hour training course
focusing on public procurement (also
case-studies)+ legal and financial
knowledge
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FUNCTIONS OF PPC TRAINING
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since 2004: max. 500 (220) hour long PP
training is organized by different
organizations/ accredited, stateapproved training, certification in the
end (requested more and more often by
contracting entities when hiring pp
people)
members and staff of the PPC is present
during the exams monitoring the quality
of training
supervision through setting out
professional and examination criteria
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FUNCTIONS OF PPC TRAINING
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in the framework of coordination and
supervision of PP training: PPC publishes
information related to pp training activities
(information on workshops, trainings
together with their duration, trainers
involved), as well as information about the
results of the exams
PPC contacts any training organisation if
detects any problems concerning the quality
of the training
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FUNCTIONS OF PPC TRAINING
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training of civil servants by the Hungarian Public
Administration Office – PPC participated in the
elaboration of the training materials and in the
selection of trainers
several universities offer public procurement
courses (part of the training, e.g. Faculty of Law)
or special courses – PPC participates in the
elaboration of the programmes and training
materials
members and staff of PPC participating at pp
events (workshops, trainings) as a
speaker/trainer when requested
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FUNCTIONS OF PPC
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administering lists:
• contracting entities
• approved contractors
• Official Public Procurement
Consultants
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publishing the Official Journal of
the PPC: the Public Procurement
Bulletin
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MONITORING ACTIVITY
ex officio proceedings
initiated by the President or
the Members of PPC
 possibility for the President to
require information from any
contracting entities
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CONTROL OF NOTICES
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notices related to public
procurement has to be
published through the PPC
before notices are forwarded or
published, the Editorial Board
revises all of them both
regarding their form and content
strict time limits apply for this
control activity
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CONTROL OF NOTICES
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if the notice breaches PP law, it is
sent back for reconsideration
notices sent back to the Editorial
Board with the same content are
forwarded or published, but the
PPC is also informed
members of the PPC are entitled to
initiate ex officio proceeding of the
Arbitration Board
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CONTROL OF AMENDMENT/
PERFORMANCE OF CONTRACTS
contracting authorities shall
publish a notice in the PP
Bulletin regarding the
amendment and the
execution (completion) of the
contract
two model notices:
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one for modification
one for execution
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CONTROL OF AMENDMENT/
PERFORMANCE OF CONTRACTS
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PP Act sets out strict conditions
for amending the contract ->
‘events not foreseeable’
the Arbitration Board has the right
to settle legal disputes regarding
the amendment/ performance of
the contract concluded in a public
procurement procedure
any interested party may initiate
the procedure of the Arbitration
Board based upon the information
published
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CONTROL OF AMENDMENT/
PERFORMANCE OF CONTRACTS
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in addition, should emerge the
suspicion of a violation of law, the
PPC shall forward the notice to
bodies generally controlling pp
these controlling bodies (e.g. State
Audit Office, Government Control
Office) may initiate the ex officio
proceeding of the Arbitration
Board within one year of the
infringement
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CONTROL OF NEGOTIATED
PROCEDURES WITHOUT PRIOR
PUBLICATION OF A NOTICE
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PP Act obliges CAs to send the
contract notice, along with the
information and documents justifying
the application of this procedure to
the Chairman of the PP Arbitration
Board
if the Chairman finds that the
application of this procedure was
unfounded, he/she initiates the ex
officio review procedure of the
Arbitration Board
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CONTROL OF NEGOTIATED
PROCEDURES WITHOUT PRIOR
PUBLICATION OF A NOTICE
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the Chairman has 15 days to take
this decision
if the panel of the Commissioners
finds that the application was
unlawful, it sets aside of the
decision of the CA concerning the
choice of procedure (except the
contract has already been
concluded)
in the latter case the Board
imposes a fine (up to the 30 % of
the value of the contract)
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STATISTICAL
OBLIGATIONS
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PPC is obliged to report to the
Parliament and fulfill statistical
obligations towards the EU
sources:
• Centralized publication >contract award notices
• PP Act obliges CEs to prepare
an annual statistical summary,
in a prescribed format, about
their annual pps. This summary
shall be communicated to the
Council not later than May 31st
following the year in question.
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SOME STATISTICS
FOR 2008
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the overall value of public
procurement: 1521,3 billion HUF
above the national thresholds (no
information about low-value
procurements yet)
4957 procedures above the
thresholds
11 bids submitted as an average
6% (value) won by foreign tenderers
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IV. REVIEW
PROCEDURES
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PROCEDURE OF THE
ARBITRATION BOARD
May be initiated
 upon application or
 ex officio (two types)
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EX OFFICIO
PROCEDURES
Ex officio procedures may be initiated by
organisations defined in the PPA:
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Members or the President of the PPC
the State Audit Office
the Government Control Office
the Public Administration Office of the county or
Budapest
the Hungarian State Treasury (in respect of the use of
tied subsidy or addressed subsidy granted to local
governments)
the parliamentary commissioners
the entity providing subsidy for public procurements;
the entity authorized to conduct public procurement
procedures in the scope of centralised public
procurement
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DECISIONS OF THE
ARBITRATION BOARD IN
2007
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rejection (appeal unfounded):
the case was terminated:
appeal founded:
pending proceedings:
318
148
227
58
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NUMBER OF REVIEW
PROCEDURES IN 2007
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number of review
procedures: 751 (decrease: in
2005: 1091, 2006: 858)
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among these: upon the
initiative of the Chairperson
of the Arbitration Board: 109
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PUBLICATION OF THE
DECISIONS AND THE
RULINGS
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both the decisions of the
Arbitration Board and the rulings
of the courts shall be published in
the Public Procurement Bulletin
(official organ of the PPC)
as the Bulletin is published on the
Internet as well, the decisions and
the rulings are also available there,
free-of-charge
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THANK YOU FOR YOUR
ATTENTION
www.kozbeszerzes.hu
[email protected]
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