Procurement and SMEs: the new Public Sector Contracts Law
With quite a delay by Spain in implementing the new generation of directives on procurement, the new Public Sector Contracts Law has finally seen the light of day. Coming into force on March 9, 2018, the new law introduces some important new legislation, notably including a raft of measures to encourage tender participation by SMEs. To that end, it simplifies tender procedures and reduces administrative burdens. It moreover reverses the general rule concerning division into lots, and the tender dossier will now have to stipulate that the subject-matter of the contract cannot be divided.
And as an incentive for contract holders to comply with their obligation to pay subcontractors on time, compliance with the statutory payment periods to suppliers is laid down as a selection criterion related to financial standing. Subcontractors still have no direct remedy against the contracting authority, however, even though the EU directives allow member states to grant such a remedy. This is counterbalanced by allowing contracting authorities to monitor compliance regarding payments to subcontractors and suppliers, and also allowing direct payments to subcontractors to be set out in the tender specifications. In addition, the law softens the technical ability criteria for newly created companies, meaning those that are less than five years old.
The law also seeks to improve compliance with the principles of advertising and transparency in procurement procedures, by limiting the cases in which tender procedures do not have to be advertised or reducing the threshold under which contracts can be awarded directly, among other measures. To reconcile this goal with that of administrative simplification, the law establishes the concept of a simplified open procedure which, as the preamble to the law states, is intended to become a swift and flexible procedure that enables the authorities to award contracts up to a given financial threshold within a month of the call for bids.
This new legislative framework places Malaga’s SMEs in a better position to take advantage of new business opportunities in the area of public sector procurement.
Garrigues Department of Administrative Law
Article published in Diario Sur