• Amendment to Public Procurement Law (“ppl”)
  • February 28, 2014
  • Law Firm: BSJP Brockhuis Jurczak Prusak Sp.k. - Warsaw Office
  • It was the intention of the legislator to provide greater protection for subcontractors performing public contracts. Among others, the key changes relate to:

    a) introduction of a definition of subcontract, deemed to be a contract for pecuniary interest concluded between the economic operator selected by the contracting authority and the subcontractor and further subcontractors, having as its subject matter the services, supplies and construction work constituting part of the public contract; a subcontract has to be concluded in writing;

    b) maintaining of the general consent for conclusion of subcontracts, whereby it is permissible to reserve in the specification of essential terms of the contract that the economic operator is obliged to personally perform the key parts of the contract; furthermore, the contracting authority shall be able to request that the economic operator identifies the parts of the contract it intends to subcontract, as well as the names of the subcontractors whose resources it relies on;

    c) introduction of a certain supervisory power for the contracting authority over the concluded subcontracts: the economic operator shall be obliged to submit to the contracting authority the draft subcontract (the subcontractor or further subcontractor shall additionally be obliged to enclose the consent of the economic operator to conclude the subcontract), and subsequently a certified true copy of the concluded subcontract (with the exemption of subcontracts of a lesser value of up to PLN 50,000), in order for it to be approved by the contracting authority;

    d) introduction of the rule of direct payment of due remuneration payable to the subcontractor that has entered into the approved subcontract, in the event that the economic operator evades its obligation to effect payment, whereby the contracting authority is obliged to first allow the economic operator to submit comments on the legitimacy of the payment; in the event that comments are submitted, the contracting authority may deposit the amount of the remuneration payable to the subcontractor with a court; in the event that a direct payment is made, the contracting authority shall deduct the amounts paid to subcontractors from the remuneration payable to the economic operator;

    e) in the case of contracts for construction work to be performed over a period longer than 12 months, introduction of an additional rule that payment of consecutive parts of remuneration or advance payments shall only be effected following a submission of proof of payment of remuneration to subcontractors; and in the event of failure to produce such proof, payment to the economic operator shall be suspended.