• S-7 Express Road to Be Completed
  • June 4, 2012 | Authors: Krzysztof Kowalczyk; Jaroslaw Sroka
  • Law Firm: BSJP Brockhuis Jurczak Prusak Sp.k. - Warsaw Office
  • The case concerned a contract awarding procedure lead by the GDDKiA on the construction of the S-7 express road within the section stretching from the end of the Radom ring-road to the boarder of Mazowieckie province. The opening of tenders took place on 22 September 2010. The most attractive tender was submitted by the joint-stock company Dragados S.A. However, the ordering party has not chosen the most advantageous offer and, on 22 February 2011, it cancelled the tender procedure.

    Due to the same reason, in February 2011 the GDDKiA cancelled another 14 tender procedures, among others the procedures on: the construction of the southern carriageway of the A-18 motorway, the construction of the S-7 road within the Nidzica - Napierki section, the construction of the S-5 road within the Żnin - Gniezno section, or the construction of the S-7 road within the Koszwały - Kazimierzowo section.

    According to GDDKiA, Article 93, Paragraph 1, Sub-paragraph 6 of the public procurement law constitutes the reason for the cancellation. Pursuant to this article, the ordering party shall cancel the contract awarding procedure in the event that a significant change in circumstances occurs, due to which to conduct the procedure or to execute the order will prove not to be in public interest, which could not be foreseen earlier. The factual basis, however, was the resolution of the Council of Ministers of 25 January 2011 on the National Road and Motorway Construction Program for years 2011-2015. The section of the S-7 road which the cancelled procedure concerned, was included in the amendment No. 1a to the above-mentioned program. The amendment pointed to those sections of roads the construction of which may be commenced once the savings from the realization of other tender procedures on the construction of roads are obtained.

    Legal counsel Jarosław Sroka and legal counsel Krzysztof Kowalczyk of the BSJP law company, representing the contractor, have established before the court that, in this very case, it was not possible to speak of a change in circumstances due to which the execution of the order would prove not to be in public interest. The contractor was supported by the local authorities, entrepreneurs and residents of the area on which the investment was to be made. All of them confirmed before the court that the construction of the S-7 road would be beneficiary to the safety of residents and to the development of enterprises located within the area in question.

    The contractors bear costs connected to the preparation of and submitting the tender already at the tendering stage, and they do so in a conviction that, once issuing a call for tenders, the ordering party obliges to execute the investment. The contractors do so based on the assumption that the ordering party has funds committed to the execution of the investment. The resolution of the Council of Ministers, adopted after the public contract awarding procedure has commenced, should not influence the continuation of the procedure. In the course of the trial, it was being proved that the choice of investments to be first executed, introduced in the resolution of the Council of Ministers, concerning the National Road and Motorway Construction program for years 2011-2015, was not obvious and was not in accordance with the recitals provided for in the regulation in question. The GDDKiA asserted that the necessity to cancel the tender procedure was the consequence of the regulation adopted by the Council of Ministers. On the other hand, the necessity to adopt the regulation was being justified with the financial crisis. The contractor opposed to such reasoning. In Poland, contrary to other European states, the issue of the collapse of public finance is not valid. The lawyers have also been proving that the GDDKiA - the ordering party, has already made savings as a result of the already-awarded tenders. Taking the above into consideration, in this case it is not possible to speak of insufficient funds to finance the investment.

    In its decision, the Regional Court has agreed with the reasoning of the layers of the BSJP law company, ordering the GDDiA to continue the tender procedure. In the verbally-given reasons for the judgment, the Court has indicated, amongst others, to the GDDKiA not having grounds to cancel the procedure. According to the Court, the sphere of public finance shall not have decisive significance for the private law sphere. Article 93, Paragraph 1, Sub-paragraph 6, which was mentioned by the GDDKiA, does not deal with the financial problems of the State. According to the Court, the alteration in the allocation of budgetary appropriations should not result in cancelling the public contract awarding procedure. The Court has also emphasized that the construction of the S-7 express road still constitutes a matter of public interest (does not stand in opposition to the financial interest of the State), and the reasons for the cancellation of the public contract awarding procedure, being determined by the Court, may be interpreted in an extensive manner.

    Due to the decision, the procedure shall continue and, most probably, an agreement on the construction of the S-7 express road, running from the end of the planned Radom ring-road to the boarder of Mazowieckie province, should be concluded shortly.

    On behalf of the BSJP Brockhuis Jurczak Prusak Sp.k. law company, the case was run by: legal counsel Jarosław Sroka (partner) and legal counsel Krzysztof Kowalczyk (partner).

    BSJP Brockhuis Jurczak Prusak Sp. k. is an independent law company providing legal advisory services to Polish and foreign economic entities. Since 2002, the BSJP law company, together with a team of more than 50 layers, operates in five offices across Poland, providing legal services, among others, in the area of public procurement, construction law, public-private partnership, real estate, services for financial institutions, energy law, labor law, commercial law, intellectual property, merger and acquisitions.

      

    More information:

    legal counsel Jaroslaw Sroka - partner, head of the public procurement department ([email protected])

    legal counsel Krzysztof Kowalczyk - partner, head of the litigation department, [email protected])

    Wioleta Gasinska - marketing manager (501.499.414, [email protected])