Designer work will not be competed for the lowest price

Prague - The Ministry for Regional Development (MMR) wants to prohibit the competition for certain types of contracts based solely on the lowest price. This would apply, for example, to the work of designers or legal services, said Ondřej Votruba, Deputy Minister for Regional Development, at today's Forum of Czech Construction. The change is to be part of an upcoming law on procurement procedures, which will replace the current law on public procurement next year.
The ministry is responding to increasing criticism of the current state, where public institutions choose the winners of tenders in the overwhelming majority of cases solely based on the price offered. For instance, builders emphasize that this leads to a decline in construction quality, and some prices supposedly do not allow for their safe execution.
"We have received complaints about competition based on the lowest price for certain projects, typically for intellectual work, designers, and similar. We are now preparing a new law on public procurement, which we call the law on procurement procedures, and there we will likely prohibit competition solely based on price for some more detailed types of projects," Votruba stated, who is responsible for public investment at the MMR.
According to him, this would concern, for example, tenders for intellectual services, abstract work, creative activities, design creation, media affairs, design work, or legal services. "If someone is having a private house designed, it is hard for them to choose the cheapest designers. Similarly, when being represented in court, a person finds it difficult to choose the cheapest lawyers," explained the reason for the planned changes Deputy Votruba. He did not specify how the ministry would prohibit such selection.
However, he emphasized that they will in no case prohibit comparing offers based on price. "That is always necessary. But using only the lowest price as the sole criterion is really not reasonable," added Votruba.
The deputy is resigned to the fact that contractors will attempt to circumvent the contemplated regulation, for example, by assigning 99 percent weight to the price criterion in evaluating offers, with the remaining one percent allocated to technical solutions. "However, we will at least try to introduce this and we'll see. The direction will remain, and it will state that not all projects that are the cheapest are also the highest quality. Usually, it is quite the opposite," claims Deputy Votruba.
The Ministry for Regional Development is now finalizing the preparation of the legislative wording of the law, and next week the government is to discuss the material intent of the law. The ministry aims to send the law to the Chamber of Deputies this fall. Due to European regulations, the law must come into effect no later than April 18, 2016.
The new law on procurement procedures, which responds to last year's European directive, regulates the procedure of the ordering party in selecting a supplier. It thus determines the conditions of the procurement procedure. Conversely, it does not address what constitutes a public procurement at all. It only defines what a public procurement is not. It grants greater powers to contractors while mandating that they proceed transparently and appropriately. They must also not circumvent the obligations imposed by law. The draft law prohibits concluding a contract with a tender participant who does not meet the requirements of the law or the contractor. It also raises the limit for allowed additional work to 50 percent from the currently applicable 30 percent.