Must a company controlled by the State Treasury comply with the Public Procurement Law? | In Principle

Generally a legal person controlled by the State Treasury is required to follow the procurement procedures set forth in the Public Procurement Law only if was established with the specific purpose of satisfying common needs, not of an industrial or commercial nature.

Other companies controlled by the State Treasury are required to follow the Public Procurement Law only when they are awarding contracts involving utilities—specific sectors of the economy defined in Art. 132(1) of the Public Procurement Law to include fuels, transportation, production and transmission of electricity, gas and heat, postal services, and public services involving production or distribution of drinking water. However, as the law is interpreted by commentators, whether the “utilities” requirement applies is determined by the business conducted by the company, not the subject matter of the particular contract. Thus, for example, if a state-controlled company in the fuels sector puts out an order for paper to be used in the company’s photocopiers, the contract is deemed to be related to utilities and thus the Public Procurement Law must be followed when awarding the contract.

Public procurement procedures must also be followed by other companies, regardless of their ownership structure, if more than half of the value of the particular contract is derived from public funds, the value of the contract exceeds thresholds specified by EU regulations, and the contract involves construction work related to civil engineering or marine engineering, or construction of hospitals, sports or recreation facilities, schools or universities, or buildings for use by the public administration, and services related to these types of construction. In order for public procurement requirements to apply, all of these conditions must be met.