Legal Mindset

Legal Mindset

The use of this special procedure can offer to the contracting authorities a series of benefits, being mainly applicable to a repetitive process of products, services or works supply which extends to a determined period of up to 4 years. Without having a limited character, we show below some of these benefits:

  • the possibility of the contracting authority to conclude a master agreement without effectively having, on the signature date, the resources necessary for the respective purchase, following that the financing source is identified afterwards;
  • on the entire period for which the master agreement has been concluded and depending on the specific needs, the contracting authority shall be able to grant afferent subsequent contracts, thus not being necessary to organize new procedures for supplementary quantities/ services/ works.

The first hypothesis is the one in which the contracting authority concludes the master agreement with a single participant. In this situation, the respective agreement must mention at least:

(i) the obligations which the participant assumed through the technical proposal; and

(ii) the unit price that the participant mentioned in the financial proposal and on the basis of which there shall be determined the price of each contract granted afterwards.

The second hypothesis is the case in which the contracting authority concludes the master agreement with several participants, situation in which the master agreement must mention at least:

(i) the obligations which each of the participants assumed through the technical proposal; and

(ii) the unit price which each of the participant mentioned in the financial proposal.

In consideration of the subsequent contract which follow to be granted on the basis of a master agreement, the later must mention also the elements/ conditions considered essential which refer to:

  • obligations which the participant/ participants assumed through the technical proposal presented in the tendering procedure, especially in regard to (i) technical characteristics – functional and performance – of the products which follow to be supplied, (ii) description of the services which follow to be provided and their quality level, (iii) description of the works which follow to be provided and their quality level, (iv) duration/ delivery, performance or execution terms, starting from the moment of signing the contract, (v) guarantees granted, (vi) any other elements which have been taken into consideration in the process of analysis and evaluation of the technical proposals;
  • the price/ unit fee or the prices/ unit fees, other financial or commercial terms, which the participant/ participants mentioned in the financial proposal;
  • specific conditions and price adjustment formulas, as the case may be; as well as
  • any other elements/ clauses which the contracting authority considers necessary.

Furthermore, in case the master agreement is concluded with several participants, and the subsequent contracts follow to be granted by resuming the tendering, the master agreement must mention also:

  • the elements/ conditions which cannot be modified on the entire duration of the respective agreement; as well as
  • the elements/ conditions which shall be subject to resuming the tendering for granting the subsequent contracts.

Also, any master agreement shall include the following main obligations:

(i) for the contracting authority:

  • the obligation of not concluding with another participant, on the duration of the master agreement, a contract having as object the purchase of products/ services/ works, which are part of the respective master agreement1;
  • the obligation of granting contracts to the signatory participant/ participants, when it intends to purchase the products/ services/ works which were object of the respective master agreement, complying with the essential conditions set at its signature, and also,
  • in case the master agreement is concluded with several participants, and the subsequent contracts follow to be granted by resuming the tendering, the obligation that, when the contracting authority shall decide the purchase of the products/ services/ works which are object of the respective agreement, the contracting authority sends at the same time an invitation for participation to re-tender to all the participants signatories of the master agreement2.

(ii) for the participant/ participants:

  • the obligation to supply products/ provide services/ perform works, as it has been mentioned in the respective master agreement, when the contracting authority requests it (request which shall be materialized by signing a subsequent contract).

As regards the clauses of the subsequent contracts concluded on the basis of a master agreement, these shall mention expressly and in detail aspects as the price of the contract, the manner of payment of the price, the effective works to be provided/ the exact quantity which shall be delivered/ the services which shall be provided, the fulfillment term, etc.

As regards the estimated value of a master agreement, according to the provisions of article 31 from GEO no. 34/2006 stipulate that this is considered to be the maximum estimated value, without VAT, of all public procurement contracts which is anticipated to be granted on the basis of the respective master agreement, on its entire duration.

At the finalization of the services afferent to a master agreement (and not at the end of the subsequent contracts granted on the basis of the respective master agreement), the contracting authority has the obligation to issue justifying documents which include information regarding the fulfillment of the contractual obligations by the participant, and, if the case may be, eventual damages, as follows:

(i) for the supply master agreements: in a period of 14 days from the date of finishing the supply of the products which are object of the respective agreement and, supplementary, in a period of 14 days from the date of expiry of the warranty period of the respective products;

(ii) for the services master agreements (other than the ones for design services): in a period of 14 days from the date of finalization of the services which are object of the respective agreement;

(iii) for the design services master agreements: in a period of 14 days from the date of finalization of the services which are object of the respective agreement and, supplementary, in a period of 14 days from the signing of the reception minute at the termination of the designed works;

(iv) for the works master agreements: in a period of 14 days from the date of signing of the reception minute at the termination of the works and, supplementary, in a period of 14 days from the date of signing the final reception minute for the works drafted at the expiry of the warranty period of the respective works.

All these justifying documents mentioned above shall be drafted in 3 copies, the contracting authority having the following obligations:

(i) to issue a copy to the participant;

(ii) to file one copy at the public procurement file; and

(iii) to send a copy to ANRMAP, in maximum 10 days from the date of expiry of the terms mentioned above.

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1The law mentions two exceptions from this obligation, respectively: (1) the signatory participant/ participants of the master agreement does/do not have the capacity to answer to the requests of the contracting authority or (2) the contracting authority does not have the right to grant subsequent contracts whose cumulated value is bigger than a value whose exceeding would lead to eluding the application of those provisions of GEO 34/2006 which institute obligations of the contracting authorities in connection with certain values – in this later case, without breaching the rules of estimating the value of the public procurement contract.

According to the provisions of article 69 from the Government Decision no. 925 from July 19, 2006 for the approval of the application norms of the provisions regarding the granting of the public procurement contracts from GEO 34/2006, the invitation to re-tender must include at least the following information:

a) regarding the quantities and specific elements which shall be object of the contract which follows to be granted;

b) regarding the elements/ conditions which are object of resuming the tendering and the granting criteria/ evaluation factors which follow to be applied for deciding the participant to which the contract shall be granted, as it was mentioned in the documentation drafted for the signing of the master agreement;

c) regarding the manner in which it is filed/ sent the new offer and the deadline until when the participants have the right to file/ send the new offer.
We must also mention the fact that, according to the same article, the elements which can be object to re-tender can refer to price, delivery/ performance/ execution terms, technical characteristics, quality and performance level and/ or other similar, if these have been mentioned.

  • Few considerations regarding the possibilities to challenge the decisions issued by the Romanian National Council for solving complains (for public procurement related contracts) – May 3, 2012

    The phase of administrative means within the jurisdiction (in Romanian: “faza administrativ-jurisdicţională”) for the settlement of the complaints which were filed during the public procurement procedures is finalized when the Romanian National Council for Solving Complaints (“CNSC” or the “Council”) adopts a grounded and motivated decision. It is to be observed that such decisions are binding both for the appellant and the contracting authority.

    Nevertheless, the Romanian legislator provided and regulated a remedy against the decisions which are issued by the Council (namely the complaint), thus ensuring the judicial review of the legality and grounds on which such decisions were issued. The material jurisdiction in this type of control is provided to the courts of appeal, contentious-administrative and fiscal sections, where the headquarter(s) of the respective contracting authority/authorities is/are located. It is to be noted that the only competent court which has the jurisdiction to settle the complaint brought against the Council’s decision issued in connection with the awarding procedures of services and/or works related to the national transport infrastructure is the Bucharest Court of Appeal, Contentious-administrative and fiscal Section.

    With regard to the procedure for the settlement of the complaints brought against CNSC’s decisions, it is to be mentioned that this is similar with the appeal (in Romanian: “recurs”) (as this remedy is provided by the Romanian Civil Procedure Code, further referred to as the “CPC”) but with the observance of the special provisions of Government Emergency Ordinance no. 34/2006 regarding public procurement contracts, the public works concession contracts and concession contracts, such decisions issued by the competent courts being definitive and irrevocable. Furthermore, the complaints shall be settled in accordance with article 3041 of CPC, this being of nature to enable the court which was legally vested to consider the case in all its aspects, without being required to confine itself only to the cassations motives provided by article 304 CPC.

  • Consolidation of the legislation regarding the establishment of the promotion system for the production of energy from renewable energy sources – July 24, 2012

    In October last year, after almost three years of battle with the European Commission, Romania finally enacted the green certificates promotion system for the production of energy from renewable energy sources, differentiated based inter alia on the technology used for the foregoing production. Such enactment occurred based on the Emergency Governmental Ordinance no. 88/2011, for the modification and completion of the Law no. 220/2008 for the establishment of the promotion system for the production of energy from renewable energy sources (the “Law 220/2008”), which was advertised with the Official Gazette no. 736/19.10.2011 (the “EGO 88/2011”). Nevertheless, at its turn, EGO 88/2011 needed to be reviewed by the Romanian Parliament and eventually approved by way of issuing an approving law thereto (as per the Romanian Constitution), procedure which was seen by both the Romanian regulator and, especially, the affected parties (mainly, investors in this field) as a good opportunity to either remedy some previous flaws or ambiguities of both the Law 220/2008 and EGO 88/2011, or to bring clarity and/or a better treatment of existing institutions. One concern, especially, rose after the enactment of EGO 88/2011, in relation to the right of the Romanian Regulator to decrease the number of green certificates granted per 1 MW of energy produced from a specific authorized technology for cases of overcompensation, based on a fairly complex computation method, and in relation to the moment when such decrease may be implemented or even more, when it might occur. In an attempt to calm down this concern, Law no. 134/2012 for the approval of the Emergency Governmental Ordinance no. 88/2011 for the modification and completion of the Law no. 220/2008 for the establishment of the promotion system for the production of energy from renewable energy sources (the “Law 134/2012”), which was recently enacted (advertised in the Official Gazette no. 505 of July 23rd, 2012), established two reference dates, namely January 1st, 2014, for the producers of electrical energy from solar sources, respectively January 1st, 2015, for all other producers, starting from when at the earliest, and by Governmental Decision, the maximum number of green certificates may be decreased for overcompensation cases and only for the new beneficiaries (please see Art. 29, para (3) of Law 220/2008, as amended by Law 134/2012).

    Other important amendments brought by Law 134/2012 regarded (i) the definition of the term “priority access to networks of electrical energy from renewable sources”, to take into consideration from now on the safety of the National Electro-energetic System, (ii) the mechanism for the decrease of the maximum green certificates number for such producers which enjoyed green certificates either before the enactment of Law 220/2008 or between its enactment and up to November 1st, 2011, (iii) the addition of a new term, “forestry wastes”, to be used in conjunction with the energetic crops for the cases of one extra green certificate for biomass serving for the production of electrical energy, (iv) a mitigation system for the decrease of green certificates for such investments which enjoyed additionally state aid support, and (v) the establishment of a guarantee fond coordinated by OPCOM, to be funded by the penalties applied for such suppliers and energy producers which failed to achieve the annual mandatory quota of green certificates acquisition.