Public contracts connected with COVID-19 not subject to the rigours of the Public Procurement Law | In Principle

The pandemic requires immediate response and rapid launch of solutions for combating the coronavirus and its socio-economic impacts. Thus the Anti-Crisis Act includes provisions allowing contracts for fighting the pandemic to be awarded without following lengthy formal procedures.

It usually takes a long time from commencement of proceedings for award of a public contract to conclusion of a contact with the selected contractor. To allow contracting authorities to expeditiously conclude contracts for combating the coronavirus pandemic, the Anti-Crisis Act (Act on Special Solutions for Preventing, Countering and Combating COVID-19, Other Infectious Diseases, and Crises Caused by Them of 2 March 2020) has introduced several major exemptions.

Award of contracts for supplies or services under Art. 6(1) of the Anti-Crisis Act

Art. 6(1) of the Anti-Crisis Act authorises the award of contracts for supplies or services needed to combat the coronavirus without applying the Public Procurement Law.

Such supplies or services must be essential for countering COVID-19, defined in the act to mean actions connected with:

• Combating infection
• Halting spread of the disease
• Prophylaxis
• Combating the consequences, including socio-economic consequences, of disease caused by the SARS-CoV-19 virus.

The lawmakers’ intention was undoubtedly to extend this provision to cover not only combating the effects of the illness caused by SARS-CoV-19, but also all socio-economic effects of the existence of the epidemiological threat or epidemic. This applies to combating negative consequences arising during and after the epidemic.

To apply the exclusion under Art. 6(1) of the Anti-Crisis Act, it must be found that there is a high probability of rapid and uncontrolled spread of illness or that the exclusion is required to protect public health. It is sufficient to meet either of these conditions, but clearly in the current situation both grounds are met.

Art. 6(1) of the act is temporary, and will remain in force for 180 days after entry into force of the act, i.e. from 8 March to 5 September 2020.

Exemption under the Anti-Crisis Act and exemption under the Infectious Diseases Act

Another basis for awarding contracts in the fight against the coronavirus, also introduced pursuant to the Anti-Crisis Act, is the new Art. 46c of the Infectious Diseases Act (Act on Preventing and Combatting Infections and Infectious Diseases in Humans) of 5 December 2008. It permits exclusion of the public procurement regulations from contracts for services, supplies or construction works awarded in connection with preventing or combating an epidemic in an area where a state of epidemiological threat or a state of epidemic has been declared.

This provision applies not only to contracts for supplies or services for fighting the coronavirus (like Art. 6(1) of the Anti-Crisis Act), but also to contracts for construction works awarded for this purpose. And Art. 46c of the Infectious Diseases Act applies to combating all epidemics, not just the current coronavirus epidemic. Moreover, unlike Art. 6(1) of the Anti-Crisis Act, this provision has become a permanent fixture of the legal system.

Art. 46c is applicable only in an area where a state of epidemiological threat or a state of epidemic has been declared. A state of epidemiological threat related to the coronavirus was introduced for the territory of Poland on 14 March 2020, and Art. 46c may be applied only from that date. In turn, a state of epidemic was introduced for the territory of Poland on 20 March 2020. Art. 46c can thus be applied so long as either a state of epidemic or a state of epidemiological threat remains in force in Poland.

But a state of epidemiological threat or state of epidemic is not required for application of Art. 6(1) of the Anti-Crisis Act. This provision could thus be applied during the period of 8–13 March, i.e. after entry into force of the Anti-Crisis Act but before declaration of a state of epidemiological threat. Unlike Art. 46c of the other act, Art. 6(1) can be applied in the fight against COVID-19 during the period after cancellation of the state of epidemic but within 180 days after entry into force of the Anti-Crisis Act.

Other exclusions from applying the Public Procurement Law

Under the 31 March 2020 amendment, Art. 6(2) was added to the Anti-Crisis Act, excluding application of the Public Procurement Law also from public contracts awarded by Bank Gospodarstwa Krajowego, the Polish Development Fund (Polski Fundusz Rozwoju SA) or regional development funds involving support instruments essential for combating the negative economic consequences of the epidemic.

This exclusion applies to contacts awarded by these entities to carry out tasks:

• Involving administration of funds created, entrusted or forwarded on the basis of separate regulations and connected with implementation of government programmes or other programmes implemented out of public funds
• Connected with the use of moneys from those funds.

Art. 6(2) is a temporary measure and will remain in force until 31 December 2020.

Under Art. 15zza, added to the Anti-Crisis Act by the same amendment, the Public Procurement Law will also not apply to contracts awarded by the Social Insurance Institution (ZUS) for supplies or services connected with implementation of tasks related to determination of the rights to standstill benefits or payment of such benefits.

Application of the Public Procurement Law has also been excluded in the event of a state of epidemiological threat, a state of epidemic, or a danger of spread of infection or infectious diseases, with respect to conclusion of an additional contract by the province governor with the administrator of emergency medical service teams, pursuant to the new Art. 49a added by the Anti-Crisis Act to the Emergency Medical Services Act of 8 September 2006.

No liability for infringing public finance discipline

A contracting authority exercising the exclusion from application of the Public Procurement Law in connection with combating COVID-19 will not be subject to liability for infringing public finance discipline.

Under Art. 27(1) of the Act on Liability for Infringement of Public Finance Discipline of 17 December 2004, an action or failure to act done exclusively for the purpose of mitigating the effects of a fortuitous event does not entail liability for infringement of public finance discipline.

The drafters explained that a fortuitous event should be understood to mean an event caused by external factors which cannot be predicted with certainty, particularly an event directly threatening human life or health or threatening an injury disproportionately greater than that caused by the act or failure to act infringing public finance discipline. The SARS-CoV-19 epidemic, involving widespread infection across a given territory, should be regarded as such an event.

Notwithstanding the release from liability for infringement of public finance discipline, expenditures by contracting authorities connected with combating COVID-19 should be made observing the principles set forth in Art. 44(3) of the Public Finance Act of 27 August 2009, namely:

• In a purposeful and thrifty manner
• Enabling achievement of the best effects from the given outlays, with optimal selection of the measures for achieving the adopted aims
• Enabling timely completion of tasks, and
• In an amount and within the time provided under previously incurred obligations.

Katarzyna Śliwak, attorney-at-law, Cyprian Herl, Infrastructure, Transport, Public Procurement & PPP practice, Wardyński & Partners