Several important amendments of the Public Procurement Act 1999 will be enacted following the Bill submitted by The Ministry of Administration on Armistice Day. The Bill aims at implementing the de minimis rules of Directive 2007/66/EC.
The Administration Minister admits that as a consequence of the change from today’ system with administrative fines imposed by the Procurement Complaints Board to a model where all sanctions including fines must be adjudicated by the courts may lead to enforcement of fewer cases regarding direct procurements without prior publication. The Complaints Board’s right of imposing administrative fines in the event of unlawful direct procurements will be abolished on the ground that it would be too difficult to handle a system with administrative fines in addition to the discretionary rights of the courts to adjudicate fines.
Contracts already entered into will in the event of unlawful direct procurements and certain other serious breaches have to be declared ineffective, a concept which is new to traditional Norwegian law of contract. The remedy of declaring contracts ineffective will be applicable only for contracts relating to goods, prioritized services and building and construction works exceeding the EEA threshold values. The courts may in such cases choose between retroactive cancellation or cancellation of future performance of the contract. Furthermore, alternative remedies (fines, shortening of the term of the contract) will be available if the court finds that overriding reasons relating to a general interest require the contract to be maintained.
For contracts that have not been entered into it is proposed that in the event of a motion for an injunction against the award decision submitted within the standstill period determined by the awarding body, the court of the first instance must rule that the contracting authority cannot conclude the contract before the court has made its decision. However, this does not apply if the contracting authority has not determined a standstill period, even if it had an obligation to do so. In such cases, the general rules on interlocutory measures apply, meaning that an injunction can be achieved on certain terms but not if the contract has already been concluded.
In the event that the awarding body has not determined a standstill period where it should have and concludes the contract before a concerned tenderer obtains an injunction, this will still be a breach of the standstill provisions which may lead to fines on the contracting authority and/or shortening of the contract.
