What is Act No. 40 / 2004 Coll.?

Act No. 40 / 2004 Coll., on Public Procurement — Public procurement law.

When it became Act No. 40 / 2004 Coll. effectiveness?

Act No. 40 / 2004 Coll. became effective 01.05.2004.

Is Act No. 40 / 2004 Coll. still valid?

Yes, Act No. 40 / 2004 Coll. is still valid and effective.

Act No. 40 / 2004 Coll. - Public procurement law

40

THE LAW

of 17 December 2003

on public procurement

Parliament has decided on this law of the Czech Republic:

ČÁST PRVNÍ

GENERAL PROVISIONS

HLAVA I

SUBJECT MATTER OF ADJUSTMENT, SCOPE OF THE LAW AND BASIC INJURY

§ 1

This law regulates in accordance with the law of the European Community1)

(a) the range of legal and natural persons required to award contracts under this law;

(b) the procurement procedure;

(c) the types of procurement procedures;

(d) the procedure for awarding concessions;

(e) tender for a proposal;

(f) supervision of procurement.

§ 2

(1) Under this law, the following contracting entities shall proceed:

(a) the contracting authority:

1. Czech Republic, 2)

2. state contribution organisation, 3)

3. the local authority and, in the case of the capital of Prahy4, the city district or the urban part of the city, and their controlled and established contribution organisations;

4. The Land Fund of the Czech Republic, the State Fund, the Czech National Bank, the Czech Radio, the Czech Television, the Czech Consolidation Agency, the health insurance company, the voluntary association of municipalities and another legal person, provided that it has been established by law or by law in order to meet the needs of the public interest and is financed mainly by contracting authorities, or is managed by contracting authorities or contracting authorities appoint more than half of the members in its administrative, management or control body;

(b) any other legal or natural person, when procuring supplies, services or works which are more than 50% financed by the contracting authority; or

(c) an entrepreneur, (5) if it is controlled by a contracting authority or whose business is subject to authorisation, (7) which grants it special or exclusive rights and carries out one of the activities referred to in § 3.

(2) A number of contracting entities referred to in paragraph 1 (a) and (b) may be jointly appointed by the contracting authority if they have their mutual rights and obligations and relations with third parties under contract.

§ 3

(1) Under this Act, the contracting authority in the water, energy, transport and telecommunications sectors procures only superlimited public contracts (§ 14) where:

(a) to provide or operate fixed networks intended for the supply to the public in connection with production, transport or distribution;

1. drinking water,

2. electricity,

3. gas or heat,

(b) supply the networks referred to in (a) with drinking water, electricity, gas or heat;

(c) carry out an activity involving the use of a geographical area for the purpose of:

1. exploration or extraction of oil, natural gas, coal or other solid fuels; or

2. the provision of airport, port and other terminal facilities to air carriers and inland waterway carriers;

(d) operate or develop a network providing services to the public in the field of rail transport, automated systems, trams, trolleybuses, buses or cableways;

(e) provides or operates sewerage for public use or carries out treatment or treatment of waste water, provided that at the same time it provides or operates fixed networks intended for supply to the public in connection with the production, transport or distribution of drinking water or supplies such networks with drinking water;

(f) provide telecommunications services or operate telecommunications networks. 8)

(2) The activity referred to in paragraph 1 (a) and (b) shall not be considered to be the activity of the contracting authority referred to in Article 2 (1) (b) if:

(a) in the case of drinking water or electricity:

1. drinking water or electricity shall be produced because of the necessity for carrying out activities other than those referred to in paragraph 1; and

2. the supply to the public network depends solely on the contracting authority's own consumption and has not exceeded 30% of the average total production of drinking water or electricity by the contracting authority in the last 3 years;

(b) in the case of gas or heat,

1. the production of gas or heat is an unavoidable consequence of the performance of an activity not referred to in paragraph 1; and

2. supply to the public network is intended only for the economic use of such production and does not account for more than 20% of the contracting authority's average turnover over the last 3 years.

(3) The activity referred to in paragraph 1 (d) shall not be considered to be the operation of public bus transport where other persons may provide such services throughout the territory of the State or only in a demarcated area under the same conditions.

(4) This law shall not apply to purchases by contracting entities which provide telecommunications services or operate telecommunications networks in the event of a specific legislature8) allows the provision of telecommunications services or operate telecommunications networks in an effective competition.

§ 4

(1) This law shall not apply to the award of contracts where:

(a) their object is classified information or the implementation thereof under specific legislation9) is linked to specific security measures or, where this is required, the protection of the essential security interests of the State;

(b) their object is the manufacture, purchase or repair of weapons, weapon systems, ammunition or the provision of other military material to ensure defence or security of the State;

(c) their procurement is governed by specific procedural rules and contracts are awarded following an international treaty relating to the residence of the armed forces of other States in the territory of the Czech Republic (10) or to the deployment of the armed forces of the Czech Republic in the territory of other States to which the Czech Republic is bound and which has been declared in the Collection of Laws or in the Collection of International Treaties;

(d) their award is subject to the rules laid down in specific procedures of international organisations;

(e) are awarded following an international contract concluded between a Member State of the European Union and a Member State other than a Member State of the European Union or other than a Member State of the European Union with a view to implementing or using a joint project by the Contracting Parties; the conclusion of such a contract must be communicated to the Commission of the European Community ("the European Commission '),

(f) are services the object of which is research and development where the results are not used exclusively by the contracting authority for its own activities and where the service provided is fully reimbursed by the contracting authority;

(g) the provision of financial services related to the issue, sale, purchase or other transfer of securities or other financial instruments;

(h) services or supplies provided and received by the Czech National Bank in connection with the exercise of its powers;

(i) the provision of arbitration and conciliation services;

(j) it is an activity or work on the basis of a contract of employment or an employment or similar relationship;

(k) the object of the contract is the principal object of the public undertaking's business or the object of the activity of a contribution organisation established or established by the contracting authority referred to in Article 2 (1) (a) (1) and (3);

(l) it is a service contract awarded to a person who is a contracting entity under Article 2 (1) (a) on the basis of an exclusive right granted by law or by law in accordance with the Treaty establishing the European Community;

(m) their object is the provision of an expert or interpreter (11) for the purposes of judicial, administrative, arbitral or other similar proceedings, including preparatory criminal proceedings;

(n) the contract is awarded for supplies to the State tangible reserves;

(o) the purchase, storage and sale of agricultural products and foodstuffs by the State Agricultural Intervention Fund;

p) The Czech Republic is a supplier of supplies or services through the Czech Prison Service, if the contracting authority is the Czech Republic,

(r) is the contracting entity of the Deposit Guarantee Fund.

(2) This Act does not apply to sublimity contracts (§ 15)

(a) supplies or services directly related to visits to constitutional officials of other States and their authorised representatives in the Czech Republic;

(b) whose intelligence services are the contracting entity.

§ 5

(1) This law shall not apply to contracting entities in the water, energy, transport, telecommunications sectors, where contracts are awarded for the purpose of:

(a) carrying out the activities referred to in Article 3 abroad in so far as the use of networks or territories in the European Communities is not concerned;

(b) resale or rental to other persons, provided that the contracting authority has no special or exclusive right to sell or lease the subject matter of such a contract and other persons have the possibility to sell or lease the subject matter of the contract on the same terms;

(c) the purchase of water where the contracting authority carries out the activity referred to in Article 3 (1) (a) (1);

(d) the purchase of energy or the purchase of fuels intended for the production of energy, where the contracting authority carries out the activity referred to in Article 3 (1) (a) (2) and (3) or Article 3 (1) (b);

(e) the purchase of support services under special legislation12) for the provision of system services and the purchase of electricity to cover losses in the transmission system where the contracting authority carries out the activity referred to in § 3 (1) (a) (2).

(2) This law shall not apply to contracting entities in the telecommunications sector, in respect of service contracts which:

(a) the procuring entity subcontracts to an associate [Paragraph 17 (h)]; or

(b) award a joint venture created by several contracting entities for the purpose of carrying out the activities referred to in Article 3, to one of those contracting entities or to a person associated with one of those contracting entities, provided that at least 80% of the average turnover of the associated person for the services achieved in the previous 3 years in the European Communities comes from the provision of such services to the persons to whom he is associated. Where the same or similar services are provided by more than one person associated with the contracting entity, account shall be taken of the total turnover resulting from the provision of the same or similar services of all the associated persons.

(3) This law shall not apply to contracting entities in the water, energy and transport sectors, in the case of contracts which:

(a) the procuring entity subcontracts to an associate [Paragraph 17 (h)]; or

(b) subcontract a joint venture exclusively created by several contracting entities for the purpose of carrying out the activities referred to in Article 3 to a person associated with one of those contracting entities; or

(c) award a joint venture exclusively created by several contracting entities for the purpose of carrying out the activities referred to in Article 3 to one of those contracting entities;

(d) the contracting authority shall appoint a joint venture created by several contracting entities to which the contracting authority belongs, provided that the joint venture has been set up for the purpose of carrying out the relevant activity for at least three years and the founding document of the joint venture provides that the contracting entities forming a joint venture shall belong to the joint venture for at least the same duration.

(4) Paragraph 3 (a) and (b) shall apply only if:

(a) it is a service contract and at least 80% of the average turnover of an associate for services achieved over the previous 3 years comes from the provision of services to the persons to whom he is associated; or

(b) it is a supply contract and at least 80% of the average turnover of the associated person for supplies achieved over the previous 3 years comes from the supply of supplies to the persons to whom he is associated; or

(c) it is a works contract and at least 80% of the average turnover of the associated person for the works achieved over the previous 3 years comes from the provision of works to the persons to whom he is associated.

(5) Where, in view of the time of the creation of the associate or the start of the provision of activities by the contracting entity, the turnover of the associate cannot be determined for the previous 3 years in accordance with paragraph 4, it is sufficient that the associate proves that the turnover of the associate should, in terms of commercial assumptions, reach the required amount of turnover in accordance with paragraph 4 (a), (b) or (c). Where more than 1 person associated with the contracting entity provides the same or similar services, supplies or works up to 80% of the average turnover referred to in paragraph 4 (a), (b) or (c), the turnover for the provision of the same or similar services, supplies or works of all the associated persons shall be included.

(6) Contracting entities shall communicate to the Commission, at its request, the following information concerning the application of the provisions of paragraphs 2, 3 and 4:

(a) the names or firms of the undertakings or joint ventures concerned;

(b) the nature and value of the contracts in question;

(c) the information which the Commission will consider necessary to demonstrate that the relationship between the undertaking or joint venture to which contracts have been awarded and the contracting entity complies with the requirements of this provision.

(7) This law also does not apply to contracting entities in the water, energy, transport and telecommunications sectors, where contracts are awarded for purposes other than the pursuit of the activities referred to in Section 3.

(8) Paragraph 7 shall not apply where a contract is awarded:

(a) awarded by the contracting authority referred to in Article 2 (1) (a);

(b) related to water-building, irrigation or drainage projects, provided that the amount of water intended for the supply of drinking water represents more than 20% of the total water available from such projects or from irrigation or drainage facilities; or

(c) related to the treatment or treatment of waste water.

§ 6

Public procurement

(1) The contract is a contract for supplies, services or works, the contracting entity of which is the person referred to in § 2 and where the estimated price of the subject of the contract exceeds CZK 2 000 000.

(2) A contract shall be awarded on the basis of a written contract with one or more selected tenderers or candidates.

(3) The contracting authority shall enter the supplies, services or works, the expected price of which shall not exceed the limit referred to in paragraph 1, in a transparent and non-discriminatory manner, at the usual price at the place of performance.

§ 7

Public supply contract

The supply contract shall be a public contract for the purchase of movable and immovable property (hereinafter referred to as "goods'), including the purchase of goods for hire, hire or hire of goods with the right to purchase, as well as a public contract for the installation and entry into service, in addition to the supply of goods, in the absence of a case under Paragraph 8 (2) (a).

§ 8

Public service contract

(1) A public service contract is a contract the object of which is not the subject of a public supply contract or a public works contract.

(2) A public service contract is also a public service contract which, in addition to the provision of services, also covers:

(a) the supply of goods where the price of the services provided is higher than the expected price of the supply of goods; or

(b) a works contract (Section 9) where the price of the services provided is higher than the expected price of the works.

(3) The list of services is set out in Annexes 1 and 2.

§ 9

Public works contract

(1) Public works contract is a public works contract

(a) new buildings;

(b) construction changes to the completed construction;

(c) construction maintenance work;

(d) removal of existing construction; or

(e) any works which comply with the requirements laid down by the contracting authority, including works procured using brokering or similar services provided by the contracting authority by another person.

(2) Construction works shall also include assembly work related to the implementation of the construction and construction works referred to in paragraph 1.

(3) A public works contract is also a public contract which, in addition to the execution of the works referred to in paragraph 1, is also a project and engineering activity relating to such works.

§ 9a

Construction concessions

A works concession is a similar public contract to a public works contract, whereby the consideration for the execution of the works covered by this concession lies in the right to use or operate the construction for a specified period. This right may be linked to the provision of cash performance by the contracting authority.

§ 9b

Service concessions

A concession for services is a public contract similar to a public service contract, whereby the consideration for the provision of services covered by this concession lies in the right to operate such services for a specified period of time. This right may be linked to the provision of cash performance by the contracting authority.

§ 10

Procurement procedures and procedures

(1) The procurement procedure shall be the procedure which the contracting authority must follow when the contract is awarded before the contract is concluded with the supplier, unless otherwise provided for by this law.

(2) A contract may be awarded in the procurement procedure in:

(a) an open procurement procedure in which all interested suppliers (hereinafter referred to as open procedures) may submit tenders;

(b) a restricted procurement procedure in which only candidates selected by the contracting authority (hereinafter referred to as the "restricted procedure") may submit a tender;

(c) a negotiated procedure with a publication in which the tender is submitted only by selected candidates who are then invited by the contracting authority to act; or

(d) a negotiated procedure without publication in which the contracting authority directly invites one or more suppliers to act.

§ 11

Supplier

The supplier shall be a legal or natural person who:

(a) provide services;

(b) supplies the goods,

(c) carry out works.

§ 12

Interest

The applicant shall be the supplier,

(a) which has submitted a request to participate in a restricted procedure or in a public consultation procedure at a given time; or

(b) invited by the contracting authority to participate in the negotiated procedure without publication.

§ 13

Applicant

Applicant means

(a) a supplier who has submitted an open tender at the time specified; or

(b) a candidate who has submitted a tender at the time specified in the restricted procedure or in the negotiated procedure with publication.

§ 14

Excessive procurement

(1) Excessive procurement means a contract for which the estimated price of the subject-matter of the contract (Paragraph 18) reaches or exceeds the thresholds referred to in paragraphs 2 and 3.

(2) The financial limit for supply contracts and service contracts is the amount in Czech currency corresponding to:

(a) EUR 130 000 for the contracting entities referred to in Article 2 (1) (a) (1) and (2) and for the Czech Republic - Ministry of Defence for the goods listed in Annex 3;

(b) EUR 200 000 for the contracting entities referred to in Article 2 (1) (a) (3) and (4) and for the Czech Republic - Ministry of Defence for goods not listed in Annex 3;

(c) EUR 400 000 for contracting entities in the water, energy and transport sectors where they carry out the activities referred to in Article 3 (1) (a) to (e); or

(d) EUR 600 000 for contracting entities in the field of telecommunications where they carry out the activity referred to in Article 3 (1) (f).

(3) The financial limit for works contracts is the amount in Czech currency equivalent to EUR 5 000 000.

(4) If the contracting authority is the Czech Republic, the financial limits referred to in paragraphs 2 and 3 shall apply to its organisational components, 13) unless otherwise specified.

(5) When awarding a public contract on behalf of the Czech Republic

a) Ministry of Interior, the financial limits referred to in paragraphs 2 and 3 shall apply to its organisational units and to the organisational units of the Police of the Czech Republic which are authorised to award public contracts,

(b) Ministry of Defence, the financial limits referred to in paragraphs 2 and 3 shall apply to its organisational units and to military services, military facilities or military rescue services of the Army of the Czech Republic, 14) which are authorised by the Minister of Defence to award public contracts.

(6) For the conversion of EUR into Czech currency for the purposes of this Act, until the date of entry into force of the Treaty of Accession of the Czech Republic to the European Union, the determining course declared by the Czech National Bank on the date of dispatch of the notification pursuant to § 42 to 44 or on the date of dispatch of the call for negotiations pursuant to § 45 is in force. After the date of entry into force of the Treaty of Accession of the Czech Republic to the European Union, the financial limits in the Czech currency corresponding to the financial limits laid down by this Act in EUR shall be declared in the Official Journal of the European Union.

(7) Paragraph 6 on the conversion of EUR into Czech currency shall not apply after the date of entry into force of the Treaty of Accession of the Czech Republic to the European Monetary Union.

§ 15

Sublimit procurement

A subcontract is a contract for which the expected price of the subject-matter of the contract (Paragraph 18) does not reach the thresholds set out in paragraphs 2 and 3 of Paragraph 14.

§ 16

Framework contract

A framework contract shall mean a contract concluded between the contracting authority in the water, energy, transport and telecommunications sector and the tenderer or, where applicable, the tenderer, on the basis of an open procedure or a restricted procedure containing the setting of contractual terms and conditions for contracts, in particular with regard to the prices or expected quantities to be awarded within a certain period of time.

§ 17

Some other terms

For the purposes of this Act:

(a) the terms and conditions of the contract all the requirements of the contracting authority contained in the contract notice, if any, further specified in the contract documents which must be fulfilled by the tenderer in the tender;

(b) a proposal for a contract submitted by the tenderer in an open procedure, in a restricted procedure or in a public procedure;

(c) an appropriate tender submitted by a tenderer who fulfils the specifications laid down by the contracting authority for the content of the tender;

(d) the qualification of the supplier for the performance of the contract awarded;

(e) the award of a contract by the contracting authority;

(f) contracting activities carried out under this law for the purpose of awarding a contract, including related activities;

(g) documents relating to the award of a public contract, a summary of the documents the acquisition of which is required by this law and the tenders of all tenderers;

(h) the associated person is the person to whom the contracting entity is controlled by a person under a special legislature6) or to whom the contracting entity is controlled under a specific legislation, 6) or which together with the contracting entity is a person controlled by another person;

(i) by a special or exclusive authorisation granted by law or by law by the competent administrative authority, reserving to one or more contracting entities in the water, energy, transport and telecommunications sectors one of the activities referred to in Article 3 (1);

(j) the central address of the place where the information specified by this law is published in the publicly available information system (Internet);

(k) an emergency event which the contracting authority could not have foreseen or caused;

(l) by a foreign person, a natural person residing or having a legal person established outside the Czech Republic,

(m) by a concessionary supplier to whom a works or service concession has been awarded;

(n) the joint venture is a commercial company set up by several contracting entities referred to in Article 2 (1) (c), or members of which are several of those contracting entities or associations of contracting entities referred to in Article 2 (1) (c), or other groups thereof, whether or not such an association or group has legal personality which is established by a contract between the participating contracting entities or other founding documents in accordance with the law, for the purpose of carrying out the activities referred to in Article 3 of the Act. In the event that the Joint Undertaking does not have legal personality, the legal acts relating to the Joint Undertaking provided for by this Act shall be taken jointly by all contracting entities participating in the Joint Undertaking.

HLAVA II

PROCEDURES FOR DETERMINING THE PRESENTED PRICE

§ 18

Estimated price of the subject-matter of the contract

Citation	Act No. 40 / 2004 Coll., on Public Procurement
Regulation Type	-
Author	-
Collection	Code of Laws

Date of Promulgation	05.02.2004
Effective from	01.05.2004
Effective until	-
Status	Valid

Act No. 40 / 2004 Coll.

Public procurement law

Contents