Article 46(4a) of the Public Procurement Law of 29
January 2004 (Journal of Laws of 2010 no. 113 item
759, consolidated text, as subsequently amended)
(“PPL”) has generated controversies since the very
moment it became effective. Under the said
provision, the contracting authority is entitled to
retain the bid security with interest if the
contractor—having been called upon to submit
missing documents or statements confirming that it
fulfils the conditions for participation in the
proceedings or that the services, supplies,
construction works offered by it meet the contracting
authority’s requirements—fails to submit the
requested documents, statements, or powers of
attorney, unless the contractor can prove that its
failure to do so is due to reasons which are not
attributable to it.
The restrictive provision, which was intended to
prevent collusion among contractors, proved to be
the contractors’ nightmare, as they would lose the
bid security in the event of incorrect/incomplete
submission of missing documents, and a source of
significant problems for contracting authorities,
which were accused of “cashing in” on the
contractors’ formal mistakes and inaccuracies.
Given the highly restrictive nature of the provision,
hearing an appeal against a judgement dismissing an
action for refund of a bid security forfeited under
Article 46(4a) of PPL, the Regional Court in Gdańsk
put a question of law to the Constitutional Tribunal
regarding constitutionality of a regulation providing
for the forfeit of the bid security submitted by
contractors whose bids contained mistakes or were
incomplete, and which deficiencies the contractors
were unable to remedy. By its ruling of 9 May 2012
(Case File No. P 47/11), the Constitutional Tribunal
discontinued the proceedings on the grounds that
rendering judgement was impermissible and held
that the doubts stemming from the unclear grounds for retaining the bid security laid down under Article
46(4a) of PPL may be resolved by reference to the
principles developed by the National Appeal
Chamber (“KIO”) and common courts of law, with
no need for the Constitutional Tribunal to hand down
its judgement. The justification to the Constitutional
Tribunal’s ruling contains a review of the case-law
applicable to the interpretation of Article 46(4a) of
PPL.
The KIO case-law is dominated by the view that
Article 46(4a) of PPL is restrictive and exceptional
due to the severe financial sanctions which may be
imposed under it on the contractor. This means that
it needs to be construed strictly thus excluding
extensive interpretation of the grounds for retention
of the bid security. At the same time, KIO has
consistently taken the view that the automatic
obligation to retain the bid security cannot be
derived from failure to submit missing documents or
remedy defects in documents (KIO judgement of 20
July 2011, KIO 1444/11). One should also note the
interpretation of the Supreme Court which, in its
judgement of 7 July 2011 (Case File No. II CSK
675/10), held that Article 46(4a) of PPL should be
construed strictly taking into account the purpose of
the very provision and intention of this regulation.
The Supreme Court held that the contracting
authority has a right to retain the bid security with
interest if there is a risk of collusion among the
contractors, that is when the contractor remains
completely passive and purposefully fails to comply
with the contracting authority’s request. Taking the
view that the bid security is subject to being forfeit
always in a situation when the contractor fails to
comply with the contracting authority’s request
would—according to the Supreme Court—create
room for abuse by the contracting authority.
At the moment the prevalent view seems to be that if
the contractor submits documents at the contracting
authority’s request which in the contractor’s opinion
confirm that the conditions for participation in the
proceedings have been met, retention of the bid
security by the contracting authority is out of the
question (KIO judgement of 19 November 2010,
Case File No. KIO 2413/2010), unless the contractor
has clearly submitted to the contracting authority a
sham document to avoid the adverse effects imposed
under Article 46(4a) of PPL (KIO judgement of 11
August 2011, KIO 1605/11, KIO/1616/11, KIO
1619/11, KIO1630/11).
The Constitutional Tribunal’s judgement which,
given the type of that ruling, does not include a
definite determination which of the many
constructions of Article 46(4a) of PPL is the most
accurate one, without any doubt indicates that one
should avoid going to extremes that obliterates the
sense and purpose of Article 46(4a) of PPL, and on
the one hand conclude that a formally completed
submission of any missing documents or remedying
of any defects in the documents already submitted
prevents bid security retention (a contrario: only the
physical failure to provide missing documents
entitles the contracting authority to retain the bid
security) and on the other that it is only when
missing documents are submitted or defects in the
documents already submitted remedied in a way that
meets the contracting authority’s requirements with
respect to confirmation of the conditions for
participation in the proceedings, including without
limitation substantive requirements, that bid security
retention is prevented (KIO judgement of 11 January
2011, KIO 2805/10, KIO 2810/10).
MILLER, CANFIELD,
W. BABICKI, A. CHEŁCHOWSKI I WSPÓLNICY SP.K.
ul. Batorego 28-32
81-366 Gdynia
Tel. +48 58 782-0050
Fax +48 58 782-0060
gdynia@pl.millercanfield.com
ul. Nowogrodzka 11
00-513 Warszawa
Tel. +48 22 447-4300
Fax +48 22 447-4301
warszawa@pl.millercanfield.com
ul. Św. Mikołaja 7
50-125 Wrocław
Tel. +48 71 337-6700
Fax +48 71 337-6701
wroclaw@pl.millercanfield.com
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