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Amendments to public procurement law in view of draft “Anti-Crisis Shield 4.0”

A draft version of the so-called “Anti-Crisis Shield 4.0” has just reached the parliament (the “Draft Bill”). It introduces further amendments to the existing special purpose act, including ones that concern the public procurement law (“PPL”).

The Draft Bill amends the Act of March 02, 2020 on Special Solutions Related to Prevention and Combating of COVID-19, Other Infectious Diseases and Crisis Situations Arising from them (the “Act”).

Below you will find a summary of the suggested changes.

1. INITIATION OF PUBLIC PROCUREMENT PROCEDURE

Article 40 section 1 of PPL is about to change – when commencing an unlimited public procurement procedure, the contracting authority will no longer be obliged to place a relevant notice at a publicly available location within its registered office. It will be enough to publish it at the website. Other announcement-related obligations (the requirement to send a notice to the Public Procurement Bulletin and the European Union’s Publication Office) will remain unchanged.

2. EMPLOYEE CAPITAL PLANS

Article 7 of the Employee Capital Plans Act of October 04, 2018 has been modified, so that employee capital plan management/maintenance agreements will not be governed by the Public Procurement Law Act of September 11, 2019 (the “New PPL”) if the contract value is lower than the EU thresholds. The amended article 7 will become effective as of January 01, 2021.

3. AMENDMENTS TO AGREEMENTS

3.1. The Draft Bill entails automatic amendments to the agreement in case – after determining that circumstances related to COVID-19 affect proper performance of the agreement – the contracting authority (in cooperation with the contractor) introduces the amendment referred to in article 144 section 1 item 3 of PPL.

3.2. Voluntary nature of amendments
In case it is found that circumstances related to COVID-19 may affect proper performance of the agreement, the contracting authority may (in cooperation with the contractor) amend the agreement in accordance with article 15r section 4 of the Act, i.e. (i) change the completion date for the contract or its part, or temporarily suspend the performance of the agreement or its part; (ii) change the manner of performance of deliveries, services or construction works; (iii) change the scope of the contractor’s services, and introduce a corresponding modification of the contractor’s fee or the manner of its settlement – as long as the increase in the fee, caused by any subsequent change, does not exceed 50% of the initial value of the agreement.

4. CONTRACTUAL PENALTIES

4.1. Contractual penalties.
During the state of epidemic threat or the state of epidemic, and for 90 days after its end, the contracting authority cannot set off the contractual penalty related to non-performance or improper performance of the agreement against the contractor’s fee or other claims, and cannot seek satisfaction from the performance bond – as long as the event in relation to which the contractual penalty has been stipulated took place during the state of epidemic threat or the state of epidemic.

4.2. Period of prescription.
During the state of epidemic threat or the state of epidemic, and for 90 days after the end of the later state, the period of prescription for the contracting authority’s claims (for payment of a contractual penalty) and the validity term of a performance bond do not start to run; if a given time limit has already started running, it becomes suspended. The expiration of the time limits discussed above can occur no earlier than 120 days after the end of the later of the aforesaid states.

5. ADVANCE PAYMENTS AND PARTIAL PAYMENTS

The contracting authority will be paying the fee in instalments – after performance of a specific part of a public contract, or may pay advances towards the contract performance – in case of public contracts executed for a term of over 12 months. In such case, the contracting authority:

5.1. shall specify (in the agreement) the percentage of the total fee, due for the completion of specific parts. The final part of the fee can be no higher than 50% of the total fee due to the contractor;

5.2. shall specify that the advance payment can be no lower than 5% of the fee due to the contractor;

5.3. shall specify that in case of construction works agreements covering a term of over 12 months, with respect to which the contracting authority intends to make payments in instalments, the contracting authority may indicate (in the terms of reference) the value of the final part of the payment, which can be no higher than 50% of the fee due to the contractor.

6. BID SECURITY

The requirement to provide a bid security will be voluntary in nature, irrespective of the contract value.

7. PERFORMANCE BOND

7.1. In general, the contracting authority may require a performance bond: (i) corresponding to 5% of the total price specified in the bid or the maximum nominal value of the contracting authority’s obligation resulting from the agreement; or (ii) corresponding to 10% of the above – if justified by the scope of the order, or by the risk related to the contract performance, as detailed by the contracting authority in the terms of reference.

7.2. The contracting authority can make a partial return of the performance bond after the contract has been partially performed, as long as such possibility is covered by the terms of reference.

It is also worth noting that the National Appeals Chamber resumed its operations.

At https://www.uzp.gov.pl/strona-glowna/slider-aktualnosci/zasady-bezpieczenstwa-w-krajowej-izbie-odwolawczej/zasady-bezpieczenstwa-w-krajowej-izbie-odwolawczej you can check the applicable safety rules. The key ones are as follows:
– no more than 10 people at a time are allowed in the main hall, next to the Chancellery of the Public Procurement Office and the National Appeals Chamber;
– no more than 6 people at a time are allowed in the corridors leading to the courtrooms;
– no more than 1 person at a time is allowed in the toilets;
– anyone visiting the National Appeals Chamber will be obliged: (i) to disinfect their hands upon entering the building (before getting into an elevator) and before entering a courtroom (disinfectants and soap are provided by the National Appeals Chamber); (ii) to have their temperature taken before entering a courtroom; (iii) to observe the social distancing principles, i.e. to keep a distance of at least 2 meters from others; (iv) to have and properly use personal protective equipment that allows one to cover their mouth and nose; (v) to wear disposable protective gloves.

We are ready to assist you in evaluating your particular situation. Please feel free to contact us any time by email or telephone.

Sebastian Pietrzyk – Co-Head of Public Procurement
+48 606 406 531
sebastian.pietrzyk@actlegal-bsww.com

Marcelina Daszkiewicz – Co-Head of Public Procurement
+48 665 667 670
marcelina.daszkiewicz@actlegal-bsww.com

Anti-Crisis Shield 3.0 – suspension of court and procedural deadlines lifted

May 16, 2020 was the effective date for most provisions of the so-called “Anti-Crisis Shield 3.0.” The Act lifts the suspension of court and procedural deadlines. When will time limits start to run and how to count them?

Until now, during the coronavirus epidemic, time limits in court proceedings (incl. civil, criminal and administrative ones) have been suspended. This resulted from article 15zzs section 1 of the so-called Anti-Crisis Shield 1.0 to the Act of March 02, 2020 on Special Solutions Related to Prevention and Combating of COVID-19, Other Infectious Diseases and Crisis Situations Arising from them. Anti-Crisis Shield 3.0 revokes the aforesaid provision. Pursuant to article 68 sections 1 and 2 of the amended Act, time limits will start running after 7 days of the Act’s effective date, i.e. on May 24.

Anti-Crisis Shield 3.0 has some legislative deficiencies. The revocation of the suspending provision becomes effective on the day following the Act publication date (i.e. May 16). As a result, there is no legal basis for suspension of time limits between May 16 and 23, 2020. Nevertheless, the lawmaker’s intentions are clear. We believe there is no doubt that time limits will start running on May 24.

It needs to be noted that the terms which have not begun to run at all will start anew. Those which began to run before Anti-Crisis Shield 1.0, and were subsequently suspended, will continue (rather than start once again).

Example 1:

The act suspending time limits came into force as of March 31, 2020. The court delivered a payment order to the defendant on April 15, 2020. The two-week deadline for submission of an objection to the payment order did not start running at all. The new Act came into effect as of May 16, 2020. The term starts running after 7 days of the Act’s effective date. Consequently, May 24, 2020 is the first day of the term. We need to bear in mind that the time limit cannot end on a Saturday or Sunday. In this case, it expires on June 08, 2020.

Example 2:

The court delivered a payment order to the defendant on March 18, 2020. The act suspending time limits came into force as of March 31, 2020. The deadline for submission of an objection is suspended. However, 12 days out of that 2-week term have already passed (March 19-30). Only 2 days are left. The new Act came into effect as of May 16, 2020. The term continues running after 7 days of the Act’s effective date. Consequently, May 24, 2020 is the thirteenth day of the term. It expires on May 25.

Please feel free to contact us for any questions you might have.

Piotr Wojnar
Attorney-at-law | Managing Partner
piotr.wojnar@actlegal-bsww.com
+48 602 660 610, +48 22 420 59 59

Barbara Szczepkowska
Legal counsel | Partner | Co-Head of Bankruptcy and Restructuring
barbara.szczepkowska@actlegal-bsww.com
+48 602 260 127, +48 22 420 59 59

Marek Miszkiel
Legal counsel | Partner | Co-Head of Bankruptcy and Restructuring
marek.miszkiel@actlegal-bsww.com
+48 603 553 566, +48 22 420 59 59

Anti-Crisis Shield 3.0 – remote hearings and closed-door sessions in civil cases

May 16, 2020 was the effective date for most provisions of the Act of May 14, 2020, amending specific acts in terms of protective actions related to the spread of SARS-CoV2 (Dz. U. / Journal of Laws of 2020, item 875), commonly referred to as “Anti-Crisis Shield 3.0.” Civil procedure has been amended to extend the possibility to conduct remote hearings (videoconferencing) and issue rulings at closed-door sessions.

Pursuant to the newly-adopted Act, the following will apply to cases examined under the Code of Civil Procedure during the state of epidemic or epidemic threat, and for a year of the end of the later of them:

• videoconferencing will be used for court proceedings. In order to have a remote hearing, the parties to the procedure needed to be in court buildings, e.g. in their city/town of residence. Now they will be able to participate without leaving their home. Traditional hearings can be held under exceptional circumstances, as long as they do not pose a major threat to the participants’ health. The lawmaker left ample room for interpretation as regards the criteria to adopt for evaluation whether the hearing will not expose participants to excessive hazard. It seems that such criteria could include the age of participants, their total number, the stage of epidemic, etc.;

• if the court is unable to conduct a remote hearing, while a traditional one might pose a threat to the participants’ health, the court will be entitled to examine the case at a closed-door session, unless any party objects. An objection can be filed within 7 days of the delivery of a notice about a closed-door session. Only individuals that are not represented by a professional legal advisor will be notified about such right to object;

• if so decided by the president of the court, the judging panel (apart from the presiding judge and clerk) may participate in the hearing through means of electronic communication (i.e. they will be able to participate from home), except for the hearing at which the case gets closed;

• in cases where the evidentiary procedure has already been completed, the court may close the case and issue a ruling at a closed-door session, after receiving the parties’ (or participants’) written positions;

• the period of application of article 374 of the Code of Civil Procedure has been extended, making it possible to examine appeals brought before November 07, 2019 at closed-door hearings (unless a party applies for a standard hearing or for evidence involving testimony of witnesses/parties). A request for a standard hearing can be filed within 7 days of the delivery of a notice about a closed-door session. In same of withdrawal of a lawsuit or appeal, or with respect to invalidation of proceedings, the court examines the case at a closed-door hearing.

Please feel free to contact us for any questions you might have.

Piotr Wojnar
Attorney-at-law | Managing Partner
piotr.wojnar@actlegal-bsww.com
+48 602 660 610, +48 22 420 59 59

Barbara Szczepkowska
Legal counsel | Partner | Co-Head of Bankruptcy and Restructuring
barbara.szczepkowska@actlegal-bsww.com
+48 602 260 127, +48 22 420 59 59

Marek Miszkiel
Legal counsel | Partner | Co-Head of Bankruptcy and Restructuring
marek.miszkiel@actlegal-bsww.com
+48 603 553 566, +48 22 420 59 59

Ministry of Justice announces simplified restructuring procedure

In response to act BSWW’s request for legislative actions, the Ministry of Justice has announced that it is working on a simplified restructuring procedure for enterprises.

At the onset of the epidemic, act BSWW asked the Ministry of Justice to suspend the obligation to submit bankruptcy petitions. This solution was included in the Anti-Crisis Shield 2.0. However, it was somewhat different from our recommendations. Last Friday, we received an official response to our legislative suggestions. The Ministry explained why it had not decided to suspend the declaration of bankruptcy upon the creditor’s request in case the debtor’s insolvency is caused by COVID-19. The Ministry believes that the best way to ensure protection against the creditor’s motion for declaration of bankruptcy is the debtor’s submission of a restructuring application. In case of concurrence of the bankruptcy and restructuring petitions, the latter is generally considered to prevail. However, the situation is far from simple here.

Unfortunately, the current restructuring procedure is not adjusted to mass insolvencies that we are witnessing right now. Courts were not keeping pace with demand even before the epidemic, when the number of incoming petitions was usual. The period between the submission of a restructuring application and the opening of proceedings or the creditors’ meeting (aimed at voting on arrangement) was often so long that the company was losing the ability to perform the arrangement and was left with no other option than bankruptcy. If all enterprises suffering from financial difficulties submitted restructuring applications now, courts would get stuck for years. It would be advisable to simplify the regulations, making it possible for courts to open restructuring proceedings almost automatically. Also, the restructuring procedure is expensive and (subject to some exceptions) can be afforded primarily by large enterprises that have sufficient resources to pay the costs. In practice, the enterprise should have over PLN 100,000 assigned for costs alone. Of course, the exact amount depends on the specific circumstances of a given case. The fee of an administrator in remedial proceedings varies from approx. PLN 15,000 (extremely rare in practice) to over PLN 1 million. It is strongly recommended to introduce regulations minimizing those costs. Additionally, preparation of the restructuring application, all appendices and the initial restructuring plan is time-consuming and complicated. The procedure should be streamlined.

In its letter, the Ministry mentioned that it was working on legal amendments to make it possible to conduct restructuring procedures during the state of epidemic and over a limited period after its end, using a simplified procedure. This is very good news. What we need is a simple, quick and comprehensible procedure that would allow businesses to recover from the epidemic-induced crisis. Hopefully, the new regulations will indeed make restructuring procedures much more accessible.

Please feel free to contact us for any questions you might have.

Piotr Wojnar
Attorney-at-law | Managing Partner
piotr.wojnar@actlegal-bsww.com
+48 602 660 610, +48 22 420 59 59

Barbara Szczepkowska
Legal counsel | Partner | Co-Head of Bankruptcy and Restructuring
barbara.szczepkowska@actlegal-bsww.com
+48 602 260 127, +48 22 420 59 59

act BSWW advises on framework agreement for intercontinental cargo flights with medical equipment

act BSWW has consulted one of its clients on negotiations and execution of a framework agreement with a leading Polish air operator, covering a range of cargo flights from China to Poland.

Aircrafts carry equipment intended for coronavirus prevention.

Comprehensive legal advisory services for the Client were provided by Michał Wielhorski, attorney-at-law, Managing Partner.

act BSWW at the “Polish Construction Law Conference”

The online event named “Polish Construction Law Conference. Construction Law | Contracting | Public contracts for construction works” will be held on May 20-22, 2020.

Sebastian Pietrzyk, attorney-at-law, Partner and Co-Head of Public Procurement at act BSWW, will deliver a presentation on settlement agreements between contracting authorities and contractors, as well as out-of-court dispute resolution.

Visit this website for the event’s program and participation details.

The conference is organized by Must Read Media.