As established in the preamble of the Law on the Public Procurements of Azerbaijan Republic (hereinafter “The Law”), the present Law determines the economic, legal and organizational basis of public procurements[1] in The Republic of Azerbaijan, set principles and rules of effective and economical use of state funds during procurements, creation of equal competitive environment for all consignors (contractors)[2] on the basis of competition and publicity.[3] Evidently, the main objective of holding public procurement and setting rules regulating it is to establish equal opportunities for all contractors who are willing to partake in public procurements. The adoption of the law on Public Procurements were aimed at the same purposes, however, there are some points which need further clearance in order to stimulate the free-market economy in the country.
The law therefore contains the consignor (contractor)’s right to appeal from the procurement decision and types of legal actions that may be brought.[4] Let us now delve into them below.
1. Complaint to the procuring entity or approving authority. As to Article 56.1 of the Law, such complaint shall be lodged in writing to the manager of procuring entity[5] before the procurement contract[6] takes effect (if the complaint is connected with any action, decision or the procedure of procuring entity and such action, decision or procedure is approved by any authority in accordance with present Law, the complaint is lodged to the manager of that authority).
In order to file such a complaint, the consignor (contractor) must meet three requirements:
First, the complaint must be filed before the procurement contract between the procuring entity and the winning bidder enters into force;[7]
Second, the complaint must be in writing;[8]
Third, such a complaint must be filed within 15 banking days from the date on which the consignor (contractor) becomes or should have become aware of the grounds for it.[9] If these requirements are not met, the procurement entity (or the approving authority) will not consider that complaint.[10]
The procuring entity or the approving authority receiving the complaint prepared in accordance with the above requirements shall examine the complaint within 20 banking days (10 banking days for procurements conducted in accordance with Article 50-1 of the Law on Public Procurement), makes a written decision on full or partial satisfaction of the claim or rejection.[11] If more than 20 banking days have elapsed since the complaint was lodged and no such decision has been made, the consignor (contractor) acquires the right to file an administrative and judicial complaint, and from that moment the procuring entity loses the authority to examine such a complaint.[12]
The legislator again leaves us another Pandora’s box as usual. As such, it is not clear whether those above-mentioned two periods should be accumulatively pursued in order to file a complaint to the procuring entity or not. For example, the question arises in case the 15 banking days for the complaint have elapsed, nevertheless, the procurement contract has not taken legal force yet, may the contractor still lodge a complaint to procuring entity? Or vice-versa, the contractor has filed a complaint in accordance with 15 banking day period, but the procurement contract has already come to force, what then? These are the issues that need further clearance in my very humble opinion.
2. Administratively (In administrative order). According to the Article 57.1 of the Law on Public Procurement, the consignor (contractor) may file a complaint to the relevant executive authority - the Ministry of Economy of the Republic of Azerbaijan in the following cases:
1) if due to the entry into force of the procurement contract between the procuring entity and winner bidder, the complaint cannot be filed in accordance with Article 56 or the complaint cannot be considered in accordance with that Article (provided that the complaint is filed within 15 banking days from the time the consignor (contractor) became aware of the circumstances);[13]
2) If the head of the procuring entity does not consider the complaint due to the entry into force of the procurement contract, the bidder may file an administrative complaint to the Ministry of Economy within 15 banking days after the decision is made not to consider the complaint of the consignor (contractor);[14]
3) if the procuring entity or the approving authority has not made any decision on the complaint received within 20 banking days in accordance with Article 56.4 of this Law. In this case, the consigner (contractor) may file an administrative complaint to the Ministry of Economy within 15 banking days after the expiration of this period;[15]
4) If the consignor (contractor) claims that he has suffered losses as a result of the decision made by the head of the procuring entity (or the approving body) in accordance with Article 56 of this Law, he may administratively appeal to the Ministry of Economy within 15 banking days from the issuance of such a decision.[16]
Pursuant to Article 57.4 of
the Law on Public Procurement, the relevant executive authority shall issue a written decision on the complaint within 20 banking days (10 banking days for
procurements conducted in accordance with Article 50-1 of the Law on Public
Procurement), substantiating its reasons and indicating the legal remedies
provided (if such remedies are provided).
3. Suspension of
procurement procedures. As stated in Article 59.1. If the complaint
submitted in time in accordance with Articles 56 (Complaint to the procuring
entity or the approving authority) and 57 (Making of complaint in
administrative order) of this Law is grounded, the procurement procedure shall
be suspended for a period of 7 banking days in order to examine the complaint.
The complaint is examined during the period of suspension of procurement
procedures. This rule is applicable when the procurement contract has not come
to force yet. This article awkwardly sounds as if the bidder may submit a
complaint to the relevant executive body in administrative order before the
procurement contract comes to effect.
Hence, as to the Article 59.2, if procurement contract takes legal effect, the execution of procurement contract shall be suspended for 7 banking days to examine claim on the basis of a complaint lodged in time in accordance with Articles 57 and 59.1. The implication of this article also suggests that the consignor (contractor) may never submit the complaint to the procuring entity or approving authority after the procurement contract comes to effect, even though he/she pursued 15 banking day period.
4. Judicial complaint. Courts are playing as a last resort in case of a complaint from the procurement decision. Under Article 60 of the Law, the courts of the Azerbaijan Republic have the right to examine claims filed in accordance with Article 55 of this Law, appeals against decisions of the bodies reviewing the appeal or decisions not taken by these bodies within the time limits specified in Articles 56, 57 and 59 of this Law. This law implies that the consignor (contractor) may either directly file a complaint to the court from the procurement decision, or after the procuring entity (or approving authority) made a decision or even did not make such decision regarding the consignor (contractor)'s complaint in the time frames specified in Article 56, 57, and 59. So it is up to the consignor (contractor) to pursue court or out of court remedies.
I believe you enjoyed and baffled!
See you in the next readings!
Kanan Khalilov, LLB'20
Associate at BHM Law Firm
Basic Definitions.
“procurement” – acquisition of goods (works and services) as
established by present Law;
“procuring entity” – state enterprises and organizations (administrations), enterprises and organizations procuring goods (works and services), state share in charter fund of which is 30 and more percents;
“tender” – competition held to select the most efficient procurement contract performance
proposals submitted by tenderers in writing;
“consignor (contractor)" – potential or actual party to the procurement contract entered into with procurement agency;
"tenderer" – legal or physical persons or union of legal persons who submitted proposal and
paid tender participation fee under tender conditions;
"procurement contract" – document concluded between procuring a and the tender winner(winners) and setting obligations of the parties in connection with the procurement of goods (works and services);
[1] “Procurement” - acquisition of goods (works and
services) as established by present Law; Law on the Public Procurements, Art.2
Basic Definitions;
[2] “Consignor (contractor)” - Potential or actual party
to the procurement contract entered into with procurement agency; the Law,
Art.2;
[3]The Law on Public Procurements of AR, Preamble;
[4] The Law on Public Procurements, Art. 55.1;
[5] “Procuring entity” – state enterprises and organizations (administrations),
enterprises and organizations procuring goods (works and services), state share
in the charter fund of which is 30 and more percents; the Law, Art. 2;
[6] "Procurement contract" – document concluded
between procurement agency and the tender winner (winners) and setting obligations
of the parties in connection with the procurement of goods (works and services);
the Law, Art. 2;
[7] The Law on Public Procurements, Art. 56.1;
[8]The Law on Public Procurements, Art. 56.1;
[9]The Law on Public Procurements, Art. 56.2;
[10]The Law on Public Procurements, Art. 56.2;
[11]The Law on Public Procurements, Art. 56.3;
[12]The Law on Public Procurements, Art. 56.4;
[13]The Law on Public Procurements, Art. 57.1.1;
[14]The Law on Public Procurements, Art. 57.1.2;
[15]The Law on Public Procurements, Art. 57.1.3;
[16]The Law on Public Procurements, Art. 57.1.4.
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