Order 600/2017 – The issue and the potential exits Order 600/2017 – The issue and the potential exits. A contextual approach Oana Soimulescu / Mihnea Jida

Order 600/2017 – What is wrong ? Order 600/2016 breaches: Law 24/ 200 – regarding the norms of legislative technique Law 98/2016 – regarding the public procurement Law 101/2016 - regarding the settlement of disputes concerning the public procurement procedures Law 21/ 1996 - regarding the commercial competition Government Ordinance no. 92/1997- regarding the regime of foreign investments in Romania Government Decision no. 1405/2010 Government Decision no. 901/2015 regarding the national strategy regarding the public procurement Order 878/2013 the guide regarding the main risks identified in the area of public procurement and the EC recommendations which must be followed by the Romanian authorities in the process of verification of public procurement procedures

Order 600/2017 vs. Law 24/ 2000 –Legislative technique Principles Secondary legislation cannot amend, annul contravene to or modify the general concepts and principles of principal legislation An enactment modifying another enactment cannot modify the main concepts/ and cannot modify it substantially (to a substantial extent) Facts - Order 600/2017 is intended to modify / complete and supplement the general Conditions of Contract (i.e. Annex I of Government Decision no. 1405/2010); in so doing, the aforementioned principles must be observed as a validity requirement. - In fact they are not. Major principles and concepts of GD 1405/2010 are amended as follows: The design and build concept The lump sum concept The allocation of risks The dispute resolution procedures/ concepts

Order 600/2017 vs. Law 101/2017; Government Decision 92/1997; Law 554/2004; the Civil Code - The Dispute resolution procedures The Principles Law 101/2016 - regulates an option between arbitration and courts for the settlement of public procurement disputes Government Ordinance no.92/1997 – offers a guarantee to foreign investors that they will have the option in relation to the competent arbitration/ litigation fora in relation to the resolution of disputes Law 554/2004 – establishes that in case of failure of the preliminary conciliation procedures, the dissatisfied party has 6 months to address the administrative contentious courts The Facts Order 600/2017 annuls the option provided in Law 101/2016 Order 600/2017 annuls the guarantee provided in Government ordinance no.92/1997 Order 600/2017 modifies the administrative contentious law and limits to only 42 days the 6 months provided under law 554/2004; also, by the mere switch to administrative contentious procedure, the general 3 years limitation period is reduced to just 6 months as per the specific provisions of Law 554/2004

Order 600/2017 vs. Law 98/2016; Law 21/2996; Government Decision no Order 600/2017 vs. Law 98/2016; Law 21/2996; Government Decision no.901/2015; Order 878/2013 – The provisions regarding the suspension of works The Principles Law 98/2016 establishes that public procurement is subject to the principle of non-discrimination and equal treatment/ proportionality principle/ the principle of efficiency of public expenditures Government Decision 901/2015 and Order 878/2013 call for balanced contractual conditions as a way to comply with the principles set out under the public procurement legislation Law 21/1996 provides that the public authorities must not restrict/alter in any way the free competition on any markets or establish discriminatory conditions for the activity of companies The Facts Order 600/2017 limits drastically the competition by providing abnormal periods during which The Contractors are obliged to continue to execute the works at their own expense, even if the Employer does not discharge its payment obligations (Sub-Clause 16.1. amends the 21 days notification requirement into a 730 days notification requirement) The Contractors are obliged to remain mobilized even in the context of prolonged suspensions under Sub-Clause 8.8 of the Contract; the deadline for the Contractor to exit the Contract is currently 730 days instead of the 84 days provided under Government Decision no. 1405/2010 This translates into an illegal limitation of the access of the medium and small construction companies who cannot budget for the financing of the works (absent all payments for 2 years) or who cannot budged for extended mobilizations during suspensions by the Engineer.

Order 600/2017 vs. article 235(4) of Law 98/2016 The Principles Law 98/2016 provides that the general and the particular conditions of contract for the public procurement projects are due to be approved by way of Government Decision. This provision is in force as of 05.05.2017 The Facts In June 2017, such conditions are enacted by a Ministerial Order which is of a lower legislative value compared with the government decision provided for under article 235 (4) of Law 98/2016.

Order 600/2017 – What can be done? Objectives The Annulment of Order 600/2017 – Entirely or Partially? The Suspension of the effects of Order 600/2017 Procedural basis Law 554/2004 regarding the administrative contentious procedure Who can be a Claimant Any company who can demonstrate that participates in public procedures in relation to road infrastructure project Any company who qualifies as foreign investor for the purpose of Government Ordinance no.92/1997

Order 600/2017 – What can be the effect ? Procedures which have been launched on the basis of Order 600/2017 in an incipient status If Order 600/2017 is suspended the tenderers may require the contracting authority to implement correcting measures and clarify which conditions of contract will apply; if the response is not satisfactory the tenderers may start the dispute resolution procedure provided for under Law 101/2016 and may also request the suspension of the procedure until such time when the annulment request is finally settled on its merits. Procedures which have been launched on the basis of Order 600/2017 where the offers have been submitted/ DUAE stage is completed/ Letter of award issued In these procedures, regardless of the actual status, the suspension of Order 600/ 2017 can only lead to the suspension of the procedure itself; in this case the contracting authority cannot indicate alternative conditions of contract; if Order 600/2017 is annulled then the entire procedure will be annulled; if order 600/2017 is maintained, the procedure will continue on the basis of Order 600/2017 Procedures which have been launched on the basis of Order 600/2017 where the Contract has been awarded and signed In these procedures the suspension/ the annulment of order 600/2017 will have no effects.

Order 600/2017 - Conclusions Order 600/2017 must be challenged in front of the administrative contentious courts under Law 554/2004 Partially/ Entirely? As a consortium or individually and simultaneously? Other issues Questions

Thank you Oana Soimulescu oana.soimulescu@oflaw.eu Mihnea Jida mihnea.jida@oflaw.eu 66 Grigore Alexandrescu Sector 1, 010626 Bucharest, Romania