1. National coordination of public procurement in Poland Ministry of Infrastructure and Development

2. Content of the presentation Introduction (basic data) Public Procurement Law Management and control system role PPL – financial corrections –Evolution of the national document –Methods of determining financial corrections Lessons learnt

3. EU funds for Poland (pre-accession funds, 2004-2006, 2007-2013, 2014-2020) [bln EUR]

4. 2016-06-23 enterpreneurship IT systems research and development environment transport public institutions 16 Regional Operational Programmes ERDF OP Development of Eastern Poland OP Infrastructure and Environment OP Human Capital OP Innovative Economy OP Technical Assistance Areas supported by the Cohesion Policy Areas supported by the Cohesion Policy employment education 2007-2013 Operational Programme Infrastructure and Environment Operational Programme Technical Assistance Operational Programme Eastern Poland Operational Programme Knowledge-Education- Development Operational Programme Digital Poland European Territorial Cooperation OPs Regional operational programmes ERDF+ESF Operational Programme Smart Growth 2014-2020 European Territorial Cooperation OPs SOP Increasing the innovativeness of enterprises Integrated Operational Programme of Regional Development SOP Development of Human Resources Strategy of implementation of the Cohesion Fund 2004-2006 Eutopean Territorial Cooperation OPs

5. Smart Growth Infrastructure and Environment Knowledge-Education -Development Digital Poland Eastern Poland Technical Assistance Regional OPs 27 513,9 mln EUR 8 614,1 mln EUR 4 419,3 mln EUR 2 255,6 mln EUR 2 117,2 mln PLN 700,1 mln EUR 31 247 mln EUR Operational Programmes for 2014-2020

6. Institutional system of implementation of the EU funds 2004-20062007-20132014-2020 central governmental administration coordinating authority, managing authorities, intermediate bodies beneficiaries coordinating authority, managing authorities, Certifying Authority, intermediate bodies beneficiaries coordinating authority, institution responsible for designation, managing authorities, intermediate bodies, certifying authorities, beneficiaries Ministry of FinancePaying Authority, Audit Authority Audit Authority regional governmental administration intermediate bodiesintermediate bodies for certification - Regional self-government (voivodship) implementing authorities, beneficiaries managing authorities for ERDF (50% of the allocation) intermediate bodies, beneficiaries managing authorities for ERDF (55%) and ESF (65%), certifying authorities, intermediate bodies, beneficiaries Local self-government (poviat) beneficiaries Local self-government (gmina) beneficiaries

7. Public Procurement Law in Poland The basic act regulating the area of public procurement in Poland is Public Procurement Law adopted in 2004. Public Procurement Law implements a threshold of 30 000 € (14 000 € before amendement in 2014). The act has to be obeyed in case of procedures, which value exceeds this threshold.

8. Public Procurement Law in Poland Content of Public Procurement Law (published at webside: http://www.uzp.gov.pl/cmsws/page/?F;370): implements definitions concerning public procurement, defines general rules in that area, defines the content of the contract notices and the specification of essential terms of the contract, defines specific procedures for awarding public contracts (i.e. open tendering, restricted tendering, negotiated procedure with and without publication, competitive dialogue, single-source procurement, request for quotations, electronic bidding), defines duties of the President of PPO, establishes and defines duties of the National Appeal Chamber.

9. Public Procurement Law in Poland The body responsible for the content of the PPL is Public Procurement Office (PPO), managed by the President of PPO. PPO plays a policy making and co-ordinating role for the whole public procurement system. It is an independent unit within the Polish government. The President of PPO is appointed by the Prime Minister. The key duties of PPO are: to prepare drafts of legislative acts on public procurement, to publish contract notices in the Public Procurement Bulletin, to arrange appeal proceedings under the Public Procurement Law, to check the regularity of conducted procedures, to prepare training programs, organise and inspire training events in the field of public procurement, to maintain international cooperation on issues relating to public procurement.

10. Public Procurement Law in Poland The President of the PPO is obliged to control public procurement procedures conducted within projects co-financed by the Structural Funds and the Cohesion Fund, when the value of the contract exceeds: - 20 000 000 euro for construction works, - 10 000 000 euro for services and supplies. Besides the President of the PPO may control any procedure on demand of the Managing Institution. PPO is not in position to impose financial correction or to inform about irregularities.

11. Public Procurement Law - EU funds Institutions of the management and control system (Coordinating Institution, Managong Authorities): Control of procedures within projects, detection and correction of irregularities Suggestions, explanations and guidelines Publication of EC audits reports Preparation of documents concerning financial corrections Coofinancing of seminars

12. Controls of public procurement procedures – EU funds Besides controls conducted by the PPO, there are also controls of the public procurement procedures conducted within projects co-financed from EU funds:  ex ante controls – controls conducted by Managing Authorities (Intermediate or Implementing Bodies) before the public procurement procedure, on the basis of documents prepared by the beneficiary;  ex post controls – controls conducted by Managing Authorities (Intermediate or Implementing Bodies) during verification of expenditures.

13. 13 CONTROL OF FUNDS’ IMPLEMENTATION NATIONAL INSTITUTIONS NATIONAL INSTITUTIONS   MA (IB, IB II)  AA  CA COMMUNITY INSTITUTIONS  EC  OLAF  ECA  NIK (CONTROL CHAMBER)  UZP (PUBLIC PROC. OFFICE ) Controls of public procurement procedures – EU funds

14. 14 CA INTERMEDIATE BODIES MANAGING AUTHORITIES INTERMEDIATE BODIES II BENEFICIARY AA NATIONAL SYSTEM OF FUNDS’ IMPLEMENTATION CONTROL Controls of public procurement procedures – EU funds

15. Types of irregularities - information sent to the EC (2007-2013) 15

16. Public Procurement Procedures – financial corrections 16 European Commission guidelines for determining financial corrections to be made to expenditure co-financed by the Structural Funds or the Cohesion Fund for non-compliance with the rules on public procurement COCOF 07/0037/03-EN C(2013) 9527 final European Commission guidelines for determining financial corrections to be made to expenditure co-financed by the Structural Funds or the Cohesion Fund for non-compliance with the rules on public procurement COCOF 07/0037/03-EN C(2013) 9527 final National document determining levels of financial corrections to be made for non-compliance with the public procurement law by beneficiaries of EU funds

17. National document determining financial corrections – history and evolution 17 First version – published in March 2008 6 versions Legal status Why national document? Evolution – from interpretation to strict application

18. National document determining financial corrections – history and evolution National document determining levels of financial corrections to be made for non-compliance with the public procurement law by beneficiaries of EU funds – evolution before 19.12.2013 before 19.12.2013 after 19.12.2013 after 19.12.2013 Financial perspectives 2000-2006 and 2007-2013Financial perspectives 2000-2006 and 2007-2013 Financial perspective 2014-2020Financial perspective 2014-2020

19. Audit Authority vs. Managing Authority 19 Audit Authority European Commission guidelines for determining financial corrections to be made to expenditure co-financed by the Structural Funds or the Cohesion Fund for non-compliance with the rules on public procurement Managing AuthorityNational document determining levels of financial corrections to be made for non- compliance with the public procurement law by beneficiaries of EU funds

20. National document determining financial corrections – financial perspective 2014-2020 20 Legal status – regulation of the Minister of Regional Development Different form, similar content New requirements concernig procurements below EU and national thresholds (Public Procurement Law, Guidance for eligibility of expenditures)

21. Methods of determining financial corrections 21 Two methods of determining financial corrections: Flat rate method (with pre-difined levels of financial corrections) Diversification (difference between the price of correct and chosen offer)

22. Procurements below and above EU threshold 22 According to the EC decision of 19.12.2013: „Regardless of the existence of a certain cross-border interest in relation to a given contract not (or not fully) subject to the provisions of the Directives, there is a need to examine whether the expenditure declared for that contract complies with the national rules on public procurement. If cross-border interest exists or there is non-compliance with national legislation, the Commission may propose the application of a financial correction based on the criteria established below (in the guidelines)” The same levels of corrections (from 12.2013)

23. Examples of irregularities – levels of financial corrections Findings revealed in the area of public procurement: Improper public procurement procedure – single source procurement (financial correction – 25% or 100% of the value of the contract – depends on the value); Artificial division of contracts to avoid public procurement procedures (financial correction – 25% of the value of the contract); Improper publication of contract notice (financial correction - 25% of the value of the contract); Changes to the information included in the tender notice without corrigendum being published in the OJEU (financial correction – 10% of the value of the contract); Improper conditions for participation in the procedure (experience in coofinanced projects - financial correction – 25% of the value of the contract, experience in project realised in Poland – financial correction – 10% of the value of the contract);

24. Examples of irregularities – levels of financial corrections Findings revealed in the area of public procurement: Additional works without any procedure (financial correction – 25% of the value of the contract); Discriminatory description of the subject-matter of the contract (trademarks) (financial correction – 5% of the value of the contract); Unlawful contract award criterion (financial correction – 5% of the value of the contarct); Limitations to consortiums and subcontracting (financial correction – 5 or 10% of the value of the contract); Required equipment to be available at the stage of tendering (financial correction – 5% of the value of the contract).

25. Financial corrections – problems Question of financial effect Legal basis for financial coorrections – coofinancing agreement, legally binding act Institutions entitled for controling public procurement procedures – Public Procurement Office Attitude to the question of the effect of the irregularity – institutions of the management and control system vs. Public Procurement Office and courts

26. Lessons learnt and challenges Public procurement is still main reason of irregularities (complicated law, question of irregularities – restrictive attitude, formal or not mistake) New public procurement procedures – implementation into the national legal system, new requirements Problems identified – conflict of interrests, collusions

27. Thank you for your attention www.mir.gov.pl www.funduszeeuropejskie.gov.pl