The requirement to pay security when submitting an application to the Procurement Monitoring Bureau does not comply with the Satversme (Constitution)
The Constitutional Court has adopted a judgment in the case No. 2009-77-01 “On Compliance of Section 83.2 and Para 12 of the Transitional Provisions of the Public Procurement Law with Article 1 and Article 92 of the Satversme (Constitution) of the Republic of Latvia”.”
The contested norm provides for the duty to pay security in certain cases when submitting an application to the Procurement Monitoring Bureau [Iepirkumu uzraudzības birojs] (IUB). The case was initiated based on an application of the President of Latvia Valdis Zatlers, wherein it was indicated that the contested norm restricts the right of a person to a fair court, as well as the possibility of persons to demand examining lawfulness of the use of public and municipal resources, deteriorates business environment, reduces fair competition and trust in lawfulness of activities of public institutions. In the application, it was requested to recognize the contested norm as non-compliant with Article 1 of the Satversme that provides that Latvia is an independent democratic republic, and Article 92 of the Satversme which guarantees among the rest things that everyone has the right to defend his or her rights and lawful interests in a fair court.
The Constitutional Court has recognized that the objective of the contested norm is to prevent persons from knowingly submitting ungrounded applications to the IUB and thus facilitate efficiency of the procurement procedure and speed it up. The norm, however, does not apply only to those persons who knowingly submit ungrounded applications but also to those persons who have submitted one due to their true doubt about lawfulness of the procedure.
The Court indicated that the requirement to provide security does not facilitate efficiency of the procedure because efficient procurement procedure is guaranteed only by those requirements and restrictions that ensure balance between time economy in procurement processes, on the one hand, and ensuring of lawfulness of the processes, on the other hand, the latter including both, grounded activities of a purchaser during the procurement process and verification of decisions adopted by the purchaser.
The Court indicated that examination of an application by the Bureau cannot be regarded a non-proportional prolongation of procurement procedure because the term for examination of applications is established by law, and the purchaser, when planning a purchase, has the possibility to take it into consideration. The speed of procurement process is influenced by undue and incorrect planning of procurement process rather than by an application indicating to possible breaches of the procedure, which, according to the law, can prolong the process by one month and three working days. The purchaser, when planning a purchase in a correct and due manner, has the possibility to initiate purchase procedure with a precise deadline. The Court has also indicated that, based on the principle of good administration, the State has the duty to ensure conditions for IUB to be able to fulfil its functions within the terms established in normative acts.
The Court recognized the Contested Norm as non-compliant with Article 92 of the Satversme and null and void as from the date of coming into force of the Judgment.
The Judgment of the Constitutional Court is final and not subject to appeal. The Judgment shall come into force on the fate of publishing it in the newspaper “Latvijas Vēstnesis”.
Linked case: 2009-77-01