IT procurement law / IT tenders / EVB-IT / BVB
Purchasing IT services / IT tendering / IT awarding
The special law for public hospitals
Public hospitals must comply with public procurement law. Direct purchasing is not permitted for purchases of more than EUR 500. Complex technical issues must be assessed when procuring IT services. However, dialog with potential contractual partners is prohibited. Failure to comply with the procurement regulations can result in the invalidity of the contract, considerable delays and negative publicity due to the non-transparent handling of public funds. This article provides a brief overview of the principles and explains common cases in a hospital using examples.
Affected hospitals
Hospitals must always comply with public procurement law if they are predominantly financed by regional authorities (i.e. state, district or municipality), if the regional authorities supervise the hospital management or if the regional authorities have appointed more than half of the members of the management or supervisory body (Section 98 No. 2 GWB).
The award procedure
Even minor breaches of the procurement procedure have devastating consequences for the hospital as the contracting authority, of which the overall ineffectiveness of the contract is only one consequence. Longer-term contracts that violate public procurement law may have to be terminated even after a longer term (ECJ, judgment of 10.04.2003, cases C-20/01 and C-28/01). In accordance with Section 115 (1) GWB, breaches of public procurement law can also result in the hospital not being allowed to award a contract until the decision of the public procurement chamber due to a review procedure. If the review procedure is successful, the invitation to tender may have to be repeated - even if funds are urgently needed.
Basic principles of awarding contracts
§ Section 97 GWB regulates six basic principles that must be observed for every award. These are the principle of equal treatment, the principle of competitive tendering, the principle of transparency, the principle of taking into account the interests of SMEs, the principle of economic efficiency and the principle of awarding contracts to suitable companies.
The basic ideas behind the six principles can largely be deduced from the terms. For example, the principle of competition calls for as many bidders as possible to be given the opportunity to submit bids in a procedure that is as formalized as possible. However, the effects of the requirement to take SMEs' interests into account are not readily apparent: Section 97 (3) GWB requires a call for tenders by awarding lots as an expression of this principle. This means that no single overall contract may be awarded. Instead, as far as possible, the contract must be divided up and parts of the contract awarded to different companies. For the purchase of an IT system, for example, one lot can be awarded for the delivery of the hardware and one lot for the delivery of the software. This runs directly counter to the hospital's interest in receiving the service "from a single source", which is why exceptions can also be justified. The principle of equal treatment also has less obvious effects: Among other things, it requires a product-neutral tender. If, for example, "Microsoft Office" is to be purchased, the hospital must justify in more detail why competitors from Microsoft are excluded from the award from the outset and why a "word processing program" is not generally put out to tender.
Different types of award
Depending on what type of service is to be purchased and at what value, different award procedures must be carried out. If, as is often the case, the threshold value for EU-wide awards is reached, four regulated types of award procedure are available (Section 3 EG VOL/A): the open procedure, the restricted procedure, the negotiated procedure and the competitive dialog. A distinction is also made between (unlawful) de facto awarding, in which an award procedure is not carried out either in ignorance or in full knowledge of the legal circumstances.
Far from being an exception, the contract must always be awarded by open procedure. The open procedure is highly formalized and does not allow negotiations with the bidders. Violations of this can lead to the subsequent annulment of the award at the instigation of an overlooked bidder. If an (unlawful) de facto award is made, i.e. if the service is purchased directly from a provider, the contract is even suspended pursuant to Section 101b GWG.
Procedure for awarding contracts
If an open contract award is carried out in accordance with Section 3 EG (1) VOL/A, the hospital as the contracting authority publishes the invitation to tender throughout Europe by submitting it to the Office for Official Publications of the European Communities. Bidders can submit their bids within a bidding period of generally at least 52 days. At the end of the bidding period, the hospital opens the bids that have been closed up to that point and evaluates the bids according to the basic principles of the award and other criteria that the hospital has already specified in the tender document. The most economical bid is awarded the contract. The contract between the hospital and the bidder is concluded with the award of the contract, whereby only the hospital's award document and the bidder's bid form part of the contract. The other bidders must be informed that their bids have not been considered, stating the reasons for the rejection, the characteristics and advantages of the successful bid and the name of the successful bidder.
The award document
The hospital must develop the aforementioned award document itself. The contract award document becomes an integral part of the contract, which is why it should - like a contract - already contain all regulations with the subsequent contractor, such as liability regulations. As the hospital is not allowed to negotiate with individual bidders, all bidders can submit their bids on the same, informed basis. The contract award document therefore contains a comprehensive list of services that specifies the requirements for the service requested by the hospital and to be offered to the bidders. The hospital shall also indicate whether the individual criteria in the specifications are an exclusion criterion or an evaluation criterion. If a bidder is unable to meet even one exclusion criterion, its bid must be disregarded. The evaluation criteria, on the other hand, are evaluated by the hospital by comparing the bids of all bidders. The bidder whose offer receives the best evaluation is awarded the contract. The weighting with which the hospital assesses the individual evaluation criteria must be communicated by the hospital in an evaluation matrix with the award document. For example, if a word processing program is to be purchased, the hospital can specify that the number of available fonts is to be rated at 20%, while the availability of an interface to the existing hospital information system (HIS) is to be rated at 80%.
The ministries already have ready-made forms for various types of services, which can be used by the hospital to standardize and simplify the tendering process. The area of purchasing IT services is particularly worth mentioning. A total of nine different EVB-IT form types can be used here, for example for the purchase of hardware and software, the commissioning of software maintenance, hardware maintenance, the provision of training or the creation of software. However, even when using these forms, the hospital must at least design the rest of the award document and, in particular, provide a precise description of the desired service according to exclusion and evaluation criteria as well as a concrete description of the award procedure.
Examples
The above is illustrated by a few examples:
The hospital wants to order 100 USB sticks at EUR 7.50 net each for its employees. Is a call for tenders necessary? The order value is EUR 750. A public procurement procedure must be carried out. The situation would be different if the order value were only EUR 500; a direct purchase would then still be permissible.
Managing Director Schlaubich still wants to purchase 100 USB sticks at EUR 7.50 each, but does not want to award a contract. She is therefore considering concluding a framework agreement with Schreiberling GmbH under which she is allowed to call up a certain quantity of USB sticks each month, but never more than a value of EUR 500. Can Schlaubich therefore dispense with an invitation to tender? No, because when assessing the contract value of such a framework agreement, the total contract volume envisaged must be determined. It is therefore not the value of the services called off by Schreiberling GmbH on a monthly basis that is important, but the value of the services called off over the entire term of the agreement. Since Schlaubich ultimately wants to call up USB sticks worth EUR 750, the contract is subject to a tendering procedure.
The hospital would like to purchase the new version of Microsoft Office. How does it go about this? The value threshold for a Europe-wide invitation to tender will have been reached. The award document can be designed primarily using the "EVB-IT Überlassung" type A or type B form. If additional services are to be purchased at the same time, such as software maintenance, the "EVB-IT System Supply Contract" form can be used. The design of the award document must also explain why a product-neutral tender cannot be issued, but why the Microsoft product is mandatory and the exclusion of Microsoft's competitors is permissible. Although the specifications need not go into technical details, it is advisable to provide precise information on the previous licensing policy and the structure of the hospital's IT system in order to enable bidders to assess whether the offer can be based on cheaper volume licensing programs (such as MS Select). It is also important to ensure that the bidder is obliged to connect to the hospital information system (HIS) if this is not to be carried out by the hospital's own IT department.
The hospital's IT manager wants software that converts old databases and transfers them to a new database. There is free software available on the Internet for the conversion, which the contractor has to adapt, but which is to be used as a basis. Can the IT manager simply fill in the EVB-IT template? No, the EVB-IT does not take free and open source software into account. At the same time, free and open source software may not be excluded without objective reason due to the principle of equal treatment. Free and open source software is also of great interest because its acquisition, use and maintenance is generally free of charge. In order to include free and open source software in the EVB-IT, it is advisable to include an annex with some special provisions (e.g. extended granting of rights of use, transfer of source code, liability and warranty).
The IT manager is tasked with procuring software for the evaluation of X-ray images. The IT manager has also found free, open-source software for this on the Internet, which only needs to be adapted slightly. The IT manager's team could even make the adjustments themselves. The IT manager therefore does not want to go out to tender at all. Does that make sense? Software for the evaluation of X-ray images is a medical device (§ 3 No. 1 MPG). A medical device must undergo a conformity assessment procedure and bear the CE mark. If software is developed in compliance with certain technical standards, there is a legal presumption (Section 8 (1) MPG) that the software meets the conformity requirements. Open source software is regularly not developed in compliance with these standards. If there is no invitation to tender, the IT manager must have the conformity assessment procedure carried out separately and budget for the costs involved.
Larger items of hospital equipment are to be sold (not purchased). Is a contract award necessary for this? According to the prevailing opinion, the sale does not constitute a public contract requiring a tender. Nevertheless, a private sale is generally considered to be permissible and a so-called structured bidding procedure is considered necessary, which is similar to a normal procurement procedure.
The hospital intends to have laboratory services provided by the external company Laborant GmbH (outsourcing). Laborant GmbH provides the laboratory services using equipment owned by the hospital. Is a call for tenders necessary? The awarding of laboratory services is also subject to tendering as a service. The fact that equipment owned by the hospital is used for this purpose does not affect this classification.
Conclusion
Public procurement law must be observed for practically all purchases and many sales by a public contracting authority. Even minor infringements, such as opening a tender before the tender deadline, can result in the invalidity of the contract, considerable delays or the unexpected, subsequent termination of longer-term contracts. On the other hand, the award procedure makes it considerably easier for the contracting authority to find potential service providers: the contracting authority's service requests only need to be published in accordance with the award procedure. The respective providers then have to approach the contracting authority with qualified offers.
Status: 28.03.2014