1. The Public Procurement Act as a general rule
The Public Procurement Act of 17 June 2016 provides the general legal framework for public procurement in Belgium. This Act transposes the European Directive 2014/24/EU into Belgian law. The principles of transparency, fair competition and equal treatment are the guiding principles of this legal framework.
In general, the Public Procurement Act applies to all public contracts in Belgium, unless otherwise stipulated. This also applies to Belgian Defence. Apart from exceptions (discussed below), Belgian Defence applies the Public Procurement Act when awarding contracts for works, supplies, or services.
This means that contracts are in principle published in the Belgian Bulletin of Procurement and, depending on their value, the Official Journal of the European Union. Interested companies can submit their candidacy or offer to compete for the contract.
Procurement procedures then follow either the so-called “open” or “closed” procedure, in which no negotiations are possible, or the competitive procedure with negotiations, in which the contracting authority may negotiate with candidates about their offers.
In the framework of preliminary market consultations, companies and contracting authorities may enter into contact with each other prior to a public procurement procedure. It is not impossible that companies would proactively reach out to contracting authorities to present their capabilities. Of course, the principle remains that every contract must be awarded on the basis of a published public procurement procedure, allowing all interested parties to compete on equal grounds. The principles of transparency and equality – principles of public order – remain fundamental.
Public procurement within the defence and security sector does not fall within the scope of the classic Public Procurement Act when:
- The Defence and Security Act applies (see below); or
- Article 346(1)(b) TFEU can be applied (see below); or
- International rules require the contracting authority to award the contract under other procurement procedures.
2. The Defence and Security Act as a first exception
The Defence and Security Act of 13 August 2011 provides a specific framework for procurement in the defence and security sector. This Act transposes the European Directive 2009/81/EC into Belgian law. Depending on the matter, contracts in the defence context may therefore be subject to different rules.
The applicability of the Defence and Security Act depends on the objective of the contracting authority. The Defence and Security Act applies only to public contracts awarded in the field of defence and security and relating to:
- The supply of military equipment, including parts, components and/or assembly parts;
- The supply of sensitive equipment, including parts, components and/or assembly parts;
- Works, supplies and services directly related to the above-mentioned equipment, for all phases of its life cycle;
- Works and services for specific military purposes or sensitive works and sensitive services.
The definitions of ‘military equipment’ and ‘sensitive equipment, sensitive works and sensitive services’ are therefore important. The Defence and Security Act defines these terms as follows:
- ‘Military material’ means material specifically designed for or adapted to military purposes and intended for use as weapons, ammunition or war material;
- ‘Sensitive material, sensitive works and sensitive services’ means material, works and services for security purposes that involve classified information or that necessitate and/or contain classified information.
Contracts falling within the scope of this Act will be procured through either a restricted tender, a limited call for tender or a negotiation procedure with prior publication. These contracts will be announced at Belgian level or European level, depending on the value of the contract.
In the principle, as is the case under the Public Procurement Act, interested companies may come forward after the publication and submit an offer, which may be subject to negotiations depending on the procedure.
The Defence and Security Act provides the same fundamental safeguards as the Public Procurement Act. In addition, this Act allows the contracting authority to include specific safeguards in the tender documents, in light of the special requirements that a contracting authority in the defence and security sector might have, such as:
- Security and confidentiality: for example, the contracting authority may require companies to implement specific security measures and sign confidentiality agreements.
- Selection criteria: the contracting authority may impose additional requirements in this area, such as specialised experience or certain security clearances, which are not always required in other public procurement procedures.
- Grounds for exclusion: different grounds for exclusion apply to non-EU operators, as well as to operators who may not be considered sufficiently reliable.
- Modified procedural guarantees: there may be accelerated procedures or special requirements for tenderers, e.g. due to the urgency or confidentiality of the contract.
- Security of supply: the contracting authority can also impose other requirements, e.g. on security of supply.
3. Article 346(1)(b) TFEU as a second exception
At a European level, Article 346(1)(b) of the Treaty on the Functioning of the European Union (TFEU) provides an important exception to the procurement rules when such is necessary to safeguard the national security interests of Member States. This article allows Member States to exempt themselves, under certain conditions, from procurement rules.
The Belgian legislator has specified that, when Article 346(1)(b) TFEU is invoked, the negotiation procedure without prior publication must be followed.
When a contract is awarded on the basis of this exception, not every interested company will have the opportunity to compete. The use of the negotiation procedure without prior publication obliges the contracting authority only in certain cases, and to the extent possible, to consult several companies. In such case, the contracting authority itself chooses which companies it includes.
This exceptional regime only applies under a limited set of circumstances. The exception may be invoked by the contracting authority only when such is necessary for the protection of a national and essential security interest and provided that the strict conditions of application of this provision are met.
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N.B.: the purpose of this contribution is to briefly summarize certain basic principles on how Belgian Defence can award contracts to private partners. As such, this contribution does not aim to be legally comprehensive.
Should you have any questions in a specific matter, please do not hesitate to contact Thomas Christiaens or Manon De Weser, who are happily available.
