Hungary: new laws on public procurement

From 15 January, there are important changes to procurement procedures in Hungary.

The changes tidy up unsatisfactory aspects of the 2003 laws as well as implementing EU public procurement directives, which member states were obliged to implement by 31 January 2006. They also reflect extensive consultation by the Ministry of Justice with organisations and institutions involved in public procurement.

Key changes include:

• Public corporations, public corporate budgetary organisations and the national societies of various sports are now exempt from public procurement procedure.
• Organisations operating in the postal services sector and providing specific postal services are no longer exempt
• There is also an exemption for authorities seeking to provide a public e-communications service or access to a public e-communications network but orders for telephone, telex, radio telephone, pager or satellite services are not
• As a new procedure “competitive dialogue” has been introduced, allowing “classic” contracting authorities to negotiate procurement needs with bidders as part of the procurement process.
• “Dynamic” purchasing will come into force in 2007, allowing registered bidders who satisfy certain criteria to make common purchases via an electronic process
• Electronic auctions will come into force on 1 July 2006, allowing electronic bids and creating an automatic ranking of prices offered by bidders
• Negotiated procedures can also be used without an invitation to tender for the supply of goods and, for purchases at or above national thresholds which are public and open to anyone, where it is the only way to take advantage of exceptionally favourable circumstances which only exist for a short time
• Accelerated procedures can now be applied in not only “extremely urgent, but in urgent cases as well, where restricted or negotiated procedures are being used with an invitation to tender
• Practical conflict rules have been introduced which don’t treat individuals as having become involved in the procurement procedure where they request a status report, market survey or other information to estimate the value of the contract or quote a price to the contracting authority for submitting an application.
• There are new rules governing requests for missing data or documents
• There are new rules allowing simple copies of documents to be submitted in national and "simple" procurement procedures covered by EU directives
• Contracting authorities are now allowed to amend results (once only) within 15 days after announcement to correct a legal infringement
• There is also an attempt to curtail the number of remedies procedures by increasing the administration fee to HUF 900,000 for challenging procedures covered by EU directives at or above the relevant threshold. To encourage early challenges, this is not payable for challenges to the invitation to tender itself.
• From 1 January 2006, the thresholds have been raised in all areas.

Law: 2003 Public Procurement Act; Act No. CXXIX of 2003; EU Directives 2004/17/EC and 2004/18/EC