Hungary has made a major amendment to the Hungarian Public Procurement Act (PPA) with the main modifications entering into force on 1 September and 12 October. The main modifications are aimed at ensuring the PPA’s compliance with the EU Regulation on the access of third-country economic operators to the EU’s public procurement (i.e. EU Regulation 2022/1031 or the IPI Regulation) and EU Regulation on foreign subsidies distorting the internal market (EU Regulation 2022/2560). Other changes are mostly intended to enable faster and more effective procedures or to provide technical clarifications.
The main amendments to Hungary's PPA are as follows:
- New basic principle: Contracting authorities are required to act in a proportionate manner during public procurements, which means that the measures intended to be used by the contacting authority should not exceed the measures necessary for achieving its aims.
- Technical equivalence: The definition of technical equivalence is erased from the PPA.
- E-procurement: Deviation from the e-procurement system will become harder.
- New optional ground for declaring the public procurement procedure unsuccessful: Contracting authorities may declare procedures unsuccessful if concluding the contract with the price or price components of the winner entailed a serious breach of the effective and responsible management of public funds.
- Remedying infringements: Remedying infringements within the competence of the contracting authorities will become easier (e.g. when infringements have been noticed after the final report on the bids, any bid evaluation measures can be adopted within 20 days and even afterwards in certain cases. (An exceptional case may include remedy as a result of a preliminary dispute resolution if the contract has not been concluded).
- Rules related to EU IPI Regulation: A number of changes have been introduced to the PPA due to the EU IPI Regulation regarding notices, bid evaluation, bid invalidity and contractual obligations with commitments for winners as well. Such commitments include (among other things) restriction on subcontracting to market operators and on goods and services originating from third countries under IPI measures.
- Rules related to EU Regulation 2022/2560: Bidders, main subcontractors and main suppliers will be required to notify contracting authorities of their eventual foreign (i.e. third country) financial contributions in the bid. Such declarations may be examined by the EU Commission and non-compliance could result in bid invalidity or the Commission banning the market operator from the conclusion of the contract.
- Contract conclusion moratorium changes: Contracts based on framework agreements and dynamic purchasing systems can be concluded before the expiry of the general moratorium. To avoid potential misuse of this possibility, the unlawful declaration of the bidder (among other things) could lead to the nullity of the contract.
- Review procedures: Extensive deadline changes for review procedures before the Public Procurement Dispute Board have been adopted.
- Emergency situation: Government Decree No. 357/2022. (IX. 19.) on deviation from public procurement rules in emergency situation is repealed.
For further information on these amendments and Hungary's public procurement rules, contact your CMS client partner or these members of the CMS public procurement team in Budapest.
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