2018 - 02 - 22
Article by: Dr Deividas Soloveičik

1. Introduction: regulation of public procurement in Lithuania

As Lithuania is the country of continental law system it is natural to expect it having the set of rules of written law that regulates the procedures of public procurement. It is also common to understand that Lithuanian legal system is mainly affected by the EC law, since it is a member of the EC since 2004. This means that within the domain of public procurement law the present Lithuanian legal rules mainly refer to the post 2004 EC directives[1] as well as international public law and treaties related thereto, such as WTO Agreement on Government Procurement[2]. Mostly the legal regulation of public procurement in Lithuania does not differ much from the one that is provided by the EC directives. In other words, Lithuanian law mainly includes verbatim the very same provisions which might be come across at the EC directives without adding anything authentic or at the same time without excluding the legal possibilities provided for the contracting authorities or the suppliers which by the directives. On the other hand, Lithuanian law on public procurement is one of the most dynamically developed laws in Lithuania, since during the recent years it has been amended almost twice a year. Some of the latest amendments introduced such elements of the public procurement procedure which the EC directives are unfamiliar with. For instance, Lithuanian law includes the provisions on in-house purchase. Albeit the conditions of this exception are similar to the Teckal[3] criteria still there are slight differences which make the in-house concept in Lithuania a bit authentic. Besides, the Lithuanian law includes different provisions, if compared to the EC directives, on confidentiality during the public procurement procedures, quite thoroughly regulated procedures of the procurement organised for purchases under the threshold of the EC law, etc. Thus it seems that there is a trend to regulate public procurement order in Lithuania than simply re-write the EC directives into national laws as well as to adjust the EC requirements to the national legal culture which is nowadays very highly oriented towards the making the public procurement procedures as transparent as it is possible to.

The main source of public procurement law within the Lithuanian jurisdiction is the Law on Public Procurement (LPP),[4] which originally was adopted in 1996 and afterwards amended numerous times adapting it to the regulation of the EC rules on public procurement. It has to be mentioned that the LPP theoretically is not the source of law having the “highest rank”, since according to the hierarchy of legal sources in Lithuania the Constitution, international treaties, codified laws (codes) have prevalence over the Legal Act. However, the provisions of the LPP are lex specialis meaning that they are the primary ones in the field of public procurement and prevail over the norms of the other laws, such as the norms of the civil code, if such norms compete in legal regulation.[5]

LPP contains five sections. The first one includes so called common provisions which regulate many important aspects of public procurement procedure: legal definitions (which are generally translated from EC directives), principles and objects of public procurement, formal description of contracting authorities and suppliers, requirements of confidentiality, the beginning as well as the legal end of public procurement procedure, the status and tasks of Public Procurement Office (PPO), the rules on calculation of the purchase value, exemptions from the application of LPP, legal grounds for centralised purchase, the status of procurement commission, requirements for communication and interchange of information as well as the public contract, etc. The second section of the LPP regulates the so called international value procurement. This is the procurement which value exceeds the EC directive threshold and must correspond to the requirements of the EC public procurement law. Therefore, this section of the law mainly includes the provisions of the Directive 2004/18/EC. The third section deals with the utilities procurement and encapsulates the norms of the Directive 2004/17/EC. The fourth section of the LPP regulates the so called simplified procurement, i.e. the procurement which is not covered or not fully covered by the norms of the EC directives. The final (fifth) section of the law regulates the remedies in public procurement and this section corresponds to the requirements of the EC remedies directives.[6] Thus, as it might be noticed, the LPP regulates all the procedures related to public procurement and is to be applied in relevant procedures.

Another important source of public procurement law in Lithuania is the regulations which are passed and enforced by the order of the chairman of PPO. Some of the regulations are non-obligatory and are to be considered as recommendations only. Such include, for instance, the Methodological recommendations on evaluation of the qualification of the suppliers[7] and many others which are devoted to the unification of public procurement practice. Besides, the regulations of this type serve as the useful guidelines for contracting authorities as well as they provide many practically helpful templates which might be easily implemented by the contracting authorities and are user friendly. Sometimes there is even a tendency in the Lithuanian case-law on public procurement to consider these non-obligatory regulations as main, correct and prevailing requirements. In other words, notwithstanding the fact that the mentioned recommendations are designed to be the guidelines only, there are many cases where they are referred to as if they were the mandatory norms. Another set of regulations adopted by PPO includes the regulations which are of mandatory nature and must be followed by every contracting authority in each case of procurement.

In addition to the previously mentioned sources of public procurement law in Lithuania, the civil code has to be also taken into consideration.[8] Albeit it is provided in Art.1.3 (2) of the civil code that the lex specialis provisions envisaged by the other laws are to be applied if they regulate the specific legal issues, as it is the case with the public procurement matters, the particular provisions of the code are still relevant. For instance, it is a settled case-law of Lithuanian courts that all the public contracts and even the procurement documents (notices, etc.) have to be interpreted and applied in the light of Art. 6.193 of the civil code which regulates the rules on interpretation of contracts (theological, linguistic and systematic methods, priority to the true intention of the parties to the agreement vis-a-vis the text of the contract, etc.).[9]

Despite Lithuania being the civil law country the judge-made law or the concept of the judicial precedent is getting stronger in national case-law. Even the Constitutional Court of Lithuania acknowledged a couple of years ago that legally judicial precedent is a source of law and that all the courts must be consistent while applying the same legal rules to the similar facts in the light of the afore made judgements.[10] Therefore, it is no surprise that the practice of public procurement is strongly affected by the case-law in that area. It has to be mentioned that Lithuanian case-law is very rich with judicial decisions on various public procurement issues. The national courts has elaborated the idea that the public procurement itself is a matter of ordre public, meaning that judges must scrutinize every single allegation on public procurement breaches with a due care so that the public funds were spent wisely and legally. Consequently, the national case-law has elaborated the specific concept of public procurement principles, ineffectiveness of a public contract, the concept of “unfounded competitive advantage”, etc.[11] In other words, the courts are extremely active in interpretation of LPP. They construe the national law in the light of the EC public procurement directives and all the time with the purpose to safeguard and fully employ the principles of equality, non-discrimination, proportionality, transparency and mutual recognition.[12]

2. The background: complex procurement prior to competitive dialog

The notion of competitive dialog was introduced into the realm of Lithuanian law in 2006 when the Directive 2004/17 and Directive 2004/18 were transposed into the national law by amending the LPP. Prior to these amendments no contracting authority has ever tried to implement the procedures which would be resemble to the competitive dialog. It has been a common practice for many years of most contracting authorities to use the main two forms of the procurement in complex projects. The first one is the open procedures which were always available according to LPP and are still very promoted nowadays in order to fully guarantee the implementation of the principles of transparency and non – discrimination. The second form of procurement which used to be implemented in practice quite often was negotiated procedures, especially the procedures without a prior notice. Many contracting authorities tended to negotiate directly with the suppliers who firstly submitted the bids to the call for open procedures and afterwards appeared that these bids were unsuitable, what allowed the contracting authorities to proceed with negotiations without publication of a notice. However, this type of practice has been totally criticized by the Government during the recent years. Nowadays the contracting authorities are strongly encouraged to exercise the open procedures as well as the competitive dialog in case they need to implement the sophisticated projects, such as PPP, etc. There is a Government policy that every case of negotiated procedures without a prior notice will be scrutinized and the procedure might be repealed in case the conditions for the beginning of the negotiated procedures were interpreted too wide by the contracting authority. National case-law seems to favor this policy.[13]

It has to be mentioned that to the best knowledge of the author there were no competitive dialog procedures implemented in practice so far. Lithuanian contracting authorities still need to be taught more on the advantages of this type of procurement and the added value it may create while using it to purchase services, goods or works. Nevertheless, competitive dialog has not been overlooked by Government authorities which are responsible for public procurement policy in Lithuania. As it will be discussed further on in the following subsections of this chapter, there were particular successful initiatives to promote the competitive dialog procedure namely for the PPP and large investment projects. Bearing in mind that the latter projects are considered by the present Government as the impetus of the national economy growth there are high chances that the competitive dialog procedures will be started to be used in the nearest future on every possible occasion.

3. Introduction to competitive dialog

The procedure of the competitive dialog including the legal description of this type of procurement is provided in Section II of the LPP. It was transposed into Lithuanian legal system together with the other provisions of Directive 2004/17 and Directive 2004/18 and became effective from the beginning of the year 2006. There were no substantial discussions on how the competitive dialog should be shaped or if any additional provisions were to be added if compared to the EC legislation. At the time of its implementation into LPP the wording of the legal text was and still is the same as it stands in the EC public procurement legislation.

In addition to the provisions of LPP there is another very recent legal document that is expected to foster the use of competitive dialog in Lithuanian public procurement practice. These are the Recommendations on the application of the competitive dialog which were adopted and confirmed by the order of the chairman of the PPO (hereinafter referred to as “The Recommendations”).[14] As it has been already mentioned above, generally recommendations of PPO itself are not obligatory. This means that technically the contracting authorities do not have the legal obligation to follow the procedures and order that is provided in the recommendations. Nevertheless, it a common national practice that the contracting authorities are referring to the recommendations as they were a law when they are executing the public procurement procedures. Therefore, it is very likely that the Recommendations will be a primary source of useful information for every contracting authority which will consider the competitive dialog as an option for the procurement.

4. Scope of the competitive dialog procedure in law and practice

Art. 50 LPP outlines the main conditions that must be met in order to implement the competitive dialog for the procurement. It is followed by Art. 51 LPP which provides the legal regulation on the procedural requirements of the competitive dialog (publishing of a notice, award criteria, application of a stages procedure, etc.). Art. 52 LPP envisages the order of bringing the requests for participation at the competitive dialog, meanwhile the selection criteria as well as the pre-qualification requirements are regulated by Art. 53 LPP. The last article in Section IV of the LPP is Art. 54 which envisages the requirements for invitation of the candidates to take part at the Competitive dialog procedure. Though the legal norms of those mentioned articles will be analysed further on, it might be noted here that the Section IV of the LPP mainly includes all the provisions of Art. 29 of the Directive 2004/18. Therefore, it is correct to say that the Lithuanian regulation of the competitive dialog procedure is almost verbatim if compared to the regulation of the EC Directive.

It is important to mention that differently from the LPP, paragraph 1 of the Recommendations provides the purpose of this document, which is to help the contracting authorities to implement the competitive dialog in sophisticated PPP and investment projects. Thus it is a very clear indication that the procedure of the competitive dialog is seen as a tool for promotion of PPP projects and their execution in Lithuania. Besides, the contracting authorities are being given a hint that the competitive dialog might be the procedure which provides the needed flexibility to some extent which is important in big investment projects and these types of deals. It has to be mentioned that the Recommendations were passed with the purpose of making the PPP climate more attractive for investors in Lithuania. Therefore, it expected that this type of procurement will be used more often. The Recommendations are silent on whether the competitive dialog should be used only in high value contracts or if this procedure might be applied also in case of procurement that has a value below the EC thresholds. The LPP does not give any indication either. Consequently, it would be rational to deem that the procedure of competitive dialog is available in both above and below the EC Directive value procurement procedures. However, it is unlikely that the contracting authorities would use it in cases of procurement which value is below the EC threshold due to the complexity of the procedure.

The Recommendations have four sections. The first one gives the general provisions including the mentioned purpose of the document as well as some definitions. The second section outlines the conditions for implementation of the competitive dialog. Preparation for the competitive dialog is scrutinised in Section III. The final section of the Recommendations (Section IV) envisages the execution of the procedure on a step-by-step basis. All these sections of the document give the detailed explanation on how the competitive dialog should operate. Besides, they are drafted on the basis of the European Commission explanatory note on competitive dialog what allows expecting the proper functioning of the analysed procedure in cases when it’s chosen by the contracting authorities.[15]

As provided in both the EC Directives and the LPP this procedure may be commenced when there are no objective possibilities to define the technical means of what is going to be procured or to specify the legal or financial background of the future deal. It is explained in paragraph 6.2 of the Recommendations that these are the situations, for instance, when the public partner in PPP projects does not know to what extent the private partners are ready to finance the project what leads to the use of competitive dialog in order to find it out. This line of reasoning is continued in paragraph 8 which says that competitive dialog is recommended in cases of complex infrastructure and services projects which are organised under the scheme of PPP. PPO recommends choosing the competitive dialog in such cases when the negotiated procedures do not guarantee the expected flexibility and the consultations with the suppliers are necessary (Paragraph 9). Finally, it is provided that there is an obligation of each contracting authority to make a thorough evaluation on whether the legal conditions to start the competitive dialog procedures are present (Paragraph 10). From the text of the Recommendation it might be concluded that there is an implied negative obligation for the contracting authorities, meaning that it is forbidden to use the competitive dialog every time when there is a genuine possibility to prepare a precise and exhaustive technical specification.

Despite the described legal regulation of the competitive dialog procedure, there has not been any case of its practical implementation yet. This refers to the practice of both the contracting authorities as well as Lithuanian courts.

5. Operation of the competitive dialog procedure

5.1. Introduction

As mentioned above, the LPP includes the same conditions for the implementation of competitive dialog that are provided in Art. 29 of the Directive 2004/18. This means that pursuant to Art. 50(2) LPP a public contract shall be awarded by using the competitive dialog on the sole basis of the award criterion of the most economically advantageous tender. Besides, the contracting authority may establish prises and payments to participants of the competitive dialog.

5.2. The planning stage and drafting of the descriptive document

As it is known, neither the Directive 2004/18 nor the LPP provisions are explicit on what are the practical hints that should be taken into consideration while preparing for the competitive dialog procedure as well as drafting the descriptive document. Only Art. 51 (1) LPP envisages that contracting authorities have to advertise their needs and requirements related to the competitive dialog in the notice and / or in a descriptive document. Section III of the Recommendations is oriented towards the explanation of what and when should be done. Paragraphs 12.1-12.18 outline the checklist which is to be gone through at the preparation stage. Points that have to be taken into consideration by contracting authorities include:

  • Identification and provision of the information which will be deemed as confidential in order to protect the interests of both contracting authority and the suppliers;
  • Identification and provision of the requirements related to the conflict of interest so that all the suppliers be aware of whether they fit these requirements and are not precluded from participation at the procedure;
  • Essential elements of technical specification which might lead to shaping the final result the contracting authority wishes to reach at the end of the procedure;
  • Duration of the public contract;
  • Duration of the procedure. It is recommended to plan the duration in such a way as to have the comfortable time-frames for both contracting authority and the suppliers;
  • Procurement value;
  • Selection and pre-qualification criteria;
  • The number of candidates;
  • Means of communication;
  • The criteria for evaluation, related parameters and the methodology of their application;
  • Requirements for the subcontractors if any;
  • The number of the solutions that are allowed to be presented;
  • Information on whether the alternative bids are allowed;
  • Requirements for consortia;
  • Stages of the public contract execution;
  •  General evaluation of the market with the purpose to identify what the main market players are who might be the potential bidders, if the transparent and effective competition is possible, what the reputation of the contracting authority is, etc.;
  • Information related to the competitive dialog procedure (what is the shape of the whole procedure, how many stages of it are predicted, what the main questions and issues that are needed to be discussed with the bidders are, what the methodology of the dialog is, when it should end the dialog, what the form of invitation to present a final bid is, etc.

5.3. Confidentiality of information and solutions

There are couple of legal provisions related to the confidentiality requirements during the conduct of the competitive dialog. The first one which is the lex specialis and is mostly connected to the dialog procedure is the legal requirement provided in Art. 51 (7) (2) LPP which prohibits the contracting authority to disclose to the third parties any information that is received from the supplier without its’ prior consent as well as about the solutions and agreements reached with the supplier during the dialog procedure. Hence, the LPP includes directly the mandatory norms that forbid the contracting authority to share any information received from the bidders. It has to be noted that pursuant to Lithuanian case-law the public procurement procedure is considered as the pre-contractual legal relationship. This means that in case of breach of the confidentiality obligation the contracting authority would be responsible for culpa in contrahendo, meaning that the aggravated party would have a right to claim for damages for the breach of the mentioned legal obligation. Secondly, there is an Art. 6 LPP which regulates the confidentiality obligation for contracting authorities overall and which also has to be applied during the procedure of the competitive dialog. Art. 6 (1) LPP repeats the above mentioned statement that the contracting authority, the procurement committee and its’ members including the experts and all the other persons involved in the procedure must not disclose the confidential information that is explicitly classified and indicated as such to the contracting authority by the suppliers. The law continues with the explanation that the confidential information is deemed to be the commercial secret as well as the confidential aspects of the bid. Besides, the Art. 6 (1) LPP includes the provision that has no direct roots in the Directive 2004/18 and which says that upon the request of the bidders the contracting authority must allow these bidders to familiarise themselves with the bids of the other suppliers unless they have limited the disclosure of such information to the third parties. Reading those lines of the LPP in the light of the whole “transparency policy” that is, as mentioned before, is the cornerstone of the present Lithuanian public procurement system, it seems that the confidentiality of proposals and bids is not considered as the priority and should always give its’ place to the principle of transparency. Nevertheless, in practice this provision is often circumvented by simple indication that all the information in the bid is confidential and must not be disclosed to the others. There have not been challenges in courts regarding this type of actions of the contracting authorities yet. However, the PPO recommends the contracting authorities to implement the more flexible approach as concerns the confidentiality matters. In the usual opinion of the PPO the contracting authorities should allow the suppliers of the particular public procurement to access as much information provided in the bids and commercial proposals as it is possible to.

5.4. Advertising requirements

Art. 51(1) LPP mentions that the contracting authority shall publish a notice of the contract in the manner set forth in Art. 22 and 23 LPP and shall make known its needs and requirements in that notice. The same provision is repeated in paragraph 14 of the Recommendations. These two mentioned articles of LPP provide the legal order and requirements of the advertising of public purchases which exceed the EC directive value. Pursuant to the mentioned articles of the law the notices are published in (i) Official Journal of the EC (OJ), (ii) national Official Bulletin (lith. Valstybės žinios) and (iii) central public procurement information system (CPPIS). It has to be noted that from the 1st January 2012 the advertising will be arranged only through OJ and CPPIS.

According to the paragraph 15 of the Recommendations the contracting authority must specify the deadline for the submission of the application to take part at the dialog which may not be less than 37 days from the day of sending the notice from the PPO and 7 days in case of e-procurement.

To help the contracting authorities to prepare the notices in all cases of the EC value procurement, including the procedures of competitive dialog, the PPO has published the Recommendations on filling the typical forms of international public procurement notices.[16] This document refers to EC Regulation 1564/2005 and to the Directives 2004/17 and 2004/18. These recommendations comment on the step-by-step basis how to fill in each line of the typical form of the public procurement notice. It has to be mentioned that in practice PPO scrutinizes each draft of the notice that is submitted to it electronically. PPO must do the review of the draft within 3 business days from the receipt of the draft. In cases PPO has comments on any items of the notice it does not send the notice for publishing and returns it back to the supplier with the particular comments. These might include the remarks on selection, award criteria and other information that is being provided in the notice. The remarks of PPO regarding the public procurement notice (and the whole procurement as well) are of the obligatory nature (in cases of EC value procurement) and usually the contracting authority has nothing else to do but to agree on them. Otherwise the notice might not be advertised, what means that the procurement would not begin.

5.5. The selection phase – choosing the candidates to participate in the dialog

Pursuant to Art. 51(2) LPP the contracting authority shall open, with the candidates selected in accordance with the relevant provisions of Art. 54 LPP, a dialog the aim of which shall be to identify and define the means best suited to satisfying the needs of the contracting authority. Thus the contracting authority is obliged to select those suppliers who meet the selection criteria (the minimum qualification requirements) and are able to submit an appropriate proposal, therefore it shall perform the procedure described in Art. 53 LPP.

However, LPP does not provide any specific provisions for selection phase and Art. 53 LPP gives direction to Art. 47 LPP wich shall be applied in cases of restricted procedures. Where the number of the suitable candidates is sufficient the contracting authority shall have the right to limit the number of candidates to be invited to participate in the competitive dialog. In this case the contracting authority shall indicate in the contract notice objective and non-discriminatory criteria and rules which it intends to apply when selecting the candidates, the minimum number of candidates invited to participate in the dialog  which shall be not less than 3 and, where necessary, their  maximum number.

Art. 47 (2) LPP provides that when fixing the number of candidates and defining the selection criteria or procedure, the contracting authority shall follow the following requirements:

1) the contracting authority must ensure the genuine competition;

2) the selection criteria must be clear and non-discriminatory;

3) the selection criteria should be based on the provisions of Art. 35 to 38 LPP.

According to the provisions of Art. 53(3) LPP the contracting authority shall invite a number of candidates at least equal to the minimum number set in advance. Where the number of candidates meeting the selection criteria and the minimum levels of ability is below the minimum number, the contracting authority may continue the procedure by inviting the candidate(s) with the required capabilities. In the context of this same procedure, the contracting authority may not include other suppliers who did not request to participate, or candidates who do not meet the minimum qualification requirements. The common requirements for selection phase and related recommendations are provided in the methodological guidelines for evaluation of the suppliers’ qualification[17].

5.6. The dialog phase

As it was mentioned above the contracting authority shall open a dialog with the candidates selected in accordance with the relevant provisions of Art. 54 LPP. The contracting authority may discuss all aspects of the contract with the chosen candidates during this dialog, the aim of shall be to identify and define the means best suited to satisfying the needs of the contracting authority. Therefore, according to Art. 53 (1) LPP the contracting authority shall simultaneously and in writing invite the candidates selected according to the procedure established in Art. 53 LPP to take part in the competitive dialog.

Art. 51 (3) LPP provides that the contracting authority may provide for the procedure to take place in successive stages in order to reduce the number of solutions to be discussed during the dialog stage by applying the award criteria in the contract notice or the descriptive document (the contract notice or the descriptive document shall indicate that recourse may be had to this option).

Pursuant to Paragraph 25 of the Recommendations dialog may be operated in the following ways by:

  • Searching for the best suitable solution throughout the dialog, which would include all the best solutions from all provided proposals. Normally, a contracting authority, subject to the confidentiality requirements cannot without the prior consent of a candidate participating in the dialog to disclose its’ proposed solutions to the other participants. Therefore, in order to apply this method of implementation of the dialog phase the contract notice or descriptive document shall state that the invitation to participate in the dialog implies consent to disclose proposed solutions to other participants. This type of legal approach has not been challenged by the suppliers in courts nor banned or limited by the PPO. There is no Lithuanian legal doctrine on this issue either;
  • Inviting the non-binding proposals, which are then adjusted until the best of each option;
  • Execution of the dialog in stages: at the beginning of the dialog the technical means will be discussed and only then the financial issues are checked;
  • Starting from initial solution provided by the contracting authority and then participants are invited to comment this solution through dialog. The participant whose solution has been declined is out of the further procedures.

The Recommendations provide that there are two possible methods of implementation of the dialog: a consultative dialog and a research dialog (Paragraph 26). Consultative dialog – is the way in which the contracting authority, in accordance with its’ developed project, seeks for advice from suppliers, how and by what means it could be executed. In this case, the contracting authority requires from the suppliers not to provide their own projects or solutions, but to provide alternative solutions to what is conceived by the contracting authority. Meanwhile, the research dialog begins by the contracting authority defining its goals and desirable results, without giving details. In this case the suppliers firstly submit general proposals, which are then revised and adjusted until defining the most appropriate option.

Pursuant to Art. 51 (7) LPP during the dialog, the contracting authority shall: 1) conduct the dialog with each supplier separately; 2) not reveal the other participants information given by the supplier participating in the dialog without his/her agreement and also shall not reveal to the supplier information about the agreements reached with other suppliers; 3)  ensure equality of treatment among all the suppliers. In particular, the contracting authority shall not provide the information in a discriminatory manner which may give some suppliers an advantage over the others; 4) prepare the minutes of the dialog. The minutes of the dialog shall be signed by the chairman of the procurement committee and the authorised representative of the supplier who has been dealt with.

Until the selection of the best offer the contracting authority may also carry out the following steps (Paragraph 27 of the Recommendations):

  • to resolve the remaining unclear provisions of the Public contract as it cannot be executed after the winner is selected;
  • to define what constitutes the main aspects of the proposals; to define narrowly circumstances under which the main elements of the proposals may be modified;
  • to define the scope of possible amendments of the proposals under certain circumstances;
  • to ensure that the explanation, clarification, correction of the proposals to be made only upon the initiative of the contracting authority – i.e. suppliers cannot take an advantage to improve their proposals.

According to Art. 51 (4) LPP the contracting authority shall continue such dialog until it can identify the solution or solutions, if necessary after comparing them, which are capable of meeting its needs. The award criteria may not be modified during the whole procedure.

5.7. Final tender stage

After the dialog phase the Contracting authority shall inform the participants under Art. 51 (5) LPP about the conclusion of a dialog and shall ask them to submit their final tenders on the basis of the solution or solutions presented and specified during the dialog. These tenders shall contain all the elements required and necessary for the performance of the contract. These tenders may be clarified, specified and fine – tuned only at the request of the contracting authority. However, such actions or additional information may not involve changes to the basic features of the tender or the call for the participation in the dialog. Any such changes may not distort competition or have a discriminatory effect to suppliers.

Art. 51 (6) LPP provides that the contracting authority shall assess the tenders received on the basis of the award criteria laid down in the contract notice or the descriptive document and shall choose the most economically advantageous tender. It has to be mentioned that the contracting authority must choose from not less than 3 offers provided by the suppliers. The final tenders must be complete and fit the requirements of the solution(s) the contracting authority has (have) chosen. The supplier may present only one bid to the contracting authority.

5.8. Procedure following the selection of the winning tender or preferred bidder

At the request of the contracting authority, the supplier identified as having submitted the most economically advantageous tender may be asked to clarify aspects of the tender or confirm obligations contained in the tender (Art. 51 (6) LPP). However such changes may not result in modifying the material aspects of the tender or of the call for tender.

The Recommendations provide that material changes of the proposal shall be changes of the conditions of the final bid, such as (Paragraph 32):

  • payment mechanism and payment schedule;
  • pricing rules and the final price;
  • scope of the contract;
  • duration of the contract and the contract performance schedules;
  • to the site, the method and conditions;
  • technical specifications and etc.

5.9. The standstill period

Art. 18 (9) LPP provides that the Public contract cannot be concluded before the expiry of a standstill period. Such standstill period is not applied in cases where:

  • There is only one participant;
  • Contracts are awarded on the basis of the dynamic purchasing system or the contracting authority awards the public contract under conditions of a framework agreement.
  • The public contract value does not exceed 10 000 LTL excluding VAT in cases of procurement excluded from the scope of the EC directives.

5.10. Payments for costs of participation

Art. 50 (4) LPP provides that the contracting authority may establish prizes and payments to participants taking part in the competitive dialog. Such prizes and payments shall compensate at least part of the costs incurred due to the preparation of proposals (solutions) (Paragraph 11 of the Recommendations). Other goal of such payments is to encourage more candidates to participate in the competitive dialog. This is a very rare exception that the contracting authority would pay to the suppliers and such practice in Lithuania would be very unusual.

6. Concluding remarks

As it might be seen from the legal regulation of the competitive dialog procedures this type of procurement can be implemented in Lithuania on the basis of the same legal conditions which are provided in the EC public procurement law. To the contrary of the practice which exists in the other Member States, the competitive dialog is not popular as the type of procurement in Lithuania. This is only a theoretical background of this procedure that is known to Lithuanian contracting authorities so far. However, the preparation of its’ implementation is a good one, since the mentioned Recommendations will serve as a proper guidelines for these authorities that will be interested in trying of this method.

There is also a clear indication that the competitive dialog is supposed to be used in cases of PPP and large investment projects. This means that it will usually be used in the EC directives value procurement.


[1] Directive 2004/17 and Directive 2004/18.

[2] World Trade Organisation (WTO) Agreement on Government Procurement (GPA) [1994].

[3] Case C-107/98, Teckal Srl v. Comune di Viano and AGAC,[1999] ECR I-8121.

[4] The Law on Public Procurement (Lithuanian version, Lietuvos Respublikos viešųjų pirkimų įstatymas), Žin., 1996, No. 84-2000; 2002, No. 118-5296; 2003, No. 57-2529, No. 123-5579; 2004, No. 7-130, No. 96-3520, No. 116-4321. The English version, although not the latest one, of the law can be reached at: <>.

[5] See the ruling of the Court of Appeals of Lithuania of 20th July, 2007 in civil case Möbius Bau-Aktiengesellschaft  v. Klaipėdos valstybinio jūrų uosto direkcija, case No. 2A-342/2007.

[6] Directive 89/665, Directive 92/13 and Directive 2007/66.

[7] The order of the chairman of PPO of 20th October 2003 regarding the adoption of the methodological recommendations on evaluation of the qualification of the suppliers, Žin., 1st November, 2003, No. 103-4623.

[8] The civil code of the Republic of Lithuania, Žin., 6th September, 2000, No. 74-2262.

[9] See the ruling in civil case of the Supreme Court of Lithuania of 8th July, 2005, UAB „Supla“ v. Vilniaus miesto savivaldybė, case No. 3K-3-339/2005; ruling in civil case of Court of Appeals of Lithuania of 3rd December, 2007, UAB “Sostinės auditoriai” v. VšĮ Vilniaus Žirmūnų darbo rinkos mokymo centras, case No. 2A-549/2007.

[10] The decision of the Constitutional Court of Lithuania of 28th March 2006, case No. 33/03.

[11] See the Review of the regulation and the case-law on public procurement made by the Supreme Court of Lithuania (in Lithuanian), Lietuvos Aukščiausiasis Teismas, Viešųjų pirkimų reglamentavimo ir teismų praktikos apžvalga, Teismų praktika, biuletenis Nr. 31, Vilnius, 2009.

[12] See more at Soloveičikas, Deividas, Public Procurement in Lithuania: the Ongoing Development, EPPPL 2, 2009, P. 36-48.

[13] See the ruling in civil case of the Supreme Court of Lithuania of 13th November, 2009, National stadium case, case No. 3K-3-505/2009.

[14] The order of the chairman of PPO of 30th September 2010 No. 1S-140 regarding the enforcement of the recommendations on the application of the competitive dialog, Žin. 2010, No. 120-6168.

[15] European Commission Explanatory Note on Competitive Dialog, CC/2005/04_rev 1 of 5.10.2005.

[16] The order of the chairman of PPO of 29th June 2006 No. 1S-37 regarding adoption of recommendations on filling the typical forms of international public procurement notices, Žin. 2006, No. 76-2953.

[17] The order of the chairman of PPO of 30th March 2009 No. 1S-25 regarding the qualifications of suppliers for the evaluation of methodological guidelines for approval, Žin. 2009, No. 39-1505.