March 2022 changes in legislation relevant for major transport infrastructure projects

1. The analysis sets out the latest substantial legislative amendments published in the Official Gazette and entered into force between 17 – 22 March 2022, in public procurement field.
2. The amendments (which I have highlighted in blue in the memo below) are likely to have an important impact on the future implementation of major transport infrastructure projects and also on the future disputes arising therefrom.
3. Just for exemplification, the new enactments discussed in detail in the memo below reflect important changes such as:

• New 30 days limitation period (instead of 3 years) for claims related to termination of the contracts;
• Contracting Authorities’ entitlement to issue certifying documents (“documente constatatoare”) every 90 days starting with the conclusion of the contract. The certifying documents shall mention at least the stage of the contract implementation, the possible delays / deficiencies in the implementation of the contract and any damages caused by contractor’s fault. The certifying documents can be challenged as per Law no. 554/2004 regarding contentious administrative matters.
• Contracting Authorities’ entitlement to choose the mechanism of settling the disputes by courts of law or by arbitration in the tender documentation.

4. We refer in particular to:

• Government Emergency Ordinance no. 26/2022 for amending and supplementing certain legal acts in the public investment field published on 21 March 2022;
• Government Decision no. 375/2022 published on 22 March 2022 for amending and supplementing:
• the Government Decision no. 394/2016 approving the Methodological Norms for the application of the provisions concerning the sectoral public procurement contract/framework agreement set forth under Law no. 99/2016 on sectoral public procurement,
• the Government Decision no. 395/2016 approving the Methodological Norms for the application of provisions concerning the award of public procurement contract/framework agreement set forth under Law no. 98/2016 on public procurement and
• the annexes no. 1 and 2 to the Government Decision no. 1/2018 approving the general and specific conditions for certain categories of procurement contracts related to the investment objectives financed from public funds.
• Government Decision no. 342/2022 published on 17 March 2022, approving the mechanism for the establishment and use of the database of machinery and equipment by establishing the Register of machinery, equipment and installations that economic operators may have to participate in public/sectoral procurement procedures in the field of transport infrastructure projects.

I.      Government Emergency Ordinance no. 26/2022 for amending and supplementing certain legal acts in the public investment field

5. Government Emergency Ordinance no. 26/2022 for amending and supplementing certain legal acts in the public investment field (hereinafter referred to as “GEO 26/2022”) has been published and entered into force on 21 March 2022[1].
6. GEO 26/2022 amends and supplements the following legal acts:

• Law no. 98/2016 on public procurement (hereinafter referred to as “Law 98/2016”);
• Law no. 99/2016 on sectoral public procurement (hereinafter referred to as “Law 99/2016”);
• Law no. 101/2016 on remedies and appeals concerning the awarding of public procurement contracts, sectoral contracts and concessions and for the organisation and functioning of the National Council for the Settlement of Complaints (hereinafter referred to as “Law 101/2016”);
• Law no. 107/1996 water law (hereinafter referred to as “Law 101/1996”);
• Law no. 50/1991 on the authorization of construction works (hereinafter referred to as “Law 50/1991”);
• Law no. 255/2010 on the expropriation for public utility required for developments of national, county and local interest (hereinafter referred to as “Law 255/2010”);
• Law no. 10/1995 on the quality in construction (hereinafter referred to as “Law 10/1995”);
• Government Emergency Ordinance no. 101/2020 on some measures for the implementation of the projects financed from European funds in order to avoid the risk of disengagement for the 2014-2020 programming period (hereinafter referred to as “GEO 101/2020”).

7. Also, GEO 26/2022 establishes new provisions in relation to the issuance of the permits, approvals, opinions etc. required for the implementation of some investment projects.

1.1.      Amendments to Law no. 98/2016 and Law no. 99/2016

8. Amendments to Laws no. 98/2016 and 99/2016 are applicable to the public procurement procedures launched after 21.03.2022 and to the contracts concluded after 21.03.2022 and to those concluded before, only to legal situations occurred after 21.03.2022

Negotiation without prior publication procedure

9. Negotiation without prior publication procedure is a form of public tender which does not require the contracting authority to publish a participation announcement but allows it to send invitations to one or more economic operators for submission of their bids.
10. Negotiation without prior publication procedure is applicable only in limited cases strictly listed in Laws no. 98/2016 and 99/2016. Negotiation without prior publication procedure is applicable as an absolutely necessary measure, when due to extreme urgency reasons, determined by events which could not have been foreseen by the contracting authority, the deadlines for other open tender procedures cannot be obeyed. In the described situation, the duration of the contract cannot exceed the period of time necessary in order to overcome the emergency situation that determined the application of the negotiation without prior publication procedure.
11. As per GEO 26/2022, in case of transport infrastructure projects TEN-T, Core and Comprehensive, the duration of the contract can exceed, for justified reasons, the period of time necessary in order to overcome the emergency situation that determined the application of the negotiation without prior publication procedure.

Bidder’s obligation to provide the updated supporting documents proving the fulfilment of the entire qualification and selection criteria

12. Before awarding the contract to the first ranked bidder, the contracting authority has the obligation to ask for submission of all supporting documents demonstrating the fulfilment of all the qualification and selection criteria, as per information in DUAE. No deadlines were provided however, either for the contracting to ask such documents from the bidder, no for the bidder to submit them.
13. GEO 26/2022 institutes a 1 working day deadline for the contracting authority to request the bidder to submit the supporting documents, calculated from the date when the first ranked bidder was determined and a 7 working days deadline (with the possibility of extending it by maximum 3 days, upon request) for the bidder to submit the documents, under the sanction of the bid being rejected as unacceptable.

Subcontracting

14. In accordance with Laws no. 98/2016 and 99/2016, the contracting authority can make direct payments to the subcontractors proposed in the tender, if the nature of the contract allows it and the subcontractors expressed this option.
15. As per GEO 26/2022, the direct payment mechanism can be also applied to the suppliers, to the subcontractors’ subcontractors and to any other economic operators, should this option be foreseen in the tender documentation.

Modification of the public procurement / sectoral contract without launching a new tender

16. Under Laws no. 98/2016 and 99/2016, the public procurement contract can be modified without organizing a new tender procedure in certain limited situations. One of them is when the following conditions are cumulatively met: (i) the value of the modification is lower than the thresholds provided in the laws; (ii) the value of the amendment is lower than 15% of the contract price (for works contracts) and (iii) the change does not affect the general nature of the contract. In this situation, in case of several successive modifications of the contract, the value of the modification shall be determined based on the net value of the cumulated successive modifications.
17. As per GEO 26/2022, in the described situation, the value of the modification shall be determined only on the basis of the respective successive changes and without considering the changes which do not lead to the increase of the contract price.

1.2.      Most important amendments to Law no. 101/2016

18. All amendments to Law no. 101/2016 are applicable to lawsuits commenced / claims filed after 21.03.2022.

Jurisdiction to settle the dispute

19. In its former form, Law no. 101/2016 provided that lawsuits and claims resulting for the execution of administrative contracts shall be settled in first instance, by the civil section of the tribunal seated either at the seat of the contracting authority or of the claimant.
20. GEO 26/2022 added to the list of lawsuits and claims to be settled by the civil section of the tribunal those related to the termination of a public procurement / sectoral contract for reasons beyond contracting authority’s control.

Limitation periods

21. As per Law no. 101/2016, the limitation period for claims resulting from execution, annulment, nullity, termination, unilateral denunciation of administrative contracts was of 3 years.
22. In the new form of the law, pursuant to GEO 26/2022 amendments, the limitation period for claims resulting from execution, annulment, nullity of contracts is of 3 years, however the limitation period for claims resulting from termination of the contracts was reduced to 30 days.

Injunction

23. It is expressly mentioned that no injunction is admissible for suspending the effects of termination, denunciation or other form of notifications.

Bail

24. As per Law no. 101/2016, when submitting complaints to the National Council for Settlement of Complaints (“CNSC”), the plaintiff has to make a deposit bail in an amount calculated on the basis of the estimated value of the contract. The deposit is recoverable following the decision of the CNSC, with the only exception in which the contracting authority proves that it made a claim in court for damages against the plaintiff.
25. GEO 26/2022 provides that upon final resolution of the case in favour of the contracting authority, the latter is obliged to make the necessary steps to retain the bail provided by the bidder, in order to cover the damage caused by delaying the procurement procedure.

1.3.      Most important amendments to Law no. 107/1996

26. Amendments to Law no. 107/1996 are applicable to the requests for approvals submitted after 21.03.2022 and before 21.03.2022, but not finalised until that date.

Right to manage the lands belonging to the public domain of waters

27. GEO 26/2022 establishes the legal right of the employer to temporarily manage the lands belonging to the public domain of waters during the implementation of transport infrastructure projects of national interest, investment projects approved by the Government of a value greater than 40 mil lei. This right shall be recorded in the water management approval (“aviz de gospodărire a apelor”) and shall last until the taking over of the works. After the taking over, the administration of the lands, including the new riverbed, the new flood defence line and also the new hydrotechnical works, solely administered by the National Administration “Romanian Waters” shall be passed to the Ministry of Environment, Water and Forests through National Administration “Romanian Waters”.

1.4.      Amendment to Law no. 50/1991

28. The amendment is applicable to the requests for permit issuance submitted after 21.03.2022 and before 21.03.2022, but not finalised until that date.
29. Under Law no. 50/1991, demolition of buildings situated in the expropriated corridor required issuance of demolition permit.
30. As per GEO 26/2022, no demolition permit is required for the buildings located on the expropriation corridor, in case of infrastructure projects of national interest.

1.5.      Most important amendments to Law no. 255/2010 and GEO 101/2020

Relocation of utilities

31. As per Law no. 255/2010, the utility owners had the obligation to free the location where the works would be executed, on the basis of the technical project approved by the expropriator, within 6 months from the availability of necessary lands for relocation.
32. Also, GEO 101/2020 includes in art. 12 and 25 provisions related to the relocation of the utilities by the operators of transport/distribution of natural gas/electricity.
33. GEO 26/2022 maintains the above provision for works related to construction, rehabilitation and modernization of road works and parking of county and local interest. However, for the works of national interest, the relocation will be carried out by the expropriator himself or by the contractor, based on the technical design approved by the utility owner, approved no later than 10 calendar days from its submission.
34. In the same vein, GEO 26/2022 expressly provides that provisions of art. 12 and 25 of GEO 101/2020 are not applicable to the transport infrastructure projects of national interest.
35. These amendments are applicable to projects implemented after 21.03.2022.

Changing in location

36. GEO 26/2022 provides that in case the location of the work is changed due to the revision of the feasibility study, amendments of the technical project or working drawings, the procedure to amend the expropriation decision shall be 90 days for the works of national interest.
37. The amendment is applicable to projects implemented after 21.03.2022.

Borrow pits

38. GEO 26/2022 provides that the lands required for the borrow pits for the works of national interest, can be subject to expropriation and shall be passed to the territorial administrative units, after the completion of the works.
39. The amendment is applicable to projects implemented after 21.03.2022.

Immovables in the expropriation corridor owned by the territorial administrative units

40. GEO 26/2022 provides that the immovables owned by the territorial administrative units shall be passed to the state and administered by the expropriator’s representatives, in 15 days from the notification of the territorial administrative units, compared to the previous deadline of 30 days.
41. This amendment is applicable only to the requests submitted to the territorial administrative units after 21.03.2022.

1.6.      New provisions regulated by GEO 26/2022 - applicable to projects implemented after 21.03.2022

Deadlines for the issuance of the permits / approvals

42. New deadlines for the issuance of the permits / approvals etc. required for the implementation of transport infrastructure projects of national interest have been established as follows:

• for the urban planning certificate – 15 calendar days from the application;
• for the approvals required by the urban planning certificate (including those related to the relocation of utilities) – 10 calendar days from the application;
• for the building permits – 15 calendar days from the application;
• for the regulatory act issued by the environmental protection authority – 30 working days from the completion of the public debate procedure.

Approvals required by the urban planning certificate

43. Approvals required by the urban planning certificate shall refer strictly to the works needed for implementing the infrastructure project and are exempt from any fees.
44. The conditioned permits / approvals shall only be issued once and the imposed conditions shall be duly justified. No conditions related to other technical solutions than those provided in the preliminary permit issued during the feasibility study phase can be imposed.
45. If approvals are not issued within prescribed legal deadlines, it is deemed that the documentation submitted is complete. In this case, the issuing entities are under the obligation to issue the approvals within 5 days from the dates when they were If the approvals are not issued within 5 days, they shall be deemed to be issued and the works can start after the issuance of the building permit.

Building permit

46. The issuing authority is entitled to ask for any additions / clarifications to the DTAC only once within 5 working days from the receipt of the application, requesting that the additions / clarifications would be submitted within 15 days from the original submission.
47. If the building permit is not issued in 15 calendar days from submission of the DTAC, it is deemed that the DTAC is complete and the authorities shall issue the building permit no later than 5 days from the date when the building permit issuance was due.

If the issuing entity is the Ministry of Transport, the building permits are deemed to have been issued, if they had not been issued within the 5 days deadline mentioned above. If the issuing entity is not the Ministry of Transport (in case of national interest transport projects) and if the building permit was not issued within the 5 days deadline mentioned above, the respective building permit shall be issued by the Ministry of Transport.

II.         Government Decision no. 375/2022

48. In the Romanian Official Gazette, Part. I, no. 277/22.03.2022, the Government Decision no. 375/2022 (hereinafter referred to as “GD 375/2022”) has been published and entered into force on the same day.
49. GD 375/2022 amends and supplements the following legal acts:

• the Government Decision no. 394/2016 approving the Methodological Norms for the application of the provisions concerning the sectoral public procurement contract/framework agreement set forth under Law no. 99/2016 on sectoral public procurement,
• the Government Decision no. 395/2016 approving the Methodological Norms for the application of provisions concerning the award of public procurement contract/framework agreement set forth under Law no. 98/2016 on public procurement and
• the annexes no. 1 and 2 to the Government Decision no. 1/2018 for the approval of the general and specific conditions for certain categories of procurement contracts related to the investment objectives financed from public funds.

2.1.      Most important amendments to Government Decision no. 394/2016 and Government Decision no. 395/2016

Participation Guarantee and Performance Security

50. GD 394/2016 and 395/2016 provided that the two securities referred above shall be lodged either by bank transfer or by a guarantee instrument issued by a Romanian / foreign credit institution or an insurance company in accordance with the law.
51. GEO 26/2022 provides that the two securities referred above shall be lodged either by bank transfer or by a guarantee instrument as follows:

• letter of guarantee issued by a Romanian or foreign credit institution or
• bond policy guarantee issued by a Romanian or UE state insurance company registered by the Financial Supervisory Authority or by a foreign insurance company through its Romanian branch registered by the Financial Supervisory Authority.

52. The amendment is applicable to the public procurement procedures launched after 22.03.2022 and to the contracts concluded after 22.03.2022.

Negotiation procedure without prior publication of an announcement

53. GEO 26/2022 provides that the termination of the public procurement / sectoral contracts of transport infrastructure projects TEN-T, Core and Comprehensive, may be deemed in exceptional situations, as falling within the ambit of the emergency situations entitling the contracting authority to apply the negotiation procedure without prior publication of an announcement.
54. In such cases, the contracting authority shall invite to the negotiations at least the bidders declared admissible during the prior public procurement procedure, except the winning bidder with whom the terminated contract had been concluded. The minimum number of candidates cannot be less than 3.
55. The amendment is applicable to the public procurement procedures launched after 22.03.2022 and to the contracts concluded after 22.03.2022.

Unusual low price of the bid

56. Laws no. 98/2016 and 99/2016 provide that in case of an unusually low financial proposal, the contracting authority has the obligation to request clarifications to the bidder. No indications were provided as to what an “unusually low financial proposal” means.
57. GEO 26/2022 defines the unusually low price of the bid as one that provides a price smaller than 80%, without VAT, of the estimated contract amount.
58. The amendment is applicable to the public procurement procedures launched after 22.03.2022 and to the contracts concluded after 22.03.2022.

Price adjustment and revision clauses

59. GD 394/2016 and 395/2016 provided that the contracting authority was (i) entitled to include price revision clauses for contracts with a duration exceeding 6 months and (ii) under an obligation to include such clauses in contracts with a duration exceeding 24 months.
60. GEO 26/2022 amended the above provision as follows.
61. The contracting authority is entitled to include price adjustment and revision clauses in: service or supply contracts with a duration exceeding 6 months and the works contracts of with a duration of maximum 6 months.
62. The contracting authority is under an obligation to include price adjustment and revision clauses in: service or supply contracts of with a duration exceeding 24 months and works contracts with a duration exceeding 6 months.
63. The amendment is applicable to the public procurement procedures launched after 22.03.2022 and to the contracts concluded after 22.03.2022.

Certifying document (Document constatator)

64. As per GD 394/2016 and 395/2016, the contracting authority is under the obligation to issue certifying documents regarding the fulfilment or non fulfilment by the contractor of its contractual obligations, and the prejudice suffered by the contracting authority, if any. The certifying documents are issued within 14 days from the issuance of the taking over at completion of the works and within 14 days from the final taking over of the works.
65. Under GEO 26/2022, the contracting authority is currently entitled to issue certifying documents during the performance of the contracts, every 90 days, starting from the conclusion of the contract. The certifying documents shall mention at least the stage of the contract implementation, the possible delays / deficiencies in the implementation of the contract and any damages caused by contractor’s faut. The certifying documents can be challenged as per Law no. 554/2004 regarding contentious administrative matters.
66. The amendments related to the certifying documents are applicable both to contracts signed after 22.03.2022 and also to the contracts pending on 22.03.2022.

2.2.      Government Decision no. 1/2018

67. GD 375/2022 has amended both annex 1 (construction contracts) and annex 2 (design and build contracts) of the GD 1/2018 as follows:

• Sub-clause 37.7 points a) and b) (related to annex 1) and point b) (related to annex 2): The price for Variations shall also include the profit share declared by the Contractor within its bid.
• Sub-clause 64.1point a): In relation to the termination by the Employer, the terms of “serious breach” and “without a reasonable justification” of the Contractor were deleted.
• Sub-clause 64.1¹: This new sub-clause reads as follows:

“The termination case referred to in sub-clause 64.1(a) shall be deemed to be unforeseeable event or situation which could not be foreseen by the Employer after two notifications issued by the Employer to the Contractor regarding the non-fulfilment, each notice having a remedial period of at least 30 days. If the Contractor fails to fulfil the obligations set out in the notices, after the expiry of the time limit set out in the last notification, the contract shall be terminated automatically, without notice, notice of delay, court decision, arbitral award or any other formality.

As the Contractor infringes the Contract (Contractor’s fault), termination by the Employer is an event which cannot be controlled by the Employer and which the Employer, exercising all his diligence, cannot avoid.

The Employer shall not be liable if the delay in carrying out the Works or other failure to fulfil the obligations under the Contract is due to the fault of the Contractor, provided that the Employer has carried out the due diligence in order to prevent such situations.

• Sub-clause 64.8: The payment certificate at termination shall be issued no later than 25 days from the termination of the Contract. It is also provided that the value of the works shall also include the documents produced by the Contractor.
• Sub-clause 64.9: The report at termination shall be issued no later than 25 days from the termination of the Contract. It is also provided that the report shall also include the documents produced by the Contractor.
• Sub-clause 65.1 point b): The Contractor is entitled to terminate the Contract only after submitting three notifications to the Employer/ Employer’s personnel to fulfil its obligations, with a deadline for remediation for each notification of minimum 30 days. Any notice of termination submitted without fulfilling this provision shall be null and void.
• Sub-clause 70.2: It stipulates the reference to the settlement of the disputes by the courts of law, as an alternative to the arbitration.
• Sub-clause 70.2¹: This new sub-clause reads as follows:

“The mechanism of settling the disputes by courts of law or by arbitration, will be specified by the Employer in the tender documentation.”

• Sub-clause 70.3: A new paragraph is included at the end of the sub-clause as follows:

“Notwithstanding the provisions of this sub-clause, if the Employer has provided in the tender documentation the settlement of disputes through courts of law, the provisions of subclause 70.6 [Courts of law] shall apply.”

• Sub-clause 70.6: This new sub-clause named Courts of law reads as follows:

“Except in cases where disputes are amicably settled, pursuant to subclause 70.2 [Amicable settlement], in application of the provisions of Article 53 par. (1¹) of Law no. 101/2016 on remedies and appeals concerning the awarding of public procurement contracts, sectoral contracts and concessions and for the organisation and functioning of the National Council for the Settlement of Complaints, as amended and supplemented, the trials and claims arising from the performance of administrative contracts, as well as from the termination of public procurement contracts shall be settled at first instance, as a matter of urgency and with priority, by the civil department of the tribunal of the seat where the authority is situated, if such a modality has been provided for by the Employer in the tender documentation.”

68. Related to annex 2 (design and build contracts), also Clause 33 has been entirely amended as follows:

“33.1 Within 15 days of the signing of the Contract Agreement, the Supervisor will issue the Administrative Commencement Order of the Design Works to the Contractor with notification of the Commencement Date of the Design Work.

33.2 The Supervisor will submit to the Contractor the Administrative Commencement Order of the Build Works only if the Technical Execution Design has been completed and the Building Permits have been obtained. The Supervisor shall set in the Administrative Commencement Order of the Build Works the Commencement Date of the Works, which shall not exceed 30 days from the date of submission of the Administrative Commencement Order of the Build Works. The Administrative Commencement Order of the Build Works may also be issued for Sections/Sectors.

33.3 The Contractor shall start the performance of the Works on the Commencement Date of the Works and shall continue the performance of the Works promptly and without delay.”

69. The amendments of clauses 33 and 70 are applicable only to contracts concluded after 22.03.2022. The rest of the amendments are applicable to contracts concluded after 22.03.2022 and to contracts concluded prior to this date, but only in respect of legal situations occurred after 22.03.2022

III.           Government Decision no. 342/2022

70. In the Romanian Official Gazette, Part. I, no. 262/17.03.2022, the Government Decision no. 342/2002 for the approval of the mechanism for the establishment and use of the database of machinery and equipment by establishing the Register of machinery, equipment and installations that economic operators may have to participate in public/ sectoral procurement procedures in the field of transport infrastructure projects (hereinafter referred to as “GD 342/2022”) has been published and entered into force on the same day.
71. GD 342/2022 approves the mechanism for the establishment and use of the database of machinery and equipment by establishing the Register of machinery, equipment and installations that economic operators may have to participate in public/ sectoral procurement procedures in the field of transport infrastructure projects.
72. The purpose of the Register is to allow the contracting authorities to check the availability of the machinery, equipment and installations declared by the economic operators during the procurement procedure.
73. The operationalization of the Register shall take place in two steps:

• First step implemented until 01.08.2022 – the contracting authorities shall fill in the system the relevant data of the machinery, equipment and installations declared during the pending procurement procedures
• Second and final step until 01.03.2023 – finalising the system.

74. There are no additional details in relation to the implementation of such mechanism and what would be the bidders’ obligations in this regard.

[1] With the exception of a single provision related to contraventions that entered into force on 31.03.2022.

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