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Consortia with financial companies – a way to implement public procurements

Long payment deadlines, mass delays in payments or, finally, no payment at all are common problems of public procurement contractors in the medical industry.

What is more, the contractors of contracts with hospitals cannot freely assign their claims because they have to obtain the consent of the founding body of the hospital.  When looking for a way out of the difficult situation, they most often choose to enter the consortium with the entities assuring funding of the procurement. Unfortunately, such application of the form of joint application for the procurement has recently been questioned by the National Appeals Chamber (NAC).

In the judgment of March 14, 2017, file ref. no.:  KIO 353/17, the National Appeals Chamber dismissed the appeal of the consortium whose bid was rejected pursuant to art. 89 sec. 1 item 8 of PPL Act, i.e. as invalid under separate provisions.  According to the Ordering Party – a large Warsaw hospital, the conclusion of a consortium contract under the tender only served to enable the consortium member to obtain receivables in the event of non-payment by the hospital.  The hospital recognized that the scope of activities and the nature of the procurement did not imply the need to engage a consortium member for the implementation of the procurement, so the concluded consortium contract was apparent.  The National Appeals Chamber agreed with the hospital and dismissed the consortium’s appeal.  According to the National Appeals Chamber, conclusion of the consortium contract was intended to circumvent the Act on Medical Activity.  The judgment of the National Appeals Chamber was appealed to the District Court, we are waiting for the final decision of the court and a valid guideline on this matter.

The judgment of the District Court will be important for the entire medical industry. The medical industry de facto takes on the burden of public health service funding. Use of services of the specialized companies ensuring payment or conclusion of consortium contracts with such companies aims only to secure the contractor’s right to receive payment for the delivered products. This is an attempt to secure the basic interest of the entrepreneur. Looking at the need and the right to jointly take part in the tender exclusively through the prism of meeting the conditions of participation in the procedure, does not reflect the economic purpose of the parties forming the consortium. Since independent market players decide to voluntarily conclude a consortium contract, they must have their own economic motives for that. No one should study it “as a substitute” for the entrepreneurs. After all, no contractor decides to engage an additional entity for implementation of the contract and to lower its profit from the procurement. It is certainly a well-thought step, not a desire to “cause damage” to the hospital.

Applying for a procurement in the form of the so-called consortium is a legitimate form of taking part in tenders, which also should be freely allowed for use in the medical industry, and the last judgment of the National Appeals Chamber is unjustifiably restrictive.

/Source: opinion of the legal counsel Marek Sterniczuk from Czublun Trębicki Law Office/.