8. Remedies and Enforcement
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8. Remedies and Enforcement Start Comparison
a. Are there any remedies and enforcement mechanisms in the procurement legislation?

The PPA contains detailed rules on available remedies. In Hungary, the Public Procurement Arbitration Board is responsible for reviewing infringements of PPA provisions. Decisions of the Board may be challenged before the public administration courts.

A remedy procedure before the Board may be initiated either ex officio or upon the request of a contracting authority, a bidder or any other interested party, and upon payment of a procedural fee. The Board may decide to hold a public trial. The Board may take interim measures if it is likely that the PPA is violated or there is a jeopardy thereof.

b. Are remedies available outside the scope of procurement legislation, e.g. civil law damage claims?

Any claim in civil law based on an infringement of legislation applicable to public procurement or to the procurement procedure shall be admissible on condition that the infringement had been established in a final and binding decision by the Public Procurement Arbitration Board, or in the review of the decision of the Public Procurement Arbitration Board, by the court.

c. Is there a specific forum before which procurement disputes are heard?

The Public Procurement Arbitration Board is responsible for reviewing infringements of the Act, it is entitled to conduct investigations and make administrative decisions on legal disputes falling within its competence.

The Board's jurisdiction extends over the entire territory of Hungary.

The Committee, acting in panels of three, decides on disputes arising in connection with the following alleged infringements of the Act:

  • the violation of public procurement rules;
  • the illegal amendment or performance of contracts awarded in a public procurement procedure; and
  • the violation of the procedural rules which were set out by the contracting authority independently in the case where the contracting authority chose to establish its own procedural rules.
d. Are there any timing requirements for the review?

Yes, remedy proceedings may usually be requested or initiated within 15 days from the date on which the violation of the PPA came to the attention of the complainant if the complainant became aware of the violation only after it was committed.

If the request for remedy challenges the contracting authority's final decision establishing the results of the tender, remedy may be requested or initiated within 10 days from the date on which the violation of the PPA came to the attention of the complainant. If the request for remedy is challenging the call for tender or call for participation or the tender documentation, as a general rule, a remedy may be requested not less than 5 days before the expiration of the deadline for the submission of the bids.

The PPA contains certain presumptions concerning the date which is to be considered as the date of the violation and that of it coming to the attention of the complainant. No remedy proceedings may be requested more than 90 days after the date on which the violation of the PPA was committed.

e. What are the main preconditions for review?

There are no specific admissibility requirements, but the review procedure may be initiated for the review of certain specified decisions and documents (final decision, call for tender, tender documentation).

Furthermore, only the contracting authority, the tenderer, any tenderer of a grouping, the candidate tenderer, any candidate tenderer of a grouping, or any other interested party, whose right or lawful interest is violated or jeopardized by any unlawful conduct or infringement of the PPA may file for review. (Certain chambers and associations may also be entitled to file review.)

f. What are admissible grounds for starting a review proceeding?

The Public Procurement Arbitration Board decides on disputes arising in connection with the following alleged infringements of the PPA:

  • the violation of public procurement rules;
  • the illegal amendment or performance of contracts awarded in a public procurement procedure; and
  • the violation of the procedural rules which were set out by the contracting authority independently in the case where the contracting authority chose to establish its own procedural rules.
g. Does a review proceeding affect an ongoing procurement procedure or an awarded contract respectively?

In an ongoing review procedure, until conclusion of the contract based on the procurement procedure involved in the review procedure, the Public Procurement Arbitration Board may order interim measures if there is a likelihood of an infringement of the provisions or principles of the PPA or if an infringement has been committed or there is a risk that an infringement will be committed.

As an interim measure, the Public Procurement Arbitration Board may suspend the procurement procedure or call upon the contracting authority involved in the procurement procedure to invite the applicant seeking a remedy to take part in the procurement procedure. Such suspension of the procurement procedure shall result in the extension of the ongoing periods of time prescribed in the invitation by the duration of the suspension period, however, to protect a pressing, particularly vital interest or public interest the Board may allow the conclusion of the contract on request of the contracting authority.

h. What are the consequences of a successful review proceeding for the affected procurement procedure or awarded contract respectively?

If the Public Procurement Arbitration Board states in its decision that an infringement has occurred, it may

  • call upon the person who committed the infringement to act in conformity with the rules laid down in the PPA (before closure of proceedings) or order that the contracting authority take decisions subject to certain conditions;
  • declare the decision of the contracting authority void (during the procurement procedure or closing it), provided that no contract has been concluded yet based on the decision in question;
  • order the removal of the tenderer from the list of approved tenderers;
  • impose a fine on any organisation or person that has infringed the law or on any person or organisation that is liable for the infringement and has a legal relationship with the person or organisation liable for the infringement in question, the amount of which fine shall not exceed 10% of the estimated value of the procurement procedure or, in the case of the division of the contract into lots, the lot concerned by the remedy taking into account all the circumstances relevant in the matter(importance of the offence committed, subject-matter and value of the public procurement, effect of the offence on the closing decision, reoccurrence, cooperation in review proceedings, time elapsed and whether the offence was manifestly deliberate).
i. How long does a judicial proceeding for review take?

Review proceedings before the Public Procuration Board may take up to 30 day. After the Board decides on the matter, judicial review may be requested not more than 15 days after the receipt of the decision. Generally such procedures take around 1-1.5 years.

j. Must unsuccessful bidders be notified before the award? If so, when?

The Public Procurement Arbitration Board notifies all parties concerned in the public procurement action on the opening of the proceeding, and shall request such parties to present any comments they may have within five days.

k. Are review proceedings common?

Yes, review proceedings are common.

l. Are damage claims in relation with procurement procedures common?

No, damage claims are quite rare. Pursuant to the PPA, subject to certain limited exceptions, civil actions may be launched in connection with any infringement involving public procurements and contract award procedures only if the infringement is established by final ruling of the Public Procurement Arbitration Board, or by the court following the review of a decision of the Board.

However, if a tenderer's claim for damages is limited to recovering from the contracting authority his expenses incurred in connection with the preparation of his tender and with participation in the public procurement procedure, it shall suffice to provide proof to the extent:

  • that the contracting authority has breached any provision of the regulations on public procurements and contract award procedures;
  • that they were in real contention for the contract; and
  • that the infringement had a direct impact on his chances for winning the contract.
m. What are the leading court decisions involving procurement disputes?

In Hungary, there have been many court decisions involving public procurement disputes, including those by the Supreme Court of Hungary. These court decisions cover various fields of public procurement, such as references (Supreme Court's decisions No. BH299.137), abnormally low price (Supreme Court's decision No. EBH2005.1351), and invalid bid and excluding causes (Supreme Court's decision No.BH2004.344).

A long awaited Curia decision recently clarified competence issues. Decision BDT 2017.3688 was recently published which sets forth that if an administrative dispute has not been initiated in connection with the judicial review of the substantive decision of the Public Procurement Arbitration Board, the invalidity of the contract due to unlawful omission of public procurement procedure and the civil action for the application of the legal consequences fall within the competence of the civil courts.