2. Application of the Statutory Procurement Laws
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2. Application of the Statutory Procurement Laws Start Comparison
a. Which public agencies are covered by the laws?

The following bodies, agencies and entities of the public sector are subject to public procurement rules or principles:

  • the Public Administration at the national, autonomous community and local levels (e.g. Ministry of Industry; Catalan Government, etc);
  • the entities for the management and provision of common services of the Social Security (e.g. Instituto Nacional de la Seguridad Social);
  • the autonomous bodies, public corporate entities, public universities, national agencies and any public sector entities with legal status or those organized under them, including those that function independently or with special autonomy recognized by law, have regulatory functions or exert external control over a particular sector or activity;
  • companies where a stake higher than 50% is publicly owned;
  • consortia with legal status in which a public administration holds a stake;
  • foundations with a direct or indirect majority contribution from one or more public sector entities or permanent foundations with an endowment of more than 50% in goods or rights contributed or transferred by the public entities;
  • the Social Security mutual insurance company covering accidents and occupational diseases;
  • any entities or agencies with legal status which have been created specifically to meet needs of general interest, with no industrial or commercial interest, provided that one or more entities in the public sector are largely financing their activities, controlling their management or appointing more than half the members of the board of directors, management or supervision;
  • associations formed by the agencies, organizations and entities mentioned above;
  • entities from the public sector and public companies in the so-called special sectors: water, gas and heating, electricity, postal services, transport services, prospecting and drilling for oil, gas, coal and other solid fuels, and provision of transport terminals.

Each of the above entities may be subject to a different level of restraint in its procurement rules and principles, according to a case-by-case analysis under the rules provided by law.

b. Which private entities are covered by the laws?

The following private entities are subject to public procurement rules or principles:

  • entities that, according to Section 2(a) above, are deemed to belong to the public sector but may have a private nature;
  • private entities entering into subsidized contracts above the price threshold applicable at any time; or
  • private entities granted exclusive or special rights in the so-called special sectors: water, gas and heating, electricity, postal services, transport services, prospecting and drilling for oil, gas, coal and other solid fuels, and provision of transport terminals.

Private entities would be subject to procurement principles rather than to the stricter rules of public procurement.

c. Are co-operations between contracting authorities exempted from public procurement law? If so, what are the conditions for the exemption?

Co-operations between contracting authorities are exempted from public procurement law if certain legally defined conditions are met. That is the case if the contract is awarded to an entity that is predominantly controlled by the contracting authority awarding the contract (or controls the contracting authority), the contractor carries out the essential part of its activities for the controlling contracting authority and no private equity investment in the contractor's entity exists.

d. Which types of contracts are covered?

Those entered into by an entity belonging to the public sector: works and construction contracts; public works concession contracts; contracts for the management of public services; supply contracts; service contracts; and contracts for collaboration between the public and the private sectors (public-private partnerships), over the price thresholds applicable at any time. Other types of contractual relationships entered into by entities in the public sector may be governed by legislation other than procurement laws but would still be restrained by the principles of transparency, competition and publicity, as a general rule.

Those entered into by an entity in the so-called special sectors: works and construction contracts, supply contracts and services contracts, over the price thresholds applicable at any time.

e. How are changes to an existing contract dealt with? Do changes require a new procurement procedure?

The treatment of the changes varies depending on whether it is an extension, an amendment or a transfer to a new contractor:

On one side, public contracts can be extended once or twice, as long as its conditions remain unchanged and the awarding has been done taking into account the maximum duration of the contract, including the extensions. The eventual extension must be established by the tender documents.

On the other side, it is possible to amendment a contract provided that (i) the tender documents established this possibility in a clear manner and specify the procedure to be followed; or (ii) in case the tender documents do not foresee this possibility, some exceptional conditions apply (e.g. in cases of force majeure; or the contracted service turns out to be inadequate to satisfy the necessity covered by the contract as a consequence of errors or omissions in the project). In the latter case, the accorded amendment may not alter the essential conditions of the tender and awarding, as well as it should be limited to introduce those indispensable changes.

It will be considered as an "alteration of the essential terms of the tender" and, therefore, the modification would not be allowed, in the following cases:

  • the proposed amendment significantly alters the function and characteristics of the contracted service, or the proportion between the service and the price;
  • in case it is required a professional qualification or different solvency conditions not contemplated in the original contract;
  • in case the amendment entail a price modification equalling or exceeding a 10% of the awarding's price;
  • any other changes where we can assume that known in advance (during the tender procedure), either other companies/persons would have concurred, or the concurrent bidders would have presented offers substantially different form the ones already presented.

In those cases, the contract will be terminated and new procurement procedure would have to be initiated.

Furthermore, the amendment can not include new complementary services to the one originally contracted, an extension of the purpose of the contract in order to include new finalities not foreseen in the tender documents, or add a service susceptible to be exploited independently. In these cases a new procurement procedure will also be necessary.

Regarding the assignment of public contracts, the Spanish law distinguishes between succession and assignment of contracts:

  • Succession: the change of the contractor party is due to a fusion, as a consequence of other corporate restructuring operations like split-ups, or contribution or transfer of business or branch of business. In these cases, the contract will keep in force as long as either the "new" company has the required solvency for the awarding. The situation must be notified to the contracting body.
  • Assignment: a public contract/s is/are assigned to a third party. The assignment is subject to the fulfillment of the following requirements:
  1. the technical and personal qualities of the contractor can not have been determinants to award the contract, and the assignment of contract can not cause an effective restriction of competition in the market;
  2. the assignment must be previously authorized by the contracting body;
  3. the 20% of the contract has to have been executed;
  4. the assignee must have capacity to contract with the administration; and
  5. the assignment must be formalized in a public document.

Nevertheless, please note that in Spain Directive 2014/24/CE has not been transposed yet, and it introduce some modifications in this regard.

f. What is the applicable regime for framework agreements?

Framework agreements are contracts designed to set out the general conditions for future procurements during a given period of time and especially the cost of those procurements. The contracting authority has to conduct a competitive award procedure to award a framework agreement. The contracting authorities that are parties to a specific framework agreement from the outset should be clearly indicated, either by name or by other means, such as a reference to a given category of contracting authorities within a clearly delimited geographical area, so that the contracting authorities concerned can be easily and unequivocally identified. The length of a framework agreement is limited to four years.

Framework agreements with multiple suppliers are admissible, but they shall be a minimum of 3.

Contracts based on a framework agreement can only be awarded under the conditions laid down in the framework agreement. The contracting authority may conduct a competitive procedure for the award of single orders under the framework agreement with multiple suppliers if this possibility has been stipulated by the contracting authorities in the procurement documents for the framework agreement. The award decision should be based on objective reasons that have been set out in the procurement documents for the framework agreement.

g. What is the applicable regime for public-private partnerships (PPPs)?

Public-private partnerships can only be used for complex projects, therefore they require a prior assessment in order to determine the complexity of the project, as well as the need of executing it through this kind of contract. Then, the contracting authority will issue a descriptive document to establish the basis for the competitive dialogue with the bidders, and this document will be included in the descriptive document of the contract.

As indicated, PPs must be awarded via competitive dialogue. This procedure is characterized by the establishment of a dialogue between the contracting body and each bidder to find out the best solution for the project as a previous step to the awarding.

This procedure is initiated with the publication of the invitation to tender and the mentioned descriptive document (which replaces the usual tender documents). Those interested in the tender have to apply, but eventually, it will be the contracting body that chooses, at least, three eventual bidders. After that, the invited bidders will submit their proposals and the competitive dialogue will start. Once the contracting authority finds the solution to its necessities, the dialogue ends and the participants are allowed to submit their bids. The last step is the awarding to the most economically advantageous offer.

h. How are concessions dealt with?

Currently, the Spanish legal system establishes two types of concessions: public works concession and concession for the management of public services. Both are subjected to general procurement provisions, without prejudice to certain particularities.

However, with the transposition of the Directive 2014/23/EU this regulation would be changed, because it creates specialized procurement law provisions on the award of concessions. Nonetheless, this Directive is a directive of minimums, which means that States can establish a stricter regulation when transposing it.

i. Are there anti-avoidance rules (including laws on bid rigging)?

As provided in the laws, the principles of transparency, competition and publicity apply. Where procurement rules do not strictly apply, procurement principles may still be enforceable. The laws contain criteria to define their specific scope of application for each scenario. Actions circumventing or breaching the application of procurement rules and principles may have their contracts nullified. In addition, there may be actions punishable as violations of competition law. If a case involves public officers, they could be punished for an offence under certain circumstances.