Latvia
1. Legislative framework
Directives
The Community Directives on public procurement that have been transposed into domestic legal
system:
Directive
Date
92/50/EEC
18th June 1992
The coordination of procedures for the award of public service
contracts
93/36/EEC
14th June 1993
The coordination of procedures for the award of public supply
contracts
93/37/EEC
14th June 1993
The coordination of procedures for the award of public works
contracts
93/38/EEC
14th June 1993
The coordination of the procurement procedures of entities
operating in the water, energy, transport and
telecommunications sectors
97/52/EC
13th October 1997
Amending Directives 92/50/EEC, 93/36/EEC and 93/37/EEC
concerning the coordination of procedures for the award of
public service contracts, public supply contracts and public
works contracts respectively
98/4/EC
16th February
1998
Amending Directive 93/38/EEC coordinating the procurement
procedures of entities operating in the water, energy, transport
and telecommunications sectors
89/665/EEC
21st December
1989
The coordination of the laws, regulations and administrative
provisions relating to the application of review procedures to the
award of public supply and public works contracts
92/13/EEC
25th February
1992
The coordination of the laws, regulations and administrative
provisions relating to the application of Community rules on the
procurement procedures of entities operating in the water,
energy, transport and telecommunications sectors
2004/17/EC
31st March 2004
Coordinating the procurement procedures of entities operating
in the water, energy, transport and postal services sectors
2004/18/EC
31st March 2004
The coordination of procedures for the award of public works
contracts, public supply contracts and public service contracts
2005/51/EC
7th September
2005
Amending Annex XX to Directive 2004/17/EC and Annex VIII to
Directive 2004/18/EC on public procurement
2005/75/EC
16th November
2005
Correcting Directive 2004/18/EC on the coordination of
procedures for the award of public works contracts, public
supply contracts and public service contracts
General Principles
The general principles constituting the basis of the national legislation on public procurement:
- transparency of the procurement process;
- free competition for sellers of goods, providers of services and performers of construction work, as
well as equal and fair treatment of such;
- effective utilization of State or local government resources by maximally reducing the risk of
contracting authorities.
Legislation currently in force
National legislation that currently regulate the State’s public procurement sector:
N.
Date
Law
-
Public Procurement Law
1st May 2006
Law
-
Law on Procurement for the Needs of
Public Service Undertakings
24th November 2004
Cabinet Regulation
363
Models of Public Procurement Notice
Forms
9th May 2006
Cabinet Regulation
364
Public Procurement Contract price
Thresholds
9th May 2006
Cabinet Regulation
1026
Models and Contents of Public
Procurement Notices for Public Service
Undertakings
27th December 2004
Cabinet Regulation
997
Contract Price Thresholds (with
amendments in Cab.Reg. 72)
24th January 2006
The Public Procurement Law has replaced the Law on Procurement for State and Municipal Needs.
The overall goals of the Public Procurement Law are simplification, modernisation and flexibility of
public procurement in order to ensure that the procurement rules are effective, user-friendly, provide
the right set-up for getting value for money and ensure fair and equal competition. It is likely that this
has been achieved by greater clarity of the law, introduction of new procurement mechanisms and
enhanced transparency. While the effectiveness of the new law will need to be tested in practice, it
has at least made a good effort to render the procurement procedure less cumbersome and
bureaucratic.
2. Institutional framework
The structures responsible for public procurement (legal nature and composition)
Each authority is responsible for its procurement.
Monitoring of the observance of regulatory enactments in the area of procurements is performed by
the Procurement Monitoring Bureau (PMB) and other authorities (State Audit Office, Corruption
Prevention and Combating Bureau) in accordance with regulatory enactments.
The Procurement Monitoring Bureau is a State administrative authority supervised by the Ministry of
Finance and operating in accordance with the Public Procurement Law, Law on Procurement for the
Needs of Public Service Undertakings, with the by-laws of the Procurement Monitoring Bureau and
with other regulatory enactments. The Bureau is a state institution financed by the State budget.
The State Audit Office is an independent, collegial, supreme audit institution. It performs audits in
conformity with international audit standards recognized in the Republic of Latvia.
The Corruption Prevention and Combating Bureau is an institution of the State Administration under
the supervision of the Cabinet of Ministers. The work of the Bureau is based on the Law on
Corruption Prevention and Combating Bureau.
Duties
The Procurement Monitoring Bureau has the following rights and duties:
1. to monitor the conformity of the procurement procedures with the requirements of the Law;
2. in conformity with its competence to co-operate with relevant foreign authorities;
3. to request and receive without hindrance at any stage of a procurement procedure, as well as to
receive free of charge full information regarding the procurement;
4. to invite independent experts;
5. to compile and analyse the statistical information on procurement in the State;
6. to provide methodological assistance and consultations, and to organize training for institutions that
are contracting authorities, for sellers of goods, lessors, providers of services and performers of
construction work;
7. to conduct other activities permitted by regulatory enactments in order to fulfil the tasks provided
for by Public Procurement Law;
8. to make sure that complaints with respect to violations of procurement procedures are examined;
9. to publish the notices in the website of Procurement Monitoring Bureau and to send those notices
to be published in the Official Journal of EU, to provide European Commission with the requested
information;
10. to prepare reports of procurements in the State.
The State Audit Office and The Corruption Prevention and Combating Bureau perform the inspections
following the conclusion of the contract. The State Audit Office performs the auditing of the legality
and usefulness.
The duties of these institutions are provided by the appropriate Laws (Law on Corruption Prevention
and Combating Bureau and State Audit Office Law).
Bodies responsible for appeals (legal nature and composition)
The body responsible for examining and deciding appeals regarding public procurement procedures
in Republic of Latvia is the Procurement Monitoring Bureau (outlined above). In order to examine
complaints, the Procurement Monitoring Bureau forms a complaints examination commission.
In any case every entity can appeal the decision also in court according to Law.
3. Types of public procurement and award procedures
Types of public procurement
Public Procurement Law provides three types of public procurement:
- purchases, services received, or construction performed for the needs of the contracting authority.
The second Law that regulates public procurement - Law on Procurement for the Needs of Public
Service Undertakings also provides the same types of public procurement.
Forms of advertising
- Prior Information Notice
- Contract Notice
- Simplified Contract Notice
- Contract Award Notice
The contracting authority shall send the respective notice to the Procurement Monitoring Bureau
regarding the expected procurement (of and above 10 000 LVL) and the Bureau places the notice on
the Internet as well as publishes the notice in the EU Official Journal. In case the estimated contract
price is less than 10 000 LVL and above 1 000 LVL the contracting authority published the notice in
its own website or local newspaper. A similar order is after a decision has been taken.
Procedures for awarding contracts
There are regulated five procedures for awarding contracts by domestic legal system:
- an open competition (goods or services of and above 50 000 LVL; construction works of and above
120 000 LVL);
- a restricted competition (goods or services of and above 50 000 LVL; construction works of and above
120 000 LVL);
- a request for a price quotation (goods or services of and above 10 000 LVL but less than 50 000
LVL; construction works of and above 10 000 LVL but less than 120 000 LVL);
- a negotiated procedure (goods or services or construction works of and above 10 000 LVL);
- a draft design competition.
The selection of procurement procedure depends on thresholds and the procurement category
(construction works, goods or services). The contracting authority may choose the draft design
competition if the contract will be entered into for the preparation of draft designs for construction
works or territorial planning.
Appeal procedures
Tenderers, candidates, sellers of goods, providers of services or performers of construction work
have the right to submit to the Procurement Monitoring Bureau complaints regarding the actions of
the contracting authority with respect to the legality of the procedures of open or restricted
competition or negotiated procedure if the submitter considers that the contracting authority or the
procurement commission has not observed the requirements of regulatory enactments which regulate
procurement and in so doing have violated the lawful rights and interests of the submitter of the
complaint.
Complaints may be submitted up to the time of entering into a procurement contract. After a
procurement contract has been entered into, the submitter of a complaint may appeal decisions of the
contracting authority to a court only (Administrative Court) in accordance with procedures prescribed
by law.
The Law provides a legal suspension. It means that if a complaint has been submitted to the Bureau
prior the entering into a procurement contract, the Bureau shall notify the contracting authority thereof
and the contracting authority shall not enter into a procurement contract without a decision of the
complaints examination commission that permits to enter into such contract.
Decisions of the Procurement Monitoring Bureau regarding the activity of public service undertakings
may be appealed in court in accordance with the procedures specified by law.
4. New organizational and managerial arrangements
The new form of co-operation between public and private entities has been put into effect in Latvia –
Public Private Partnership (PPP).
Public Private Partnership (PPP) - partnership between State or municipal entity and private business
within the framework of which public service or object is handed over to private business on
contractual basis for a definite period of time and on definite terms in order to ensure public services
and to attract private sector resources.
Latvian Investment and Development Agency (LIDA) opened Public Private Partnership Department
in May 2004; the tasks of the Department are:
to promote the implementation of the PPP projects, as well as to facilitate the attraction of private
capital and initiative for public (state and municipal) services realization and public objects
management.
The following policy planning documents regulate PPP in Latvia:
- Cabinet Order on General Principles of Public Private Partnership Promotion in Latvia
- Cabinet Order on Implementation Strategy of PPP Promotion in Latvia in 2006 - 2009
The following laws regulate PPP in Latvia:
- Law Law on Concessions
- Cabinet Regulation on the Order of Registration and Control of Concession Agreements
- Law Law on Public Procurement (section 67, paragraph 3)
5. Models adopted
The list of the new procurement mechanisms introduced by the Public Procurement Law includes
framework agreements, i.e., agreements with the purpose to establish the terms governing contracts
to be awarded during a given period. While the use of framework agreements was permitted already
under the Law on Procurement for State and Municipal Needs, that law failed to provide a detailed
regulation of the application of the framework agreements. The law leaves room for the contracting
authorities to choose whether to involve one or more companies in the framework agreement and
whether to settle everything from the outset or to reopen competition when there is a need for specific
contract.
The dynamic purchasing system is another novelty. The method is defined as "a completely
electronic process for making commonly used purchases, the characteristics of which, as generally
available on the market, meet the requirements of the contracting authority, which is limited in
duration and open throughout its validity to any economic operator which satisfies the selection
criteria and has submitted an indicative tender that complies with the specification". The dynamic
purchasing systems will ensure that the contracting authorities are able to process information
relating to a large number of companies and the companies can easily find information relating to
procurements.
6. The e-procurement
Public Procurement Law provides that contracting authority shall send a notice to the Procurement
Monitoring Bureau regarding the expected procurement and the Bureau places the notice on the
Internet. The same system refers to the notices concerning a decision.
As part of promotion of e-procurement, the law allows the contracting authority to decide to use
electronic means of communication. The use of electronic communication is however currently
impossible due to the fact that the implementation of electronic signature has not yet been fully
accomplished.
Another new procurement mechanism introduced by the Public Procurement Law is electronic
reverse auctions. The contracting authorities are allowed to decide that, after an initial full evaluation
of the tenders, the award of a public contract is preceded by an electronic auction. The use of
electronic auction is however allowed only when the contract specifications can be established with
precision. In case the auction is based on the price, the prices proposed by the participants of the
auction are revised downwards. The information regarding the tenderers’ relative rankings and, if the
contracting authority so decides, also information concerning the other prices or values submitted and
the number of participants in each phase of auction, is available to the tenderers. In the light of it, the
use of electronic auctions is likely to increase transparency and facilitate the getting the best value for
money.
Full introduction of e-procurement will give possibility of managing all steps of procurement procedure
using Information technologies.
Other experiences of innovation in the public procurement sector
In order to promote an effective utilization of State or local government resources and an obtaining of
better quality the Public Procurement Law also approves the use of central purchasing. By enabling
the supplies and services to be acquired through a central purchasing body, the central purchasing
allows the contracting authorities to gather their administrative resources and to profit by large-scale
contracts. A pilot project of the centralised purchasing was launched in Latvia already before the
adoption of the Public Procurement Law with the purpose to test the pros and cons of such
procurement method. The approval of the use of central purchasing by the Public Procurement Law
suggests that central purchasing will most probably become more widely employed.