Legal basis for conducting of negotiated procedure in accordance with Article 35 Paragraph 1 Point 1 of Public Procurement Law exists only if contracting authority has completely examined the contents of submitted offers and established all the reasons for their possible inadmissibility in open, restricted or qualification procedure or competitive dialogue in accordance with Article 3 Paragraph 1 Point 33 of Public Procurement Law.

Explanation:

Article 35 Paragraph 1 Point 1 of Public Procurement Law (“Official Gazette of Republic of Serbia” no. 124/12, hereinafter: PPL) prescribes that Contracting authority may conduct negotiated procedure with invitation to bid, if in open procedure, restricted procedure, qualification procedure, or in competitive dialogue it received only unacceptable bids, given that initially established prerequisites for participation in the procedure, technical specifications and criteria for contract award did not change.

The same provision of PPL prescribes that if contracting authority decides to invite only the bidders who took part in open, restricted, qualification procedure or competitive dialogue to take part in negotiated procedure, and ask them to amend their bids in order to make them acceptable, there is no obligation to publish the invitation for submission of bids.

Article 33 Paragraph 1 Point 33 of PPL prescribes that bid can be deemed acceptable if it is timely, not rejected by contracting authority for essential deficiencies, adequate, not limiting or conditioning either the rights of contracting authority or responsibilities of bidder, nor exceeding the amount of the estimated value of the public procurement.

Article 106 of PPL prescribes that the essential deficiencies of a bid exist if:

1) Bidder fails to prove fulfillment of mandatory prerequisites for participation;

2) Bidder fails to prove fulfilment of additional requirements;

3) Bidder fails to provide the requested collateral;

4) Offered period of validity of the bid is shorter than the prescribed one;

5) Bid contains other deficiencies which makes it impossible to determine the actual contents of the bid, or to compare it with other bids.

Article 3 Paragraph 1 Point 32 of PPL prescribes that bid can be deemed acceptable if it is timely and if it completely meets all of the technical specifications.

Bearing in mind previously quoted legal provisions, Republic Commission establishes that Article 35 Paragraph 1 Point 1 of PPL clearly prescribes the obligation of the contracting authority to enable participants of previously unsuccessfully conducted open, restricted, qualification procedure or competitive dialogue to make their previously submitted bids acceptable, in the newly initiated negotiated procedure depending on deficiencies in their contents, by additionally submitting supplementary documents needed.

It necessarily ensues that one of the legal prerequisites to initiate negotiated procedure in accordance with the Article 35 Paragraph 1 Point 1 of PPL, is met only if contracting authority in detail examines the contents of the bids submitted in the open, restricted, qualification procedure or competitive dialogue and establishes all the reasons for their unacceptability, and especially those reasons that cannot be subsequently removed through submission of supplementary documents to the already submitted bids. This means that the obligation to establish findings of facts regarding unacceptability of examined bids does not cease to exist, if during the phase of expert evaluation of bids it is established that there is only one deficiency that makes the bid unacceptable. Namely, in accordance with Article 3 Paragraph 1 Point 33 of PPL, the evaluation of the bid means that complete findings of facts have to be cumulatively established with regards to:

– Existence of one or more important deficiencies as in Article 106 of PPL;

– Existence of one or more deficiencies causing the bid to be unacceptable;

– Existence of one or more important deficiencies causing the limiting or conditioning of the rights of the contracting authority or responsibilities of the bidder;

– Whether the offered price exceeds the amount of the estimated value of the public procurement.

In accordance with the Articles 105 and 109 of PPL, findings of fact regarding all established reasons for unacceptability of the examined bids have to be clearly and explicitly stated within the report on expert evaluation of the bids, i.e. within decision to suspend public procurement procedure, which terminates the conducting of the open, restricted, qualification procedure or competitive dialogue.

If contracting authority fails to act in the previously described way, and then initiates the negotiated procedure with invitation to bid, and during that procedure it is established that one or more bids have deficiencies that make them unacceptable, and that said deficiencies originating from the previously unsuccessfully conducted open, restricted, qualification procedure or competitive dialogue can be removed, the consequence is that public procurement procedure was applied even though the legal prerequisites from Article 35 Paragraph 1 Point 1 of PPL have not been met.