Řízení o námitkách dodavatele proti rozhodnutí o vyloučení z VZ

Exclusion from a Tender: What Does It Mean for Your Company and Why Must You Act Immediately?

The key is to understand that the first and only effective line of defense is the mechanism of objections. This is a statutory primary step, without which it is impossible to defend yourself further.

If you do not file objections on time or in a formally correct manner, you definitively waive the opportunity to have the contracting authority's procedure reviewed by the superior authority, which is the Office for the Protection of Competition (ÚOHS).

Under Czech legislation, Section 242 of the Act on Public Procurement sets an uncompromising deadline of 15 days from the delivery of the notice of exclusion for filing objections against exclusion under Section 242.

Missing this deadline, even by a single day, means automatic rejection of the objections and the loss of any further possibility of defense.  In this race against time, speed is absolutely crucial.

The ARROWS legal team is structured to respond immediately, which is key to protecting your interests in situations with such strict deadlines.

Why Did the Contracting Authority Exclude You? The Most Common Reasons in Practice

The contracting authority cannot exclude a supplier arbitrarily. It is bound by an exhaustive list of reasons set out in Section 48 of the Act on Public Procurement. For better orientation, these reasons can be divided into two basic categories, which also determine your defense strategy.

Mandatory (obligatory) reasons, where the contracting authority must exclude the participant. These include, for example, failure to provide the required bid security, failure to prove qualifications, or the existence of tax arrears. Here, the defense focuses on proving that the given reason did not actually occur.

Voluntary (discretionary) reasons, where the contracting authority may exclude the participant, but does not have to. This is where the greatest room for successful objections arises, as the contracting authority's decision is based on its administrative discretion, which must comply with the fundamental principles of the Act. The most common include:

• Non-compliance with tender conditions: The bid deviates in some point from the requirements of the contracting authority.

• Abnormally low tender price: The price appears unrealistic and the supplier fails to sufficiently justify it upon the contracting authority's request.

• Provision of false information: The data in the bid do not correspond to reality and could have influenced the evaluation.

• Serious or long-term misconduct in the past: The supplier has committed serious misconduct in the performance of an earlier public contract in the last 3 years.

Even if one of the reasons for exclusion exists, the law in Section 76 allows the supplier to demonstrate the so-called restoration of eligibility (referred to in professional practice as self-cleaning). This involves adopting corrective measures to prove that you have learned from past mistakes and are once again a reliable partner.

Are you unsure whether the reason for your exclusion was justified? Our Prague-based legal team at ARROWS will assess your notice of exclusion and identify weak points in the contracting authority's reasoning.

Objections as the First Step to Rescue: How to File Them Correctly and on Time?

Success in objection proceedings relies on compliance with formal and content requirements. According to Section 244 of the Act on Public Procurement, every objection must contain five key elements:

1. Identification of the complainant (who is filing the objections).

2. Designation of the act of the contracting authority against which the objections are directed (the specific decision on exclusion with the date and reference number).

3. What is perceived as a violation of the law (the core of the legal argument, e.g., violation of Section 48 in conjunction with the principle of transparency under Section 6 of the Act on Public Procurement).

4. What harm is imminent or has been incurred by the complainant (loss of chance to win the contract, wasted costs of bid preparation).

5. What the complainant is seeking (a clearly formulated goal, e.g., "we seek the annulment of the decision on our exclusion").

Omitting any of these requirements gives the contracting authority a legal reason to formally reject the objections under Section 245(3) of the Act on Public Procurement, thereby closing your path to further review by the ÚOHS.

At ARROWS, we specialize in preparing complete documentation that protects you from such formal errors and sanctions.

Incorrectly Filed Objections and Their Consequences

How to Build a Winning Argument? Strategies Backed by the Decision-Making Practice of the ÚOHS

Successful objections rarely focus on defending the quality of your bid. Instead, they attack the weak points in the procedure of the contracting authority. The entire procurement procedure must comply with the fundamental principles under Section 6 of the Act on Public Procurement: transparency, proportionality, and equal treatment (prohibition of discrimination).

It is their violation that is the most common reason for annulling a decision on exclusion.

Key lines of argument that work in practice:

1. Unreviewability and insufficient reasoning: The notice of exclusion must be specific, comprehensible, and reasoned in detail. A mere reference to a section of the law is not enough. The contracting authority must clearly describe exactly in what way and why your bid failed to meet the conditions. This is one of the most common and successful objections, as contracting authorities often make mistakes in their reasoning.

2. Violation of the principle of proportionality: The contracting authority chose the harshest penalty (exclusion) for a minor, easily rectifiable discrepancy (e.g., a missing signature on an insignificant document). Such a procedure is disproportionate.

3. Failure to use clarification of the bid (Section 46 of the Act on Public Procurement): Instead of inviting you to clarify an ambiguity in your bid, the contracting authority excluded you straight away. The decision-making practice of both the ÚOHS and the courts confirms that for ambiguities that do not alter the bid, clarification should be the first step.

4. Hidden discrimination: The reason for exclusion was non-compliance with a condition that was itself discriminatory, disproportionate to the subject matter of the contract, or unjustifiably restricted competition.

Thanks to long-term cooperation with our clients, which include more than 150 joint-stock companies and 250 limited liability companies, our Czech legal team has extensive practical experience in identifying these errors and formulating effective arguments.

What Happens After Objections Are Filed and What Are the Possible Outcomes?

Filing objections has an immediate and major legal impact. It activates the so-called standstill period under Section 246 of the Act on Public Procurement, which prohibits the contracting authority from concluding a contract with the selected supplier until it decides on your objections and until the deadline for potentially filing a petition with the ÚOHS expires. This gives you not only time but also a strong negotiating position.

The contracting authority has a deadline of 15 days from the delivery of the objections to review them and send a written decision. Three situations may occur:

1. The contracting authority complies with the objections: The best possible outcome. The contracting authority annuls its decision on exclusion and you are back in the competition. The decision must state what corrective measure will be adopted.

2. The contracting authority rejects the objections: The most common scenario. The contracting authority justifies in writing why it disagrees with your arguments. This opens the path to the next step – filing a petition with the ÚOHS.

3. The contracting authority does not decide within the deadline: If the contracting authority does not respond within 15 days, the law considers this a fiction of rejection. You can therefore proceed in the same way as if your objections had been rejected.

Whatever the outcome, it is crucial to be prepared for the next step. ARROWS will provide you with representation throughout the process and ensure that your rights are protected.

What to Do After the Contracting Authority Rejects the Objections

When the Contracting Authority Does Not Comply with Objections: The Next Instance Is the Office for the Protection of Competition

If the contracting authority rejects your objections, the next step is to file a petition for review of the contracting authority's actions with the ÚOHS, which is the main supervisory body in the field of public procurement. 

Strict rules apply again for filing the petition:

• Deadline: You must file the petition within 10 days of delivery of the decision rejecting the objections (or within 25 days of filing the objections if the contracting authority did not respond).

• Deposit: Filing the petition is linked to the obligation to pay a security deposit, which is returned in the event of success in the dispute.

• Requirements: The petition has its own formal requirements under Section 251 of the Act on Public Procurement, which must be precisely observed.

At ARROWS, we specialize in representation before administrative authorities and have extensive experience in successfully managing disputes before the ÚOHS.

If your contract contains an international element, such as a foreign contracting authority, we utilize our ARROWS International network, built over ten years, thanks to which we handle cross-border cases practically on a daily basis.

Effective management of objections is key, but prevention and the correct setup of all corporate processes are equally important. At ARROWS, we also specialize in Corporate Compliance and ESG. You can find more about this service on our website.

Final Summary

A notice of exclusion is not the end of the road, but the beginning of a legal process that you can win with a quick response and the right strategy. 

The key to success is speed, procedural precision, and strong legal arguments based on a deep knowledge of the Act on Public Procurement and relevant decision-making practice.

At ARROWS, we offer you comprehensive support in this situation, which includes legal consultations, preparation of all documentation, representation before administrative authorities and courts, and drafting of expert legal opinions. 

We have twenty years of experience in resolving disputes in the field of public procurement. We know what arguments work and what mistakes contracting authorities make most often.

Do not hesitate to contact our office – write to us at consultation@arws.cz and we will make sure that your business opportunities are not thwarted by an unjustified decision. 

At the same time, we are happy to connect our clients if we see interesting business synergies, and we are also open to your business ideas.