Opportunities and pitfalls of pre-market consultations: what the contracting authority should know
Author of the article: Mgr. Alexandra Johnová, ARROWS (office@arws.cz, +420 245 007 740)
Preliminary Market Consultations ("PMCs") are a tool that allows contracting authorities to obtain important information related to the procurement process before the start of the procurement procedure. Proper use of PTQs can bring transparency, better conditions for suppliers and savings of public funds. As contracting authorities, what are the key aspects you should not forget?
What are pre-market consultations?
Preliminary market consultations are an institute pursuant to Article 33 of Act No. 134/2016 Coll., on Public Procurement (hereinafter referred to as "PPA"), which allows contracting authorities to communicate with suppliers or experts prior to the start of the procurement procedure. This procedure serves to prepare the tender conditions, obtain feedback and better orientation in the market possibilities, while the contracting authority may choose whether or not to conduct a preliminary market consultation at its own discretion.
It is particularly appropriate to use the pre-market consultation in situations where:
- the contracting authority does not have sufficient expertise in the subject matter of the contract or does not have the necessary experts;
- it is not possible or practicable to obtain all the necessary information on the subject-matter of the public contract from publicly available or otherwise accessible sources, or it is necessary to supplement or verify this information;
- there is a risk that the terms of the contract will be defined in a discriminatory, disproportionate or substandard manner in relation to the market concerned.
For example, a contracting authority may be considering the purchase of a new software solution but, thanks to the PTK, find that its needs can be more effectively covered by SaaS (software as a service) services. However, PTK must always be transparent and must not distort competition!
Why is pre-market consultation used?
The main objective of PTQs is to optimise the procurement conditions and reduce the risk of errors that could make the procurement process more expensive or questionable. The most important benefits include:
- Getting feedback from the market: the contracting authority can find out what solutions are currently available on the market and which best meet its needs.
- Minimising the risk of objections: Transparent preparation of documentation reduces the risk of potential objections from suppliers.
- Efficient use of public funds: PTK helps the contracting authority to better define 'value for money'.
What to look out for during implementation?
While PTK brings a number of benefits, it also carries some risks. Contracting authorities should be particularly cautious in the following areas:
- Transparency in the selection of participants: Contracting authorities should clearly document why specific experts or suppliers have been invited.
- Protection of competition: The TEC must not favour one supplier to the detriment of others.
- Critical evaluation of the information obtained: Suppliers may wish to provide information that will give them a competitive advantage, so the contracting authority must be able to critically evaluate the truthfulness and objectivity of such information.
The law states that TQTs must be conducted in such a way that they do not distort the level playing field and are properly documented. In particular, we recommend:
- Thorough preparation: formulating specific questions or sharing parts of the tender documentation increases the quality of the answers obtained.
- Involvement of experts: Involving independent experts can help eliminate the risk of misleading information from suppliers.
- Respecting deadlines: The information obtained in the TQF should be used within a maximum of 12 months after the consultation to reflect the current state of the market.
Obligations of the contracting authority in the procurement procedure
If the results of the TQT affect the tender documentation, the contracting authority must, in accordance with Article 36(4) of the PPA, include this information in the documentation, together with the identification of the persons involved in the TQT. The contracting authority is also obliged to give all suppliers equal access to the information obtained during the consultation. Finally, the contracting authority must document the measures taken in the contracting authority's written report.
Contracting authorities should also set a sufficiently long time limit for the submission of tenders to ensure that even those suppliers who did not participate in the PTC have the opportunity to prepare a quality tender. In addition, it is crucial to eliminate the risk of conflicts of interest, for example by negotiating the terms of participation before the implementation of the TQF.
Pre-market consultations are an important tool to help contracting authorities better define the terms of reference and thus obtain an optimal solution. However, transparency, careful preparation and prudence in the evaluation of the results are key to success.