Public Procurement of Medical Devices and Services in the Czech Republic

The procurement of medical devices and services through public tenders represents one of the most complex areas faced by healthcare facilities in the Czech Republic. Healthcare providers must adhere to strictly formalized procedures regulated by Czech legislation and subject to oversight by the Office for the Protection of Competition. The aim of this overview is to explain the specifics of these procurements and highlight the most common errors under the Czech legal framework.

Legislative framework for public procurement in the healthcare sector

The legal regulation of public procurement in the Czech Republic is built on the principles of transparency, proportionality, equal treatment, and non-discrimination. The basic legal framework is established by Act No. 134/2016 Coll., on Public Procurement, as amended. The basic financial limits for small-scale contracts remain, even after recent amendments, at CZK 2,000,000 for supplies and services and CZK 6,000,000 for construction works under Czech law.

For a detailed analysis of the impacts of the amendment, we recommend our article on the amendment to the Czech Public Procurement Act. For healthcare providers, it is crucial that they cannot acquire medical equipment, pharmaceuticals, and services at will, but must follow formalized procedures. Healthcare facilities are also subject to supervision by the Office for the Protection of Competition (ÚOHS), which actively enforces compliance with legal regulations in this area in the Czech Republic.

Historical development and legal obligations arising from the European Union

The legal regulation of public procurement in the Czech Republic is based on the European Union legal framework, specifically Directive 2014/24/EU of the European Parliament and of the Council. A significant milestone in responsible procurement in the Czech Republic was the amendment to the law that introduced the obligation of socially and environmentally responsible procurement and innovation.

Healthcare facilities cannot limit themselves to merely selecting the cheapest supplier; they must also consider factors such as environmental protection, social aspects, and innovation. These principles allow for a better response to the needs of a specific environment and ensure that suppliers meet the quality criteria necessary for protecting patient health under Czech legislation.

Specifics of purchasing medical equipment and devices

The purchase of medical equipment and devices differs in many aspects from standard public contracts. Healthcare facilities acquire a very diverse range of goods and services, which can be divided into two basic groups. The first consists of standard public contracts, and the second of specific contracts for the healthcare sector.

The group of specific contracts involves the purchase of pharmaceuticals, disinfectants, medical technologies, and devices. This category includes a very heterogeneous spectrum of products, from simple aids to highly sophisticated diagnostic and therapeutic equipment, such as MRI machines or robotic systems used in Czech hospitals.

Medical devices as a legal category

For a device to be considered a medical device, it must meet specific criteria defined by legal regulations. Medical devices are understood as instruments, apparatus, equipment, or software intended by the manufacturer for specific therapeutic or diagnostic purposes in humans. In the European Union, they must undergo a conformity assessment, particularly according to the MDR or IVDR regulations.

microFAQ – Legal tips on the definition of medical devices

1. How do I know if a product is a medical device?
The decisive factor is the intended purpose set by the manufacturer. A medical device is a product intended for the diagnosis, prevention, monitoring, treatment, or alleviation of a disease, injury, or disability, and it must bear the CE marking.

2. What are the risks of purchasing devices without proper certification?
Hospitals must not use medical devices that do not meet legal requirements, such as a missing CE mark. The use of such devices exposes the contracting authority to the risk of sanctions from the State Institute for Drug Control (SÚKL) and liability for potential damage to patient health.

3. What role does the CE certificate play?
The CE mark is a manufacturer's declaration that the product meets the requirements of the relevant European regulations and that a conformity assessment has taken place. Without a valid conformity assessment, the device must not be placed on the market.

Determining the estimated value of public contracts for medical equipment

One of the most common problems in the purchase of medical equipment is the incorrect determination of the estimated value of the public contract, as this determination dictates the entire regime of the procurement procedure. The estimated value is not the same as the final bid price, but rather the amount that the contracting authority estimates before the start of the procurement procedure.

Act No. 134/2016 Coll., on Public Procurement, sets the rules for determining the estimated value. For regular purchases (pharmaceuticals, consumables), the value is determined over 12 months, and it is necessary to aggregate all performances that form one functional unit (e.g., drugs with the same active substance).

Aggregation of multiple parts as one functional unit

In practice, healthcare facilities often face the problem of how to define the estimated value in situations where a purchase contains multiple items. According to Czech law, the sum of the values of the parts of a public contract must include all performances that form one functional unit and are awarded in temporal connection.

Distinguishing between construction works and equipment supplies can be problematic. If a device is merely placed freely in a room, it is a supply; however, if the technology is firmly built-in, the main subject of the contract must be assessed. The contracting authority must clearly define the scope of the supply and related works in the tender documentation.

Exemption for separate parts of a contract

The law allows for certain flexibility when awarding parts of above-threshold or below-threshold public contracts. A contracting authority may award an individual part of a public contract using a procedure corresponding to the estimated value of that part, provided that the total value of the parts awarded in this way does not exceed 20% of the aggregate value.

This rule allows Czech healthcare facilities to separate smaller purchases from a large whole and implement them in a simpler manner, provided they stay within the set limit. However, it is necessary to monitor this procedure carefully to ensure the legal threshold is not exceeded.

microFAQ – Legal tips for determining the estimated value

1. How is the estimated value determined for repeated purchases?
For supplies and services that are repeated, the estimated value is determined either as the actual price for the preceding 12 months or as the sum of the estimated values for the following 12 months.

2. Can I split the purchase of equipment into smaller contracts to avoid legal limits?
No, if the performance forms a single functional unit and the contracts are awarded in temporal proximity, this constitutes illegal splitting of a public contract under Czech law. Such a procedure is one of the most frequently penalized offenses.

3. What are the current limits for small-scale public contracts in the Czech Republic?
As of July 16, 2023, the limit is CZK 3,000,000 excluding VAT for supplies and services, and CZK 9,000,000 excluding VAT for construction works. Below these limits, it is possible to proceed outside the formal procurement regime while adhering to basic legal principles.

Most Common Errors and Violations of the Czech Public Procurement Act (ZZVZ)

Cases from the practice of the Office for the Protection of Competition (ÚOHS) show that the most frequent errors consist of the unauthorized use of exemptions and incorrect aggregation. For pharmaceuticals, products with the same active substance are generally considered performance of the same kind, and their values must be aggregated.

Unauthorized Changes to Contractual Obligations

A common violation is making unauthorized changes to contractual obligations through amendments. The ÚOHS strictly monitors Section 222 of the ZZVZ, whereby a substantial change to an obligation that was not reserved in the procurement documentation is prohibited.

In practice, purchasing additional accessories for a device via an amendment is risky if it causes the limits to be exceeded. Such a change could be assessed as inadmissible if it would have allowed the participation of other suppliers in the original tender process.

Incorrect Definition of Procurement Conditions

The basic rule states that conditions must not unreasonably restrict competition. In healthcare procurement, the interest in the widest possible competition clashes with the need to ensure a specific quality of care; therefore, strict technical conditions must be objectively justified by medical needs under Czech legislation.

It is not permissible to copy the technical specifications of one specific device if comparable solutions exist on the market. If a contracting authority requires a specific parameter offered by only one manufacturer, they must be able to demonstrate why this parameter is essential for patient treatment.

Failure to Implement Competitive Procedures for Pharmaceutical Purchases

Pharmaceuticals are standard supplies, and arguments regarding medical uniqueness will not hold if generics or biosimilars are available. Contracting authorities should utilize modern tools such as Dynamic Purchasing Systems (DPS) or Framework Agreements, which allow for flexible purchasing while maintaining competition. Our specialized public procurement team can assist you with setting up these processes.

Who can you contact?

Mgr. MUDr. Veronika Králíková

Consultant

• kralikova@arws.cz

Mgr. Dita Zbožínková, LL.M.

associate

• zbozinkova@arws.cz

microFAQ – Legal Tips for Purchasing Pharmaceuticals in the Czech Republic

1. Can I buy pharmaceuticals without a tender directly from the manufacturer?
Only if the conditions for a Negotiated Procedure without Prior Publication are met—for example, if only one supplier exists for technical reasons and no alternative is available. This must be assessed very strictly for pharmaceuticals under Czech law.

2. What is the advantage of a Dynamic Purchasing System (DPS)?
A Dynamic Purchasing System is fully electronic, flexible, and does not limit the number of suppliers. It reduces administration for repeated purchases and allows for a quick response to market price changes.

3. Do I have to tender for biosimilar drugs?
Yes, if multiple products exist on the market, competition must be enabled. Specifying a particular brand name without allowing an equivalent is generally considered discriminatory.

Healthcare Facilities as Public Contracting Authorities

Healthcare facilities in the Czech Republic are usually public contracting authorities or subsidized contracting authorities. They must publish contracts in the Register of Contracts and information about tenders on the Contracting Authority Profile, with an obligation to archive procurement documentation for 10 years.

The Equipment Commission

A specific feature for organizations directly managed by the Czech Ministry of Health and for purchases covered by public health insurance is the role of the Equipment Commission (Přístrojová komise). Its purpose is to assess the efficiency and effectiveness of purchasing expensive medical equipment, and its approval is often a prerequisite for the allocation of funds.

Funding of Purchases and Subsidies

When purchasing through subsidy programs, specific rules for applicants and subsidy recipients apply in addition to statutory laws. These can be stricter than the law itself, and their violation may result not only in a fine from the ÚOHS but also in the reduction or withdrawal of the subsidy.

New IPI Legal Framework

Regulation (EU) 2022/1031 of the European Parliament and of the Council on the International Procurement Instrument (IPI) now impacts the Czech legal environment. The goal is to ensure reciprocity in market access for EU suppliers in third countries.

IPI measures may apply to public contracts with a high estimated value. If the European Commission adopts measures against a specific third country, contracting authorities will have to restrict access for suppliers from that country to tenders, which may be relevant for large technology purchases.

Risk Table – Public Procurement for Medical Equipment and Services

Executive Summary for Management

The purchase of medical equipment and services requires a comprehensive understanding of the Czech legal framework. From the perspective of healthcare facility management, the following points are essential for the decision-making process:

• Estimated value and aggregation: Correctly summing up the values of all related performances is fundamental under Czech law. An error here leads to choosing the wrong type of procurement procedure and the potential invalidity of contracts.
• Prohibition of contract splitting: It is not permissible to intentionally divide a purchase into small parts to facilitate a "direct" purchase under Czech public procurement rules.
• Justification of specifications: Requirements for medical equipment must be based on medical needs, not on the supplier's marketing materials.
• Contracts and maintenance: Service conditions should be part of the equipment purchase to ensure the contracting authority does not become dependent on expensive maintenance from a single supplier.
• Beware of contract amendments: Any amendment to a contract must be tested for admissibility according to the Czech Public Procurement Act.

Our Prague-based attorneys at ARROWS law firm regularly handle these matters and can provide healthcare facilities with specific legal advice to minimize the risk of errors and sanctions.

Conclusion

Public procurement of medical equipment and services in the Czech Republic is a complex discipline requiring knowledge of the Czech Public Procurement Act (ZZVZ), the Act on Medical Devices, and the decision-making practice of the Office for the Protection of Competition (ÚOHS). Healthcare facilities must balance the need for top-tier equipment with strict competition rules.

The Czech legal team at ARROWS law firm has extensive experience in public procurement within the healthcare sector and provides comprehensive services including the preparation of tender procedures, documentation review, handling objections, and representation before the ÚOHS. For more information, please visit our service page for Medical Law and Pharmacy.

Given that our portfolio includes numerous clients from the healthcare sector, we are very well acquainted with the practical challenges in this field. ARROWS law firm in Prague is ready to listen to your specific questions and provide a tailored solution. Do not hesitate to contact us at office@arws.cz.

FAQ – Frequently Asked Legal Questions Regarding Public Procurement in the Czech Healthcare Sector

1. What is the difference between the estimated value and the final contract price?
The estimated value is a professional estimate by the contracting authority before the tender begins, which determines the legal regime under Czech law. The final contract price is the amount actually paid after the competition.

2. Can I purchase equipment "directly" if I am in a hurry?
Only in cases of extreme urgency that the contracting authority did not cause and could not have foreseen. Poor planning is not a valid reason for this procedure under Czech legislation.

3. What if I need to purchase additional accessories that were not in the original contract?
If these are necessary additional deliveries from the original supplier and a change would cause significant difficulties, the rules for modifying a commitment under Section 222 of the Czech Public Procurement Act (ZZVZ) can be used, provided financial limits (usually up to 50% of the value) and substantive conditions are met. For negotiated procedures without prior publication (JŘBU) for new services, there is a 3-year limit, but for equipment deliveries, technical compatibility and necessity are key.

4. What are the limits for small-scale public contracts (VZMR) in the Czech Republic?
Currently, the limits are CZK 3 million excluding VAT for supplies and services, and CZK 9 million excluding VAT for construction works.

5. Are there exceptions for the purchase of research equipment?
Yes, the Czech Public Procurement Act contains an exception for the purchase of products for research and development purposes, but only if they are not intended to generate profit and the costs are not fully covered by the contracting authority. Standard purchases of equipment for research facilities usually must be tendered.

Disclaimer: The information contained in this article is for general informative purposes only and serves as a basic orientation on the subject. Although we ensure maximum accuracy of the content, legal regulations and their interpretation evolve over time. To verify the current wording of Czech regulations and their application to your specific situation, it is essential to contact ARROWS law firm directly (office@arws.cz). We bear no responsibility for any damages or complications arising from the independent use of information from this article without our prior individual legal consultation and professional assessment. Every case requires a tailored solution; therefore, do not hesitate to contact us.

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