Procurement law: The lowest price should no longer be the sole deciding factor

On February 15, 2017, the Federal Council adopted the dispatch on the total revision of the Federal Law on Public Procurement (BöB). One of the main objectives of the revision is to harmonize the procurement regulations of the Confederation and the cantons. In parallel, the Federal Council also adopted the dispatch on the revised WTO Agreement on Government Procurement of 2012 (GPA). The new agreement improves transparency and market access and replaces the original agreement of 1994. At the end of January 2018, the National Council's Committee on Economic Affairs (WAK-N) made some groundbreaking decisions in its detailed deliberations, particularly with regard to awarding contracts according to the lowest price.

Paradigm shift in procurement law

So will there be a paradigm shift in procurement law, whereby the lowest price will no longer be the sole deciding factor? The Economic Committee of the National Council wants to include a plausibility check for dumping bids in the revised Federal Law on Public Procurement. This was decided unanimously during the above-mentioned detailed discussions on the revision of procurement law (BöB). In future, unusually low bids are to be scrutinized more closely. "Today is a good day for the procurement of intellectual services," cheers Heinz Marti, president of the association of consulting engineering companies usic and co-president of the Alliance for Progressive Public Procurement (AföB). "Now this paradigm shift must also be implemented in practice." Stefan Cadosch, president of the SIA and AföB co-president, is also delighted, according to a media release: "Politicians have finally recognized that intellectual services cannot be procured like standardized goods."

Bid plausibility as award criterion

The WAK-N announced on January 31 that it intends to submit a proposal to the National Council against dumping bids. By 29 votes to 0 with 2 abstentions, the commission decided to include the request of AföB, a federation of associations and organizations whose members provide intellectual services to public clients, for the introduction of a bid plausibility check in the award criteria. This is an important step in combating nonsensical price bids and improving the quality of bids. The Commission adopted by 16 votes to 6 with 2 abstentions another AföB concern, namely that unusually low bids should be subject to stricter review. The review requirement, which previously applied only to public sector bidders, is now to apply to all bids submitted. This will give the awarding authorities a powerful instrument to take action against purely low-price bids.

Real price-performance competition draws closer

Furthermore, the Commission has clarified the term "most economically advantageous offer" to mean the offer with the best price-performance ratio. The AföB has indeed demanded that the wording should be replaced by the "most advantageous offer". However, the clarification is in the spirit of the Alliance, which calls for genuine price-performance competition in procurement law instead of pure price competition.

More information and arguments: http://www.afoeb.ch/argumente/