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Public Procurement Law

The parliament of Latvia recently passed its new Public Procurement Law 2006.

The Law relates to procurements made by state or municipal institutions, and to companies fully or partly (more than 50%) owned or financed by such institutions. The public procurement procedure is the procedure by which the contracting authority selects the tenderer and assigns it with the rights to enter into public construction, supply or service contracts. The scope of public supply contracts includes purchase and lease contracts.

The Law allows the contracting authority to assign contracts without following the procurement procedure in certain areas, for example, research, purchase of immovable property, contracts for maintaining public electricity networks, and supplies of certain military goods. Other laws govern these contracts.

The Public Procurement Law provides thresholds upon which the procurement procedure does not apply. The procedure is only for procurements with an expected price of Lats10,000 ($18,348 ) or more.

On tenders from Lats1,000 to Lats10,000 the only requirement is that the relevant information is published on the home page of the contracting authority or in a local newspaper.

A private individual or company that finances supplies, purchases and works from their own resources, if those resources are co-financed by state budget or public funds (for example, EU structural funds), is considered a contracting authority and must follow procurement procedures. For example, they must organize the procurement procedures prescribed by law for: (i) construction works, if they are financed by more than 50% directly from own resources and if the expected price of works is equal to Lats3.5 million or more; and (ii) for supplies related to construction, if the expected price is Lats141,953 or more.

The law provides for several types of procedure: open competition, restricted competition, negotiated procedure, price quotation and design tender (design tender relates only to construction). The application of each type of procedure depends on the expected price of a contract and the type of contract (that is, construction, supply or service). For example, the price quotation procedure would be applied for all supplies above Lats10,000, services between Lats10,000 and Lats50,000, and construction works between Lats10,000 and Lats120,000. The main difference between the price quotation and competition procedures is that, in quotation, the sole criterion is the lowest price, but in competition other criteria are also assessed (such as experience and expected quality).

The call for tenders will be published on the homepage of Procurement Surveillance Authority in more cases than in the past. The information on price quotations will also be published – the contracting authority at least once a year will notify of expected contracts where the price quotation procedure may apply. A company wishing to participate in a tender and get a contract assignment should regularly check the Authority's homepage. The notification on planned tenders must include, along with the subject of the tender, where applicants can find the rules of the tender, and the term and place for submission of applications. The decisions of the contracting authority may be appealed to the Procurement Surveillance Authority.

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