Government Contracts 2016: Discussion

Have there been any significant legislative developments in your jurisdiction and, if so, how have these developments affected the focus of your practice?

Hans-Joachim Prieß: Germany has just implemented the 2014 EU public procurement directives, and this is considered the largest reform in public procurement law since 2004. I have been involved in the legislative process in many different ways, advising the German government as part of the German expert group on the reform of public procurement law but also advising clients and holding seminars on the impact of the reform. As the legislation is more complex, and there are quite a few completely new legal rules, the reform will certainly lead to an increased demand for legal advice.

Anna Ulfsdotter Forssell: Sweden has not yet implemented the 2014 directives on public procurement, utilities and concessions. According to information from the legislator the new directives will be implemented on 1 January 2017. A bill is expected to be presented in June 2016.

Sweden is always very active on the “procurement market”. The Supreme Court and the Supreme Administrative Court have ruled in several very interesting court cases during 2016 and the Administrative Courts of Appeal (four of them) are active as well. The total amount of applications for review have decreased but still Sweden has about 3,000 applications for review per year in the administrative courts (12 courts).

The new directives will probably lead to more court cases if no changes are made to the right of suppliers to apply for review. This has been mentioned by the procurement minister. The changes might be application fees and a spread of costs, depending on who is winning the case.

Would you agree that the energy sector, with a particular emphasis on renewables, is driving the market at the moment? Has this become a prominent part of your own practice?

Hans-Joachim Prieß: This is correct. In Germany large construction projects have been started, for example, concerning wind parks and the electric power lines connecting northern and southern Germany. The projects in this area are particularly complex – not only because of the technical challenges, but also complicated links with other legal areas such as energy law, the provisions on the Renewable Energy Sources Act (EEG) and energy taxes. Our firm has been involved in quite a few of these projects.

Anna Ulfsdotter Forssell: This has been the case during the last five to 10 years, but I would not say that these questions are driving the market at the moment. Questions driving the market right now are more related to obligations in the fields of social and labour law.

Litigation seems to be an ever-present focus of a practitioner’s public procurement practice in the current market. How has this affected the advice you give to clients?

Hans-Joachim Prieß: Litigation has always been an integral part of my practice and clients who are bidders are becoming less and less reluctant to litigate against contracting authorities. On the other hand, being aware of this, contracting authorities have an increased “incentive” to be compliant! When advising contracting authorities, a large part of our advice concentrates on mitigating the risk of bid challenges.

Anna Ulfsdotter Forssell: The Swedish procurement litigation market is very active. Sweden has about 3,000 applications for review cases per year. The amount of damages cases is not known but I estimate there to be only around 50 a year. For the time being an application for review can be made without any application fees and each party bears its own costs. The minister of procurement has expressed that this will be changed in the future, with the aim of reducing the amount of court cases.

According to several respondents, a growing number of public procurement boutiques have begun appearing in the market. Would you agree with this statement? Has this development affected your practice in any way?

Hans-Joachim Prieß: I could not agree more! My former team has left Freshfields to set up their own boutique law firm in Berlin, called BLOMSTEIN. After I left Freshfields in April 2016, I started working there as of counsel. The clients’ responses are great!

Anna Ulfsdotter Forssell: This is not a new trend. We have seen smaller boutique firms established on the market over the past 10 to 15 years. Actually, all larger firms started one day in the past as smaller boutique firms. The establishment does not affect us, the competition on the market is permanent. I have seen more cross-border procurement cases/matters. These are always the most interesting ones and it is a pleasure working on them.