What is a public bidding process?
1. Concept of public bidding
2. Types of tenders in Spain
3. Examples of tenders
4. Awarding of tenders in Spain
5. How to bid in Spain
01
What is a public bidding process and how does it work?
Based on the definition in our glossary, a public tender is understood as the administrative procedure for the acquisition of supplies, performance of services or execution of works (constructions) held by more than 10,000 Public Sector organizations in Spain.
Also called public tenders, their objective is to offer and secure the acquisition of goods and services by the State. Suppliers can be self-employed, SMEs or large companies as long as any of them meet the required conditions.
The process consists of the publication of a bidding process with the corresponding bidding terms and conditions by the entity interested in the contracting, which contain all the requirements so that the different bidders may submit a proposal in accordance with the bid. With all the proposals received, the contracting party will select and award the one it considers the best.
02
What are the types of bids?
In general terms, there are two types of tenders:
- Public bids: Contracting where a state entity makes a public call for bids so that, with equal opportunities, interested parties may submit their bids and the entity awards the contract to the most suitable proposal.Therefore, this type of bidding entails the obligation on the part of the public entity to use publicity and ensure the transparency of the process.
- Private bids: They involve a process similar to that of public tenders, but invitations are made expressly to a limited number of companies and not by public announcement. Some of the justifications for private bidding are:
- Cases of extreme urgency and/or an emergency. ◦ Need for confidentiality of the service.
- To award public bids that have remained deserted (without bidders).
On the other hand, the Public Sector Contracts Law (LCSP) of Spain defines 3 modalities of tenders divided in turn, in sub-modalities. In our note “Types of public procurement procedures” you can find all the details, but in summary the modalities are:
1. According to its purpose:
- Typical contracts: Referred to by the Law as all works contracts, works concessions, service concessions, service and supply contracts.
- Mixed contracts: Merger of several complementary or interrelated contracts of different types.
- Special administrative contracts: Their purpose is different from typical contracts, even though they directly satisfy a specific public purpose that is the responsibility of the Administration.
2. Depending on their legal regime under community law:
- Contracts subject to harmonized regulation (SARA): Subject to European guidelines depending on the contracting entity, type and amount (the latter are set every two years by the European Commission and are available in the LCSP). Their current amounts (April 2021) are:
a. In the case of works contracts, when their estimated value is equal to or greater than €5,350,000, VAT excluded.
b. Contracts for supplies and services, when their estimated value is equal to or greater than €214,000, VAT excluded.
Contracts NOT subject to harmonized regulation: They are not regulated by Community law, either due to their amount or purpose. They are also subject to comply with the conditions of the Treaty on the Functioning of the European Union. These conditions are: Freedom of movement, freedom of establishment, freedom to provide services and the principles derived from these freedoms such as equal treatment, non-discrimination, proportionality and transparency.
3. Depending on its legal regime of administrative law or private law:
- Administrative contracts: They are governed by the LCSP and its development provisions; they are also affected by administrative law rules and, failing that, by private law rules. The contentious-administrative jurisdictional order will be competent to resolve litigious issues.
- Private contracts: Book I and Book II of the LCSP apply to them; and as regards their effects and termination, the rules of private law will be applicable.
03
Examples of tenders
a. Example of mixed bidding:
Supply and execution of the following work: adaptation of public lighting in malkorbe and gaztetape, in accordance with the works project drafted by momarkitektura s.l. divided as follows: lot 1: supply of complete street lamps. lot 2: civil works.
- Type of contract: Mixed
- Date of publication: 27.12.21
- Type of document: Award CPV31527200-8 34928500-3
- Division into lots: Yes Number of bids: 2 Awarding entity:
- Getaria City Council Estimated amount: 124,544.91 EUR
- Awardee(s): LEYCOLAN
b. Example of works bidding:
Renovation of outdoor lighting installations by changing to LED technology in the urban area, phase ii, obejo.
- Type of Contract: Works
- Date of Publication: 27.12.21
- Type of Document: Tender CPV Codes: 45316100 45311000 45315600
- Deadline: 24.01.22
- Division into lots: No Awarding Entity: Diputación Delegada de Asistencia Económica a Mancomunidades y Municipios de la Diputación Provincial de Córdoba
- Estimated Amount: 205,065.73 EUR
c. Example of services bidding:
Fire protection maintenance services for municipal buildings and facilities.
- Type of Contract: Services
- Date of Publication: 27.12.21
- Type of Document: Tender
- CPV Codes: 50413200
- Deadline: 11.01.22
- Division into lots: No Awarding
- Entity: Ajuntament d’Amposta
- Estimated Amount: 10.452,25 EUR
d. Example of supply bidding:
Supply of software licenses, as well as the supply of hardware, necessary for the operation of the IT infrastructure of the association of municipalities of the western Costa del Sol.
- Type of Contract: Supply
- Date of Publication: 27.12.21
- Type of Document: Tender
- CPV Codes: 48710000 30210000 30233141 30237110 30237110 48310000 48620000 48760000 48781000
- Deadline: 11.01.22
- Division into lots: Yes
- Awarding Body: Presidency of the Mancomunidad de Municipios de la Costa del Sol
- Occidental Estimated Amount: 39.600 EUR
04
Awarding of tenders in Spain
In public procurement, an award is understood as the legal act in which a contract is awarded to a company or person, through an auction, competition or tender. By law, this process is the one that guarantees equal treatment, non-discrimination, transparency and the participation of the maximum possible number of bidders in a public tender.
In Spain there are the following types of awarding processes:.
1. Ordinary procedures:
a. Open procedure: Any large company, SME, self-employed or organization may submit a bid, as long as it complies with the requirements set forth in the bidding documents. There are also 2 modalities:
i. Ordinary simplified open: Contracts with an estimated value below the threshold established by the European Commission for contracts subject to harmonized regulation (SARA).
ii. Supersimplified open, simplified abbreviated or express open: Works contracts with an estimated value of less than 80,000 euros. In the case of supply and service contracts, the threshold is 60,000 euros.
b. Restricted procedure: Only companies that, at their request and based on their solvency, are selected by the contracting body, and any negotiation of the terms of the contract with the applicants or candidates is prohibited (Article 160 to 165 LCSP).
2. NON-ordinary procedures: Used in the cases provided for in the regulations:
a. Negotiated procedure: The award is made to the bidder chosen in a justified manner by the contracting entity. For this, the entity must first consult with several candidates and negotiate the contract conditions with them (articles 166 to 171 of the LCSP). Within this modality there are two alternatives:
i. Bidding with negotiation, in contracts for works, supplies, services, works concessions and service concessions when any of the situations contemplated in Article 167 of the LCSP occur.
ii. Negotiated procedure without advertising, only in the cases established in Article 168 of the LCSP, which refers to works, services or very specific or determined supplies.
b. Competitive dialogue procedure: the public entity establishes a dialogue with the selected candidates, at their request, in order to develop one or more solutions likely to meet their needs (articles 172 to 176 LCSP).
c. Partnership procedure: It is used in cases where it is necessary to carry out R&D activities in works, services and products, for their subsequent acquisition by the Administration, provided that they meet the performance and cost levels agreed between the Administration and the participants (articles 177 to 182 LCSP).
05
How to bid in Spain
To bid for a public tender in Spain, the first step is to make sure that the interested party or parties comply with the requirements of the tender (set out in the bidding documents) and, if they do comply, proceed with the preparation of the documentation to be submitted.
Currently in Spain, since 2018, the process of public tenders is tied to the Directive 2014/24/EU of the European Parliament and of the Council, published by the OJEU. This Directive in particular, contains key clarifications concerning the electronic processing of public tenders that had to be complied with by all EU states, by 2018.
On the other hand, it is important to know that currently tenders in Spain are published in the multiple electronic portals of public entities in the country, which is why we recommend you to licitaciones.es where they compile all this information daily to help you save time by sending you the tenders related to your sector directly to your email.
Multiply your business opportunities in the Public Sector
Whatever your sector, participation in public tenders can only offer you important business opportunities.