New Estonian Public Procurement Act – What’s the First Impression?

The Estonian parliament approved the new public procurement act on the 14th of June 2017. 

The timing of the enactment of this new law set it right before the summer solstice, which symbolically marks the start of the holiday season coming into full swing. The law was fixed to come into force on the 1st of September 2017, which in turn marks the end of the holiday season and start of the new school year. 

The timing of the new procurement act coming into force could have been better, taking into account that local authorities, infrastructure organisations and anyone whose procurement activities are at least partly governed by the new Public Procurement Act, would need to become fully familiar with the specifics of the new law that affects them, have sufficient time to train their personnel, and test the new requirements set out in the renewed ‘rule book’. The holiday season is surely not the best time for such resource demanding high significance activities. One can argue also that there should have been sufficient time, for the government, to take into account the potential new requirements, since the new Public Procurement Act had been discussed for a while and the new EU Utilities Directive came into force already some while back. Sufficient time to become familiar with any new law in order to adhere to it, is always necessary for those whom it is meant for. 

This timing in turn put all the professionals and legal advisors, who provide such training courses and consulting, under an immense pressure to become fully familiar with the new law, compile their material for the training courses, having to do all this in sufficient time so that the people who require training can be taught prior to the 1^st of September 2017 or shortly after this date. 

It is not hard to imagine the confusion, lack of advice and clarity that September brought to many people having to apply the new rules in practice. For larger organisations who have specialist knowledge and skills with procurement and legal proficiency the situation, although challenging, is manageable. For smaller organisations and local government institutions the challenge is very real and the risk of unwillingly defaulting on certain specifics of the new law is relatively high, considering the amount of regulation in the legislation and the complexity of it. 

Over the coming months especially, there will be a lot of learning and interpretation of the new Estonian Public Procurement Act being undertaken by procurement professionals in Estonia, while at the same time many organisations are ramping up their procurement activities to fill their annual plans toward the year end. So, there will certainly be a fair amount of additional pressure put upon all procurement professionals, to say the least. 

Hence, from Procurement Experts, we wish all procurement professionals good fortitude and patience over this difficult period and surely there is light at the end of the tunnel. 

As for the new Public Procurement Act itself, as well as the EU procurement directives it is largely based on, there does not appear to be much improvement in the bureaucracy when dealing with public or utilities procurement requirements, but rather a very similar amount of somewhat different bureaucracy. In other words, the length of the red tape didn’t change much, the colour simply got brighter. For example, some reporting requirements in the previous Estonian Public Procurement Act have been simplified, however, on the counter balance there are additional requirements, such as the need to assess thoroughly the tenderers’ proposed sub-contractors, clarify tenderer’s wages to their employees in relation with the market average salary etc., all of which add complications and unknowns to a procurement process, which should otherwise be a business driven process, rather than deriving from law, regulation and bureaucracy. It is, of course, reasonable to have regulations in place for the spending of public money, but it is doubtful whether overregulation will solve all problems in that compartment. 

All this said, however, the law is the law and it must be adhered to. Whilst the EU directives and the Estonian Public Procurement Act are far from perfect, they must be followed. 

Time will tell how the professionals are able to adjust, how the businesses tune into the renewed process and what the newly forming claims and legal challenges will bring to the table. Without doubt, there will be some change to the new law in the medium term, once initial difficulties and claims have highlighted the most prominent aspects to be tackled.