Law On Public Procurement Amended

On 16 July 2009, the Latvian Parliament (Saeima) passed a large number of amendments to the Law on Public Procurement, extending the scope of the exemptions when the law is not applicable, as well as changing various details concerning the tender procedures and their application. The amendments entered in force on 13 August 2009.

The amendments to the Public Procurement Law have introduced a new specific exemption for the loans from the international financial organizations in which Latvia is a member state, as well as simplified the exemption conditions for the procurement of goods and services from the entities that are fully controlled by the tenderer. A surprising new exemption has been made in respect of contracts whose value is below LVL 70,000 (approx. EUR 100,000) – thus, according to the new amendments, the Public Procurement Law will not apply to procurement of goods and services by credit institutions for their own needs if the contract value is below LVL 70,000. The amendment is surprising since the credit institution per se is not among the subjects subject to the public procurement obligation under the Public Procurement law.

The former state interests and public security exemption has been revised and split into two new exemptions allowing the Cabinet of Ministers (the Government) very broad latitude in determination of which of the government contracts could be excluded from the public procurement obligation. Thus, pursuant to the new amendments, the Public Procurement Law will not be applicable to any contracts information in respect of which or whose performance has been declared by the Cabinet of Ministers (the Government) as a state secret. The concept of a "state secret" is governed by a special Law on State Secret, according to which state secret means all information determined as such by the Cabinet of Ministers based on the criteria specified in the law. As such it excludes particularly secret information, secret information, as well as all other information declared as confidential. In addition the Law will not apply also if its application could cause...