Czech Ombudswoman: the fee of CZK 10.000 for the notification addressed to the Office for the Protection of Competition about the potentially unlawful public procurement procedure is unconstitutional

In 2016, the Office for the Protection of Competition (the antimonopoly authority, further referred also as “OPC”) proposed to introduce the fee of CZK 10.000 (EUR 390) for an application to initiate ex officio proceedings in respect of each challenged public contract. The OPC claimed that the possibility to notify the potential unlawfulness of the public procurement procedure in concrete cases was overused in the practice. As a result, the OPC was overloaded by applications which caused its ineffectiveness.

The proposed amendment of the Public Procurement Act was adopted by the Parliament. Section 259 of the Public Procurement Act thus introduced a fee of CZK 10.000 for mere addressing the notification to the OPC, i.e. information provided by the applicant to the administrative authority that something potentially unlawful or illegitimate is taking place within the area of its competence. The fee is rather high, reaching nearly the amount of net minimum wage, and is applied indiscriminately with no exemptions or possibility of waiver. The citizens are thus paying an administrative authority funded from the public budget for helping it carry out its duties. The law does not even allow for a refund of the fee if the application is found substantiated, i.e. not even in the case where the citizen pointed out a demonstrably unlawful procedure on the part of the contracting authority.

The introduction of the fee led to a significant decrease (93.5%) in the number of resolved applications (i.e. applications where the fee was paid and the Office subsequently inquired into the matter) from 2016 and 2017. The number of notifications filed by non-profit organizations fell to single digits. The above mentioned fee thus aims to significantly reduce public control exercised by citizens and non-profit organizations and results in a decreased transparency of public contracts.

The Ombudswoman believes that the current legal rules contradict the principle of officiality, which means the OPC (like other supervisory bodies) is obliged to initiate proceedings when a circumstance anticipated by the law arises, regardless of how it learns about it. Indeed, the duty of the Office is not only to decide on specific disputes within proceedings initiated on application, but also to oversee the procurement environment as a whole (with the exception of small-scale contracts).

“The situation in which the person who decides to use the right to turn on the Office and to provide it with information the Office needs to carry out its duties is obliged to pay almost the equivalent of the minimum wage I consider as immoral and unconstitutional,” stated the Ombudswoman Anna Šabatová in relation to the fee. Moreover, the fee of CZK 10.000 the OPC requests to be paid also by other public authorities which have the obligation prescribed by law to submit the information about the findings following from their control activities to the OPC. The OPC therefore does not deal even with such findings without the fee being paid by the submitting public authority. 

Using her legal powers, the Ombudswoman Anna Šabatová tried to persuade the Czech Government to propose an amendment of the Public Procurement Act repealing the fee. As the attempt was not successful, the Ombudswoman decided to join the proceedings currently pending before the Constitutional Court on abolishing Section 259 of the Public Procurement Act. The proceedings was initiated by the senate of the Constitutional Court dealing with an individual constitutional complaint in which the issue in question was raised.

The opinion of the Ombudswoman was delivered to the Constitutional Court on 11 July 2019. The press release and the opinion are both accessible on: https://www.ochrance.cz/aktualne/tiskove-zpravy-2019/poplatek-za-podnet-k-uohs-brani-kontrole-verejnych-zakazek-ustavni-soud-by-ho-mel-zrusit/.