ARTICLE
29 February 2024

Public Procurement Comparative Guide

Public Procurement Comparative Guide for the jurisdiction of Malta, check out our comparative guides section to compare across multiple countries.
Malta Government, Public Sector
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1. Legislative framework

1.1 What legislative and regulatory provisions govern public procurement in your jurisdiction?

As a member of the European Union, Malta has a public procurement regime which is based in large part on EU directives, such as:

  • the Public Sector Directive (2014/24);
  • the Utilities Directive (2014/25);
  • the Concessions Directive (2014/23);
  • the Remedies Directive (1989/665, as subsequently amended); and
  • the Utilities Remedies Directive (1992/13, as subsequently amended).

These directives have been transposed into Maltese law by the following legal notices promulgated under the Public Finance Management Act (Chapter 601 of the Laws of Malta):

  • the Public Procurement Regulations (Subsidiary Legislation 601.03);
  • the Public Procurement of Entities Operating in the Water, Energy, Transport and Postal Services Sectors Regulations (Subsidiary Legislation 601.05);
  • the Public Procurement of Contracting Authorities or Entities in the Fields of Defence and Security Regulations (Subsidiary Legislation 601.07);
  • the Concession Contracts Regulations (Subsidiary Legislation 601.09); and
  • the Electronic Invoicing in Public Procurement Regulations (Subsidiary Legislation 601.10).

These legal notices are further complemented by:

  • the Emergency Procurement Regulations (Subsidiary Legislation 601.08); and
  • the Procurement of Property Regulations (Subsidiary Legislation 601.12).

The Department of Contracts publishes:

  • numerous documents which can be considered as 'soft law' documents, including:
    • the General Rules Governing Tenders; and
    • the General Rules Governing Dynamic Purchasing; and
  • circulars and procurement notes of both general and particular applications.

1.2 Do any special regimes apply in specific sectors (eg, utilities, defence)?

Specific regulations apply to:

  • the utilities sector;
  • the defence and security sector; and
  • public concession contracts.

The Procurement (Energy and Fuels) Appeals Board Regulations (Subsidiary Legislation 497.06) and the Procurement (Health Service Concessions) Review Board Regulations (Subsidiary Legislation 497.13) allow for the possibility of remedies in certain specified procurement processes to be sought from boards established in terms of the respective subsidiary legislation.

1.3 Which bilateral or multilateral instruments or treaties with effect in your jurisdiction (if any) have relevance for public procurement?

Malta is a member of the European Union and is therefore bound by the Treaty on the Functioning of the European Union (TFEU), as well as secondary legislation promulgated in terms of the TFEU.

As a member of the European Union, Malta is bound by the terms of the World Trade Organization Agreement on Government Procurement.

2. Scope of application

2.1 What kinds of entities fall within the scope of the public procurement rules in your jurisdiction? Do any exemptions apply?

The Procurement of Property Regulations, the Public Procurement Regulations and the Concession Contracts Regulations apply to 'contracting authorities', which are defined as:

  • state, regional or local authorities;
  • bodies governed by public law; and
  • associations formed by one or several of such authorities or bodies governed by public law.

Both the Public Procurement Regulations and the Concession Contracts Regulations contain a non-exhaustive list of contracting authorities.

The Public Procurement of Entities Operating in the Water, Energy, Transport and Postal Services Sectors Regulations apply mainly to procurement by contracting entities – that is, entities that are:

  • either contracting authorities or public undertakings; and
  • active in one of the specified utility activities.

The Public Procurement of Entities Operating in the Water, Energy, Transport and Postal Services Sectors Regulations also apply to entities that:

  • exercise one of the specified activities; and
  • operate based on a special or exclusive right.

The Emergency Procurement Regulations apply only to government entities listed in the schedule – currently:

  • the Central Procurement Supplies Unit; and
  • the Civil Protection Department.

The Public Procurement of Contracting Authorities or Entities in the Fields of Defence and Security Regulations apply to both contracting authorities and contracting entities, as defined above.

Exemptions mirror those which are contained in EU directives, such as the in-house exemption.

2.2 What kinds of contracts fall within the scope of the public procurement rules in your jurisdiction? Do any exemptions apply?

The Public Procurement Regulations and the Concession Contracts Regulations regulate written contracts for a pecuniary interest which are concluded between:

  • one or more economic operators; and
  • one or more contracting authorities.

The Public Procurement Regulations categorise contracts into:

  • public supply contracts;
  • public service contracts; and
  • public works contracts.

The Concession Contracts Regulations categorise contracts into contracts where the economic operator is engaged for:

  • the execution of works (referred to as a 'works concession');
  • the provision of services (referred to as a 'services concession'); or
  • a mixture of both.

In the case of contracts regulated by the Concession Contracts Regulations, the consideration due to the concessionaire must be either:

  • the right to exploit the works or services; or
  • such a right together with payment.

The Public Procurement of Entities Operating in the Water, Energy, Transport and Postal Services Sectors Regulations are applicable to supply, works and services contracts as defined in the regulations.

The Public Procurement of Contracting Authorities or Entities in the Fields of Defence and Security Regulations regulate the award of contracts that relate to:

  • the supply of military or sensitive equipment;
  • works and services related to that equipment; or
  • works and services which are intended for specific military purposes.

In general, exemptions reflect those which are contained in EU directives.

The Procurement of Property Regulations apply to contracts where a contracting authority intends to acquire immovable property, by whatever title.

2.3 What financial thresholds must be met for specific contracts to fall within the scope of the public procurement rules in your jurisdiction? Do any exemptions apply?

The application of the various rules depends on the value of the contract to be awarded.

The Public Procurement Regulations set a threshold of €140,000:

  • If the value of the contract is below this threshold, the procurement process is to be administered by the contracting authority directly.
  • If the value exceeds that threshold, the procurement process is administered by the director of the Department of Contracts on behalf of the contracting authority. However, the procurement process will still be managed by the contracting authority without the involvement of the director of the Department of Contracts if:
    • the value of the contract is less than €750,000; and
    • the authority is listed in Schedule 16 of the Public Procurement Regulations.
  • In general terms, processes leading to the award of contracts of a value of less than €10,000 are subject to simplified rules.

The Public Procurement of Entities Operating in the Water, Energy, Transport and Postal Services Sectors Regulations adopt a similar approach; the difference is that a higher threshold of €431,000 is established by those regulations.

The Public Procurement of Contracting Authorities or Entities in the Fields of Defence and Security Regulations apply in full to:

  • service and supply contracts which have a value of €134,000 or more; and
  • works contracts with a value of €5,186,000 or more.

Less stringent rules apply to contracts of a lower value.

The Concession Contracts Regulations apply in full to works and service concessions which have a value in excess of €5,382,000. Concessions lower in value are not subject to all of the rules contained in the Concession Contracts Regulations.

The Procurement of Property Regulations set a threshold of €500,000:

  • Processes which will lead to the award of a contract above this value are to be administered by the director of the Department of Contracts; and
  • All others are to be administered by the contracting authority directly.

Lastly, the Emergency Procurement Regulations apply to contracting authorities within scope that wish to procure supplies, services or works with a value below €135,000.

All amounts are exclusive of value added tax.

2.4 Do any rules apply in regard to contracts which fall below the relevant financial thresholds?

In general, the rules apply only in part to contracts which fall below the various financial thresholds.

2.5 Do any special rules apply to certain types of agreements (eg, concession contracts, framework agreements)?

The Maltese provisions on framework agreements reflect those contained in EU directives. The rules regulate:

  • the duration of such agreements; and
  • the minimum number of participants in the process.

The rules on concession contracts reflect those contained in the relevant EU directives.

2.6 Do any special rules apply where the supplier is a foreign entity?

Suppliers from jurisdictions in the European Union or the European Economic Area have the right to participate in procurement processes without discrimination.

As the European Union is a party to the World Trade Organization Agreement on Government Procurement (GPA), suppliers established in a third country that has signed and ratified the GPA are also permitted to participate in certain tender processes.

2.7 Do any anti-avoidance rules apply in your jurisdiction?

There are rules which are intended to prevent the artificial splitting of contracts into various separate contracts to avoid the application, or the full application, of legislation.

3. Preliminary stages

3.1 What initial engagement with the market will a procuring entity typically undertake in advance of launching a tender procedure? What rules and requirements apply in this regard?

The Public Procurement Regulations and the Public Procurement of Entities Operating in the Water, Energy, Transport and Postal Services Sectors Regulations contain explicit provisions allowing procuring entities to issue preliminary market consultations which are aimed at assisting the procuring entity in:

  • preparing the procurement; and
  • informing economic operators of the procurement plans and requirements.

Procuring entities can seek or accept advice from independent experts or authorities or from market participants. That advice may be used in the planning and conduct of the procurement procedure, but always subject to the condition that such advice:

  • does not have the effect of distorting competition; and
  • does not result in a violation of the principles of non-discrimination and transparency.

Preliminary market consultations do not occur as a rule and are typically used in cases where procuring entities wish to procure complicated technical services or products.

3.2 How are invitations to participate in a tender made public in your jurisdiction?

Notices of calls are published on the government procurement website (e-PPS); and when certain thresholds are exceeded, they are also published on Tenders Electronic Daily, the EU platform for tender notice publication.

3.3 What criteria determine eligibility to participate in a tender? Do any exemptions apply?

In general, bidders are not permitted to participate in a tender if:

  • they have been blacklisted; or
  • they are subject to any specified exclusion criteria, which include:
    • a conviction for a defined class of criminal offences (participation in a criminal organisation, corruption, terrorism, fraud, money laundering or terrorist financing, and human trafficking);
    • non-compliance with certain obligations related to the payment of taxes or social security contributions;
    • insolvency; or
    • the existence of a conflict of interest.

Procurement processes also establish:

  • selection criteria, which are aimed at assessing a bidder's:
    • suitability;
    • economic and financial standing; and
    • professional and technical ability; and
  • award criteria, for the assessment of bids

3.4 Can the number of potential participants in a tender be restricted in your jurisdiction?

Certain procurement processes allow for the number of participants to be restricted. For instance:

  • the Public Procurement Regulations allow a restricted process to be run where the number of participants can be restricted to not less than five; and
  • participants can be restricted to not less than three in:
    • the competitive procedure with negotiation;
    • the competitive dialogue procedure; and
    • the invocation partnership.

The Public Procurement of Entities Operating in the Water, Energy, Transport and Postal Services Sectors Regulations also allow the limitation of participants in certain types of tendering processes.

3.5 Do any special incentives apply to promote the participation of small and medium-sized enterprises in tenders in your jurisdiction?

Not as such; although several legal provisions have the effect of facilitating the participation of small and medium-sized enterprises. These include:

  • a prohibition on contracting authorities from requiring a bid bond from economic operators participating in tenders which are below a certain value; and
  • provisions which seek to promote the division of tenders into lots to enable the participation of small and medium-sized enterprises.

3.6 What rules and requirements apply in regard to the formulation of technical specifications used as part of a tender procedure?

In general terms, contracting authorities must craft technical specifications that:

  • afford economic operators equal access to the procurement procedure at issue; and
  • do not have the effect of creating unjustified obstacles to the opening up of public procurement to competition.

Contracting authorities must ensure that technical specifications set forth in the procurement documents refer:

  • to EU standards; or
  • in the absence of such standards, to national standards that reflect EU law.

Where specific standards are referred to, contracting authorities must expressly permit equivalent standards with a view to avoiding restrictions on competition. References to specific companies or particular processes are not permitted unless justified by the subject matter of the contract.

3.7 Are prospective tenderers which have assisted in the preparation of the tender restricted from participating in the tender procedure? If they are, what requirements are there on procuring entities to manage this?

In general terms, tenderers that have assisted in the preparation of a tender document may not subsequently participate in the call. Contracting authorities must not award a contract to a tenderer which has not been involved in the call, unless less intrusive measures can address the matter adequately.

4. Governing principles

4.1 What key principles govern public procurement in your jurisdiction?

The key principles underlying public procurement in Malta are based on the wording and spirit of EU directives. They include requirements that contracting authorities:

  • treat bidders equally and without discrimination; and
  • act transparently and in a proportionate manner.

The safeguarding of effective competition is also a key objective which should inform the drafting of procurement documents and the entire procurement process.

4.2 What requirements and restrictions apply with regard to the impartiality and independence of the procuring entity, including conflicts of interest?

Contracting authorities must act with impartiality and independence in order to ensure that they comply with the principle of equal treatment.

'Conflicts of interest' are defined by legislation as any situation in which any person that is involved in the conduct of the procurement procedure or that may influence the outcome of that procedure has, directly or indirectly, a financial, economic or other personal interest which might be perceived to compromise that person's impartiality and independence in the context of the procurement procedure. Contracting authorities must take appropriate measures to prevent, identify and remedy conflicts of interest.

5. Procedures

5.1 What different types of tender procedures are available in your jurisdiction? What are the advantages and disadvantages of each?

The Public Procurement Regulations regulate several different procurement procedures:

  • Open procedure: In this procedure, any interested party may submit a bid.
  • Restricted procedure: In this procedure, a pre-qualification stage is adopted and only pre-qualified candidates are permitted to submit a bid.
  • Competitive procedure with negotiation: This procedure requires the prior approval of the director of the Department of Contracts and can only be used in certain limited circumstances, such as where:
    • the needs of the authority cannot be met through readily available solutions;
    • the technical specifications cannot be defined precisely; or
    • after an open or restricted procedure has been held, only irregular or unacceptable bids were submitted.
  • Competitive dialogue: This procedure may be used, with the approval of the director of the Department of Contracts, in the case of particularly complex contracts. It entails a process by which:
    • economic operators may request to participate in the process;
    • the contracting authority carries out a dialogue with economic operators with the aim of developing solutions that are suited to its requirements; and
    • participants are then invited to submit bids on that basis.
  • Innovation partnership: This procedure requires the approval of the director of the Department of Contracts and may be used when the needs of the procuring entity cannot be met by purchasing products, services or works which are already available on the market.
  • Design contests: This procedure takes the form of a context as part of a procedure which leads to the award of a public service contract and contests with prizes and payments to participants.

The Public Procurement of Entities Operating in the Water, Energy, Transport and Postal Services Sectors Regulations and the Public Procurement of Contracting Authorities or Entities in the Fields of Defence and Security Regulations allow for the award of contracts through:

  • restricted procedures;
  • negotiated procedures with or without a prior call; and
  • competitive dialogue.

The open procedure and design contests can also be used under the Public Procurement of Entities Operating in the Water, Energy, Transport and Postal Services Sectors Regulations.

Each process has its own advantages and disadvantages, and, broadly speaking, each process entails a trade-off between:

  • encouraging as much participation in the call as possible;
  • ensuring that only quality bids are received; and
  • facilitating the task to be performed by the persons charged with evaluating the submitted bids.

5.2 What rules and requirements apply with regard to the direct award of contracts, without a tender procedure?

A contract may be awarded without a tender procedure only in very limited circumstances. This procedure, known as a 'negotiated procedure without publication', may be utilised only in a list of defined circumstances reflecting the provisions of EU directives. These grounds allow the direct award of contracts to be interpreted restrictively and include situations where:

  • no tenders or suitable tenders, or no requests to participate, have been received; or
  • a direct award is strictly necessary due to reasons of extreme urgency caused by unforeseen circumstances not brought about by the contracting authority.

5.3 What rules and requirements apply to the choice of tender procedure? What other factors play a role in this regard?

As a general rule, contracting authorities in Malta make use of the open or restricted procedure. Other procedures can be used only:

  • if the circumstances justifying their use apply; and
  • where applicable, the director of the Department of Contracts has granted prior consent.

5.4 How do the different types of tender procedures typically unfold? What are the typical timeframes for each?

The general principle is that all time limits set by contracting authorities must be set taking into account:

  • the complexity of the contract at issue; and
  • the time required to draw up the procurement documents.

That said, each procurement process has a minimum timeframe during which the call must be open; this is established by law but it may be shortened in urgent cases. Typically – but not always – calls are open for the minimum duration established by law; although in complex or large contracts, contracting authorities can establish longer periods for calls to remain open.

Once a call has been published, most tender processes allow for prospective bidders to submit requests for clarifications; and some also establish viva voce clarification sessions and site visits.

5.5 What rules and requirements apply with regard to contract award criteria?

In general terms, contracting authorities should base the award of public contracts on the most economically advantageous tender. In practice, contracting authorities award tenders to either:

  • the cheapest compliant bidder; or
  • the bidder which has the most cost-effective bid, in which case the price along with other criteria (qualitative, environmental and/or social aspects) will be taken into account.

The procurement document drafted by the contracting authority will indicate:

  • which basis is being used; and
  • if applicable:
    • which criteria will be taken into account; and
    • their relative weighting.

5.6 On what grounds will tenderers be excluded from a tender procedure?

The procurement document published by the contracting authority will establish the applicable grounds. In general terms, a bidder will be excluded if the exclusion criteria apply. If a bidder does not meet the selection and eligibility criteria, the procurement document will usually provide that a bidder will be allowed to rectify its bid within an established (short) timeframe. If a bidder does not meet the technical specifications or financial criteria of the tender, the contracting authority may ask it for clarifications, but no changes to the bid are permitted. Bidders that do not comply with mandatory requirements are disqualified.

5.7 Are tenderers permitted to negotiate with the procuring entity as part of the tender procedure? If so, what rules and requirements apply in this regard?

As a general rule, tenderers are not allowed to negotiate with the procuring entity, unless the procurement process used by the procuring entity is one which, by its nature, involves negotiation between bidders and the procuring entity.

5.8 What rules and requirements apply to the evaluation of tenders? What factors other than price play a role in this regard?

When evaluating tenders, the committee entrusted with evaluation will usually:

  • assess whether a bid is compliant with the requirements set out in the procurement document; and
  • determine whether:
    • the bidder has been blacklisted or affected by exclusion criteria; and
    • the selection criteria have been met.

Thereafter, the technical offers of bidders that have not been eliminated will be evaluated to ensure compliance with the established technical specifications. The financial offer is usually considered last.

Tenders are scored based on the rules set forth in the procurement document. The document may establish that factors in addition to price are to be considered, in which case these factors will be scored in accordance with the weighting established in the tender document.

5.9 Do any special rules or requirements apply with regard to abnormally low bids?

A contracting authority is obliged to require economic operators to explain the price or costs proposed in the tender, where the bid made 'appears' to be abnormally low in relation to the works, supplies or services sought.

The contracting authority must then assess the information provided by consulting the economic operator. A bid can be rejected where:

  • the evidence supplied does not satisfactorily account for the low level of price or costs proposed; and
  • no response is received from the economic operator.

5.10 How is the winning tenderer selected and what is the process for awarding the contract?

The evaluation of bids leads to the selection of the most economically advantageous offer, depending on the basis for evaluation that has been set out in the procurement documents.

The successful bidder is to be notified electronically through the government electronic online tendering system that its bid has been selected as the winning bid. Furthermore, unsuccessful bidders are (generally simultaneously) informed that their bid has been unsuccessful. Following a standstill period of 10 days – and on the assumption that no procedures have been commenced to challenge the award – the successful bidder is requested to execute the contractual documents in order to finalise the contractual arrangements for award.

5.11 What is the process for notifying unsuccessful tenderers of the outcome of the tender procedure?

Unsuccessful tenderers are notified of the outcome of the tender procedure by email through the government electronic online tendering system. Bidders must register on this system for the purposes of submitting bids, and therefore notifications are made via the email address provided at the time of registration.

5.12 Is joint procurement possible? If so, in what circumstances is it typically used and what rules and requirements apply in this regard?

Contracting authorities may acquire supplies or services intended for contracting authorities:

  • from one of the central purchasing bodies – currently:
    • the Department of Contracts; or
    • the Malta Information Technology Agency; or
  • using a framework agreement or dynamic purchasing system operated by a central purchasing body.

With the approval of the director of the Department of Contracts, two or more contracting authorities may agree to perform certain procurements jointly.

5.13 What rules and requirements apply in regard to a procuring entity's record keeping during a tender procedure?

Contracting authorities must:

  • document the progress of all procurement procedures; and
  • ensure that they keep sufficient documentation to justify decisions taken at all stages of the procurement procedure, such as documentation on:
    • communications with economic operators and internal deliberations;
    • preparation of the procurement documents;
    • dialogue or negotiation (if any);
    • selection; and
    • award of the contract.

The documentation must be kept for a period of at least three years from the date of award of the contract.

6. Modifications

6.1 What rules and requirements apply to modifications during the tender procedure – for example, to the contract specifications or conditions, to the timetable or to the members of a bidding consortium?

In general terms, contracting authorities can modify tender specifications and conditions, prior to the closing date of the call, by issuing clarifications. Standard procurement documents utilised by contracting authorities impose a limit on the latest date by which clarifications of contracting authorities may be issued.

Any modifications must comply with the general principles, underlying all procurement, of transparency, non-discrimination and so forth.

6.2 Is the procuring entity permitted to negotiate with the successful tenderer after the contract has been awarded? If so, what rules and requirements apply in this regard?

As a general rule, negotiations are not permitted after the contract has been awarded.

6.3 Are any contract modifications permitted post award? If so, what rules and requirements apply in this regard?

Modifications to awarded contracts are allowed subject to certain conditions which reflect the provisions set forth in EU directives.

The Public Procurement Regulations provide that a contracting authority can allow for the modification of a contract, with the prior consent of the director of the Department of Contracts, in the following cases:

  • The modification, irrespective of its monetary value, has been provided for in the initial procurement documents in clear, precise and unequivocal review clauses which may include price revision clauses or options. Such clauses must state:
    • the scope and nature of possible modifications or options; and
    • the conditions under which they may be used.
  • However, they may not provide for modifications or options that would alter the overall nature of the contract or the framework agreement.
  • Additional works, services or supplies by the original contractor have become necessary and were not included in the initial procurement and a change of contractor:
    • cannot be made for economic or technical reasons, such as requirements of interchangeability or interoperability with existing equipment, services or installations procured under the initial procurement; and
    • would cause significant inconvenience or substantial duplication of costs for the contracting authority.
  • In any case, the increase in price cannot exceed 50% of the value of the original contract.
  • All of the following conditions are fulfilled:
    • The need for modification has been brought about by circumstances which a diligent contracting authority could not foresee;
    • The modification does not alter the overall nature of the contract; and
    • Any increase in price is not higher than 50% of the value of the original contract or framework agreement.
  • The modifications, irrespective of their value, are not substantial – that is, they do not make the public contract materially different in character.

The Concession Contracts Regulations and the Public Procurement of Entities Operating in the Water, Energy, Transport and Postal Services Sectors Regulations provide similar grounds on which a contract can be modified. Contracts awarded under the Emergency Procurement Regulations cannot be modified.

6.4 Can the contract be transferred to a third party post award? If so, what rules and requirements apply in this regard?

Contracting authorities – and in particular, the Department of Contracts – are not generally open to allowing the transfer of a contract to a third party following the award of the contract. However, the Public Procurement of Entities Operating in the Water, Energy, Transport and Postal Services Sectors Regulations, the Concession Contracts Regulations and the Public Procurement Regulations provide in broad terms that the transfer of a contract to a third party can take place in the following circumstances:

  • There is an unequivocal review clause or option allowing this;
  • The universal or partial succession into the position of the initial contractor takes place following a corporate restructuring – including a takeover, merger, acquisition or insolvency – of another economic operator that fulfils the criteria for qualitative selection initially established, provided that this:
    • does not entail other substantial modifications to the contract; and
    • is not aimed at circumventing the application of the law; or
  • The contracting authority itself assumes the main contractor's obligations towards its subcontractors.

7. Review

7.1 Which national bodies are responsible for enforcing procurement laws and regulations?

The main national body responsible for enforcement is the Public Contracts Review Board (PCRB), which is an independent tribunal with specialised jurisdiction.

The director of the Department of Contracts:

  • is also obliged to monitor procurement activities with the aim of ensuring adherence to applicable legislation; and
  • has the power to cancel awards of contracts awarded if:
    • applicable regulations were breached; or
    • the award has been made in such a way as to discriminate between economic operators.

7.2 On what grounds can a decision of a procuring entity be reviewed? Who has standing to submit an application for review?

Prior to the close of a call, prospective candidates and tenderers are permitted to file an application before the PCRB for the purposes of challenging:

  • discriminatory technical, economic or financial specifications, errors or ambiguities in the procurement documents; and
  • procurement processes that are in violation of any law.

Following the close of a call, the award mat be challenged by:

  • any tenderer or candidate concerned; or
  • any person that:
    • has or had an interest in the award; or
    • has been harmed or risks being harmed:
      • by an alleged infringement; or
      • by any decision taken including a proposed award in obtaining a contract.

The cancellation of a procurement process may also be challenged.

An interested party or tenderer may file an application before the PCRB asking it to declare that a contract which has been awarded is ineffective. This action is available only:

  • where the contract exceeds a certain value; and
  • on certain limited grounds, such as where a contract has been awarded without the publication of a prior notice.

7.3 What is the limitation period for submitting an application for review?

Applications made prior to the close of a call must be filed within the first two-thirds of the time period allocated in the call for competition for the submission of offers. In the case of concession contracts, the application must be made at least one day before the closing date of the call.

Applications filed for the purposes of challenging an award must be filed no later than 10 calendar days from the date on which the contracting authority publishes the award or cancellation of the procurement process.

Applications made for the purpose of obtained a declaration of ineffectiveness of a contract must be filed:

  • before the expiry of at least 30 calendar days from:
    • the day following the date on which the contracting authority published a contract award notice; or
    • 30 days from when the authority responsible for the tendering process informed the tenderers and candidates concerned of the signing of the contract; or
  • within six months of the date of contract signature in any other case.

7.4 Does the submission of an application for review have a suspensive effect on the tender procedure?

An application filed before the PCRB has the effect of suspending the procurement process.

7.5 What is the typical timeframe for review proceedings?

The PCRB must decide on applications submitted within six weeks of the date on which the application is heard. When submitted, an application is usually scheduled for hearing within around one month.

7.6 What costs are typically incurred in review proceedings?

Challenges to the procurement process before it closes require the payment of a deposit equal to 0.5% of the estimated value of the contract, subject to a maximum payment of €50,000. No deposit is payable when this type of action is filed to challenge a procurement process leading to the award of a concession. The PCRB can order the refund of the deposit and will do so when the action application is successful.

The challenge of an award or cancellation of the procurement process also requires the payment of a deposit equal to 0.5% of the estimated value of the contract, but subject to:

  • a minimum payment of €400; and
  • a maximum payment of €50,000.

The PCRB can order the refund of the deposit and will do so when the action application is successful.

An application for the declaration of ineffectiveness of a contract is not subject to the payment of any deposit.

Professional fees incurred for the purposes of filing any of the above actions are not recoverable.

7.7 What enforcement powers and remedies are available where a breach of the procurement rules is found?

The PCRB has the power to:

  • order changes to procurement documents;
  • cancel awards of contracts;
  • cancel procurement processes; and
  • declare as ineffective contracts which have been executed in breach of the rules.

When declaring a contract ineffective, the PCRB can also:

  • impose penalties on contracting authorities which have infringed the rules; and
  • award damages to interested parties.

7.8 Can the review decision be appealed? If so, what is the process for doing so?

An appeal is available to the Court of Appeal in its superior jurisdiction. An appeal must be filed within 20 days of the date of the decision of the PCRB by means of an application to be filed with the Court Registry of Malta. Payment of certain court fees must be made at the time the appeal is filed. The Court of Appeal is bound by law to decide such appeals within four months of the date on which the appeal has been filed and the parties to the appeal have been notified of the appeal.

Appeals filed to the Court of Appeal in its superior jurisdiction do not require the payment of a deposit and court costs are typically in the region of €400. Professional fees are only partly recoverable.

8. Privatisations and public-private partnerships

8.1 Do any special rules apply with regard to privatisations in your jurisdiction?

Maltese law does not regulate privatisations explicitly.

8.2 Do any special rules apply with regard to public-private partnerships in your jurisdiction?

Maltese law does not regulate private-public partnerships explicitly.

9. Environmental, social and governance

9.1 How are ESG factors influencing public procurement in your jurisdiction? What specific concerns and considerations should be borne in mind in this regard?

Social and environmental considerations may be applied as award criteria to the extent that they are relevant to the subject matter of the contract. Contracting authorities frequently include award criteria which are linked to environmental considerations, and increasing importance is being given by contracting authorities to factors which ensure that bidders comply with all applicable labour laws.

The regulations allow for tenderers to be placed on a blacklist if they fail to comply with their obligations in the fields of environmental, social and labour law.

10. Trends and predictions

10.1 How would you describe the current public procurement landscape and prevailing trends in your jurisdiction? Are any new developments anticipated in the next 12 months, including any proposed legislative reforms?

There are no legislative reforms in the pipeline that we are aware of; although certain constituted bodies – such as the Malta Chamber of Commerce, Enterprise and Industry – have published reports which make detailed recommendations on legislative changes. It remains to be seen whether these will be taken on board, in whole or in part.

In general terms, we have noticed that market participants' awareness of their rights is growing and companies appear to be increasingly willing to make use of the remedies available to them – in particular, by filing applications to obtain declarations that contracts are ineffective as a result of contracting authorities failing to issue calls when required to do so.

11. Tips and traps

11.1 What are your top tips for participants in public procurement procedures in your jurisdiction and what potential sticking points would you highlight?

Participants in public procurement processes should familiarise themselves with the government online procurement system though which tender calls are issued and where bids are submitted. Registration on the system is mandatory for bid submission. Bidders should also ensure that they keep track of any clarifications issued throughout the procurement process, as clarifications may sometimes alter tender specifications.

Bidders submitting a tender bid which is regulated by the Public Procurement Regulations should ensure that they analyse the procurement document as soon as possible, since applications before the Public Contracts Review Board to challenge unlawful specifications can only be made in the first two-thirds of the time period allocated in the call for competition for the submission of offers.

11.2 What are your top tips for procurers in your jurisdiction and what potential sticking points would you highlight?

Procurers frequently opt for award criteria which place excessive – and sometimes sole – emphasis on price and tend to disregard other criteria. While this approach generally makes sense in the case of relatively simple supplies, services or works, it is generally not desirable when other more complex supplies, services or works are required. While this may make the evaluation of bids easier for contracting authorities, there may be an adverse impact on the quality of bidder selection and, consequently, on the satisfaction of procurer requirements post-contract.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

ARTICLE
29 February 2024

Public Procurement Comparative Guide

Malta Government, Public Sector

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