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In brief

As a result of the extraordinary situation resulting from the spread of COVID-19 in Switzerland, the Executive Board of the Federal Procurement Conference (FPC) has issued recommendations for the public procurement of goods and services and contractual matters during the current COVID-19 crisis. The main goal is to mitigate the impact of the COVID-19 crisis on the Swiss economy from a public procurement perspective.

The recommendations are valid during the exceptional situation as defined in the COVID-19-Ordinance 2 on measures to combat the coronavirus (SR 818.101.24) and for six months after the end of the exceptional situation.

However, owing to federalism, procurement law is not uniform. The recommendations of the FPC are not legally binding and, thus, the cantons may deviate from them.


Options available to contracting authorities in cases of urgency

The federal public procurement law offers several possibilities for federal authorities to exceptionally accelerate and simplify award procedures, which could apply in situations of danger and urgency.

Standard procedures during the COVID-19 pandemic

In the current exceptional situation caused by the spread of COVID-19, these could be in particular:

  • exception to the applicability of procurement law to protect the health and life of humans, animals and plants (cf. art. 3 para. 2 Federal Act on Government Procurement (SR 172.056.1))
  • private treaty award due to unforeseeable events and urgency (cf. art. 13 para. 1 let. d Ordinance on Government Procurement (SR 172.056.11), see below)

The FPC recommends that the exceptions mentioned above be examined for pending and ongoing procurement projects during the exceptional situation, as they simplify and speed up the procurement process.

Direct awards are permissible under extreme urgency

Only in cases of extreme urgency can a contracting authority award the contract directly and without a call for tender. This exemption applies if, due to unforeseeable events, procurement becomes so urgent that no other procedure can be carried out.

The contracting authority is free to directly choose which economic operator receives the contract. The essential elements of the procedure, i.e., competition, time limits and other formal requirements, are not mandatory, and negotiations are allowed.

However, the recommendations clearly state that even in urgent cases, the contracting authority should create a competitive situation by requesting several tenders and selecting the most economical one.

In Switzerland, the contracting authorities generally have a wide margin of discretion. At present, this discretion should take into account the unique circumstances of the COVID-19 crisis. This may involve the waiving of formalities, such as minimum time limits, requirements and a structured assessment. Nevertheless, the exceptions should only apply in a very restrictive manner.

In particular, this only applies for short-term and expeditious procurement in order to protect fundamental legal interests, such as human life and health, to meet the needs of urgently needed services to contain the COVID-19 crisis and to maintain the operation of public administration services.

This includes, for example, medical and pharmaceutical products and medicines, goods and services to ensure public order and national supply, services to maintain system-relevant facilities, IT and telecommunications resources, and related services for the operation of administrative units outside or in addition to existing infrastructures.

Other options available to contracting authorities

The FPC recommendation mentions other options available to contracting authorities that may enable them to purchase urgently needed goods and services during the COVID-19 crisis.

In particular, these include possibilities under contract law, such as extending the contract period and expanding contractually agreed purchase quantities.

Conclusion

In Switzerland, there are possibilities to accelerate the procurement process and even to award the contract directly. However, the derogations must be applied very restrictively. A deviation from the standard procedure will probably only be possible for procurements directly related to the COVID-19 crisis. Even then, the basic principles of procurement law should be observed and respected.

Author

Philippe Reich is the head of Baker & McKenzie's Antitrust and Trade Law Practice Group in Switzerland and a member of the European Competition Law and transactional practice groups. He is a member of the EMEA Steering Committee of the International Trade and Commerce Practice Group and of the Global Steering Committee for the Firm's India Practice. He is also the Chairman of the Swiss Indian Chamber of Commerce and forms the Indian Desk in Switzerland. Mr. Reich regularly publishes articles on Swiss antitrust and trade laws and the Swiss-EU as well as Swiss-Indian bilateral relations.

Author

Boris Wenger is a partner in Baker McKenzie's Zurich office, where he advises on competition law, public procurement, healthcare, export control, customs and energy law matters. Chambers Europe and Legal 500 have ranked Mr. Wenger as a leader in the field of competition and antitrust for many years.

Author

Roger Thomi is an associate in the Antitrust & Competition Practice Group in Zurich. He joined Baker & McKenzie in 2011 as a trainee. After his bar admission in Switzerland in 2013, he rejoined Baker & McKenzie as an associate. Mr. Thomi advises domestic and international clients on all aspects of antitrust and competition issues as well as commercial and corporate law matters, including mergers, acquisitions and private equity transactions. He focuses on national and international merger control, cartel investigations, distribution systems, restrictive practices and abuse of dominance. Mr. Thomi also represents parties before competition authorities and courts. He assists in drafting all kinds of commercial and transactional agreements, including distribution and franchising agreements, joint venture agreements and share purchase agreements.