Republic of Latvia
Cabinet
Regulation No 257
Adopted 8 April 2004
Regulations Regarding Procurement for Needs of Providers of Public Services
Issued in accordance with Article 81
of the Constitution of the Republic of Latvia
Chapter I
General Provisions
Section 1. Terms used in these Regulations
The following terms are used in these Regulations:
1) supply, works and service contracts – contracts which have been entered into in writing between a provider of public services and one or several suppliers of goods, performers of construction works or providers of services for profit-making purposes and the subject-matter of which is:
a) for the works contracts – performance of the works referred to in Annex 1 to these Regulations or the performance or design of these works in accordance with the requirements specified by the provider of public services, or a structure acquired by any means. A structure within the meaning of these Regulations is the total result of construction works which is sufficient to serve the purpose specified in the design, and
b) for supply contracts – purchase of products, hire purchase, hire with or without the rights of pre-emption. If the subject-matter of a contract is supply of goods and the smallest part of it is siting or installation of the product, such contract shall be considered to be a supply contract,
c) for service contracts – the services referred to in Annex 2 to these Regulations;
2) works concession – a works contract with the condition that the remuneration for this contract is only the operation of the structure or the operation of the structure and payment for it;
3) service concession – a service contract with the condition that the remuneration for that contract is the right to provide services with or without payment for that right;
4) framework agreement – such agreement between one or several providers of public services and one or several suppliers the purpose of which is to determine and characterise the contracts to be entered into within a certain period of time and to provide for the rules on the basis of which such contracts shall be entered into (especially in relation to prices and, if necessary, the quantity intended);
5) dynamic purchasing system – a completely electronic process used for purchasing commonly used products which is limited in time and open for all suppliers with the condition that the suppliers conform to the qualification requirements and have submitted information regarding the products which they may offer (an indicative tender);
6) electronic auction – repeated indication of descending prices or new values of parts of certain tenders by utilising electronic means which occurs after full evaluation of the tenders, thus enabling the ranking of the tenders by electronic means in a specific sequence according to prices or the values of parts of specific tenders. Certain service contracts or works contracts the subject-matter of which is intellectual performances (for example, the design) shall not be the object of electronic auctions. Within the meaning of these Regulations electronic means shall mean electronic devices which are appropriate for the processing and storage of the data received or sent by wire, by radio, by optical means or other electromagnetic means.
7) supplier - a natural or legal person or other provider of public services within the meaning of these Regulations, or associations of such persons or providers of public services in any combination thereof which offer on the market, respectively, the execution of construction works or a structure, products or services;
8) tenderer – a supplier who has submitted a tender;
9) candidate – a supplier who seeks an opportunity to take part in a restricted or negotiated procedure;
10) central purchasing institution – a provider of public services which acquires products or services for its own needs or for the needs of other providers of public services or exclusively for the needs of other providers of public services, or which awards works, supply and service contracts and framework agreements for the needs of other providers of public services;
11) open, restricted and negotiated procedures - procurement procedures applied by the providers of public services and in which:
a) in the case of open procedures, any interested suppliers may submit tenders,
b) in the case of restricted procedures, any supplier may request to participate, but only the candidates invited by the provider of the public services may submit tenders, and
c) in the case of negotiated procedures, the provider of the public services consults the suppliers of its choice and negotiates the terms of the contract with one or more of them;
12) design contests – those procedures which enable the provider of public services to acquire a plan or design selected by a jury after having been put out to competition with or without the award of prizes, mainly in the fields of town and territorial planning, architecture, construction or data processing;
13) Common Procurement Vocabulary CPV – nomenclature approved by the European Parliament and European Council in accordance with specific procedures and which is applied in the procurement procedures for the identification of the procurement object;
14) provider of public services:
1) a public sector institution or public sector undertaking which performs the activities referred to in Chapter II of these Regulations in the fields referred to in Chapter II of these Regulations; and
2) any private legal entity which performs the activities referred to in Chapter II of these Regulations in the fields referred to in Chapter II of these Regulations or in any combination of these fields on the basis of special or exclusive rights granted by a competent authority on the basis of regulatory or administrative enactments containing norms which restrict the performance of activities in the fields referred to, granting the right to perform activities in any of these fields only to some entities and which affects significantly the possibilities of other entities to act in these fields;
15) public sector institutions – State administrative institutions, other State institutions, derived legal persons governed by public law, as well as a private legal entity, which concurrently conforms to the following criteria:
a) it is established or functions to meet the needs of society and it does not have commercial character, and
b) it is subordinate or subject to the decisive influence of a State administrative institution, other State institution, derived legal persons governed by public law, or subject to the decisive influence of private legal entity conforming to these criteria (it finds expression in the majority of voting rights in the election of the members of the supervisory or executive body or in the appointment of the administration) or the activities of such private legal entity as is financed by over 50 per cent from the State, derived legal persons governed by public law or other private legal entity conforming to these criteria;
16) public sector undertaking – any undertaking over which the public sector institutions may exercise, directly or indirectly, decisive influence on the basis of the property law, financial participation or rules which regulate it. A decisive influence on the part of the public sector institutions shall be deemed to be when the public sector institutions, directly or indirectly, in relation to some undertaking hold the majority of the undertaking’s subscribed capital (more than 50 per cent), or control the majority of the votes attaching to shares issued by the undertaking, or can appoint more than half of the members of the administrative, management or supervisory body of the referred to undertaking; and
17) indicative tender – a tender characterising the range of goods offered by the tenderer in the dynamic purchasing system, but upon the submission of which it is not binding upon the tenderer and the provider of public services.
Section 2. Principle of Equality
The provider of public services shall set equal requirements for all suppliers and observe transparency in procurement procedures.
Chapter II
Area of Activities of Providers of Public Services
Section 3. Activities of Providers of Public Services in Heat Supply, Gas Supply and Electricity Supply
(1) In the field of heat supply and gas supply these Regulations apply to the provision or operation of public networks for the production, transport or distribution of gas or heat, as well as to the supply of gas or heat to such networks, except the cases where the production of gas or heat is the unavoidable consequence of other types of activities of public sector undertakings or private legal entities which are not referred to in Sections 3, 4, 5, 6, or 7 of these Regulations, and the public sector undertaking or the private legal entity caries out the supply only to exploit economically the gas or heat obtained through such action and for the sum not exceeding 20 % of the amount in monetary terms from the turnover of the relevant public sector undertaking or private legal entity having regard to the average turnover for the preceding three years, including the current year.
(2) In the electricity supply field these Regulations apply to the provision or operation of public networks for the production or distribution of electricity, as well as to the energy supply to such networks, except the cases where the public sector undertakings or private legal entities require the production of electricity in order to ensure the consumption of electricity in other types of activities not referred to in Sections 3, 4, 5, 6 and 7 of these Regulations, and the supply to the public network depends only on the own consumption of the electricity and does not exceed 30 per cent of the annual total production of electricity, having regard to the average amount of electricity produced for the preceding three years, including the current year.
Section 4. Activities of Providers of Public Services in Field of Water Supply
(1) In the field of drinking water supply these Regulations apply to the provision or operation of public networks for the supply, transportation or distribution of drinking water or water supply to such networks, except the cases where obtaining and consumption for the public sector undertakings and private legal entities is the unavoidable consequence of the types of activities not referred to in Sections 3, 4, 5, 6 and 7 of these Regulations, and the drinking water supply to the public network depends upon the own consumption of the public sector undertaking or private legal entity referred to, and does not exceed 30 per cent of the total amount of water obtained, taking into consideration the average amount of water obtained in the preceding three years, including the current year.
(2) These Regulations shall also apply to contracts or design contests which are related to hydraulic engineering projects, irrigation of land or drainage, provided that the volume of water to be used for the supply of drinking water exceeds 20 per cent of the total volume of water obtained as a result of the installation of the hydraulic structure, irrigation or drainage of agricultural areas, as well as to those contracts or design contests which are connected to the disposal or treatment of sewage and which are awarded or organised by public sector undertakings, private legal entities, and public sector institutions pursuing the activities referred to in Paragraph one of this Section.
Section 5. Activities of Providers of Public Services in Provision of Transport Services
(1) In the field of transport these Regulations apply to a public railway, tramway, trolley bus and bus network and to the provision of the services thereof, except in the cases where the public-sector undertaking or private legal entity ensures a public bus transport network and the provision of services, if other private legal entities are entitled to provide the same services in general or in that particular area in accordance with the same conditions which apply to these public sector undertakings, private legal entities and State institutions.
(2) Within the meaning of this Section, a transport network exists, if transport services are provided in accordance with the rules issued by an institution regulating the provision of these services which include rules regarding the routes to be served, the quantities carried or the frequency of the carriage services.
Section 6. Activities of Providers of Public Services in Field of Postal Services
(1) In the field of postal services these Regulations apply to activities relating to the provision of postal services or to the provision of postal services concurrently with mail service management services (services provided preceding and subsequent to the despatch of a consignment), added-value services linked to or provided by electronic means (transmission of coded documents by electronic means, address management services, transmission of registered electronic mail), direct mail bearing no address, financial services (money transfers and postal giro operations), philatelic services, logistics services (services combining physical delivery and/or warehousing with other non-postal functions.
(2) Within the meaning of this Section postal services are services related to the clearance, sorting, routing and delivery of postal items, and the postal item is an item addressed in the final form in which it is to be delivered by the provider of postal services. Such items shall include, for example, books, catalogues, newspapers, periodicals and postal packages containing merchandise with or without commercial value.
Section 7. Activities of Providers of Public Services in Field of Utilisation of Certain Territory
In the field of the utilisation of a territory these Regulations apply to the utilisation of a certain territory for exploring for or extraction of oil or for the extraction of solid fuel, as well as to the management of airports or sea ports.
Section 8. Contracts Covering Several Activities in Several Fields or Various Types of Subjects of Contract
(1) If a contract applies to activities in several fields, the award thereof shall be regulated by norms, which apply to the field to which the most essential part of the contract applies.
(2) If a contract applies to activities in several fields, it may not be divided into several simple contracts for each field separately in order to avoid the application of these Regulations or the application of the Law on Procurement for State or Local Government Needs.
(3) If a contract applies to activities in the field of application of these Regulations, as well as in the field of application of the Law on Procurement for State or Local Government Needs and it is impossible to determine objectively to which field the essential part of the contract applies, the contract shall be awarded in accordance with the requirements of the Law on Procurement for State or Local Government Needs.
(4) If a contract applies to activities in the field of the application of these Regulations, as well as to other activities which are neither included in these Regulations nor in the Law on Procurement for State or Local Government Needs, and it is impossible to determine objectively to which field the essential part of the contract applies, the contract shall be awarded in accordance with the requirements of these Regulations.
(5) The contracts containing the provision of services, as well as delivery of supplies shall be considered to be supply contracts, provided that the total value of the supplies exceeds the value of services included in the contract.
(6) Contracts the subject-matter of which is the provision of services, but which in addition to the provision of services also contain construction works as an unimportant part shall be considered to be service contracts.
Chapter III
Exceptions to the Application of these Regulations
Section 9. Concessions of Construction Works and Services
These Regulations shall not be applied in cases where the provider of public services awards the construction or services concession in order that the concessionaire perform the activities referred to in Sections 3, 4, 5, 6 or 7 of these Regulations.
Section 10. Contracts with Third Parties
(1) These Regulations shall not be applied in cases where the provider of public services enters into a supply or works contract if the subject-matter of the contract is intended to be sold or leased to third parties for profit-making purposes, provided that the provider of public services has no special or exclusive rights to sell or lease such subject-matter of the contract and that other private legal entities may sell or lease it under the same conditions applied to the provider of public services.
(2) The provider of public services shall inform the European Commission upon a request thereof regarding all categories of products or activities to which the exceptions are applied in accordance with Paragraph one of this Section.
Section 11. Contracts Awarded for Purposes Other than Activities in a Particular Field
(1) These Regulations shall not be applied in cases where the provider of public services awards contracts for purposes other than the performance of the activities referred to in Sections 3, 4, 5, 6 and 7 of these Regulations, or with a purpose of performing these activities outside the European Union, provided that the public network or a territory in the European Union is not physically used for this purpose.
(2) The provider of public services shall inform the European Commission upon a request thereof regarding all activities to which the exceptions are applied in accordance with Paragraph one of this Section.
Section 12. Secret Contracts or Contracts in which Certain Secrecy Regimes must be Complied with
These Regulations are not applied in cases where the Cabinet imposes a secrecy regime or where the implementation of the contract is related to special secrecy measures in accordance with the regulatory enactments in force.
Section 13. Contracts Awarded in Accordance with International Rules
These Regulations are not applied in cases where contracts are awarded in accordance with other rules of procedure, which shall be determined:
1) in accordance with the International agreement between Latvia and a country outside the European Union (hereinafter - third country) for supplies, construction works or services necessary for a common implementation or operation of a Member States project of that international agreement. In such case the European Commission shall be notified of all such agreements;
2) in accordance with an international agreement regarding the deployment of troops. The rules of procedure shall be applied to organisations in Latvia or third country; and
3) in accordance with the special rules of an international organisation.
Section 14. Contracts Awarded to Branches, Joint Venture or Provider of Public Services which is part of Joint Venture
(1) These Regulations shall not be applied to services, supply and works contracts awarded by the provider of public services to a branch, or awarded by a joint venture formed of various providers of public services for the purpose of carrying out activities within the meaning of Sections 3, 4, 5, 6 or 7 of these Regulations, to any of the branches of the providers of these public services, provided that at least 80 per cent of the average turnover of the branch from the services provided, supplies or works performed within a period of the last three years have been formed from the provision of supplies, performance of supplies or works to the provider of public services the branch of which is the provider of services, supplier or performer of construction works.