Risks associated with the execution of building and construction works as a criterion for the evaluation of bids

A contracting authority decided to use the quality criterion in the evaluation of bids to transfer onto the contractor the risks associated with:

• the conditions of the ground as different from that defined in the tender;
• the occurrence of unlisted collisions;
• the occurrence of industrial collisions that require coordination;
• the need to comply with the requirements and decisions of the Regional Director for the Environmental Protection.

The risks transferred onto the Contractor included both the need to incur higher costs of the execution of the works and the need to extend the term of the contract compared to the original schedule of work and its financing.

Questioning the legality of the Contracting Authority’s actions, the Contractor appealed to the National Chamber of Appeals and then to the District Court in Warsaw.

Following up on the stance of the National Appeal Chamber (KIO 1375/23), the District Court in Warsaw (Judgment of 28 Sept. 2023 in Case No. XXIII Zs72/23.) held that the contracting authority’s freedom to determine the criteria for the evaluation of bids is not absolute and that the contractual documentation should be structured so as to allow the contractor to prepare the bid and calculate the price in a reliable manner.

The assumption of risk by the contractor is not included in the set of criteria relating to aspects such as price, other cost-related criteria, quality criteria, contractual criteria or workforce criteria, i.e. the criteria for the evaluation of bids admissible by the law.

The description of the criteria for the evaluation of bids should enable contractors to be fully aware of how and on what basis their bids will be evaluated so that they can include relevant information in their bids.

It is therefore worth sticking to realistic and lawful conditions for contract bidding. Despite the Ordering Party’s boundless “imagination”, its attempts to transfer unpredictable contractual risks to contractors have been effectively halted.