PUBLIC PROCUREMENT 2010

1 Relevant Legislation 

 

1.1 What is the relevant legislation and in outline what does each piece of legislation cover? 

 

The main pieces of legislation governing public procurement, are the Public Contracts Regulations (Legal Notice 177 of 2005, as amended) (the “Public Contracts Regulations”) and the Public Procurement of Entities operating in the Water, Energy, Transport and Postal Services Sectors Regulations (Legal Notice 178 of 2005, as amended) (the “Public Procurement Regulations”), hereinafter together referred to as the “Regulations”, both issued under the Financial Administration and Audit Act (Chapter 174 of the Laws of Malta). The Regulations prescribe the substantive and 

procedural rules governing the procurement of works, supplies and services by contracting authorities and entities, the functions and powers of the Director of the Department of Contracts, the Contracts Committees and the Procurement Committees, and establish and regulate the Public Contracts Appeals Board. 

 

The Local Councils (Tendering) Regulations (Legal Notice 157 of 1993, as amended) establish specific rules on tendering by local councils and the procedure to appeal against decisions taken by any local council in respect of a calls for tenders. These Regulations will not be considered further for the purposes of this publication.  

 

1.2 How does the regime relate to supra-national regimes including the GPA and/or EC rules? 

 

As a Member State of the European Union (the “EU”), Malta is bound to ensure compliance with the provisions of the Treaty establishing the European Community (the “EC Treaty”) and secondary legislation promulgated by the European institutions, including the legislative package in the field of public procurement (in particular, Directive 2004/17/EC and Directive 2004/18/EC; hereinafter together referred to as the “Public Procurement Directives”). Malta’s accession to the EU in 2004 entailed that it became a contracting party to the international agreements 

concluded in conformity with the EC Treaty between Member States and one or more non-Member countries (for example, the Agreement on the European Economic Area, in terms of which the European Community’s public procurement regime extends to the EEA - EFTA States). Malta forms part of the European Community, which is a party to the Government Procurement Agreement (“GPA”). The provisions in relation to the GPA set out in the Public Procurement Directives were transposed into the Regulations. Where reference is made to the Public Procurement Directives in this Chapter, kindly refer to the General Chapter on EC Public Procurement Rules for further guidance. 

 

1.3 What are the basic underlying principles of the regime (e.g. value for money, equal treatment, transparency) and are these principles relevant to the interpretation of the legislation? 

 

The general principles underlying Malta’s public procurement regime derive from the EC Treaty and the case law developed by the European Court of Justice and the Court of First Instance, including the following: the free movement of goods; the freedom to provide services; the freedom of establishment; equal treatment; non-discrimination; proportionality; transparency; and mutual recognition. These underlying principles must be observed in the application and interpretation of local procurement legislation, and are relevant even where the contract falls below the Community thresholds and, generally, in matters not caught by the Public Procurement Directives (for example, the award of a public service concession contract). 

 

1.4 Are there special rules in relation to military equipment or any other area? 

 

The Contracting authorities operating in the field of defence (including the Armed Forces of Malta) are generally subject to the same rules as other contracting authorities. However, there are certain exemptions that may apply to defence related procurement, including the procurement of military equipment. For instance, the Regulations do not apply to public contracts which are declared secret or the execution of which must be accompanied by special security measures in accordance with the legislation in force from time to time, or when the protection of Malta’s security so requires. Furthermore, pursuant to article 296 of the EC Treaty, the Maltese Government would not be precluded from taking such measures as 

it considers necessary for the protection of the essential interests of its security which are connected with the production of or trade in arms, munitions and war material (provided that such measures do not adversely affect the conditions of competition in the common market regarding products which are not intended for specifically military purposes). 

 

This article appeared in the 2nd edition of The International Comparative Legal Guide to: Public Procurement; published by Global Legal Group Ltd, London (www.iclg.co.uk). 

 

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