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Bank Guarantees in Public Procurement: Practical Problems of Contracting Authorities and Economic Operators

Bank Guarantees in Public Procurement

Poland
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Bank guarantees are one of the forms in which economic operators tendering for a public contract may provide, the so-called tender bonds. The new Public Procurement Law, in force since 1 January 2021, has not significantly changed the rules concerning the provision of tender bonds (including bank guarantees) compared to those based on former legislation.

It is however worth mentioning that in accordance with the new act, it has become optional and fully discretionary for the contracting authority over whether to request a tender bond. The rules for the return of the tender bond have also been made more flexible. In accordance with the new Public Procurement Law, economic operators’ funds or tender bonds may be “released” earlier by the contracting authority, without the need to wait for the selection of the most advantageous tender or the cancellation of the tendering process itself.

Despite several changes, the new act has not however definitively resolved several important doubts concerning the rules of providing tender bonds in the form of bank guarantees. These concerns emerged under the previous act and have been the subject of numerous and often divergent decisions of the National Appeal Chamber (KIO) and common courts.

These doubts concern, among other things, the possibility of providing a tender bond in the form of a bank guarantee in a foreign currency, the manner of securing a tender with a bank guarantee where the tender is submitted by economic operators competing jointly for a public contract (as a consortium), and the correctness of determining the period of validity of a bank guarantee if this period expires on the last day on which the beneficiary (contracting authority) may submit a request for payment.

By Jakub Krysa, Partner, Kochanski & Partners

Poland Knowledge Partner

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