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The impact of Covid-19 on public procurement: analysis of three legal adjustment mechanisms

12/08/2020
Source : Le Soleil
Categories: General Information

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An unprecedented and unpredictable health crisis has turned everything upside down at the global level, leading to an unprecedented economic and social crisis. Four months after its appearance in our country, it has managed to upset all economic and programmatic forecasts. The Government of Senegal very early on took the full measure of the situation and risks related to this disease on the pace of development of the country in the short and medium term. That is why it quickly and successively put in place an effective strategy for the fight against the disease, economic resilience and recovery.

Already, as soon as he addressed the Nation on March 19, 2020, the President of the Republic announced a panoply of measures relating to the response strategy: the closure of universities, schools and places of worship as well as the implementation of barrier measures to be respected by everyone through distancing. physical associated with the establishment of a state of emergency with a curfew. Then, since June 2, the country has moved to a phase of easing and gradual recovery of economic activity, and to a more or less normalized social life. After three months of virtual shutdown of economic activity, a new phase of full recovery is opening, led by the State in a contete where, for the last half of 2020, the latest forecasts of the Bceao expect a slum of economic growth of less than 2% against an initial forecast of the order of 6.8%. This fall in economic growth is felt in the implementation of the budget with the observed fall in revenue and the increase in certain expenditure leading to a worsening of the budget deficit. This is also the reason why, in the resilience phase, countless support measures for SMEs and VSEs have been decreed by the Head of State and implemented by the government, with a view to relieving companies in a contractual relationship with the public authorities, through legal mechanisms relating to the regulation of public procurement.

While there has been an almost total halt to major public works and other construction sites, systematically generating financial consequences, we wish to initiate a reflection on three notions of public procurement (force majeure, unforeseeability and postponement) and the case law to be drawn from them in the formulation of contracts in the future, in particular on the financial impact of delays in implementation and on the modalities of resumption of the activities of companies.

1. THE CONCEPT OF FORCE MAJEURE IN PUBLIC PROCUREMENT

A priori, in most cases, there has been a service order to interrupt the execution of public contracts and partnership contracts, in principle, or postponement decisions on the grounds of force majeure and unforeseeability relating to the Covid-19 pandemic.

First of all, with regard to force majeure, according to administrative case-law, it corresponds to the hypothesis where unforeseeable circumstances and characteristic of the parties lead to a definitive upset of the economic balance of the contract. Accordingly, three main conditions must be met in the present case. First, we have unpredictability, which is an established criterion in view of the economic disaster related to Covid-19, in any case, concerning contracts concluded well before March 2 (date of registration of the first case of coronavirus in our country). Secondly, there is the condition of superiority which requires that the circumstance be superior to the parties to the contract, which is also fulfilled. And thirdly, the condition of irresistibility, meaning that it must be impossible for the parties (public contract holders and contracting authorities) to comply with their contractual obligations.

Therefore, once force majeure has been established, focus on the immediate consequences attached to the qualification of force majeure, in an administrative contract. Therefore, there is an extension of the deadlines for the execution of public contracts, obviously at the request of the holders. For the simple reason that the latter can rely on it to justify the non-performance of public contracts and consequently release their responsibilities. In the same way, force majeure also prevents the application of penalties by the contracting authorities to companies.

In other words, it is important to note that force majeure, in principle, does not give rise to the right to compensation except in very special circumstances. This is the case where an undertaking suffers damage provided that it has immediately reported the facts in writing to its counterparty and can demonstrate the compensability of the damage suffered. This is, for example, the loss mainly of equipment, directly caused by the situation of force majeure. In the present case, by the deterioration of equipment or other, for stopping construction sites by decision of the contracting authority.

Moreover, this demonstration has been enshrined in case law through a famous judgment delivered by the French Council of State of 11 December 1991. Also, this thesis is supported by the Senegalese Cahier des clauses administratives généraux (Ccga) of the Dao_Travau Grande taille, in its articles 19 and following.

Therefore, it is not a question of compensating the companies' loss of profits, or other parallel damages, or the other losses they have had to suffer during this entire period of economic disaster. But, beyond force majeure, it would be of paramount importance to analyse the legal mechanism of unforeseeability.

2. THE CONCEPT OF UNFORESEEABILITY IN PUBLIC PROCUREMENT

Unforeseeability is defined as the occurrence of an unforeseeable event of course, which results in the upheaval, temporarily and not definitively, of the initial conditions for the execution of public contracts, in accordance with the relevant provisions governing public procurement (the Code of Obligations of the Administration (Coa), the Code of Public Procurement, Public Service Delegations and Partnership Contracts).

Here, the first condition is related to the state of unforeseeability that can only result from an event that was not predictable, and we believe that Covid-19 was not predictable, in any case for contracts concluded well before the economic containment measures were taken. The second condition relates to the upheaval of the economy of the contract by the health disaster. This means that it must significantly increase the burden on the holders of the contracts, so as to really call into question the contractual balance.

As a result, a mere loss of profits or a residual additional cost cannot justify the compensation of the holders of public contracts. It is also necessary that the event is close to the will of the parties and there, the health crisis that we are currently going through fulfills this last condition. Therefore, the holders of public contracts will therefore have to refer their difficulties to the contracting authorities as soon as possible, in order to mark the ground for the renegotiation of contracts for its fair balance. Thus, it is necessary that the holders of contracts demonstrate, with supporting evidence, that they are strongly impacted by the pandemic and that they do not cease to execute the contracts, while having no intention of terminating them for the circumstance. Hence the adjournment, another legal mechanism, which is also worth mentioning.

3. THE CONCEPT OF POSTPONEMENT IN PUBLIC PROCUREMENT

Deferment is a special legal mechanism, which may be applied in this case by the contracting authorities. With the advent of the pandemic, the public contracting authority may, as part of the public service delegation, decide to postpone the contract. In this specific case, specific provisions are laid down by the CCAG in its Articles 48 et seq., for compensation to delegated public service undertakings. This is the case, for example, of the costs of guarding, constituting a damage suffered as a result of the postponement. Thus, the holder who retains custody of the public service enjoys a right to compensation, costs inherent in that custody.

In addition, he may refuse, for legitimate reasons, to assume custody because of his cash flow difficulties. There is therefore a real possibility of suspension of the execution of the contract, leading, de facto, to the resumption of custody by the contracting authority. As a result, the damage may come from all the costs borne by the public service delegate and which result from the decision to postpone such as, among others, the immobilization costs of equipment and staff... The situation of the Bau-maraîchers station in Dakar, strongly impacted by the systematic cessation of interurban transport for a long time, is a vivid illustration of this. This is also the whole meaning of Article 48 of the CCAG of Senegal.

However, it is important to note, in principle, that the abovementioned legal mechanisms benefit only the undertakings fulfilling the conditions. Thus, according to settled case-law of the French Council of State, given on 19 March 1971 in the dispute of the Sieurs Mergui, the contracting authorities must, in their capacity as contracting authority, refrain from granting gifts to private undertakings which are in no way able to justify their damage suffered. in the performance of their contracts.

In other words, particular attention must be paid to companies' claims for compensation, but also and above all, on the basis of force majeure, postponement or unforeseeability, in this period of economic stagnation linked to the coronavirus pandemic. Thus, the government's responses must undeniably correspond, in a proportionate manner, to these difficulties. This is the case for the extension of procedural or enforcement deadlines, the eonération of penalties, compensation for expenses incurred or damages suffered, which cannot exceed the durations or amounts strictly necessary to cope with the circumstance.

Ultimately, supporting companies under public contracts means unlocking the conditions for the payment of start-up advances... And that in the event of suspension of a concession contract, authorize concessionaires to interrupt any payment to the conceding authority, whether they are entry fees, public domain royalties or contributions to the depreciation of investments. As a result, the conceding authority will be able, always on its side, to grant advances on the sums it owes, to financially support the concessionaires to meet their urgent needs.

By Serigne MBAYE

Provided by AWS Translate

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