New Swiss Public Procurement law: Confederation is live, Cantons to follow

The revised Federal Law on Public Procurement came into force on January 1, 2021. Together with the revision of the Intercantonal Agreement on Public Procurement, Swiss public procurement law has thus undergone a complete overhaul for the decade.

What is new?

First and foremost the requirements of the WTO Agreement on Government Procurement (‘GPA 2012‘), which have already been in force internationally since 2014, were transferred into new Federal Law on Public Procurement. This applies to the rules against conflicts of interest and corrupt practices, but also to the newly introduced standards in the area of electronic auctions and the expansion of judicial review. The revision also affects areas that are not related to the multilateral agreement GPA 2012. To name a few, sanction instruments in the revised Federal Law have been standardized and supplemented by the possibility for authorities to issue warnings and suspensions of awarding contracts. As a result of pressure from the cantons, the Law now also provides for a general ban on price negotiations, the so-called bidding rounds. However, the dialogue procedure, which is common in the technology sector and in complex procurements, remains possible.

Nationwide harmonization of procurement standards

A second objective of the revision was to harmonize the federal and cantonal decrees in the area of public procurement law. It is to the credit of the joint commission with the mystery name Aurora that the greatest possible consensus between the cantons and the Confederation has been achieved. The working group also ensured that the revision of the federal law and the Intercantonal Agreement on Public Procurement (‘IVöB 2019’, a concordat) actually took place in lockstep. How well the revised Federal Law and concordat are aligned with each other can easily be seen in a comparison document.

From a practitioner’s point of view, the alignment of the Confederation and the cantons is to be welcomed. Essential aspects of the previous practice of the courts in the field of public procurement law have been incorporated into the two enactments. The greater regulatory depth in the concordat leads to a further smoothing of differences between the individual cantons and thus promotes legal certainty.

Phasing-in of the new rules

It should be noted, however, that the Intercantonal Agreement only comes into force after ratification by at least two cantons. Even then it will only be binding among the respective cantons. For this reason, the new Federal Law is now applicable to public contracts on a federal level, while the previous Intercantonal Agreement of 2001 will still be applicable to cantonal procurements for a certain period of time. As a result, a transitional phase is to be expected, during which the new rules will already apply in some cantons, and the old rules will still apply in others. Thus it will to take some time before Switzerland will have a comprehensive, harmonized public procurement law. Good things come to those who wait.

This article was written with the collaboration of Gian Heimann, law student at the University of Zurich. Thank you, Gian!