The CCA opinion on public procurement rules for purchase of fixed telephony services

The Croatian Competition Agency communicated its opinion on public procurement rules relating to the purchase of fixed telephony services to the State Office for Central Public Procurement. This opinion has been basically based on the monitoring proceeding in the implementation of the remedies under the decision on conditionally approved concentration between the undertakings Hrvatski Telekom and OT – Optima Telekom and it is the result of the cooperation between the Croatian Regulatory Authority for Network Industries (HAKOM) and the Croatian Competition Agency (CCA) that are both in charge of the electronic communications markets.

In the sense of competition rules the CCA holds the view that where deciding on the public procurement process itself and its requirements regarding the criteria and specifications the State Office for Central Public Procurement should take into account all the aspects of this specific market.

Namely, given the fact that on the electronic communications market – provision of fixed telephony services – there are players of different market power and taking into account the specific nature of these services, the bidding criteria should be proportionate to the objectives that need to be achieved, whereas they should at the same time facilitate participation in the bidding to a larger number of interested bidders. This is why the CCA supports the separation of the subjects of the procurement contracts in several procurement groups.

In the opinion of the CCA regarding public procurement there are also two potential categories of service users.

The first category of users depends of the coverage location and distinguishes the users that would require from their service providers to provide the service in the whole territory of Croatia. On the other hand, the second category of users would like to have the service provided merely at a certain location.

The second category of users defines the users that may have safety or some other justified requirements that must be met by the potential bidders, in other words, criteria that are normally not necessary for the provision of regular services and are normally not required by the users.

Thus, the CCA holds the view that where the users want to have the service provided in the whole territory of Croatia and/ or have specific requirements that must be met by the bidders the public tender procedure should appropriately specify these specific criteria.

The competitive criteria for other users should be defined so as to facilitate access to the bidding and to the market to a larger number of bidders.