Summary

Public procurement contracts are contracts in private law; however, in addition to national private law, they are also governed by the general principles developed in European Union Law, which include transparency and controllability, equal treatment and non-discrimination, encouraging competition and proportionality. The general principles are listed separately in the draft act prepared for the transposition of the new public procurement directives, as they are in the currently valid Public Procurement Act, thereby also ensuring the mandatory nature of the principles for those procurements which are not governed by European Union Law. All general principles are binding upon the contracting authorities; also, when attributing substance to the conditions, the limitations arising from the said principles must be taken into account.

In order to ensure the effectiveness of general principles it is possible to contest the conditions of the procurement contract, published within the procurement procedure, before the Public Procurement Review Committee. One example of contractual conditions, the giving of substance to which seems to be problematic within Estonian procurement practice, however which vividly characterises the practical meaning of general principles, are the clauses concerning contractual penalty. Based on the analysis of 100 draft procurement contracts, published between 1 February 2014 and 28 February 2015 in the public procurement register, the authors examined what should be kept in mind when giving substance to the contractual penalty clauses of a procurement contract, considering the specific nature of public procurement law and what kind of conflicts should be avoided. The recommendations concern the consistency of contractual penalty clauses with the principle of transparency (controllability) and proportionality, which are discussed separately in parts 2 and 3 of the article.