Myths regarding the proof of references

In almost each public procurement procedure the contracting authorities examine the references of the tenderers; we now present the regulation on their certification, perhaps it might help tenderers.

In public procurement procedures, contracting authorities almost each time prescribe requirements on references for tenderers, in order to examine and certify technical capability and professional competence.

In everyday life, the term ‘reference’ is unequivocally tied by companies with the notion that a reference means a past accomplishment that would be certified by the client / customer, signed by them on the supporting document itself, that’s why the term ‘reference certification’ have integrated into everyday language.

In public procurement procedures, rules differ a bit.

Government Decree 321/2015 regulates the method of certification of references accepted or required in public procurement procedures pursuant to as follows:

In public procurement procedures, terms reference certification and reference declaration shall be essentially differentiated.

Reference certificate is a document signed by the other party having concluded the former contract (Client, Customer, etc.), while reference declaration is a document that also serves the certification of references but with the difference that this is only “issued” and signed by the tenderer, no countersignature by the other party having concluded the former contract is included.

In public procurement procedures, the method for requiring or prescribing the certification of references depends on the subject of the procurement, the scheme of the public procurement procedure (EU, national) and, in some cases, beyond these, the identity of the other party having concluded the former contract (i.e. is a reference certificate required for “certifying” a work contractually performed in the past, or is a reference declaration enough.)

The detailed rules are as follows:

Legislative regulations for public works are the simplest: in all cases a reference certificate shall be submitted, independently of who the other party having concluded the contract was.

In case of product procurements and ordering services, the situation is more complex, the predominant criterion for these procurement items is which scheme the public procurement procedure for which the tenderer intends to present the reference will be initiated in (so attention shall be drawn to the fact that it is not the value of the reference that counts: that is completely irrelevant as regards the method of certification).

In case of public procurement procedures with the subject of product procurement or service ordering, initiated per the international scheme, it is enough to certify the references by a reference declaration signed by the tenderer- in none of the cases there is need for a reference certificate signed by the former Customer.

This is something important for the tenderers to know, for a reference declaration is much easier to prepare than obtaining through a lengthy procedure a reference certificate from the former customer on a work that took place several years ago.

In case of public procurement procedures with the subject of product procurement or service ordering initiated per the scheme of the Union, the method to be prescribed or required depends on who the former customer was (other contracting party).

Regarding this, Article 22 Section (1) Points (a) and (b) of the Government Decree 321/2015 is authoritative:

• (a) if the other contracting party is an entity according to Article 5(1)(a)-(c) and (e) of the PPA or in case of entities not established in Hungary an entity being a contracting authority pursuant to Directive 2014/24/EU of the European Parliament and Council, with the certificate issued or signed by it;
• (b) if the contracting party is other than the entities pursuant to point (a) herein, with a certificate submitted by it or the declaration of the tenderer or candidate, or any other entity contributing to the certification of suitability.

For example, if we, as a tenderer, intend to present 2 references in a public procurement procedure with the subject of service ordering initiated per the scheme of the Union, one of which works were performed e.g. for a local government (that is considered as a Contracting Authority per Article 5 Section (1) Point (c) ), and we performed the other work for a business enterprise.

In this case:

- we shall submit the reference certificate issued by the local government on the works performed to the local government,

- as regards the works performed for the business enterprise, our own tenderer declaration is enough.

If for instance, we intend to present these same 2 former works also in public procurement procedure initiated per the national scheme, with the subject of service ordering, our own tenderer declaration regarding both works is enough.

On the basis of the above, in case of a public procurement procedure tendered per the Union scheme, should our former works include some performed to business enterprises (i.e. not to contracting authorities), it is more expedient and simpler to present these works as references, for obtaining the concerning certificates is much easier, since in this case only our own tenderer declaration is required.

We shall draw the attention to the fact that contracting authorities may not prescribe any rules stricter than the above-mentioned in any public procurement procedure, so if one meets such cases, one may raise lawful objection.