Estonian Public Procurement For Foreign Tenderers

Participating in Estonian public procurement can be a practical and accessible opportunity for foreign tenderers. Language, corporate form, and “local compliance” expectations do not necessarily have to exclude a tenderer. In general, Estonian procurement rules allow tenderers from other European Union Member States, and also tenderers from third countries, to participate on the same footing as domestic tenderers.

With a clear set of rules and a well-prepared tender, a foreign tenderer can compete on a level playing field and win valuable cross-border contracts. One prominent example is Rail Baltica, the largest infrastructure project in Baltic history. Its procurement and supply chains have opened real opportunities for international participants, and international experience and partnerships are rather an asset than a burden.

1. The law generally does not allow an “Estonian-only” conformity requirement

A long-standing issue in Estonian public procurement has been procurement conditions that require an Estonian-based standard, such as a particular label, certificate, guarantee, or permit. Such requirements may be unlawful. A contracting authority may refer to conformity requirements in technical specifications, the procurement contract, or as a compliance criterion, for example, requiring labels to demonstrate that goods, services, or works meet environmental, social, or other special conditions. However, the contracting authority must still respect the principle of equal treatment of tenderers from different countries.

The Estonian Public Procurement Act reflects this principle. For example, if a contracting authority requires a label, test report, or certificate, it must allow the tenderer to prove compliance using an equivalent label, report, or certificate issued by another institution. In other words, a foreign label, report, guarantee, or certificate is generally acceptable evidence of qualification or compliance. This obligation does not apply where a specific document issued by a specific body is required by law. For instance, for certain construction works, a contracting authority may require that a building permit application be made in Estonia.

2. A contracting authority may not require Estonian procurement contracts as references

There are limited exceptions. If a certain professional activity requires a particular registration or permits under Estonian law, a contracting authority may set this as a qualification requirement. For example, mining or waste management may require an environmental permit issued by the Environmental Board, and the contracting authority may require such a permit when launching procurement in those areas.

That said, this does not justify broader requirements relating to the tenderer’s general corporate organization, such as requiring the tenderer to be registered in the Estonian Commercial Register or to have submitted non-mandatory notifications to the Estonian Register of Economic Activities. It is also generally unlawful to require that a tenderer has experience specifically with Estonian contracts, or that references must be procurement contracts, because equivalent experience may come from other jurisdictions or from private sector contracts.

Even where a contracting authority aims to promote local entrepreneurship by requiring prior experience operating in Estonia, such a condition typically violates the principles of equal treatment and effective competition. In that situation, the tenderer may request an amendment and/or challenge the contracting authority’s refusal to amend the conditions.

3. Unlawful procurement conditions remain valid until amended or annulled

According to the principles of administrative procedure, unlawful procurement conditions remain effective until they are amended or declared void. This may lead to a situation where, despite the unlawfulness of the procurement conditions, both tenders and contracting authorities are obligated to follow them when submitting and processing tenders.

A tender who notices, or suspects, that a condition is overly restrictive can either ask the contracting authority to specify or amend the condition, or seek to have the documents brought into compliance with the law by filing a challenge with the Public Procurement Review Committee.

4. Tenderers have the right to ask questions about procurement conditions

Estonian public procurement is conducted through a dedicated electronic information system, which allows tenderers to submit questions about the procedure and the procurement documents without a fixed limit on the number of questions. The contracting authority is required to respond to questions submitted in time. Requests for clarification can help avoid a situation where a tender is rejected because the tenderer misunderstood the requirements. If the procurement documents are contradictory or unclear, this should first be addressed through clarification requests.

While the law sets certain restrictions on what contracting authorities may include in their replies, for example, responses should not introduce essential new information without which tenders could not be submitted or make already-submitted tenders non-compliant without a formal amendment—it does not restrict tenderers from asking questions.

Case law indicates that explanations provided by the contracting authority are binding where they clarify or specify existing conditions rather than change them. If a response goes beyond clarification, it is typically not binding as a “clarification” and may trigger an obligation for the contracting authority to amend the procurement documents and extend the tender submission deadline.

5. Tenderers may challenge both procurement conditions and decisions

A tenderer should consider filing a challenge if the contracting authority refuses to correct contradictory or disproportionate conditions, or if the contracting authority makes an unlawful decision during the procedure. The state fees for initiating the procedure are relatively modest, typically either 640 euros or 1,280 euros.

A tenderer, applicant, or an economic operator interested in participating may challenge both the procurement documents and decisions made during the procedure. For example, it is possible to challenge decisions to exclude or not exclude a tenderer or competitor, to qualify or not qualify a tenderer or competitor, to declare a tender compliant, to reject a tender or reject all tenders, and to award the contract.

When challenging decisions, standing is important. Generally, only the tenderer whose rights are affected has the right to challenge. A tenderer who would be able to conclude the procurement contract if the challenge succeeds may also have standing. For example, if a tenderer is ranked second, it may also need to challenge relevant decisions concerning the first-ranked tenderer.

Short procedural deadlines also apply. In many cases, the tenderer has only 3 to 10 days from the time it becomes aware of the infringement of its rights to initiate the challenge procedure.

6. Foreign tenderers can register in the Estonian e-procurement system with relative ease

Foreign tenderers often have questions about who can register in the e-procurement system and submit a tender on behalf of the tenderer. Registration can be completed by any natural person who is able to authenticate using an EU Member State eID. Importantly, when registering the tenderer, that person’s authority does not typically need to be proven at the registration stage.

A tender may be submitted on behalf of the tenderer either by the natural person who registered the tenderer or by another person who has been authorised in the system. If the contracting authority cannot independently verify the person’s right of representation, the tenderer will usually need to submit documents enabling verification, such as a commercial register extract and/or a power of attorney.

The law does not require the tender to be digitally or otherwise signed. However, a contracting authority may impose a signature requirement in the procurement documents. If a formal requirement effectively restricts foreign tenderers from participating, it may be considered unlawful.

In such a situation, the tenderer may request an amendment or seek a finding of unlawfulness by the Public Procurement Review Committee. In addition, because formal defects are not always treated as substantive deficiencies, the tenderer may in some circumstances submit the tender in another form and argue that the defect is non-substantive.

7. Foreign tenderers may request amendments to procurement contracts

Public procurement law regulates the process from planning to contract conclusion and also contract amendments. If a foreign tenderer that has concluded a procurement contract needs to change it, the same procedural rules apply as for Estonian tenderers. In practice, amendments are typically initiated by a reasoned request to the contracting authority, including an explanation of why the change is permitted.

Depending on the value and nature of the proposed change, permissible amendments are commonly assessed as either insignificant changes, which are generally allowed, or significant changes, which may be allowed only under specific conditions. In all cases, amendments must not change the overall nature of the procurement contract.

For example, under a de minimis approach, the contracting authority may amend the contract if the overall nature of the contract is unchanged and the total value of amendments does not exceed the statutory threshold, or 10 percent of the original contract value for goods and services, or 15 percent for construction works. This means, for instance, that for a goods contract worth 1,000,000 euros, additional goods of the same type worth up to 100,000 euros may be ordered without major restrictions.

A “significant change” may include an amendment that alters the general nature of the contract, for example where it introduces conditions that would have broadened the range of potential tenderers or compliant tenders, shifts the contractual balance materially in favor of the awarded tenderer in a way not foreseen in the contract, substantially expands the scope of the contract, or replaces the awarded economic operator with a new one. To justify such an amendment, it generally must be shown that the change was caused by circumstances a diligent contracting authority could not foresee, the one-off change does not exceed 50 percent of the original contract value, and the overall nature of the contract remains unchanged.

If a tenderer anticipates already at the tender stage that significant changes may be needed during performance, it may be prudent to define clear amendment mechanisms in advance, such as rules for price increases or indexation. In that situation, the tenderer should approach the contracting authority with a proposal to amend the procurement documents before tenders are submitted.

Magnusson Estonia has long-standing experience advising and representing clients in public procurement matters, including procurement planning, submission of tenders, challenge procedures, and performance and amendment of procurement contracts. If you plan to participate in an Estonian public procurement, need support communicating with procurers, want to challenge procurement conditions or decisions, or have other questions related to the topics above, please contact our specialists.