On 26 October 2021 PPLA filed with the President of the Public Procurement Authority a request for the issuance of an opinion concerning the possibility to use the institution of remittance ( Polish: przekaz, in the meaning of the provisions of Art. 921(1) of the Civil Code) of the remuneration payable to the contractor by the contracting authority in the course of performance of the public procurement agreement, so as to cover the contractor’s debt resulting from sub-contracting agreements.

The request is driven by the doubts that arise with regard to the admissibility of using remittance and with regard to the relationship between the provisions of the Civil Code on remittance and the provisions of Public Procurement Law on direct payment to the subcontractor. A confirmation that it is possible to make payments to the subcontractors by way of remittance is of major importance for the execution of procurements for construction work. When the remittance is made the subcontractor effectively obtains the payment that is due to it. The contracting authority is, in turn, confident that payment to the subcontractor was actually made which releases it from the obligation to open the procedure of direct payment referred to in Art. 465 of Public Procurement Law and, with regard to the subcontractors performing construction work, also from the joint and several liability towards them under Art. 647(1) § 1 of the Civil Code.

Ultimately, a remittance is also advantageous for the contractor. The contractor may thus make payments to its subcontractors in a simplified manner without having to directly commit its own funds.

The text of the request is available here.