Public Procurement in Malta – Part 1
This 4-part series aims to explain the lifecycle of public procurement in Malta: from the initial planning of a tender, through publication and bidding, evaluation of offers and contract award, to the execution of the contract and its enforcement and litigious action.
Introducing Public Procurement
Malta’s public procurement regime is built on a robust legal framework aligned with European Union (EU) law. The cornerstone of this framework is the Public Procurement Regulations (Subsidiary Legislation 601.03), introduced in 2016, these Regulations transpose Directive 2014/24/EU and regulate procurement of works, services, and supplies by ministries, departments, local councils, and public entities, depending on applicable thresholds and scope.
Maltese law reflects EU principles of transparency, competition, and equal treatment. Major tenders are open to EU-wide competition and subject to strict fairness standards.
The system is overseen by several important bodies. Foremost is the Department of Contracts, Malta’s central procurement authority and regulator and headed by the Director of Contracts. Apart from issuing standard procedures and guidance, the Department of Contracts may also act as the contracting authority in certain high-value tenders.
Indeed, the value of the work, service or supply to be procured will determine the extent of the Department of Contract’s involvement. If the estimated value of the contract is less than one hundred forty-three thousand euro (€143,000) or it involves a Sectorial Procurement Directorate in the name of the contracting authority listed under Schedule 16, with a contract value exceeding ten thousand euro (€10,000) but not seven hundred and fifty thousand euro (€750,000), then the Director is not involved. If on the other hand, the estimated value of the contract equals or exceeds the threshold of one hundred forty-three thousand euro (€143,000) the process shall be issued, administered and determined by the Director on behalf of the contracting authority.
Another pivotal body is the independent Public Contracts Review Board (PCRB), which serves to hear complaints and appeals by aggrieved bidders. The PCRB provides legal redress at various stages of the tender process, and is an independent tribunal, functioning independently and impartially from contracting authorities, and has jurisdiction to hear complaints from bidders or interested parties about tender processes and contract awards. The PCRB is composed of a chairperson and two members (one as Vice-Chair), appointed by the Prime Minister for three-year terms. Its hearings are public and conducted in a judicial manner, with parties having the right to attend and be represented (or accompanied) by legal professionals to defend their interests. This framework allows the PCRB to act as a quasi-judicial arbiter that can quickly address procurement grievances while upholding the principles of EU and Maltese procurement law. In addition to pre- and post-award appeals, the PCRB may also review decisions to cancel a tender or terminate a contract. Where a contracting authority withdraws a procurement process, or where the Director of Contracts terminates an existing contract, affected bidders or contractors may challenge the lawfulness of such decisions before the PCRB. The Regulations expressly list cancellations of a call for tenders among the decisions that can be appealed. Likewise, a contractor whose contract is cancelled by the authorities may file an objection within 10 days of that decision. The PCRB then reviews whether the cancellation was lawful and justified.
Planning and Pre-Tender Phase
Every public procurement begins with a planning and preparation phase. In Malta, before any tender is published, the contracting authority must conduct a needs analysis, possibly consulting relevant stakeholders, to define the scope of what is required. For example, if a ministry needs a new IT system, it will assess what functionalities are needed, the approximate budget available, and the timeframe for delivery.
An important part of planning is market research. Contracting authorities are expected to research the market to understand what products or services are available and at what cost. Maltese procurement guidelines encourage authorities to engage in Preliminary Market Consultations (PMCs) as permitted by Regulation 47 of S.L. 601.03. A PMC allows the authority to seek advice or information from independent experts or even potential suppliers before finalizing the tender. For instance, an authority might publish a request for information or hold meetings with industry players to gather insights on the latest technologies or realistic cost estimates. The Regulations explicitly allows this kind of pre-tender consultation, provided it’s done in a way that does not distort competition, meaning that any information gleaned from the market must be used fairly and consulted companies should not be favoured. All potential bidders should ultimately get the same information and opportunity. The Department of Contracts even provides standard templates and an option on the e-procurement platform to carry out Preliminary Market Consultations openly, underscoring that these consultations are encouraged as long as fundamental principles like non-discrimination and transparency are upheld.
During the planning phase, the contracting authority will draft the procurement documents and define the strategy. This includes writing clear technical specifications or terms of reference that describe what is being purchased, setting selection and award criteria, and preparing the contract conditions that the eventual winner will have to fulfil.
Maltese and EU law require that specifications are non-biased and do not favour any brand or provider unless necessary, and even then, equivalent makes, or source should be allowed. The contracting authority must also decide whether to divide the contract into lots, smaller sub-contracts, to allow small and medium-sized enterprises (SMEs) a better chance to participate, in line with EU policy promoting SME access to public contracts.
At this stage the authority calculates the estimated value of the contract following rules in the regulations (for example, considering the total expenditure over the contract’s duration). The estimated value is critical because it determines what procurement method is used and whether EU-wide publication is required. If the estimated value exceeds the EU directive’s thresholds (which are updated periodically, but cover most substantial contracts), the tender will need to be advertised in the EU’s Official Journal, inviting bidders from all member states. Even below those thresholds, Malta’s own rules still mandate transparency: generally, any contract above €5,000 in value must go through a formal process and be published on the government e-procurement portal.
AE Legal can assist you in navigating the procurement process from initial tender drafting to representation.
The above is intended for information purposes only and is not intended to act as legal advice.
