Public procurement in Cyprus: 10 common misconceptions under Cypriot and EU Law
By Maria Christofi
Public procurement procedures are often surrounded by persistent misconceptions such as the perception that they are strictly formal processes where “the lowest price always wins” and where even minor errors automatically lead to exclusion. In practice, the legal framework governing public procurement is significantly more nuanced.
From infrastructure and road construction projects to the procurement of medical equipment, school supplies and the construction of hospitals or educational facilities, public procurement in Cyprus operates within a complex legal environment. This framework combines national legislation with European Union directives and the jurisprudence of the Court of Justice of the European Union (CJEU).
Although the Cypriot legal system has fully transposed the EU public procurement directives, practical application continues to give rise to misunderstandings, sometimes due to the complexity of procurement procedures and sometimes due to an incomplete understanding of the underlying legal principles.
This article highlights some of the most common misconceptions encountered in practice and clarifies what applies under Cypriot and EU public procurement law.
- Does the lowest price always win?
No.
Since the adoption of Directive 2014/24/EU, contracting authorities are encouraged to apply award criteria that enable them to obtain works, goods and services of appropriate quality that meet their actual needs.
The “most economically advantageous tender” (MEAT) may be identified on the basis of price, cost, or the best price-quality ratio. Consequently, the lowest price is no longer necessarily the decisive factor but rather one of several possible evaluation parameters, depending on the nature and characteristics of the specific contract.
2. If a document is missing, is exclusion automatic?
Not necessarily.
The Court of Justice of the European Union clarified in Case C-599/10, SAG ELV Slovensko, that EU law does not preclude contracting authorities from requesting clarifications or allowing the correction of obvious clerical errors in a tender, provided that such intervention does not in substance amount to the submission of a new tender.
3. Can contracting authorities impose any requirements they wish in tender documents?
No.
The principles of proportionality, transparency and equal treatment are fundamental pillars of EU public procurement law. The CJEU has emphasised, among others in Case C-76/16, Ingsteel and Metrostav, that minimum capability requirements must be linked to and proportionate to the subject matter of the contract.
Financial and economic capacity requirements must therefore be suitable for assessing the financial and economic standing of the economic operator and proportionate to the importance of the contract. Requirements that exceed the actual needs of the contract may be considered disproportionate and may unjustifiably restrict competition.
4. Do review procedures merely delay procurement processes?
This perception does not reflect their actual function.
In Cyprus, review procedures before the national review body (Tenders Review Authority) allow procurement errors or disputes to be addressed within relatively short timeframes. The availability of interim measures aims to safeguard the effectiveness of remedies without unnecessarily disrupting procurement procedures, unless such disruption is justified after balancing the interests involved, including the public interest.
5. Can a public contract be freely modified like a private contract?
No.
Although the signature of a public contract creates a contractual relationship between the contracting authority and the contractor, the contract does not lose its public law dimension. Public contracts remain subject to principles of legality, transparency and competition.
From an EU law perspective, contract modifications are particularly sensitive because they may affect the outcome of the original competitive procedure. The CJEU has consistently held that a modification which substantially alters the original terms of the contract may amount to a new award if it changes the economic balance of the contract in favour of the contractor, significantly extends the scope of the contract or introduces conditions that could have influenced the outcome of the original tender procedure.
The rationale is clear: a contract awarded through a competitive process cannot be transformed during its performance into a substantially different contract without reopening competition.
6. Are exclusion grounds applied automatically?
No.
Article 57(6) of Directive 2014/24/EU introduces the concept of “self-cleaning”. Even where a mandatory or discretionary ground for exclusion exists, an economic operator may demonstrate that it has taken sufficient remedial measures to restore its reliability.
Such measures may include compensation for damage caused by active cooperation with investigative authorities and the implementation of effective compliance and internal control mechanisms to prevent future misconduct.
Contracting authorities must assess these measures before deciding on exclusion and must provide adequate reasoning, considering the seriousness of the infringement and the principle of proportionality.
7. Is the contract performance stage merely a formal phase?
Not at all.
Contracting authorities have a duty to monitor the performance of the contract, verify compliance with contractual obligations and properly document any modifications. Deviations from contractual terms without proper approval may lead to liability or even invalidate certain contractual arrangements.
8. Are public procurement procedures unsuitable for small and medium-sized enterprises?
On the contrary.
EU public procurement law actively promotes the participation of SMEs. This is reflected in measures such as the encouragement of contract division into lots, restrictions on disproportionate turnover or experience requirements and the possibility for economic operators to participate as groups or consortia without a predefined legal structure.
SMEs are not only able to participate; the system is designed to encourage their involvement.
9. Must abnormally low tenders always be rejected?
No.
An abnormally low tender is one that raises doubts regarding its seriousness or the ability of the tenderer to properly perform the contract. In such cases, the contracting authority must first request explanations from the tenderer.
Exclusion may only follow where the explanations provided are deemed unsatisfactory. Public procurement law does not penalise low prices as such; it addresses the inability to justify them.
10. Can contracting authorities require a specific legal form for a consortium before submission of a tender?
Generally, no.
EU public procurement law seeks to maximise participation in competition. Economic operators may participate individually or as groups without being required to adopt a specific legal form at the tender submission stage.
The CJEU has indicated that requiring a specific legal form in advance may infringe the principles of proportionality and equal treatment, particularly where it unnecessarily restricts participation by SMEs or groups of economic operators.
Under Article 19 of Directive 2014/24/EU, contracting authorities may not require groups of economic operators to adopt a specific legal form to submit a tender or request to participate. However, they may require a particular legal form after the contract has been awarded, where this is necessary for the proper performance of the contract and objectively justified.
Conclusion
Public procurement is not merely an administrative process. It is a legal and economic mechanism that significantly affects competition, public spending and the functioning of markets.
Misinterpretations, however minor they may appear can lead to distortions, disputes and unnecessary delays. A proper understanding of the applicable rules, combined with transparency and good faith between contracting authorities and economic operators, remains essential for ensuring a modern and reliable public procurement system that effectively serves the public interest.
*Maria Christofi is a Senior Associate at Elias Neocleous & Co LLC