On 23 May 2019, the Lower Austrian State Parliament adopted an amendment to the Lower Austrian Procurement Review Act (NÖ VNG) whose main point was a fundamental change in the procedure before the Lower Austrian Public Procurement Arbitration Board.

The Amendment was passed in response to an infringement procedure initiated by the European Commission against Austria because it considered the provisions of the NÖ VNG regarding the obligation to have recourse to the Arbitration Board before applying to the State Administrative Court and the blocking effect of the application for arbitration to be incompatible with Directive 89/665/EEC.

With the newly adopted amendments, which are expected to enter into effect in late July 2019, arbitration proceedings are no longer mandatory before review proceedings are instituted before the State Administrative Court. Contractors may still apply, albeit voluntarily, to the Arbitration Board, but the contracting authority is no longer obliged to accept arbitration proceedings.

Even more important for contractors is the fact that the time limit for filing an application for review will no longer be suspended or interrupted, but will continue to run. Considering the already short time limit of 10 and 15 days to challenge a decision, the application for review will therefore have to be prepared in parallel with the application for arbitration.

The new regulation of the arbitration procedure will therefore doubtlessly cause it to massively lose its relevance. Legislators themselves have apparently come to the same conclusion, as the present amendment provides for the arbitration procedure to be totally abolished by the end of April 2020.

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