Online or void – New rules for contracting with Czech state entities
Do you have any business with the Czech state or municipal entities? The question applies also to corporations or entities controlled or directly financed by government. If the answer is yes, you will need to make sure that contracts concluded with such entities after 1 July 2017 have been uploaded to an online public register. The new regulation has a broad impact as it also covers public hospitals and schools, research institutions and of course most governmental agencies (forget about the secret service or the president’s office).
The new obligation to publish the contracts begins 1 July 2016 but there is a one-year grace period during which non-compliance bears no consequence. Either party (the “public” or the “private” one) may upload the contract, so it is advisable to agree in advance who will do the job. Be careful because no contract concluded after 1 July 2017 may become effective before its publication. If neither party complies within three months, the contract automatically terminates without ever becoming effective.
As always, there are exceptions and the parties should redact some details before the upload. The most interesting exemptions are for personal data and trade secrets. We expect extensive discussions around the application of the later one. Which interest will prevail? Open information about the use of public funds or the trade secret protection? The new law itself does not provide much insight to the question as it is inconsistent in defining of the scope the trade secret exemption. We will see how the discussions and market approach will evolve during the first “trial” year. Also, one year is long enough for potential amendments to the law (the parliament is currently discussing an additional exemption for the state-owned brewery Budějovický Budvar).
Interestingly enough, the new law may be a substantial contribution to the open data buzz, at least in the Czech Republic: The contracts must be published in a machine-readable and open format.
This article was originally published at Czechstartups.org