COVID-19: Recommencement of public sector procurement procedures conducted electronically

This royal decree introduces important new provisions on public procurement along with aid and subsidies for the culture industry:

1. Measures in relation to public procurement

Recommencement of procurement procedures and chance to start other new procedures

Additional provision 8 of the royal decree-law lifts the suspension of the terms and interruption of the time periods for procurement procedures run by entities in the public sector, where they are carried out electronically. So:

• Any procurement procedures that were suspended when declaration of the state of emergency took place, are allowed to continue until their completion.
• New procedures are allowed to be commenced.
• The measure includes any special appeals that may available in either case.

Amendment of article 34 of Royal Decree 8/2020

• Advance payments: it is provided that if the suspension of contracts for services and supplies with successive obligations under subarticle 34.1 is ordered, advance payments may be made (once or periodically) to the contractor. This does not limit the ability of the contracting authority to request the provision of a guarantee in any of the forms specified in the Public Sector Contracts Law (LCSP) before it makes that payment.
• Impossible performance in relation to concessions: the last paragraph of subarticle four is amended to specify that the defined balance restoration regime, with satisfaction of the other requirements, will only apply, if relevant, in relation to the portion of the contract affected by impossible performance.
• Scope of application: a new paragraph is introduced in subarticle seven, clarifying that the article includes any public contracts in effect on entry into force of the royal decree-law, regardless of which public procedure legislation they are governed by under the special administrative terms.

2. Public aid and subsidies for the culture sector

Measures to facilitate funding for the cultural sector

• It allows two subsidies to be granted directly to Sociedad de Garantía Recíproca Audiovisual Fianzas SGR: (i) the first, amounting to €16,250,000, is to increase its technical reserves, and (ii) the second, amounting to €3,750,000, is to cover the cost of the arrangement fee relating to guarantees for the loans provided to the cultural sector by reason of the COVID-19 crisis.
• It provides, also, that Sociedad de Garantía Recíproca Audiovisual Fianzas SGR will put in place, in conjunction with any financial institutions wishing to participate, six funding facilities targeted at companies in the cultural sector with an aggregate commitment of €780 million. Namely: (i) an audiovisual facility; (ii) a performing arts facility; (iii) a music industry facility; (iv) a book industry facility; (v) a fine arts facility and; (vi) a facility for other companies in the cultural sector. Every facility will fund projects in their associated area and will have at least €40 million available. The aim is to provide funding to the players in each sector on the most favorable terms.

Measures to support performing arts and music

• Two facilities are determined, managed by INAEM (Spanish performing arts and music institute): (i) Support for retaining performing arts and music structures, and (ii) Aid for performing arts and music activities and cultural projects. These types of aid are exceptional and will be granted, once only, in a competitive bidding process, on the terms and subject to the conditions that will be determined in the decision inviting applications. Those able to apply are the self-employed, and public or private legal entities, if they are engaged in the performing arts or music, and have a permanent establishment in a member state of the European Union or European Economic Area, in addition to which the aid must relate to scenarios that, without any doubt, arise from the emergency caused by COVID-19.

Measures to support cinematography and audiovisual arts

• Extension of the time periods for fulfilling obligations imposed on beneficiaries of general and selective aid for the production of feature films based on project plans, and of aid for short films based on project plans, granted between 2016 and 2019.
• Addition of flexibility in relation to fulfilling certain obligations that must be performed in 2020 for the beneficiaries of general and selective aid for the production of feature films based on project plans in relation, among others, to the number of halls or theaters where the audiovisual works are to be premiered, together with the time period for filming to start.
• The definition of “commercial premiere” for films has been extended temporarily to include, until cinemas start operating again, those taking place on television audiovisual media services, electronic media services broadcasting television channels and services with program catalogs.
• Exceptionally, it is allowed, where the interested party so requests, to pay 50% of the general aid granted for the production of feature films based on project plans, without first having to notify the ICAA (Spanish cinematography and audiovisual arts institute), or the competent autonomous community agency, of the start of filming.
• Lastly, it allows aid to be granted directly to owners of halls and theaters used for showing films to cover, among other costs, those incurred to adopt any health protection measures required of them or to carry out campaigns advertising their return to activity. The maximum amount will be determined by the number of screens available at every showing hall or theater.

Measures to support the book and contemporary art sectors

• Creation of an extraordinary aid facility to provide urgent support for retaining the structures of the book industry and of the chain of supply of books. This aid facility will have an aggregate lending capacity of €4 million and will be managed by the Directorate General for Books and the Promotion of Reading. It will be granted in a competitive process, subject to the terms and conditions that will be determined in the respective decision inviting applications. 
• Creation of two facilities, managed by the Directorate General for Fine Arts, aimed at (i) granting aid to promote Spanish contemporary art and (ii) allowing the specific acquisition of Spanish contemporary art for the Spanish state’s public collections.

Lastly, article 14 of the royal decree-law contains  other measures to support the cultural sector, notably  the payment, to beneficiaries of public subsidies and aid granted for the performance or achievement of cultural activities, goals or projects, of any suitably supported nonrefundable expenses eligible for subsidies that they may have incurred to achieve the subsidized objective, or perform the subsidized project or activity, where  they were not able to be completed in full or in part, as a result of the measures under Royal Decree 463/2020, of March 14, 2020 and its extensions or any adopted by the competent authorities to confront the COVID-19 health crisis.

Measures to support donations and the cultural sector have also been adopted in the tax field, which may be viewed here.