In recent days, there has been a lot of buzz about the competition for grant applications organised by the Wielkopolska Regional Development Agency as part of the grant project 'WIELKOPOLSKA TARCZA ANTYKRYZYSOWA’, implemented by Wielkopolska Agencja Rozwoju Przedsiębiorczości Sp. z o.o. as part of the Wielkopolska Regional Operational Programme 2014 – 2020. Well, the competition, organised a few days ago, can 'boast’ the infamous record of exhausting the allocation in less than a minute from its start. Disappointed entrepreneurs, for whom support from WARP is often a question of to be or not to be of their business, have announced mass protests, and not only formal ones, but they have also taken protest action in the streets. How does the issue of grant-making look from the perspective of the rules on competitions of proposals? This is discussed in more detail below.
In the rich history of granting subsidies one could already observe e.g. queues of applicants in front of PARP ( the order of physical submission of applications was then decisive ), or, as it was the case in Wielkopolskie Voivodeship, a race for nanoseconds in front of a computer to submit an electronic form. To this day, probably many entrepreneurs who had the dubious pleasure of crowding in front of the headquarters of one of the institutions recall the queue lists, the queue stewards or the security guards watching over their place in the queue.
Of course, we move with the times, so today, instead of queue stewards or muscular security guards, it is necessary to employ IT specialists and release bots into the network in order to get support. These introductions are probably no fun for the entrepreneurs themselves, who wanted to benefit from the WARP Shield and ultimately did not get this support because they were overtaken by bots.
The competition of covidova applications organised by WARP, which provided for almost PLN 100 million to be distributed, eventually closed very quickly, and , as indicated by the organiser of this competition, in total more than 50 thousand applications were registered for a total amount of PLN 1.7 billion.
As WARP informs, the first application was registered by the generator’s server at 09: 00:00.017267. The last application was registered at 09:01:04.971690, and thus the call was closed (the last application for type B was registered at 09:00:27.321448 ).
The selection criteria and the entire competition procedure must also meet the requirements of transparency and non-discrimination
Already several years ago, in the post Negative assessment – how to appeal effectively? (part II) I pointed out that the control of negative project assessments should begin with the examination of the very documentation prepared by the institution, the criteria and the procedure for awarding grants. This is because the overriding principles included in both the General Regulation and the Implementation Act also or even primarily concern the project selection criteria.
The General Regulation requires that applications are selected in a transparent and non-discriminatory procedure. Additionally, the Implementation Act also requires that the selection of projects should be fair, and additionally, the principle of equal treatment of beneficiaries can be derived both from the General Regulation and the provisions of the Constitution of the Republic of Poland. The fact that the control of the provisions of the competition documentation is not only possible, but should even be a rule within the framework of the appeal procedure, has been repeatedly stated by administrative courts (e.g. judgment of the Supreme Administrative Court of 2.3.2011, ref. II GSK 177/11).
In my opinion, the verification of the chances of the protest to be successful should start with an examination of the process of the competition itself and the competition documentation adopted by the competition host. It may turn out that the criteria used to assess our project are inconsistent with generally applicable regulations, discriminatory or non-transparent, or disproportionate to the assumed goal. Similar flaws may be related to other provisions of the competition documentation, e.g. the provisions of the competition rules, the rules of the Evaluation Committee, the criteria guide, the template of the application or the business plan or the instructions to these documents which may be unclear, imprecise or insufficient.
What is the disputed criterion
What is the documentation that caused the competition to proceed in this way? As WARP itself points out, in accordance with the project Regulations, applications were accepted according to the date and time of submission of the grant application registered in the application generator (in accordance with the date and time specified by the generator’s server).
Here, it should be noted that the grant application competition was conducted by WARP on the basis of an agreement with the Office of the Marshal of the Wielkopolska Region. The criteria for this competition and its terms and conditions are set out in the document ’CON DITIONS AND RULES FOR GRANTS GRANTED UNDER THE GRANT PROJECT „WIELKOPOLSKA TARCZA ANTICRISSA”’. The competition was aimed at micro and small entrepreneurs affected by the Covid pandemic through a drop in turnover in 2020. According to the above-mentioned document, the selection of applications was to be determined, inter alia, by the order of applications (point II.3). At the same time, the grantor, i.e. WARP, was to ensure the compliance of the selection of applications with the Criteria for the selection of entrepreneurs entitled to receive a grant to cover the costs of support for maintaining operations in a situation of a sudden shortage or lack of liquidity of micro and small enterprises under ROP WK-P 2014-2020 .
According to this document, the order in which applications were submitted was to be relevant to the evaluation of the scoring criterion Declinein turnover of the grantee„In the case of the same number of points, the higher position in the ranking or receipt of support is determined by the order of submission of the grant applications„.
The order of submission was therefore not a stand-alone criterion for project selection, but should have determined the award of a certain number of points in the scoring criterion Decline in turnover of the grantee.
The order of submission of the applications was foreseen as decisive in the document „Terms and Conditions” and in the Regulations of the competition prepared by WARP. The key provisions concerning the criterion „first come, first served” can be found in the Regulations.
According to § 1.(5) of the Regulations for the grant application competition
Applications are received, evaluated and ranked according to the date and time (to the nearest second) of submission of the grant application registered in the application generator (according to the date and time specified by the generator’s server). The ranking list order is determined by the date and time of submission.
This provision is further reproduced in § 11. point 31 of the Rules of Procedure.
Applications are received, evaluated and ranked according to the date and time (to the nearest second) of submission of the grant application as registered in the application generator (according to the date and time specified by the generator’s server). The ranking list order is determined by the date and time of submission.
Subsidy snipers, bots or first come, first served - does such a criterion discriminate
Administrative courts have repeatedly had the opportunity to assess competitions in which the order of submission was the only relevant criterion. When examining such a criterion, two things should be distinguished here. First, whether such a criterion in itself fulfils the requirements I wrote about above, i.e. is it transparent, non-discriminatory and allows the objectives of the competition to be met, and second, whether the application procedure as such allows the abovementioned principles to be respected with such a criterion.
Having regard to the aforementioned provisions of the call for proposals, I have serious doubts as to their compliance with the principles of transparency, proportionality and fairness. First of all, from the juxtaposition of the documentation of the grant competition (Regulations) and the very criteria for selection of applications one may conclude that the solutions adopted in the Regulations, de facto the additional criterion „First come first served”, are not in compliance with the Criteria adopted by the Monitoring Committee.
The order of submission of applications should be important for the verification of the point criterion of the turnover drop and should be used as an auxiliary criterion, and not as a criterion that determines the application to be evaluated at all. In addition, the Rules themselves do not provide any grounds for leaving applications lodged after a certain minute and second, at most applications lodged an hour later could be left out of consideration – after all, it is the „date and time” of submission that is decisive.
Such imprecise provisions regarding the 'first come, first served’ criterion have, moreover, already been questioned by rulings of the WSA in Poznań (ref. III SA/Po 449/18 and III SA/Po 641/19).
The Court finds no rational explanation as to why the criterion in question was not communicated to those concerned in an unequivocal manner and was not specified in the document - 'Criteria for the selection of operations together with the procedure for setting or amending the criteria'. The reference to documents publicly available on the Association's website and the reference to the counselling provided does not counterbalance the fact that the deadline for the submission of applications constitutes an additional assessment criterion - in the hypothetical situation of two or more applications obtaining the same number of points. Since the deadline for the submission of applications was set, the applicant, by answering the detailed questions contained in the "Application Card" form and submitting the application together with the necessary documents by the deadline set for the competition, has grounds to expect that the criteria directly communicated to potential beneficiaries will be decisive for the selection for funding. The criterion referred to by the Association is absent in the documents indicated above. At the same time, this criterion (i.e. as regards the priority of the application receipt at the LAG office with the same number of points awarded according to the local selection criteria for operations) may constitute grounds for discrimination against the entity that takes part in the procedure initiated by the application for project financing despite the fact that the application was submitted within the deadline indicated by the Association.
Speed an end in itself
Irrespective of these remarks, in my opinion a competition in which the decisive criterion is the order in which the applications are submitted has no raison d’être when juxtaposed with the objectives of EU funds and the principles of their distribution. In this particular case, support is targeted at entrepreneurs who have been affected by Covid-19 – the criterion of turnover decrease is also provided for – differentiation of entrepreneurs should take place only in this criterion, the more so as the criteria provide for an algorithm allowing all submitted projects to be ranked on a scale of as many as 3,000 points, depending on the size of the turnover decrease.
I have already written many times on the blog that the speed of recognition of applications is not and should not be any value in itself, and certainly not a value which determines whether a given application will be recognised. The purpose of competitions, after all, is not to promote revolver applicants, but those applicants who are „the best”. In different cases, of course, best will mean different things; in one case, the best will be the one who submits the most innovative project, the most interesting service, the most promising research project or, as in the case of the covidova application competitions, will be the one who suffers the most damage or deserves the most support – taking into account criteria such as the branch of activity and the effects that the pandemic has had on it. It is certainly not 'best’ for the applicant to apply in a particular nanosecond – often with the support of bots.
As I have written about this before, in my view, the restriction of applicants’ rights cannot be motivated by the finite nature of EU funds and the need to spend them quickly – the Constitutional Court itself has stated many times that speed is not a protected constitutional value…. On the other hand, both the provisions of Regulation 1303/2013 and the provisions of the Charter of Fundamental Rights emphasise the important role of ensuring, on the basis of national legislation, protection for those participating in competitions and benefiting from grants at a level at least no worse than in other similar situations.
To conclude this section, let the last sentence of the judgment of the Supreme Administrative Court recently issued in our client’s case (case number I GSK 357/20):
Competition procedures should be structured in such a way that the applicant's ability to prove their case allows them to realistically obtain funding.
Subsidy snipers and bots - a duel for subsidy in the OK Corral
The first theories trying to explain the situation with the 'sudden’ exhaustion of funds in the competition are appearing in the press. Suspicion falls on bots or 'grant snipers’, in the simplest terms, platforms that, on behalf of companies applying for a grant, automatically submit an application in a fraction of the first second.
Reflecting on the situation of covidove application competitions, the historical duel at the OK Corral immediately comes to mind, where the speed at which the participants in the duel drew their weapons decided who would win and who would die. In the end, as we know, the shootout at the OK Corral was survived by the 'good’ Wyatt Earp, and the evil Clanton brothers fell. However, I don’t know if the intention of the organisers of covid competitions aimed at supporting entrepreneurs in very difficult circumstances was to treat them like gunmen who, through the speed of their applications, are supposed to snatch up the resources they need to survive. Well, unless this competition is precisely about promoting 'grant snipers’ rather than entrepreneurs in need of support.
Are those entrepreneurs who didn’t use bots to submit an application really supposed to „die” in Tombstone? Was this the intention of the competition organisers? Probably not… After all, it is possible to organise a competition in which entrepreneurs do not have to queue up in real or online queues, you just have to want to. In my opinion, the serious arguments cited above speak in favour of cancelling the entire call for proposals. The next call should be prepared in such a way that the order of entering the applications into the system is not an access criterion. After all, in the event of multiple applications, completely different criteria may be decisive, such as the criterion of a decrease in turnover, which, if properly applied, will allow the organiser to fairly differentiate the situation of applicants, depending on which of them has been affected by the Covid-19 pandemic to what extent.
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KRZYSZTOF BRYSIEWICZ
Managing Partner / Legal Counsel
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