PRAG PROCUREMENT PROCEDURES Procurement procedures Which procedure

PRAG PROCUREMENT PROCEDURES

Procurement procedures Which procedure to apply ? Type of contract and thresholds OPTIONS • Open procedure/Restricted procedure • International / local • Competitive negotiated procedure / framework contracts • Dynamic purchasing system • Competitive dialogue • Negotiated procedure • Single tender 2

Award criteria • Lowest price - satisfying the conditions laid down • Best value for money ( most economically advantageous tender) • Criteria G Precise G Nondiscriminatory G Non prejudicial to fair competition 3

Types of contracts Services the provision of services e. g. technical assistance, studies, training or WHO: designs WHAT: Contracting Authority & Consultant Supplies WHAT: of maintenance, WHO: the purchase, leasing, rental or hire purchase of products including their design, manufacture, delivery, assembly or commissioning goods together with any related tasks e. g. installation, repairs, training and after-sales service Contracting Authority & Supplier Works WHAT: WHO: the execution of works, or both design and execution of works; a work is the outcome of building or civil engineering works. - Contracting Authority & Contractor - Contracting Authority & Supervising Engineer (separate services contract, will be detailed later during the 4

Contract Award Procedures Services budget € 5, 000 Single Tender Supplies budget € 5, 000 Single Tender Works budget € 5, 000 Single Tender € 5, 000 < budget < € 200, 000 1 Framework Contracts 2 Competitive Negotiated Procedure € 200, 000 budget International Restricted Tender Procedure € 5, 000 < budget < € 30, 000 Competitive Negotiated Procedure € 30, 000 budget < € 150, 000 Local Open Tender Procedure € 150, 000 budget € 5, 000 < budget < € 300, 000 Competitive Negotiated Procedure € 300, 000 budget < € 5, 000 Local Open Tender Procedure € 5, 000 budget International Open Tender Procedure 1. 2. International Open Tender Procedure International Restricted Tender Procedure (exceptional cases) 5

Publicity and Transparency Contract Forecasts • Must be published (in OJEC, Internet and any other appropriate media) once a year • Should give brief indication of project subject Procurement Notices • Must be published (in OJEC, Internet and any other appropriate media) at least 30 days after the publication of the contract forecast. • Must identify clearly and precisely the subject of the project and who the Contracting Authority is 6

Publicity and Transparency Selection and Award Criteria The Tender Dossier contains an evaluation grid outlining the selection criteria that will be used during the evaluation meetings and on the basis of which a contract will be awarded. These selection criteria may under no circumstances be modified during the evaluation procedure. 7

Shortlisting of Companies Short listing is a process whereby the Contracting Authority tries to identify the best placed and highest qualified companies to ensure a successful implementation for the project. It is standard operating procedure under the international restricted tendering procedure for services and a possible procedure for works projects. 8

Short listing procedure Interested companies submit an Application for an EC Funded Service Contract in response to the Procurement Notice This Application requires that the interested company provides the following information: 1. 2. 3. 4. 5. 6. 7. Name of the lead company and partners, Details of the contact person The economic and financial standing of the company The staff resources The fields of specialisation Experience related to the project A declaration confirming that the company is eligible to participate and will abide by the ethics clause. 9

Short listing procedure The Applications received before a given deadline are evaluated by a Shortlist Panel appointed by the Contracting Authority and composed of: A non-voting Chairman A non-voting Secretary An EC observer (optional) An odd number of voting members (minimum three) possessing the necessary technical experience. 10

Short listing procedure The task of the Shortlist Panel is to: • • establish a long list summarising all applications received eliminate those candidates who are ineligible check that the candidate’s financial situation is sound verify the candidate’s technical and professional capabilities with regard to • the staffing levels and extent of the professional experience of the management, and • the main services provided by the candidate during the previous years The selection must be carried out by applying the criteria specified 11

Short listing procedure The final shortlist should contain a minimum of four and a maximum of eight candidates. If the number of candidates meeting the selection criteria is less than four then the Contracting Authority may call upon additional candidates from other sources If the number of candidates meeting the selection criteria is more than eight then the relative strengths and weaknesses of those candidates must be reexamined to identify the best eight candidates 12

Terms of reference / Technical specification Standard format/ part of Tender dossier Give instructions and guidance to contractors Contractor’s mandate Define characteristics of the product , service, material, work • Quality levels • Environmental performance • Design for all requirements • Levels and procedures of conformity assessment • Fitness for use • Safety or dimensions ( including sales name, user instructions, terminology, symbols, testing and test method, packaging, marking , labeling, production 13

The Tender Dossier is normally prepared by the Contracting Authority and either sent out to short listed Tenderers or made available at the premises of the Contracting Authority. Given the technical complexity of many works projects the preparation of the Tender Dossier may require the assistance of external technical specialist(s). These experts would normally be available to assist in the evaluation process. 14

Content of the Tender Dossier Invitation to tender A. Instructions to the Tenderers giving information on • Type of contract • Tender timetable • Who may participate • Whether sub-contracting is permitted • Information to be provided by the Tenderer 15

Contents of the Tender Dossier The Technical Offer which should contain • Sworn statements 1. 2. 3. 4. Organisation& methodology CVs of key experts Statements of exclusivity and availability Statement attesting the origin of the goods (supply) 1. The Financial Offer which should include 1. A budget breakdown 2. Cash flow forecast (service) 2. The tender dossier also includes: 1. Evaluation criteria to be used 2. Whether variant solutions are allowed 3. Information on clarification/site visits 4. Currency of the tender 5. Format of the tender guarantee 16

Contents of the Tender Dossier 1. B. Draft Contract Agreement, including: 1. Draft Contract 2. General Conditions 3. Special Conditions (supplies & works) 4. Terms of Reference / Technical Specifications 5. Organisation & Methodology ( services) 6. Curricula Vitae of Key Experts 7. Budget Breakdown 8. Model for Performance Guarantee 9. Model for Advance Guarantee 17

Contents of the Tender Dossier C. Other Information: § Shortlist Notice (services) § Glossary of Terms (supplies & works) § Administrative Compliance Grid § Evaluation Grid D. Tender Submission Form 18

Variant Solutions 1. the possibility for a Tenderer to propose a so-called “variant solution” must be indicated already at the stage of the Procurement Notice 2. variant solutions are only taken into account by the Evaluation Committee when: 1. the variant solution is part of the least expensive and technically compliant tender bid 2. the variant solution proposed meets or exceeds the TS as specified in the Tender Dossier 19

Tender Evaluations The members of the Evaluation Committee: • are appointed and nominated on a personal basis by the Contracting Authority • must attend all meetings and any absence recorded and explained in the evaluation report. • have equal voting rights 20

Composition of the Evaluation Committee The Evaluation Committee is composed of: • • a non-voting Chairperson whose main role is to ensure respect for PRAG procedures, impartiality and transparency of the evaluation a non-voting Secretary, responsible for keeping minutes of all evaluation meetings, registering attendance and drafting the Evaluation Report an odd number (minimum 3) of voting members (5 for international works tenders) a limited number of non-voting observers 21

Impartiality and Confidentiality of evaluation Proceedings • all Evaluation Committee members (including nonvoting members) must sign a Declaration of Impartiality and Confidentiality • any member who notices a (potential) conflict of interest due to one of the companies submitting a bid must declare this immediately and withdraw from the committee and shall be replaced by another individual nominated by the Contracting Authority. In this case all scores from the departing member need to be disregarded and the evaluation needs to be restarted 22

Impartiality and Confidentiality of Evaluation Proceedings • all proceedings are strictly confidential and any attempt by a Tenderer to influence the evaluation process in any way whatsoever will result in the immediate and definite exclusion of its bid from further consideration • all proceedings are conducted in camera (except for the public tender opening session) • no other people than the nominated members of the Committee should have access to the evaluation room • tender bids should not leave the room in which the meetings take place and should be kept in a safe place when not in use 23

Stages in the Evaluation Process 1. RECEIPT AND REGISTRATION OF TENDER BIDS 2. PREPARATORY MEETING 3. TENDER OPENING SESSION 4. TECHNICAL EVALUATION a. Administrative compliance b. Technical compliance 5. 6. 7. 8. FINANCIAL EVALUATION CHOICE OF SUCCESSFUL TENDERER CONCLUSION OF EVALUATION COMMITTEE CONTRACT PREPARATION 24

Cancellation of Tender Procedure The tender procedure may be cancelled at any time by the Contracting Authority. 25

Cancellation of Tender Procedure Cancellation may occur where The tender procedure has been unsuccessful The economic or technical data of the project have been fundamentally changed Exceptional circumstances or force majeur render normal performance of the All technically compliant tenders exceed the financial resources available There have been irregularities in the procedure In no event shall the Contracting Authority be liable for any damages whatsoever connected with the cancellation of the tender 26

Co-financing Projects may be co-financed by: • • • The Beneficiary Country An Individual Member State A UN Agency The World Bank The European Investment Bank The European Bank for Reconstruction and Development 27

Parallel Co-financing The project is broken down into clearly identifiable subprojects that are each financed by the different cofinancing partners. The procurement procedures laid down in the PRAG, without any modification, MUST be applied to the EC funded part of the project. 28

Joint Co-financing The total project cost is divided between the cofinancing partners and all the funds are pooled such that the source of funding for a specific activity or subproject within the overall project cannot be identified In this situation the procurement procedures to be applied will be decided by the European Commission on a case by case basis. 29

Servıce Contracts WHAT: a contract concluded between the Contracting Authority and a Service Provider for the provision of services (e. g. technical assistance, studies, training or designs) WHO: - Contracting Authority - Service Provider( Consultant) ≤ € 5, 000 SERVICE Single tender € 5, 000 but € 200, 000 Framework Contract € 5, 000 but € 200, 000 Competitive Negotiated procedure € 200, 000 International restricted tender procedure 30

Organisation of Restricted Tender • publication of a Contract Forecast and Procurement Notice on Internet, in OJEC and local media as appropriate • compilation of a Long List on the basis of Applications received • organisation and chairing of Short List sessions • preparation of Short List report • drafting of the Tender Dossier • dispatch of Tender Dossier to short listed companies • reply to queries of Tenderers • receiving, registering and storing tender bids 31

Organisation of Restricted Tender • organisation and chairing of tender evaluation sessions, including: • • Preparatory Meeting Tender Opening Session Technical Evaluation Financial Evaluation • drafting of the Evaluation Report • preparation and signature of the Contract • notification to Tenderers • publicising the award of the Contract 32

Framework Contracts Conditionality: § Duration of services must not exceed 12 calendar months Rationale: § § § Rapid application Simplicity Transparency & equality of competition Quality Pre-agreed maximum fees per category of expert 33

Framework Contracts Lot 1 Rural development & food safety (10) Lot 2 Transport, water and sanitation infrastructure (9) Lot 3 Telecommunication & Information Technology (4) Lot 4 Energy and Nuclear Safety (6) Lot 5 Mining sector (5) Lot 6 Environment (5) Lot 7 Human rights, democracy & institutional strengthening (5) Lot 8 Development of the social sector (7) Lot 9 Culture & information (4) Lot 10 Economic development (8) Lot 11 Macroeconomic & structural adjustment (4) 34

Framework Contracts A Request for Services, together with the To. R is sent, on a rotational basis, to three consortia in the relevant sector The consulted framework contractors should submit an Offer for Services containing: • • • A methodology, if required CVs of experts (maximum 3 pages) Financial offer with breakdown of price by expert and expense 35

Framework Contracts Any Offer for Services received after the deadline must be rejected All Offers for Services are evaluated by two evaluators according to a standard evaluation grid The winning offer is the most advantageous offer in terms of technical quality, price and availability of experts 36

Competitive Negotiated Procedure Conditionality: • To be used only when the use of the Framework Contract is unsuccessful or inappropriate • More time consuming than the use of the Framework Procedure • A minimum of three service providers must be contacted. • The service providers are given at least 30 days to submit their technical and financial offers in separate envelopes 37

Competitive Negotiated Procedure • Evaluation of offers follows the same procedure as for an international restricted tender • At least three compliant offers MUST be received (or the procedure must be cancelled) N. B. Although not mentioned in the PRAG it is recommended, from experience, that the proposed service providers are first approached to ascertain their interest in submitting a bid 38

Single Tender One offer only necessary The procedure is not covered in the PRAG - the identified service provider must submit a brief technical proposal and a financial offer. These documents can be sent and received by fax and the evaluation can be carried out in an informal manner, providing the confidentiality of the proceedings and the impartiality of the evaluators are respected. Note: The same procedure applies to supply and works contracts 39

General Comments The Framework Contract should be used whenever possible for projects between € 5, 000 and € 200, 000 The procurement thresholds must be respected and projects must not be split artificially to circumvent these thresholds. Technical assistance and related activities must be grouped where appropriate in large tenders and 40

Services: indicative tender and contracting times Value (€) Less than € 5, 000 Between € 5, 000 and € 200, 000 More than € 200, 000 Single tender Competitive Negotiated Framework International Restricted Estimated time Contract forecast : to EC for translation publication (OJ/Internet) n/a n/a n/a 15 30 Procurement notice: to EC for translation publication (OJ/Internet) n/a n/a n/a 15 30 n/a n/a 5 Tender Dossier approval 5 10 10 10 Submission of bids 10 30 14 50 Evaluation of bids, interviews (if any) & preparation of Evaluation Report 1 5 3 12 Approval of Evaluation Report 5 5 Notification to successful Tenderer & receipt of required documents 10 15 n/a 15 2 10 30 2 5 5 2 10 30 50 1. 5 107 3. 5 44 1. 5 229 +7 Procedure Action Short listing & shortlist report Signature/endorsement of Contract: by PAO (signature) by ECD (endorsement) by Contractor (signature) Total estimated time - calendar days months PRAG REQUIREMENT / ECD APPROVAL/ CONTRACTING AUTHORITY 41

Supply Contracts WHAT: a contract concluded between the Contracting Authority and a Supplier concerning the design, manufacture, delivery, assembly or commissioning of goods together with any related tasks (e. g. maintenance, repairs, installation, training and after-sales service) WHO: - Contracting Authority - Supplier SUPPLIES < € 5, 000 Single tender € 5, 000 but € 30, 000 Competitive Negotiated procedure € 30, 000 but € 150, 000 Local open tender procedure > € 150, 000 International open tender procedure 42

Organisation of International Open Tender • publication of a Contract Forecast and Procurement Notice on Internet, in OJEC and local media as appropriate • drafting and approval of the Tender Dossier • compilation of a register of the companies that have requested the Tender Dossier or have picked it up • reply to queries of Tenderers • receiving, registering and storing tender bids 43

Organisation of International Open Tender • organisation and chairing of tender evaluation sessions, including: • Preparatory Meeting • Public Tender Opening Session • Technical Evaluation • Financial Evaluation • • drafting of the Evaluation Report preparation and signature of the Contract notification to Tenderers publicising the award of the Contract 44

Local Open Tender • The contract forecast and the procurement notice are published only in the Beneficiary Country. • The European Commission publishes details of the publication, reference, country, Contracting Authority and type of contract on the Internet • The subsequent, tendering, evaluation and contract award follows the same procedure as for an International Open Supply Tender. 45

Competitive Negotiated Procedure • A minimum of three suppliers must be contacted. • As at least three compliant offers must be received (or the procedure must be cancelled) • It is recommended that the proposed suppliers are first approached to ascertain their interest in submitting a bid. • Evaluation of offers follows the same procedure as for an international open supply tender. 46

Rules of Origin • ALL goods must originate in the MS or the countries and territories of the regions covered by the Regulation governing the programme under which the Contract is being financed. • Evidence to this effect is asked for in the Instructions to Tenderers who must provide a signed Declaration with the tender bid • The successful tenderer must provide an original Certificate of Origin accompanying the invoice for the Advance Payment, or with the invoice for the Interim Payment upon Provisional Acceptance • Absence of a Certificate of Origin will result in non 47

How to Establish Origin = country where the product has been obtained or was produced Main Criteria: • a product cannot originate in a country in which no production process has taken place • the country of origin is not necessarily the country from which the goods have been shipped • the country of origin is deemed to be the country in which the goods have undergone their last, economically justified and substantial transformation 48

Supplies: Indicative tender and contracting times Value (€) Less than € 5, 000 Between € 5, 000 and € 30, 000 Between € 30, 000 and € 150, 000 More than € 150, 000 Single tender Competitive Negotiated Local Open International Open Estimated time Contract forecast: to EC for translation publication (OJ/Internet) n/a n/a n/a 15 30 Procurement notice: to EC for translation publication (OJ/Internet) n/a n/a n/a 15 Tender Dossier approval 5 10 10 10 Submission of bids 10 30 30 60 Evaluation of bids and preparation of Evaluation Report 2 5 10 10 Approval of Evaluation Report 5 5 Notification to successful Tenderer and receipt of required documents 10 30 30 30 2 10 5 2 10 30 Procedure Action Signature/endorsement of Contract: -by PAO (signature) -by ECD (endorsement) PRAG REQUIREMENT / ECD APPROVAL/ CONTRACTING AUTHORITY 49

Works Contracts WHAT: a contract concluded between a Contracting Authority and a Contractor for the execution of works (e. g. decommissioning of a nuclear power plant) or the building of a structure (e. g. highway) WHO: - Contracting Authority - Contractor - Supervising Engineer (separate services contract) ≤ € 5, 000 WORKS Single tender € 5, 000 but € 300, 000 Competitive Negotiated procedure € 300, 000 but € 5, 000 Local open tender procedure ≥ € 5, 000 International open tender procedure Restricted tender procedure 50 (exceptional cases)

Organisation of an International Open Tender 1. publication of a Contract Forecast and Procurement Notice on Internet, in OJEC and local media as appropriate 2. drafting and approval of the Tender Dossier 3. compilation of a register of the companies that have requested the Tender Dossier or who have picked it 4. reply to questions from Tenderers 5. receiving, registering and storing tender bids 51

Organisation of an International Open Tender • organisation of tender evaluation sessions, including: • • • Preparatory Meeting Public Tender Opening Session Technical Evaluation Financial Evaluation the minimum number of voting members is 5 drafting of the Evaluation Report preparation and signature of Contract notification to Tenderers publicising the award of the Contract 52

Local Open Tender Main differences compared to an international open procedure are: • Procurement Notice only published locally in the Beneficiary Country (the EC only publishes references on the Internet) • Local advertisement may be used for publication in the local media • Minimum period between publication and deadline for receipt of bids = 60 calendar days • The minimum number of voting members in the Evaluation Committee is 3 53

Competitive Negotiated Procedure Main differences compared to an international open procedure are: • no publication of Procurement Notice/local advertisement • a minimum of three would-be Tenderers are contacted. • at least three compliant offers must be received • minimum period between dispatch of Tender Dossier and deadline for receipt of bids = 30 calendar days It is recommended that the proposed suppliers are first approached to ascertain their interest in submitting a bid. 54

Works: Indicative tender and contracting times Value (€) Less than € 5, 000 Between € 5, 000 and € 300, 000 Between € 300, 000 and € 5, 000 More than € 5, 000 Single tender Competitive Negotiated Local Open International Open Estimated time Calendar days Contract forecast: to EC for translation publication (OJ/Internet) n/a n/a n/a 15 30 Procurement notice: to EC for translation publication (OJ/Internet) n/a n/a n/a 15 Tender Dossier approval 5 10 20 20 Submission of bids 15 30 60 90 Evaluation of bids and preparation of Evaluation Report 3 10 15 15 Approval of Evaluation Report 5 5 10 10 Notification to successful Tenderer and receipt of required documents 15 30 30 30 Signature/endorsement of Contract: -by PAO (signature) -by ECD (endorsement) -by Contractor (signature) 2 10 10 3 15 30 5 20 30 Total estimated time - calendar days months 65 +2 133 4. 5 190 +6 280 +9 Procedure Action PRAG REQUIREMENT / ECD APPROVAL/ CONTRACTING AUTHORITY 55