UNCITRAL
United Nations Commission on International Trade Law
Developing local procurement
legislation - Adapting the
UNICITRAL Model Law
Discussant:
Professor Christopher Yukins
George Washington University Law School
Caroline Nicholas
UNCITRAL
Secretariat
June 2014
Adapting the UNICITRAL Model Law
What is the UNCITRAL Model Law?
Why does it need adapting to local circumstances?
How is it adapted in practice?
UNCITRAL
United Nations Commission on International Trade Law
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UNCITRAL Working
Process
1994
2011
UNCITRAL Model Law Working Group
Why use the UNCITRAL Model Law?
• Negotiated in intergovernmental
meetings over 7 years
• All regions/countries and many
IGOs/international NGOs
participated
• Suitable for all countries in all regions
• International best procurement
practice
• Not designed by or for any one
region
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United Nations Commission on International Trade Law
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Case Study:
UNCITRAL and
Pending Trinidad & Tobago
Procurement Law
What is the UNCITRAL Model Law?
• A template for national
procurement legislation
• Not a binding legal agreement –
unlike
• UN Convention Against Corruption
• WTO GPA/Regional FTA
The Convention and regional agreements have other
primary objectives
eg prevention of corruption, international market
access
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United Nations Commission on International Trade Law
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Example of “Template” for Progress:
Framework Agreements
UNCITRAL Model Law
Trinidad & Tobago
(e) “Framework agreement procedure”
“framework agreement” means an
agreement or other arrangement
between one or more procuring entities
and one or more contractors or
suppliers which establishes the terms,
in particular the terms as to price and,
where appropriate, quantity, under
which the contractor or supplier will
enter into one or more contracts with
the procuring entity during the period
in which the framework agreement or
arrangement applies;
means a procedure conducted n two
stages: a first stage to select a supplier
(or suppliers) or a contractor (or
contractors) to be a party (or parties) to
a framework agreement with a procuring
entity, and a second stage to award a
procurement contract under the
framework agreement to a supplier or
contractor party to the framework
agreement:
(i) “Framework agreement” means an
agreement between the procuring entity
and the selected supplier (or suppliers)
or contractor (or contractors) concluded
upon completion of the first stage of the
framework agreement procedure;
Consistency of Model Law and other texts
•
•
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Fully consistent with UNCAC
More flexible on preferences than GPA
MDBs
WTO/GPA/FTAs
UNCITRAL
EU Directives
UNCITRAL
UNCAC
• A national law must allow for
international obligations
• Domestic preferences not permitted in
many international texts like the GPA
• Model Law allows for use of MDBs’
Procurement Policies, Guidelines and
Rules in donor-funded procurement
United Nations Commission on International Trade Law
Trinidad & Tobago
Proposed Law:
Domestic Preference
28. (1) A procuring entity may limit participation in procurement
proceedings to promote local industry development and local
content.
(2) A procuring entity, when first soliciting the participation of
suppliers or contractors, shall declare whether the
participation of suppliers or contractors is limited pursuant to
this section and the nature of and reason for the limitation.
(3) A declaration made under subsection (2) shall not be altered.
(4) A procuring entity that decides to limit the participation of
suppliers or contractors pursuant to this section shall
include in the record of the procurement proceedings a
statement of the reasons and circumstances on which it
relied.
Trinidad & Tobago
3. In addition to the criteria set
Proposed Law:
out in paragraph 2 of this article,
Domestic
Preference
the evaluation
28. (1) A procuring
entity may
criteria
may include:
. .limit
. participation in procurement
proceedings to promote local industry development and local
Open question:
content.
procuring entity,
when first soliciting
(b)(2)AA margin
of preference
for thethe participation of May
suppliers or contractors, shall declare whether the
be
benefit
of domestic
suppliers
or is limitedpreferences
participation
of suppliers
or contractors
pursuant to
this section and the nature of and reason for the limitation.
set on a
contractors
or for domestically
(3) A declaration made under subsection (2) shall not be altered.
procurementproduced
goods, or any other
(4) A procuring entity that decides to limit the participation of
suppliers orifcontractors
pursuant
shall
by-procurement
preference,
authorized
or to this section
include in the record of the procurement proceedings a
required
byofthe
procurement
statement
the reasons
and circumstances on which it basis in
relied.
Trinidad &
regulations
or other provisions of
Tobago?
law of this State. . . .
Adapting the Model Law in practice
Issue 1: law, regulations and rules
• A template for a national law
• A framework law: all essential
principles, rules and procedures
• Needs supporting procurement
regulations – more detail (art 4)
• UNCITRAL Guidance on
Procurement Regulations (2013)
• UNCITRAL Glossary (2013)
• Distinction between law and
regulations?
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United Nations Commission on International Trade Law
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Adapting the Model Law in practice
Issue 1: law, regulations and rules
• The law should cover …
• What is allowed, what is not allowed
• The items that should not be changed
without Parliamentary scrutiny
• Key safeguards
• Main procedures
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United Nations Commission on International Trade Law
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Example:
Abnormally Low Tenders
Where a tender is “abnormally low . . .
and raises concerns with the
procuring entity as to the ability of
the supplier or contractor who
presented that submission to
perform the procurement contract,
the procuring entity may reject the
submission.”
Example:
Abnormally Low Tenders
• UNCITRAL model
law uses same language as
proposed Trinidad & Tobago statute
Where a tender is “abnormally low . . .
• UNCITRAL
Guideconcerns
to Enactment
And raises
withmay
thehelp
frame implementing
regulations:
procuring entity
as to the ability of
• May
samples
to ensure who
quality
therequest
supplier
or contractor
• Use
market research
presented
that submission to
• Should
focus
on
price
–
not
on
vendor’s
costs
perform the procurement contract,
• Key
performance
risk –may
not reject
discrimination
theis procuring
entity
the
• If submission.”
vendor refuses to provide information,
that alone is not grounds for rejection
Issue 1: Law, regulations and rules
Some key issues for regulations/other law
Gaps intentionally left for regulation, eg
• What fees apply to participation?
• Thresholds
• Time limits
• Procurement vocabulary
• More detail – eg record, solicitation documents
Other issues
•
•
•
•
•
•
UNCITRAL
Budgeting and PFM
Government socio-economic policies
Classified information
Low-value procurement – what is it in the
country context?
Debriefing
Debarment and sanctions
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Four Paradigms for Debarment
Responsibility
(Qualification)
Only
• On a case-by-case
basis
• In U.S. – done by
contracting officer
• Allowed by new EU
Directives
Performance
Risk
Discretionary
Debarment –
U.S. Federal
Adjudicative
Debarment for
“Bad Acts”
• Based on “present
responsibility”:
focus on present
status
• Debarment is a
cross-government
“meta-qualification”
determination
• E.g., World Bank
Court-Ordered
Debarment,
After Judicial
Proceedings
Reputation
Risk
Issue 2: Key options in the national law
• Definition of procuring entity
• SOEs ?
• Use of prior approval procedures
• Which procurement methods to enact?
• Use of negotiations
• Preferences?
• How to structure the challenge
mechanism
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United Nations Commission on International Trade Law
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UNCITRAL Review Mechanisms
Procuring
Agency
19
Independent
Administrative
Independent
Administrative
Court
Court
Court
Proposed Trinidad
& Tobago
Procurement Law:
Part V –
Challenges
Procuring
Agency
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Independent
Administrative
Office of
Procurement
Regulation
Court
Court?
Court?
UNCITRAL: “Any supplier or
contractor participating in the
procurement proceedings
to which the application relates,
as well as any governmental
authority whose interests are or
could be affected by the
application, shall have the right
to participate in challenge
proceedings . . . “
Proposed Trinidad & Tobago
law: “Any supplier or
contractor participating in the
procurement proceedings to
which the application
relates, as well as any public
Procuring
body whose
interests are
or could be
affected by the
Agency
application, shall have the
right to participate in challenge
proceedings . . . “
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Proposed Trinidad
& Tobago
Procurement Law:
Part V –
Challenges
Independent
Administrative
Office of
Procurement
Regulation
Court
Court?
Court?
Issue 3: Other key aspects of Model Law requiring
guidance
• Procurement planning
• Choosing suppliers for direct
solicitation
• Use of contractors’ registers?
• Contract administration
• Institutions to support procurement
system
• Ensuring consistency in all areas
• Mandatory laws to apply?
• Employment terms
• Environmental criteria
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United Nations Commission on International Trade Law
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Key Administration Issue: Fraud
• Proposed Trinidad & Tobago Procurement
Law addresses fraud in:
• Barring contractors
• Rejecting tenders
• Policy question: Should “reckless” fraud
be enough to trigger penalties?
World Bank Sanctions: “’Fraudulent practice’ is
any act or omission, including a
misrepresentation, that knowingly or recklessly
misleads, or attempts to mislead, a party to obtain
a financial or other benefit or to avoid an
obligation . . . .”
The Guide to Enactment of the Model Law
• Background and explanatory
information on policies in the Model Law
• Discusses what is appropriate
• Encourages standard
documents/processes
• Advises on options in the Model Law
• Types of framework agreements
• Local circumstances – e.g. use of belowthreshold preferences
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United Nations Commission on International Trade Law
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Supporting the law to frame a good system
• Key roles for institutions
• Disseminating best practice
• Advising
• Monitoring and enforcement
•
•
•
•
UNCITRAL
PPA
Competition authority
Audit body
Review body
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Adapting the UNICITRAL Model Law
For more information
Website:
Christopher Yukins,
cyukins@law.gwu.edu
http://www.uncitral.org/uncitral/en/uncitral_t
exts/procurement_infrastructure.html
Contact:
caroline.nicholas@uncitral.org
THANK YOU
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United Nations Commission on International Trade Law
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