Procurement:
Overview and general rules
Training for Auditors
Estonia/Latvia/Russia ENPI CBC Programme
Riga, Tartu, 24-25 April 2012
1
Procurement in grants
• Member States and Russian public entities Beneficiaries
and Partners:
• National public procurement law and rules
• Rule of nationality and origin applied
• Other entities:
• Annex IV
+ Chapters 2(General), 3(Service), 4(Supply), 5(Works)
of PRAG adjusted to Annex IV specific provisions
2
Procurement in grants
Other entities:
• For what is not described in the Annex IV (detailed
procedures, tender documents):
• Or Chapters 3(Service), 4(Supply), 5(Works) of PRAG
adjusted to Annex IV specific provisions
3
The nationality rule
Annex IV:
• Natural and legal persons
• Open to all Member states + states allowed by
Financial regulation (ENPI)
ENPI Regulation (Art. 21):
• Memeber states
• ENPI, IPA, EEA countries
• International organisations
The detailed list in Annex A2 to PRAG (General
Annexes) ”Eligibility – Programmes 2007-2013”, second
section on ENPI
4
The nationality rule
• Do not apply to the experts proposed by
service providers taking part in tender
procedures or service contracts financed by the
grant
• If
implemented
organisation:
through
International
 + natural or legal persons eligible pursuant
to the rules of that organisation
 But: equal treatment to al donors to be
ensured
5
The rule of origin
Annex IV:
• If the Regulation contains...
ENPI Regulation (Art. 21):
• Memeber states
• ENPI, IPA, EEA countries
• The detailed list in Annex A2 to PRAG (General
Annexes) ”Eligibility – Programmes 2007-2013”, second
section on ENPI
***If implemented through International organisation:
 + pursuant to the rules of that organisation
 But: equal treatment to all donors to be ensured
6
The rule of origin – “origin”
Customs Code, Council Regulation 2913/1992, Art. 23
• Goods originating in a country shall be those wholly
obtained or produced in that country
• The expression ‘goods wholly obtained in a country’
means:
• (a) mineral products extracted within that country;
• (b) vegetable products harvested therein;
• [...]
• (j) goods which are produced therein exclusively
from goods referred to in subparagraphs (a) to (i) or
from their derivatives, at any stage of production
7
The rule of origin – “origin”
Customs Code, Council Regulation 2913/1992,
Art. 24
• Goods whose production involved more than one
country shall be deemed to originate in the
country where they underwent their last,
substantial, economically justified processing
or working in an undertaking equipped for that
purpose and resulting in the manufacture of a
new product or representing an important stage
of manufacture
8
The rule of origin – certificate
• The rule of origin applies to ALL supplies and materials
(ENPI Regulation)
The Certificate of origin:
• Contractor must present to the Beneficiary for equipment
and vehicles of a unit cost on purchase of more than €
5.000
• Made by the competent authorities of the country of origin
 In the Partner countries – Chambers of Commerce
• Must comply with Community legislation
 Art. 12 of Customs Code and Arts. 47-62 of
Implementing provisions
Code’s
 Annex 12 (model EU certificate)
9
Nationality and origin: exceptions
• By Derogation only (request to the Contracting
authority)
• Justifyed by:
• Unavailability of products and services in the
markets of the countries concerned
• For reasons of extreme urgency
• If the eligibility rule were to make the
realisation of a project, a programme or an
action impossible or exceedingly difficult
• ***NOT if a product of ineligible origin is
cheaper than the Community or local product
10
Rule of origin: exceptions
Possibility of block derogation
• For some equipment which constantly poses a problem of origin
• After market research by JMA or several cases during
implementation
• Would apply to all the projects, but for a limited time (1 year
indicatively)
• Does not prevent the JMA from requesting some individual
derogations also for the equipment that has not been identified
in the block derogation
• The time needed for such a block derogation should be taken
into account not to hamper the projects’ implementation
• Procurement plan would also help to identify the equipment
for block derogation
11
The nationality and origin rule
EU MSs
ENPI countries:
• Algeria, Armenia, Azerbaijan, Belarus, Egypt,
Georgia, Israel, Jordan, Lebanon, Libya, Moldova,
Morocco, Palestinian Authority of the West Bank and
Gaza Strip, Russian Federation, Syria, Tunisia,
Ukraine
IPA countries:
• Croatia, The former Yugoslav Republic of Macedonia,
Turkey, Albania, Bosnia, Montenegro, Serbia,
including Kosovo.
EEA countries:
•
Iceland, Liechtenstein, Norway
12
Rule of origin
EC Note from 12/05/2011
• For the TA procured by JMA and co-financed by MS
• Rule of the MS
• Procurement by Projects
• ENPI rule
Documents and links
• Annex IV to the Grant Contract
• ENPI Regulation
• PRAG
The nationality rule
• Annex A2 to PRAG “Eligibility of programmes 2007-2013”
The rule of origin
• EU Customs web site:
http://ec.europa.eu/taxation_customs/customs/customs
_duties/rules_origin/index_en.htm
• EU Customs Code: Council Regulation (EEC) No 2913/1992
• EU Customs Code Implementing provisions: Commission
Regulation (EEC) No 2454/1993
14
Annex IV and PRAG
15
Definition of contracts
Service contracts:
•
Studies: identification and preparation of projects, feasibility studies,
economic and market studies, technical studies, evaluations and audits
•
or Technical assistance: advisory role, to manage or supervise a
project, or to provide the experts specified in the contract
Supply contracts:
•
Purchase, leasing, rental or hire purchase, with or without option to
buy, of products.
•
A contract for the supply of products and, incidentally, for sitting and
installation
Work contracts:
•
the execution, or both the execution and design, of works
•
List of works in the Annex I to Directive 2004/18/EC
16
Thresholds (Annex IV)
SERVICES
≥ € 200,000
International
restricted
tender
procedure
SUPPLIES
≥ € 150,000
International
open tender
procedure
WORKS
≥ € 5,000,000
International
open tender
procedure
< € 200,000 but > € 10,000
Negotiated procedure
< € 150,000
but
≥ € 60,000
Local open
tender
procedure
< € 5,000,000
but
≥ € 300,000
Local open
tender
procedure
< € 60,000 but
> € 10,000
Negotiated
procedure
≤ € 10,000
Single tender
< € 300,000
but>
€ 10,000
Negotiated
procedure
17
Split of contracts
• Projects must not be split artificially to circumvent
the procurement thresholds
• The possible grounds for splitting:
1. Time: needed at different stages of the project
2. Type: difference in nature of the contract –
services, supplies or works
3. Nature: different nature of the purchaise (e.g.
tractors and medical equipment)
• Procurement with several Lots identifyed is
possible allowing different compagnies applying
for different Lots
18
PRAG structure
21
Specific rules of Annex IV
•
Publication of the individual contract forecast: not
required by Annex IV
•
Publication requirements are different:
•
To be published in all appropriate media, in particular
on the Beneficiary’s web site, in the international
press, national press or in other specialist periodicals
(Annex IV)
•
Deadline for submission: long enough, allowing reasonable
and appropriate period (Annex IV). (PRAG: 60 days for
Supplies and 90 days for Works in international tenders, 30
for Supplies and 60 for Works in local tenders)
•
Framework contract procedure for services not foreseen in
Annex IV (PRAG – possible for services of < € 200.000 but >
€ 10.000
22
Specific rules of Annex IV
•
Most economically advantageous tender, i.e. the tender
offering the best price-quality ratio, best value for
money (whereas price as the only criterion for supplies
and works in PRAG)
!!! Double envelope system, i.e., in an outer parcel or
envelope containing two separate, sealed envelopes,
one bearing the words "Envelope A - technical offer”
and the other "Envelope B - financial offer“
•
This system enables the technical offer and the
financial offer to be evaluated successively and
separately: it ensures that the technical quality of a
tender is considered independently of the price
23
Specific rules of Annex IV
•
Number of Evaluation Committee members - odd number
of voting members, at least 3 (PRAG – at least 5 for
International open tender for Works)
•
International restricted tender procedure for Works not
foreseen (PRAG – possible for Works of > 5,000,000)
•
Negotiated procedure (Competitive negotiated procedure
in PRAG): Beneficiary consults at least 3 suppliers of its
choice and negotiate the terms of contract with one or
more of them
•
Use of negotiated procedure for higher amounts, than
allowed by standard ceilings - listed in Art.7 of Annex
IV (combination of all correspondent Arts of PRAG)
24
International open tender
0. Publication of the indicidual contract forecast: not
required by Annex IV
1. Publication of procurement notice
•
To be published in all appropriate media, in
particular on the Beneficiary’s web site, in the
international press, national press or in other
specialist periodicals (Annex IV)
•
Deadline for submission: long enough, allowing
reasonable and appropriate period (Annex IV).
For information, PRAG: 60 days for Supplies and
90 days for Works in international tenders, 30
for Supplies and 60 for Works in local tenders
25
International open tender
•
Additional information – in writing to all
tenderers, or published (21 days - questions, 11
- answers)
•
Supplies: Meetings/visits not permitted,
unless specifically scheduled for all
tenderers
•
Works: Visits for individual companies
permitted, ensuring transparency and equal
treatment
26
International open tender
2. Evaluation (Annex IV + Art. 2.8, 4.3.8, 5.3.8)
•
Evaluation Committee - Non-voting Chairman,
non-voting Secretary and odd number of voting
members (Annex IV: at least 3)
•
Stages:
•
Receipt and registration
preparatory meeting
•
Tender opening session
•
of
proposals,
Formal public process, but restricted to
the companies which are tendering for the
contract
27
International open tender
•
•
Evaluation of technical offers/technical offers
•
Administrative and technical complience of
tenders
•
YES/NO grid, no scoring method used
•
Lot by lot
Evaluation of financial offers
•
Arithmetical errors corrected without penalty
•
Offers are compared and discounts applied for
each lot
•
Conclusions and drafting of the Evaluation report
•
Contracting
28
International restricted tender
•
For services only!!!
•
Procurement notice is published
•
Application form submitted
•
Short list is established
•
Establishing a long list summarising all the
applications received
•
Eliminating candidates who are ineligible
•
Applying the published selection criteria
•
Between 4 and 8 candidates
•
Only then tender submitted
29
International restricted tender
•
For services only!!!
•
Procurement notice is published
•
Application form submitted
•
Short list is established
•
Establishing a long list summarising all the
applications received
•
Eliminating candidates who are ineligible
•
Applying the published selection criteria
•
Between 4 and 8 candidates
•
Only then tender submitted
30
Restricted procedure for Works
• NOT FORESEEN BY ANNEX IV!!!
• So, not applicable in procurement in
grants
31
Local open tender
•
•
•
Publication (Annex IV):
•
Procurement notice is published in all appropriate media,
but only in the country of the Action
•
But: shall provide other eligible suppliers with the same
opportunities as the local firms
Tender dossier:
•
Tender guarantee - optional
•
For supplies only: Simplified tender dossier is possible
Selection criteria:
•
•
Supplies: Supporting documents optional (But: financial
guarantee if pre-financing, except public bodies)
All other measures applicable
procedure apply by analogy
to
International
open
32
Negotiated procedure
•
•
Without publication (Annex IV):
•
Beneficiary consults at least 3 suppliers of its choice and
negotiate the terms of contract with one or more of
them
•
Can also be used for higher ammounts in exceptional
cases listed in Art.7 of Annex IV
All other measures applicable
procedure apply by analogy
to
International
open
33
Negotiated procedure and Single tender
• No Evaluation Committee needed for Single tender or Negotiated
procedure based on a single tender
 Do not mix with Negotiated procedure without publication
(EvC needed)!!!
• In all cases, the Contracting Authority must prepare a report
• Explaining the manner in which the grant beneficiaries were
identified and the amounts established
• And the grounds for the award decision
• Template in annex a10_ and a10_b to PRAG
• CA must follow the negotiation steps shown in the negotiation
report templates (A10_a and A10_b) and ensure that basic
principles relating to procurement procedures such as checking
compliance with eligibility rules (nationality rules), capacity to
carry out the contract and and exclusion criteria are duly applied