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Capacity building in EDF procedures

Procedures for public procurement and for the conclusion of grants

Francis Wellens18 -20 August 2010

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http://ec.europa.eu/europeaid/work/procedures/index_en.htm

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http://ec.europa.eu/europeaid/work/procedures/index_en.htm

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7th & 8th; 9th or 10th EDF?(i) General rule: once a procedure started, continue(ii) Read it in :

(a) the FA (“EDF procedures” or “x EDF procedures”)(b) the Practical guide

7th & 8th EDF: transfers & balances: > 10 million €: the original procedure

< 10 million €: 9th EDF9th EDF: 9th & previous EDFs except:10th EDF: once into force

Which procedure to use?

Decentralised mode Ex-Ante

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The Contracting Authority Assumes full responsibility for the actions and will be accountable for in

any subsequent audit or investigation

Approval of DEC?Implies a control by EC and payment garantee (may be compared the

role of a bank with a letter of credit)

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Decentralised Ex-Ante management Actors and responsibilities

NAO HoD,(Authorising Officer by subdelegation

Clears and authorises expenditure

Approves proposal for awarding

Approves tender dossiers and calls for proposals

Endorses contracts and PEs

Validates and authorises payments

Observes in evaluation committees

Prepares tender dossiers and calls for proposal

Presides opening sessions and evaluation committees

Receives tenders and proposals

Awards and signs contracts and Programme Estimates

Launches tender dossiers and calls for proposal

PRAG - Generalities

1. Eligibility Criteria (for participation in procedures for awarding contracts financed EDF)

• Rules of Nationality– ACP states and member states(Natural and Legal persons of)

– International Organisations (+ nationalities accepted by international

organisation)

– Persons originating from Nations participating in the funding

• Origin– Origin of supplies and materials: same rules

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PRAG - Generalities

Eligibility Criteria: Practicalities

Origin:• Supply: “originating products” folowing international

agreements• Verifying compliance: Certificate

Nationality

for the contrator only:Expert: of any nationality (unless otherwise specified in FA)

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PRAG - Generalities

Eligibility Criteria: ExceptionsAgreed beforehand by commission (HoD) on request of ACP state

justified on the basis of:

– Georgraphical location

– The competitiviness

– Excessive increase of cost of performance of the contract

– Transport difficulties

– Extreme urgency

– Availability of products and services

Decision HoD up to €60 000

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2. Exclusions

On the ground of:• Bankrupt

• Convicted of offence in professional conduct (res judicata)

• Proven grave professional misconduct

• Social security / payment of taxes

• Res judicata for fraud

• Administrative penalty

• Early Warning System

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PRAG - Generalities

Exclusions Practicalities

• Verification on the basis ofCertificates country of origin.

Sworn statements

• Declaration may be waived for contracts < € 10 000 and grants <€ 5000

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PRAG - Generalities

3. Administrative and financial penalties

In case of:– Fraud– False declarations– Breach of contractural obligations

Errors, irregularities or fraud: Commission

may refuse to make payments (= the best case)

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PRAG - Generalities

4. VisibilitySet up of a Communication and Visibility plan at

project start-up http://ec.europa.eu/europeaid/work/visibility/index_en.htm

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PRAG - Generalities

PRAG - Generalities

Other essential points• Conflict of interest

Preparation tender or project excludes firm

• Awarding principlesTransparency, proporionality, equal treatement and non discrimination

• No retroactive awardsDate of last signature

• Use of standard documents• Record keeping

Unsuccessfull and awarded proposals• Availability of funds

Before signing• Environmental aspects

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PRAG - Generalities

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PRAG - Generalities

Choice of procedure

Types of procedures– Open procedure

– Restricted procedure

– Competitive negociated procedure

– Framework contracts

– Dynamic purchasing systems

– Competitive dialogue

– Negociated procedure

– Procedure with suspensive clause

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PRAG - Generalities

Open procedure

• all interested economic bodies.• maximum publicity on the EuropeAid and other website and

in any other appropriate media.

• awarded through selection procedure

• no negotiation is allowed.

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PRAG - Generalities

Restricted procedure

all economic operators may ask to take part only candidates satisfying the selection criteria may

submit a tender. Pre-Selection procedure, long list short list Tendering procedure Selection procedure Award

No negotiation allowed

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PRAG - Generalities

Competitive negotiated procedure

Contracting Authority invites candidates of its choice to submit tenders

Selects the technically compliant tender

•service tenders: the best value for money

•supplies or works tenders: the cheapest compliant offer

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PRAG - Generalities

Framework contracts

• Max 4 year agreement with one or more economic operators to establish the terms governing specific contracts

(i.e. the duration, subject, price, implementation rules and the quantities envisaged).

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PRAG - Generalities

Framework contractsOnly when funds are available (no suspensive clause)

Steps

1) Identification of the lot (12 lots)

2) Preparing the specific ToRs

3) Creating the request (EC-Del)

4) Sending the request for offers and ToRs (EC-Del)

5) Evaluation of the offersThe beneficiary authorities should be invited to take part in the evaluation and if they are absent, they have to approve the experts proposed

6) Notification of results and contracting

7) Evaluation of the performance: By the Contracting Authority

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PRAG - Generalities

Dynamic purchasing systemElectronic process for making commonly used purchases

which is limited in duration and open throughout its validity to any economic operator who satisfies the selection criteria and has submitted an indicative tender that is found compliant.

not yet available

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PRAG - Generalities

Competitive dialogue

For particularly complex contracts,– Publication of a contract notice– Dialogue with the candidates satisfying the

selection criteria (min 3 if at least 3 satisfy)– Stages in negotiation allowed– Final tenders on the basis of the solution(s) of

the dialogue

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PRAG - Generalities

Negotiated procedureTo be used in exceptional cases.

Extreme urgency, Crisis situation, additional works(50%0%), Unsuccessful tender , secrecy reasons

Mixed contractsThe Contracting Authority determines

–on the basis of the strategic importance of each component

which of the components prevails (services, supplies, works)

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PRAG - Generalities

PreferencesWidest possible participation of the natural and legal

persons of ACP StatesWorks: < 5 000 000 € & > ¼ capital & > ¼ management staff is ACP

10% price preference

Supplies: 50% of value originates in ACP15% price preference

Service contracts: preference is given to: 1)ACP;

2)ACP in consortium with EC;

3)EC with ACP sub-contractors

South Africa cannot benefit from the preference system27

PRAG - Generalities

Selection CriteriaGeneral principles

Criteria are specific to be addapted to the nature, cost and complexity of the contract. They have to be precise, non desicrimatory and open to fair competition.– Clear and non-discriminative selection criteria (proof documents!)

– Possibility to lay down minimum capacity levels

– In procurement notice/call for expression of interest: the references chosen to test the status and the legal capacity of tenderers and candidates

– Proof of the financial, economic, technical and professional capacity

Service & supply: only succesful tenderers give proof before the award of contract

Works : in accordance with tender dossier

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PRAG - Generalities

Selection Criteria

• Verification of eligibility of tenderers or candidates: cf higher (fraud, EWS, etc.)

• Verification of the financial and economic capacities of tenderers or candidates (statements of banks; profesional risk indemnity insurance; balance sheets; statement of overall return)

• Verification of technical and professional capacities if tenderers, candidates and their management staff (educational capacities; work attestations; description of technical equipment; etc)

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PRAG - Generalities

Award criteria• As specified in tender

• Most usual procurement procedure: conditions & specifications are OK than lowest price

• Best-value-for-money procedure: the most economically advantageous tender (needs derogation)

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PRAG - Generalities

Cancellation of procurement procedures

• Cancelling may occure where:– Unsuccessful tender

– Economic and technical data of the project are fundamentally altered

– Exceptional circumstances / force majeure

– Out of budget

– Irregularities

• Cancelling - before signature of contract – is possible (candidates can not make compensation claims)

• Canceling of single lots only is also possible

• Notification of the reason31

PRAG - Generalities

Ethical clauses & Appeals• Ethical clauses: p. 28-30

• Appeals

– CA replies within 90 days of complaint;

– Amicable solution

– Any interested party may appeal an administrative decision to the hierarchical superior

– European Ombudsman

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PRAG - Generalities

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PRAG - Generalities

The evaluation committeeNon-voting Chairman + voting Members (min. 3 for service & supply

and min. 5 for works)– Language

– Technical & administrative capacities

– Sign Impartiality and confidentiality

• Decentralised ex-ante: – Contracting Authority nominates (approval 5 wd in advance)

– EC is invited on a systematic basis as observer

• Decentralised ex-post: the relevant services nominates on a personal basis

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PRAG - Generalities

The evaluation committee• Non-voting Chairman + voting Members (min. 3 for service &

supply and min. 5 for works)– Language

– Technical & administrative capacities

– Sign Impartiality and confidentiality

• Decentralised ex-ante: – Contracting Authority nominates (approval 5 days in advance)

– EC is invited on a systematic basis as observer

• Decentralised ex-post: the relevant services nominates on a personal basis

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PRAG - Generalities

Award of contractBefore end of validity period of tender (deadline + 90 days)1. Evaluation report / arithmetical errors / EWS2. Notification to the successful tenderer (validity is extended by 60

days)3. Succesful tender provides required evidences (< 15 days of the date

of notification letter)4. Examination by Contracting Authority of evidences5. Preparation of contract Hod for endorsement (signature + initials)6. Sending of contract to succesful tenderer (3 originals of template and

as in tender)7. Signature + initials of Contracting Authority 8. Publishing the award of contract (service > 200 000 €; supply > 150

000 €; works > 5 000 000 €)

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PRAG - Generalities

Addendum• General principles:

– May not alter award conditions prevailing at the time of the contract

– No major changes are possible by addendum or administrative order

– Justified reasons are required

– Within the execution period of the contract

– Coherent with the implementation period of the FA (implementation & final payments)

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PRAG - GrantsDefinitions A grant is a direct financial contribution, (donation), from the EU budget or the EDF, in order to finance:

•an action to achieve an objective part of a EU policy;

•or the functioning of a body which pursues an aim of general European interest.

Grant contract procurement contractA grant is made for an operation proposed to the Contracting Authority by a potential beneficiary (an “applicant”) and falls within the normal framework of the beneficiary's activities

Grant contract financing agreement

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PRAG - GrantsDefinitions A grant is a direct financial contribution, (donation), from the EU budget or the EDF, in order to finance:•an action to achieve an objective part of a EU policy;•or the functioning of a body which pursues an aim of general European interest.

A grant is made for an operation proposed to the Contracting Authority by a potential beneficiary (an “applicant”) and falls within the normal framework of the beneficiary's activities.

Grant contract procurement contract

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PRAG - Grants

Definitions Grant beneficiary:

Is the body signing a grant contract

Final beneficiary

Target group

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PRAG - GrantsCharacteristics •Non commercial•Not benefit producing (except when reinforcement of the financial capacity)

•Percentage of eligible cost of an action (co-financing)•Not lumpsum based without prior agreement of the commission.•Subject to the principles of

• programming,

• transparency and • equal treatment.

•Not cumulative nor awarded retrospectively

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PRAG - Grants

Management (in Decentralised Programme with ex-ante controls)

•awarded by the Contracting Authority designated in the financing agreement

•On the basis of – Annual work-programme

– Call for proposals (evaluation, reports etc)

– Signed grant contract

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PRAG - Grants

Eligibility rules•Nationality, same as for the other contracts.

•Restriction not allowed if not foreseen in basis act (for location or objective purposes)

ProgrammingAccepted work programme publicised 1 year in advance (before 31 March).

Co-financingObligatory except if evidence can be given that financing in full is essential

ProcurementA grant has own procurement procedures.

Call for proposal

• Include the Guideline for applicants

• Is published on EuropeAid website

• Open or restricted (with shortlists)

Exceptions (without call) after EC agreement:

Possible for

- Real emergency

- Monopoly of the beneficiary

- Provided in basic act

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PRAG - Grants

Guideline for applicants HAS TO BE DRAFTED on the basis of the template Explains: - The purpose of the Call for Proposals- Rules regarding eligibility criteria (applicant, types of actions, types of costs etc)- Instructions how to apply- The evaluation process and criteria (for selection and for awarding)

Contains moreover:- The Application form- The contract model- The procurement procedures etc.- Dead-line for application (min 90 or 60 days), Help-desk information

Has to be approved by HoD

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PRAG - Grants

Submission of ProposalsApplication:Contains

• a concept note / proposal

• information about the action proposed, including its budget

• information about the applicant

• information about any partners.

• Supporting documents and for >100 000 euros audit of the applicant

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PRAG - Grants

Evaluation committee

• Non voting chairman and secretary

• Minimum 3 voting members (odd number)• Different kinds of assessors if too much for classic committee

Stages of the evaluation1. Receipt and registration of proposals

2. Opening session and administrative check

3. Approval of opening report by HoD

4. Evaluation of the concept note (or application form)

5. Approval of the evaluation report by HoD

6. Verification of eligibility

7. Final evaluation report sent for approval by HoD 46

PRAG - GrantsEvaluation

Cancelling of the call• the economic or technical data fundamentally altered;• exceptional circumstances or force majeure;

• irregularities in the procedure preventing equal treatment.

Awarding grants• Notification of applicants (letters, including reasons)• Contract preparation and signature

Characteristics of the standard grant contract• Includes beneficiary's independence of action (but considering max

deviation 15% per budget line)• The first pre-financing payment covering 80% of 1st year budget• Final payment on final report• Large grants: Expenditure verification and financial guarantee for advance • Visibility rules 47

PRAG - Grants

Procedures

• More than € 200 000 Restricted tender procedure

• Less than € 200 000Framework contract (or negotiated procedure if impossible)

• Negotiated procedure– extreme urgency

– Public service bodies NGO or support in social field

– Complementary (max 50%) and additional services (once and 0%)

– Unsuccessful tender or framework contract

– Contract following contest

– Protection of exclusive rights and secrecy reasons

• Competitive dialogue48

PRAG – Service Contracts

More than € 200 000: Restricted tender procedure

1. Individual contract forecast Min 30 days, brief indication of the subject

2. Procurement notice Min 30 days

Summarised description of the purpose of the contract

3. Establishment of shortlist From long list to short list, inform about (un)success

4. Drafting and submission of the tender Min 50 days

5. Submission of tenders

6. Evaluation process Normally max 90 days (+ 40 days), usual min 30 days

7. Contracting49

PRAG – Service Contracts

More than € 10 000 less than € 200 000: Framework contracts

Compulsory provide that:– Aimed for external aid (with funds available)

– In exclusive interest of an authority benefiting form external aid

– Less than 200 000 euros all inclusive

– Less than 260 working days

– Performance period less than 24 months

Different consortiums in different lots, contracts with lead firm

1. Request for services to at least 3 consortiums (more now)a) Specific TOR complying with global TOR and including OUTPUTS, Duration, Key

experts, Possible conflict of interest etc.

b) Drawing request choosing lot and time limits

Minimum 14 days

2. Awarding of specific contractMax of 2 weeks of validity

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PRAG – Service Contracts

More than € 10 000 less than € 200 000: Competitive Negotiated Procedure

When:

Framework contract impossible or unsuccessful

Steps

1.Contracting Authority draws restricted list with min 3 service providers.

2.Sending of tender dossier (may be the simplified one)

Minimum 30 days for reply

Only one administrative and technically valid offer is sufficient

Failure negotiated procedure (prior approval HoD)

Below 10 000 euros, single tender 51

PRAG – Service Contracts

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PRAG – Supply ContractsCover purchase, lease, rent, with or without buying, can

include sitting and installation.Procedures• ≥ € 150 000

International Open Procedure

• <€ 150 000 but ≥ € 60 000Local open procedure

• <€ 60 000Competitive negotiated procedure

• Negotiated Procedure• Dynamic Purchase System• Competitive Dialogue

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PRAG – Supply ContractsInternational Open Procedure ≥ € 150 0001. Individual contract forecast Min 30 days, brief indication of the subject

2. Procurement notice Summarised description of the purpose of the contract

Provided with tender dossier

Publication Minimum 60 days before deadline for submission

3. Submission of tenders

4. Evaluation process Normally max 90 days (+ 40); usual min 30 days

5. Contracting

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PRAG – Supply Contracts€ 60 000≥ Local open tender ≤ € 150 000 Locally publicised procurement notice

but advantage can be taken from EU Website Simplified tender dossier allowedMini 30 daysNo restrictions on contractors allowed (Nationality or previous success etc)

Competitive Negotiated Procedure≤ € 60 000Based on a restricted list of at least 3 companiesSimplified tender dossier Min 30 days for tendering

Procedures• More than € 5 000 000

Open Procedure, rarely restricted procedure

• Less than € 5 000 000 but more than € 300 000Local Open Procedure

• Less than 300 000Competitive Negotiated Procedure

• Negotiated procedure– extreme urgency

– Crisis situation

– additional works(50%0%)

– Unsuccessful tender

– secrecy reasons

• Competitive dialogue55

PRAG – Works Contract

More than € 5 000 000 Open Procedure

1.Individual contract forecast Min 30 days, brief indication of the subject

2.Procurement notice Summarised description of the purpose of the contract

Publication Minimum 90 days before deadline for submission

3.Tender dossiers sent on request (with or without payment)

4.Submission of tenders

5.Evaluation process Normally max 90 days (+ 40); usual min 30 days

6.Contracting

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PRAG – Works Contract

More than € 5 000 000 restricted procedure

Only with agreement of the Commission

1.Procurement notice Remains obligatory

2.Set-up of short-list

3.Tender dossiers sent with invitation to tender

4.Submission of tenders

5.Evaluation process Normally max 90 days (+ 40); usual min 30 days

6.Contracting

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PRAG – Works Contract

Local Open Procedure ≤ € 5 000 000 ≥ € 300 000

1. Procurement notice in the beneficiary country Summarised description of the purpose of the contract

Publication Minimum 60 days before deadline for submission

2. Tender dossiers sent on request (with or without payment)Must be open to other than nationals

3. Submission of tenders

4. Evaluation process Normally max 90 days (+ 40); usual min 30 days

5. Contracting

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PRAG – Works Contract