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(Kiev, 1 December 2011)

Seminar on public procurement and eProcurement policies

eProcurement Policy in International Legal Documents

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Reasons

improved value for money from access to more suppliers or more competitive techniques (such as auctions)

saving transaction costs

saving time (e.g. quicker communication)

improved compliance with rules (through better monitoring)

stimulating a more competitive local supply base (adoption of modern practices and promoting standardization)

enhancing transparency and thereby limiting corruption (reducing personal contacts)

e-procurement is used by contracting entities

for dealing with suppliers

in communicating with the public and other public bodies

in the government’s internal administrative process

I. General Overview (1)

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Opportunity for procurement regulators

many national and international regimes on procurement have gradually updated or reviewed their provision to take account of electronic procurement

(EU Public Procurement Directives)

WTO Government Procurement Agreement

UNCITRAL Model Law on Public Procurement

Multilateral Development Banks e-GP

I. General Overview (2)

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Revised GPA text 2010

Incorporates complete revision of wording (streamlined, easier to understand and user-friendly)

Use of electronic procurement

Preamble to the revised text recognizes “the importance of using, and encouraging use of, electronic means for procurement covered by [the agreement]”

Electronic Communication

Public notices

Annex 1 entities: Mandatory access of procurement notices by electronic means

Annex 2 and 3 entities: electronic accessibility is “encouraged”

Possibility for reducing minimum timescales (- 5 days)

UNCITRAL Model LawII. WTO Government Procurement Agreement (1)

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UNCITRAL Model LawII. WTO Government Procurement Agreement (2)

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Electronic Auctions

“an iterative process that involves the use of electronic means for the presentation by suppliers of either new prices, or new values for quantifiable non-price elements of the tender related to the evaluation criteria, or both, resulting a ranking or re-ranking of tenders”

online, real-time competition between a buyer and a number of suppliers

Automatic evaluation method (including the mathematical formula) must be disclosed

not only the price can be changed during auction

E.g. delivery time, warranty period

UNCITRAL Model LawII. WTO Government Procurement Agreement (3)

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UNCITRAL Model Law and e-ProcurementIII. UNCITRAL Model Law (1)

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Electronic Reverse Auction (1)

Conditions for using

Feasible to formulate a detailed and precise description of the procurement’s subject matter

Effective competition must be ensured

Award criteria must be quantifiable and be expressed in monetary terms

restriction to “standardized” goods/services

restriction to “quantifiable” criteria

Only criteria that can be applied without any subjective input

precludes non-price criteria (e.g. aesthetic merit, environmental impact) during auction ?

only non-price which can be quantified on an auditable basis (e.g. maintenance costs) ?

UNCITRAL Model Law and e-ProcurementIII. UNCITRAL Model Law (2)

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Electronic Reverse Auction (2)

Very detailed set of rules (chapter VI)

Procedure

Type 1: e-auctions as a stand-alone procurement method (Art 53)

Type 2: e-auction as a phase of normal procurement methods (Art 54)

Requirements during e-auction

Automatic evaluation of all bids

Instantaneously information of its bid vis-à-vis other bids

Requirements after e-auction

Rejection of unresponsive bids / unqualified suppliers in Type 2 e-auctions

Rejection of abnormally low bids in Type 1/2 e-auctions

UNCITRAL Model Law and e-ProcurementIII. UNCITRAL Model Law (3)

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Website www.mdb-egp.org

jointly sponsored by the Asian Development Bank (ADB), the Inter-American Development Bank (IADB), and the World Bank

e-GP as effective tool in the fight against corruption, the promotion of integration and the stimulation of greater productivity

e-GP group has achieved a high degree of harmonization in its approach to provide technical advice and support to member countries in developing national e-GP strategies and solutions

e-GP Tool Kit prepared by MDBs is the only updated international standard for e-tendering and e-auctions for the time being

IV. Multilateral Development Banks e-GP (1)

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E-GP Tool Kit

provides member countries with strategic guidelines on the planning, management, implementation and support of e-GP

E.g. e-GP Strategic Planning Guide, International Survey of e-Procurement Systems, e-GP Standards Framework

IV. Multilateral Development Banks e-GP (2)

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Excursus: World Bank

See Guidelines Procurement Under IBRD Loan And IDA Credits, May 2004, Revised October 1, 2006 at 2.11 and 2.44

Provided that Bank is satisfied with adequacy of system

Multilateral development banks have published information on criteria that e-tendering must meet

www.mdb-egp.org

IV. Multilateral Development Banks e-GP (3)

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e-procurement already under PPA 2002

PPA 2006 emphasizes greater extend on e-procurement

Shorter time scales when electronic means of communication are employed

e-auction

Dynamic purchasing system

Mandatory electronic publication of information

SIMAP; pep.online.at (below EU-thresholds)

Suppliers must announce electronic address (e-mail)

Tender documents, communication via this address

Tender documents must be available electronically

Submission of RTP/bids if safe signature

“Law on signature”

UNCITRAL Model LawV. Excursus – e-Procurement in Austria (1)

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E-auctions

Only for “standardized” goods/services

E.g. not for intellectual services

Lowest bid or most economic advantageous bid

Example:

UNCITRAL Model LawV. Excursus – e-Procurement in Austria (2)

Rounds Time Admitted suppliers

A B C D E F G H I J

1 10 200 220 180 170 290 310 250 220 180 200

2 11 150 160 160 170 150 140

3 12 110 130 130 120 140

4 13 100 100

5 14 90

Result Award

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Use of e-procurement depends on individual contracting authority

no Austrian-wide uniformed approach

Central Purchasing Entity (“Bundesbeschaffungs GmbH)

http://www.bbg.gv.at/

ASFINAG / Austrian Railways joint e-procurement plattform

https://www.ava-online.at/

UNCITRAL Model LawV. Excursus – e-Procurement in Austria (3)

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Similar provisions in international texts

e-procurement – useful new tool

transparency, efficiency, integrity (anti-corruption), fair and equal treatment

e-procurement = reform process

Not just replacing letters with e-mails

Developed e-procurement system in Austria

UNCITRAL Model Law and e-ProcurementVI. Resumé

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Contact

Johannes S. SchnitzerSenior Associate, Vienna

WOLF THEISS Rechtsanwälte GmbHSchubertring 6, 1010 Vienna, AustriaT: +43 1 515 10 5355F: +43 1 515 10 665355E: johannes.schnitzer@wolftheiss.com