state of play - guvernul românieigov.ro/fisiere/stiri_fisiere/pillar_4_national_strategy... · web...

Pillar 4: Capacity of the contracting authorities, with emphasis on professionalization and integrity issues

This Pillar contains a main text (Strategy), a table with the specific actions (Action plan) and annexes. The annexes are complementing documents. They must be read in the light of the Strategy and Action plan and cannot amend or contradict the actions as set out in the Strategy and Action plan. Those texts always prevail over the annexes.

1.1 State of Play

In Romania, public procurement is currently conducted on a decentralised basis by thousands of contracting authorities (for the period 2007-2014, a yearly average of about 7.300 contracting authorities conducted online or offline public procurement using a procurement procedure or direct awarding below or above EU thresholds). There is also a central purchasing unit within the health sector, established by Government Decision. However, the performance of this central purchasing unit will not be used as a benchmark for establishing the way forward.

According to the legislation in force, each contracting authority should include in its organization chart a unit in charge of conducting procurement procedures. Some procurement officers are in charge only of conducting procurement procedures, while others perform also other permanent tasks. This is the case in most local authorities. At central and district level, all the contracting authorities have a unit in charge of conducting procurement procedures.

Generally, the personnel conducting procurement procedures has various educational backgrounds (engineers, economists, professors, etc), therefore knowledge in public procurement is acquired over the years, without consolidating and valorising this expertise. In the best case they may have followed certified short term training courses, varying between 4-8 days, designed in accordance with the occupational standard for the occupation ofa public procurement expert.

An analysis of various reports in the area of public procurement, of the activity of CNSC, of the Courts' Decisions, the content of published tender dossiers, outcomes of procurement procedures and content of secondary and tertiary legislation in public procurement in Romania generates serious concerns in the following areas:

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i. There is a lack of technical capabilities and skills at the contracting authority level in identifying the needs, preparing the tendering documentation, evaluating the offers and implementing the projects.

Lack of capability and expertise at the contracting authorities1' level for need identification and preparation of the tender documentation (scope of Work, contract provisions and instructions to tenderers) directly leads for example to:

a. complaints generated by the content of the Tender Documents and subsequently by the evaluation process;

b. use of inappropriate references for the calculation of the estimated value; c. questions and answers during the bidding period, which lead to deadline extensions

or cancellation of the procedures; d. difficulties during the evaluation or lack of an appropriate reference for an appropriate

evaluation;e. inability of bidders to prepare meaningful offers of good quality;f. discouraging serious bidders from participating in procedures; g. delays in contract implementation;h. poor quality of contract result;i. a need for contract amendments and for additional funds to satisfy the real need of

the contracting authority.

The lack of technical skills at the level of the contracting authorities is a frequent deficiency. There is no procurement function described in the organization chart of the CAs or of the big central purchasers. They repeatedly have to relaunch procedures, which delays investments and leads to a low efficiency of public spending and high risks in implementation.

ii. There is a lack of legal / procedural skills at the level of the contracting authorities due to uneven expertise of procurement officers and the absence of adequate supporting instruments (standard contract documents, proper help –desk, guidance, etc)

There is no professionalization and no career path in the area of public procurement in Romania. In addition, there is no formal distinction between a procurement officer and a procurement professional, since there is no culture for a „procurement qualification”. Moreover, there is no connection between the performance of procurement staff and their remuneration level. The remuneration of the staff is not adequate in view of the complexity of the work, and is completely uncompetitive compared to the salaries of procurement staff in the private sector. Lack of positive motivation is acknowledged as a systemic problem.

1 Annex 1 – Capacity of Contracting Authorities at local level of 33

This lack of professionalization is also detrimental to integrity in public procurement, which is a source of constant concern and a major challenge in Romania. Dedicated actions are planned in this regard under pillar 3.

iii. Currently there is no dissemination or reference of good practices in the area of procurement in Romania, even if there is a certain awareness of the responsibilities and the difficulties faced by the public procurement officials when performing their duties.

iv. For public procurements above the threshold of direct purchase, the use of e-procurement remains fairly limited (between 17 - 21%) and only 26% of the total value of online contracts were contracted for works. This is mainly due to the fact that energy and transport contracting authorities use only marginally online procurement. Consequently, although the online publication of notices and tender documentations is widely used and known by Romanian contracting authorities, in terms of full implementation of e-procurement (the other phases of e-procurement, up to online award) very few contracting authorities2 are using it at national level, mainly due to technical considerations (still missing query and data filtering and export functionalities, lack of business intelligence, analysis features, etc.) but also due to the general administrative culture.

1.2. Way Forward

The correct and effective application of procurement procedures, compliant with the applicable legislation and maximising value for money for the tax payer requires adequate instruments to be applied, solid organisational support, as well in-depth knowledge and specialised expertise of procurement officers.

Shifting the focus from compliance to quality-based results requires a mechanism capable to produce systematic and reliable information. This is essential for the performance of the procurement system, and is addressed by the actions proposed below.

Increasing the capacity of contracting authorities requires extensive efforts, resources and time. A more efficient and effective approach could be to create clusters of expertise in public procurement and to strengthen the capacity of specific contracting authorities, by covering precise dimensions: people, process and infrastructure. The actions for improvement are structured around the following actions:

1. Developing supporting guidance and tools for contracting authorities;2. Addressing some common and structural implementation shortcomings (utilities

location, design and management of feasibility studies,…); 3. Professionalising procurement officers;

2 Out of the 2714 CAs that initiated procedures in SEAP in 2014, only 699 opted for procurement fully online. of 33

4. Mechanisms for mutualising the capacity of contracting authorities and aggregating demand

1.2.1. Actions: scope and expected impact

A. Increasing technical and procedural abilities at the level of contracting authorities by establishing guidelines and standard bidding documents

In order to secure a unitary professional approach in conducting procurement at the level of contracting authorities the web-based guideline is to be designed and administrated at the system level. Details on the role and content of the web-based guideline is outlined in Annex 6 to Pillar 1.

The web-based-guideline will address in detail the issues linked to the pre-award stage of the procurement, i.e. specifically market analysis, cost estimation, contracting strategy.

In addition to the guidelines, the responsibilities of the consultant in the pre-award stage shall be increased. It is envisaged that consultants in charge of designing the projects and preparing the tendering documentation will have to provide the contracting authorities with reliable estimation of the corresponding costs, anticipating the expected market reply as foreseen in pillar 3 of the Strategy. Developing standard sets of Tender Documents/Dossier is a pre-requisite for strengthening capabilities at CAs level. Standard documents will be developed for each type of procedure, covering at least the following:

i. General and specific information in relation to the procurement procedure

This information would be collected and detailed in the tender documentation as general and specific conditions for conducting a specific procedure. Therefore, the general conditions would be common for procurement procedures of a specific type (open, restricted, negotiated), while the specific conditions would be tailored for each procedure.

From the perspective of the contracting authority the part of the tender documentation addressing the procurement procedure should demonstrate – in relation to the market – that all conditions are fulfilled to ensure that the procurement exercise is conducted fairly and transparently. It should also communicate the rules, requirements, criteria, norms and other information required for conducting the procurement exercise.

From the perspective of the economic operator, this part of the tender documentation must provide all necessary information in order to: (i) decide whether to participate or not in the procurement exercise, (ii) understand the formal and substantial rules, (iii) understand the proofs required to fulfil the minimum qualification requirements and selection criteria, (iv)

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allow the preparation of a bid / application which fulfils the requirements of the Contracting Authority.

The information to be included in the Tender Documentation, shall refer to the selection and qualification of bidders, preparation and submission of offers, opening and evaluation of offers, contract signature, rights of the contracting authority within the procedure, appeals/remedies.

ii. Guidelines for the preparation of technical or performance specification

This information would be collected and integrated in the tender documentation and detailed as general and specific conditions for the preparation of technical or performance specifications. The information would be as customised, as much as possible, for the specific types of contracts: services and intellectual/professional services, works, supplies, with the aim to provide sufficient information to the bidders on the scope of the contract: the needs of the Contracting Authority and what are the requirements to meet these needs.

From the perspective of the contracting authority, the role of this part of tender documentation is to provide a clear presentation of the requirements and expectations, and to avoid divergent interpretations from the bidders.

From the perspective of the economic operators, the role of this part of tender documentation is to obtain clear access to the requirements (minimum specifications) and expectations (desired specifications), to allow for accurate determination of the possibility to implement the contract, as well as to present the information in a way which allows the bidder to calculate the costs to implement the contract.

The information to be included in the Tender Documentation, under the general and specific information in relation to the technical and performance specifications, for the supply contracts refersrefers to: definitions, equivalence of standards and codes, manufacturing, electrical specifications, design criteria, supply of information technology equipment and software, general environmental and health & safety requirements, spare parts, packaging labelling, transport, installation, testing, training, operation and maintenance manuals, acceptance.

The information to be included in the Tender Documentation, under the general and specific information in relation to the technical and performance specifications for the services contracts refers to: background information about the beneficiary and the project, contract objectives & expected results, results to be achieved by the contractor, assumptions underlying the contract & risks, contract scope with clear and detailed list of tasks to be undertaken in order to achieve the contract objectives, location and duration of implementation, specific requirements related to personnel and required expertize, contract management arrangements and management structure, facilities to be provided by the contracting authority and contractor, schedule of payments, reporting requirements, performance incentives.

The following is a list (indicative not limitative) of the information to be included in the Tender Documentation, under the general and specific information in relation to the technical and

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performance specifications, using web-based-guideline as a tool for disseminating the information, for the works contracts:

a. In case of technical specifications (works contracts): the scope of the specification (its objectives and content); definitions: explanation of any technical or specialised terms used, the purpose of the equipment or material that is the subject of the specification, reference to any related documents (such as standards or legislation) which apply, materials requirements, tolerances and permissible variability, desired appearance, texture and finish requirements of the finished product, drawings, samples or models of the required product (where available), conditions under which the item or material is to be installed, used, manufactured or stored, maintenance and reliability requirements, specification of packaging and protection, information to be provided by the supplier for users

b. In case of performance specifications (design and build contracts) – engineering included: the functionality, performance or capabilities to be achieved, key process inputs which will contribute to performance, the operating environment and conditions in which the performance is to be achieved (and extreme or unusual conditions in which it is not expected), how the product is required to interface with other elements of the process, required quality levels, required safety levels and controls, required environmental performance levels and controls, criteria and methods to be used to measure whether the desired function has been achieved;

c. In addition, all works conditions shall be detailed, such as : access to the site, traffic deviation, geotechnical conditions, normal weather conditions, etc… They are needed by bidders to draft their offers and they also set the standard of “foreseeable” conditions. Deviation from these detailed conditions might then justify contract modifications.

Whenever possible and relevant, more detailed technical documentation will be drafted, building on the experience acquired for EU funded water and waste projects.

The appropriate, personalized set of Tender Documentation will then be prepared first for buildings thermal rehabilitation, schools, road rehabilitation, hospitals. .

A holistic approach will be followed for the preparation of bidding documents, entailing the following:

Technical documentation for relevant frequent projects (or template detailing the above required information otherwise);

Corresponding selection and award criteria, whose justification and proportionality have to stem from the detailed description of the procured works;

Contractual provisions, ensuring balanced and proportionate allocation of responsibilities between contractors and contracting authorities (see iii below)

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Currently different sets of standard documentation are under preparation for services: preparation of infrastructure projects, supervision of infrastructure projects and contract management. These are a priority in order to address the problems upstream from the project preparation/implementation.

For supervising engineer’s contracts, the following in particular will be introduced:

Selection criteria will be aligned on those applicable for the underlying works contracts;

Contractual provisions will detail the required responsibilities of the engineers and enhance their accountability;

Recourse to outsourced independent laboratories will be required for key performance tests before accepting any works

iii. General and specific contract conditions for works and services

Based on the previous experience in implementing EU funds, the legislation shall be modified so foresee that FIDIC conditions of contract will be mandatory for managing works contracts. This measure will align the approach in contract management for all financing sources and will secure a balanced allocation of risks between employer, contractor and the engineer.

The section addressing the general conditions of the contract will include clauses to be applied in all contracts. The text of the general conditions clauses shall not be modified by the contracting authorities.

The section addressing the specific conditions of the contact will include clauses specific to each contract scope and will supplement the general conditions. These conditions will be prepared by the contracting authorities.

B. Overcoming recurrent implementation shortcomings to smooth project preparation and contract implementation

Recurrent shortcomings have been identified in the implementation of works contracts, having a negative impact on the investment, leading to delays, disputes and price increases.

Some indicative but not exhaustive examples of frequent problems:

i. Management of utilities: information on utilities’ location is not systematically attached to tendering documents or if attached does not reflect the real situation.

ii. Management of authorisations: contractors are often made responsible for obtaining authorisations that should be provided by contracting authorities, and available when the contract is awarded. The shift of responsibility dissuades serious bidders, leads to substantial delays in execution and triggers additional costs. As a result, the contracting authority is put in a position in which it depends on the contractor, although it has officially transferred the responsibility to him..

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iii. Recourse to insufficiently experienced supervising engineers: They cannot effectively manage and monitor the implementation of the contract and provide the assistance to the contracting authority, for which they have been hired. This is particularly critical for design and build contracts, when the contracting authority has to approve the proposed design.

iv. Execution following feasibility studies: According to the Law on public finance 500/2002, investments are approved by an inter-ministerial committee on the basis of a detailed list of indicators stemming from the feasibility study. These indicators defined through GD 28/2008 are later used in a rigid manner during the tendering and implementation stage, especially in case of design and build projects, with the design required to match in all respects the initial indicators, triggering a lack of flexibility in the implementation and difficulties in the relations with the contractors.

A set of measures is foreseen in at various levels (legislative framework, contractual conditions, standard documentation) in order to remedy the situation and lead to a change of approach.

i. Legislative obligations will be introduced in the relevant sectorial regulations obliging utilities’ owners / operators to issue updated and accessible mapping (with adequate details and ideally GIS based) of their networks. Given the substantial work required to get updated and accessible mapping, it is envisaged to:

a. postpone the entry into force of the obligation (for instance by 2 years from the issuance of the related law), leaving them reasonable time to comply with this requirement;

b. Mobilise public funding (under applicable State aid scheme) – including EU funding – to support the required mapping;

ii. This legal requirement shall be translated into the contractual / legal obligations between the competent public authorities (authorising / contracting entities) and the utilities owners/managers..

The legislative obligations will, therefore, make the utilities’ owners / operators accountable and financially liable for the accuracy of the information provided to the contracting authorities before the launch of a public procurement procedure. In case of deviations between the information provided and reality generating additional costs, The contracting authority will be able to recover those from the utilities’ owners/operators.

In addition, contracting authorities will be obliged to identify the utilities that might impact on the project design and implementation prior to the launch of the tender procedure. They will also be obliged to collect information on the location of the utilities. From the information collected, the contracting authorities shall quantify in the bill of quantities the expected works (protection, relocation and / or crossing) and detail the working conditions. It is only on this basis that bidders can correctly assess the working conditions and costs and make correct technical and financial offers. Standardised tendering documents for works, which might be

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influenced by utilities should take this into account in the technical specifications and the template for bills of quantities (detailed or lump sum in case of global price). For certain sectors, such as non-urban linear infrastructure, contracting authorities will complement the formal consultation of utility operators / owners with detailed field investigations (using georadars or similar) in

For authorisations unavoidably issued after the contract signature, notably – although not exclusively – for design and build contracts (such as construction permits, or complementary EIA authorisations), the consequences in terms of possible delays and costs should be duly anticipated in the contractual provisions (standstill periods, and additional costs).

The web-based guidelines will implement all these points.

iii. Standardised contracts and technical obligations for supervising engineers will be developed, based on existing FIDIC models, detailing the expected inputs of engineers and reinforcing their responsibility and accountability;

The criteria for the selection of supervising engineers have to be adequate to each contract and compatible with those required from the works’ contractors.

iv. Legislative modifications will also be introduced to change the way feasibility studies influence the procurement process.

Instead of approving the detailed technical indicators of the feasibility study the interministerial group will approve a limited set of budgetary and economic indicators verifying the financial feasibility and economic desirability of the projects;

Authorisations and approvals requested and provided at feasibility and design stages will have to be sufficiently detailed and binding on the issuer. Authorities cannot issue approvals “in principle” and contracting authorities are not allowed to base public procurement procedures on approvals or authorisations, which have only been issued „in principle”.

In design and build projects, the feasibility studies will not be imposed as compulsory solutions on the contractor, leaving flexibility to design the projects with regard to the performance objectives assigned in the tendering documentation;

FIDIC conditions of contract shall be transposed in the national legislation.

C. Professionalization of procurement officers (civil servants or contractual personnel acting in public procurement) and building a system creating incentives for procurement officers

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This action consists of three activities:

a. Establish a career path in procurement and an associated educational system for the procurement discipline

b. Set-up a system to create incentives for the public procurement officers/professionals

c. Recourse to professional expertize available on the market

The results of the above actions in the area of procurement professionalization would result in:

b. Design and implementation of a career path in procurement,

Persons in charge of public procurement on a daily basis should possess in-depth knowledge of their special area of responsibility and broad knowledge and experience of the practical application of current best practice and the tools and techniques used in procurement3 management and be professionally competent in applying them. This category of personnel would be involved in the activity performed by CPBs when these will be implemented.

The action includes:a) Establish a general function with specific tasks applicable to civil servants,

acting at the level of contracting authorities, in charge of public procurement on a full-time basis. The function shall be set up in accordance with the current legislation and shall be organised similarly to the auditor function. The personnel will benefit of and will be employed based on specific conditions established by a special law. Modification of Law 188/1999 on the civil servant status shall also be initiated in order to introduce the new general function.

b) Establish a specific function for the personnel of ANAP in accordance with the current legal framework, (similarly to the integrity inspector function, specific to the National Integrity Agency or antifraud inspector, established at the level of National Fiscal Administration) The specific function will be established by law for ANAP personnel only and will include the specific conditions in terms of employment conditions and remuneration. The law will also include reference to the mandatory application of the principles of flexible management (see point c below) that would contribute to the professionalization of the personnel.

3 And supply chain in the context of the texts of the 2014 PP Directives

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c) Facilitate the implementation at the level of ANAP of the principles of flexible management, in line with the Strategy on Consolidation of Public Administration4, via three directions:

- Career and development placement: by which a person is temporarily assigned to perform tasks in public procurement but which are not part of his/her regular job description;

- Participation in working groups on different subjects;- Introduction of the instruments: benchmarking, bench-learning and

bench doing as described in the Strategy on Consolidation of Public Administration

The career path for procurement personnel (fully described in the Annex no.2) must be based on an appropriate education and training framework. This framework should be in line with International Standard Classification of Occupation (ISCO), European Qualifications Framework (EQF) and International Standard Classification of Education (ISCED).

Actions addressing the education and training in public procurement include:

a. public procurement becomes a qualification in the register of qualifications for the higher education sector in Romania. Universities will have to include this qualification in their educational offer;

b. compulsory curricula for the training in public procurement – containing the acquisition of the necessary knowledge, but also of the required competences, including development of a specialised extended training programme in public procurement;

c. Introduction of a professional certification in procurement/public procurement.

Next steps towards professionalization are envisaged in 2016 in order to perform a cost- benefit analysis to determine a reward system for personnel in charge with public procurement.

i. design and implementation of a reward system for procurement performance against established KPIs

4 Approved by Government Decision no. 909/2014. of 33

Beside the current job-based pay structure -5, a performance-based pay structure should be considered as a long term measure for the remuneration of personnel in charge of public procurement but also for all public functions existing in the current administration.

The performance-based reward structure could include merit-based benefits sharing and group-based benefits sharing. In this case, the procurement personnel may be remunerated depending upon their own or their team’s performance against a set of criteria or goals - for example, where savings exceed a predetermined threshold, the contracting authority may further stimulate the person by various tools – such as support for career development or any other means considered appropriate.

Rewards do not refer exclusively to financial rewards, but includes all forms of professional reward, such as establishing development exchange programmes or holding „vernissages” of procurement procedures, sharing best practices or organizing contests. All these should be part of a network of PP professionals administrated by the ANAP unit in charge of operational support and using the web-based tool as an „internal” web-based forum to exchange ideas, documents, experience. In terms of the impact of potential financial rewards a cost-benefit analysis is to be performed in order to determine the magnitude of the financial reward.

In parallel, sharing good practices via buyer platforms/forums and exchange of views on the scope of works for specific categories of goods, works, services, experiences, market information should be encouraged. Such a forum/platform will be administrated by ANAP.

These measures are designed to increase the human resources capacity within the organizations acting as contracting authorities. However, the contracting authorities also have the possibility to use a public procurement service provider, in the following form:

i. use the expertise existing in CPBs or other contracting authorities

ii. use expertise from the market

The contracting authority will decide on a case-by-case basis whether it uses a procurement service provider (public or private). It will base its decision on the availability of the adequate capacities and knowledge for the management of the specific procurement process. The web-based guideline will provide guidance and instructions facilitating the decision in this respect.

Annex 2 to this pillar presents detailed information on professionalization of procurement through the establishment of a career path in procurement and an associated educational

5 the particular role and responsibilities of a job attract a particular rate of pay and all personnel in public sector undertaking that job will receive the same rate of pay – in a certain range between a minimum and a maximum.

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system, as well as on the set-up of a system creating incentives for public procurement officers holding certain specific procurement certifications.

Creating a specific category of procurement professionals does not entail per se a budgetary impact. The budgetary impact is to be analysed as part of the Feasibility Study for establishing CPBs, since it is expected that CPBs will be populated with professionals and not with procurement officers. In addition, it will be part of the cost-benefit analysis mentioned above.

D. Aggregation of demand6 and cooperation of contracting authorities

Aggregation of demand and cooperation between contracting authorities aim especially to achieve the following benefits:

o Enhanced procurement skills and expertise, allowing contracting authorities to hire specialised staff they could not afford to recruit otherwise;

o Generate economies of scale, and hence savings, for some procured activities (mostly supply contracts);

o Address functional and organisational constraints for sectors which cannot be effectively managed in a fragmented manner (water, waste, urban transport for instance)

o Trigger higher attractiveness for the market, interested by higher purchased volumes and more reliable contracting authorities, hence increasing the competition;

o Ease the work of national procurement bodies, through a lower number of more reliable contracting authorities, for training and control activities.

For the systemic actions envisaged for the benefit of decentralised contracting authorities (points b and c below), a dedicated feasibility study will assess, for some sectors, their pertinence and cost effectiveness, evaluating in this regard the afferents costs. It will also draw lessons from the experience gained in Romania (CPB in the health sector) and in selected other Member States.

a. Use of centralized procurement for the central administration for certain categories of procurement

Using centralized procurement has various aims; if well used it inter alia streamlines the process, reduces the transaction costs, professionalizes the procurement management and allows contracting authorities to obtain better value for money. Volume central purchasing system at central level as outlined below will be introduced.

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Fig no 1 Centralized purchasing system based on demand aggregation at the level of central administration

The following are the proposed categories of purchasing which are subject to demand aggregation (the list is not limitative): (i) Paper & Stationary; (ii) Printing & Copying; (iii) Cleaning services & Products; (iv) Security & Surveillance Services; (v) Car Insurance; (vi) Vehicles; (vii) Fuel; (viii) Hardware; (ix) Mobile communications; (x) Office furniture; (xi) Travel & Accommodation. Lots will be used always when required by the market addressed (e.g. for paper and stationary: paper, stationary, consumables).

The mechanism used to develop the framework agreement is depicted below (fig no 2)

The central purchasing unit will be set up in stages. Ultimately all supplies and services that are needed on a regular basis by more than one central administration can be subject to central purchasing.

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The central purchasing unit under the MoPF is designed to act as an intermediary, by concluding framework agreements to be subsequently used by contracting authorities. The framework agreements will be designed, wherever possible, as framework agreements allowing for competition before the conclusion of a specific agreement. Framework agreements will be concluded for categories of purchases, not for specific products or brands; central purchasing is not aimed at giving contracting authorities a free choice of the products due to the availability of various framework contracts for the same need. It will be mandatory for central administrations to use the framework agreements concluded by the central purchasing unit wherever available. Each stakeholder at the central administration level is responsible for the stages of the procedure it conducts.

E. Use of Central Purchasing Bodies by contracting authorities within an administration or contracting authorities within a geographical area

CPBs are responsible for centralised purchasing of goods and services for and behalf of local authorities, conducting on a permanent basis the acquisition of supplies and/or services intended for contracting authorities. More specifically, they are designed to prepare and manage procurement procedures on behalf and for the account of contracting authorities at the local level.

The conceptual model for a CPB conducting procurement procedures on behalf of local contracting authorities is depicted below:

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Fig no 3 Scope of activity for a centralized purchasing body based on demand aggregation at the level of local administration

In addition to conducting procurement procedures for and on behalf of the contracting authorities the CPBs should be used as a source of expertise for contracting authorities.

The impact of using CPBs can roughly be summarized as follows: (i) savings from the public funds through economies of scale as a result of orders volume increase; (ii) efficiency and reduction of transaction costs generated through procurement standardization; (iii) possibility of earlier implementation of the full e-procurement cycle (iv) a professional alternative to the lack of expertise and appropriate resources at the level of small contracting authorities (v) professionalization of public procurement generated by the specialization of the procurement staff hired by a CPB.

The following will be decided on the basis of a feasibility study:

i. Legal status: ownership and control ii. Setting up: through public procurement legislation (Government decisions on the

basis of primary legislation) or through public administration legislation iii. Degree of prescription/regulation of the activities to be performed - mandate:

a. Detailed description in the legislation of the strategy and objectives of the CPBs: (i) areas for and conditions under which contracting authorities have to use CPBs or (ii) the activities to be performed by CPBs

b. Decision on the concrete activities of each CPB based on market analysis and KPIs for performance

iv. The boundaries of the procurement process activities to be performed by CPBs:

a. Pre-feasibility of procurement need - types of procurements which could be performed in a centralized manner (volume, budget, recurrence, common to

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several CAs, level of specialization, etc); Analysis of market prices; estimate of the costs of setting up and operating the CPB, etc

b. Preparation of tender dossier – to contract award/framework agreement signing.

v. Financing: a. directly from the national budget for: (i) all the activities performed or (ii) only

for ancillary purchasing servicesb. service fee paid by: contracting authorities for all the activities performed or

only for additional purchasing services

For the sectors for which the Feasibility Study will have evidenced the pertinence and cost effectiveness of central purchasing, recourse to CPBs shall be mandatory and this requirement will be foreseen in the secondary legislation.

F. Consortia of contracting authorities at the local administration level

a. Contracting authorities can conduct joint procurement by creating consortia of contracting authorities, either in occasional or permanent and structural manner, with various integration modalities: integration of the capacities, by transferring within consortia the full competence for planning, financing, procuring, implementing and even operating the respective activities. Such an approach has been followed with intra-community development associations (IDAs), set up at regional level with a view to prepare, tender and implement projects in water, wastewater and waste management sectors. This framework has been established as a pre-requisite for access to EU funding (Sectoral operational Programme and Regional Operational Programme). Such integrated management may be required in sectors whose functionality requires supra-municipal management (such as water, waste, urban transport)

b. More operational cooperation, through:

i. preparation of common technical specifications for works, supplies or services that will be procured by a number of contracting authorities, each conducting a separate procurement procedure

ii. jointly conducting one procurement procedure

iii. acting together or entrusting one contracting authority with the management of the procurement procedure on behalf of one or several contracting authorities. Such an approach has been implemented in the waste sector, where county councils acted as contracting authorities on behalf of all municipalities that were members of the relevant IDA. Such an approach could be used when the investment at stake benefits several authorities (e.g. cultural / sportive center at the disposal of several municipalities) and / or when local competence cannot be effectively exercised at local level (e.g. building local roads for small municipalities)

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Based on previous experience, recourse to consortia of contracting authorities might remain quite limited unless specific provisions in the legislation or requirements prior to access financing are specifically/explicitly introduced.

The procurement through consortia will also be subject of the feasibility study mentioned under E.

The feasibility study will assess the sectors which would be more effectively managed and procured through such mechanisms, detailing the desired leval of cooperation and integration.

For the specific sectors for which the Feasibility Study will have confirmed the pertinence and cost effectiveness of using consortia, it shall be mandatory to use them, and this requirement will be foreseen in the secondary legislation.

G. Enhancing contracting authorities capacities in using online procedures

A new electronic system for e-procurement (SICAP) is being designed. It will aim amongst others at increasing user-friendliness both for companies and contracting authorities, increasing flexibility and modularity, implementing sensitive search keys (defined by the users), implementing automatic notifications and advanced search possibilities and reporting of public information.

In particular the new SICAP system will aim at implementing all the recommendations of the Commission’s Golden Book of e-procurement and will ensure that there are no barriers, be it financial or technical, to the access of foreign companies to the Romanian procurement market. Particular attention shall be paid to the operationalization of the system to allow the extraction of a relevant data and key performance indicators in order to monitor and supervise the performance of the Romanian procurement system and signal any irregular behaviour.

The future SICAP should be designed in a way which will allow a future smooth transition to end-to-end e-procurement (from the electronic publication of contract notices, to tenders), by having the ability to add new modules such as electronic opening of tenders, electronic invoicing and payment .The concept paper on e-procurement is outlined in Annex 4 to Pillar 4.

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H. Perform a feasibility study to assess the viability of introducing the list of approved economic operators, as a pilot project in the roads and highways procurement area

Romanian authorities have in the past identified the introduction of a “list of approved economic operators” as a possible factor which may improve the efficiency in procurement processes; mostly regarding the selection procedures.

Further reflection on such a measure is, however, necessary, as Romanian authorities have also be made aware of a number of possible drawbacks, such as additional administrative burden to manage such a list, the non-exclusive nature of such a list for the selection of economic operators, the necessity to ensure the respect of the principle of non-discrimination in the management of such a list.

Therefore, a feasibility study will be carried out assessing the viability and, above all, the cost effectiveness of introducing a list of approved economic operators for a particular sector (roads and highways), taking into account the possible risks.

The alleged merits of this explored solution will be in particular assessed against the expected improvement of the effectiveness of the selection procedures stemming from the dedicated above measures (standardised documentation and criteria, reinforced capacity of authorities and streamlined guidance), implemented in parallel).

1.4 . Impact and results indicators

The monitoring mechanism described under the chapter “Risks, governance and performance monitoring” is directly applicable for the monitoring of indicators and expected results described under this headline. With regard to Pillar 4, the following performance indicators are detailed in the table below.

Overall, all the actions aim at reinforcing the capacity of contracting authorities, with improvements expected regarding the regularity of procedures and the effectiveness of procurement. In this respect, the following performance indicators would be monitored over time:

a. Improved regularity of procedures: irregularity / error rate spotted by ANAP;

b. Final costs of implemented contracts against the initial estimation and contracted value (through expected reduction of contract modification through improved quality of project preparation and design).

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Summary of proposed actions, lead and contributing institutions, completion timescales and expected impacts Identified

issue/trigger for the action

Proposed Action Lead Contributors KPI Deadline Source of Information

Expected impacts

B. Overcoming recurrent implementation shortcomings to smoothen project preparation and contract implementation

Lack of instruments at the contracting authority level in areas addressing works contracts management

Blockages in contract implementations; delays in investment; disputes and additional costs;

Implementation of a mandatory mapping of utilities in accordance with the text under B.

MoE regulatory bodies for the utilities sectors

1. Adoption of the legal act imposing mapping of utilities

2. Clear official data on utilities networks (map on utilities)

July 2016

Ongoing after adoption, finalised

July 2018

Official Gazette Generated savings from the public funds through clear risk allocation mechanism avoidance of delays and disputes in PP contract implementation

Modification of GD 28/2008

MPF, MDRAP

All stakeholders

Tangible set of indicators (budgetary, economic and performance-based)

December 2015 Official Gazette Increase efficiency of public investment

Adoption of FIDIC MPF MFE , All Clear, unitary December 2015 Official Gazette Efficient of 33

Identified issue/trigger for the action


Expected impacts

conditions of contract in the national legislation

stakeholders and balanced contract conditions

management of works contract

Requirements related to management of utilities and management of authorisations in the web-based guidelines

ANAP All stakeholders

Clear contractual solutions for delays in authorities issuing or for variations of contract due to lack of/incorrect information on utilities

December 2015 ANAP site

Standard contract conditions for supervision, project design and contract management

ANAP MFE , All stakeholders

Clear, unitary and balanced contractual conditions

December 2015 ANAP site

C. Professionalization of the procurement officers (civil servants or contractual personnel acting in public procurement) and setting up a

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Expected impacts

system to create incentives for procurement officers

Lack of capabilities at the contracting authority level in areas addressing the identification of the needs

Lack of adequate skills, knowledge, and experience in managing the overall procurement process

Design and implementation of a career path in procurement:

Establish by law a general function applicable to procurement personnel (similar to auditor function)

Modification of Law 188 / 1999 on the civil servant status for the introduction of the new general function

Establish by law a specific function for the personnel of ANAP

ANAP ANFP, Ministry of Finance, Ministry of Labour,

ANFP

2 Laws adopted: general function for procurement personnel + specific function for ANAP personnel

1 modification of Law 188/1999 adopted

December 2016 Official Gazette Improved staff; incentives staff and administrative and professional capacity; reduced staff fluctuations

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Expected impacts

Implementation at the level of ANAP of the principles of flexible management

Methodology elaborated


Create adequate education and training framework:

Introduction of public procurement in the register of qualifications for higher education

ANAP ANFP

Ministry of Education

National Authority for Qualifications

Universities

Qualification in PP established within the higher education sector

Compulsory curricula for

December 2016 Ministry of Education

National Authority for Qualifications

Universities

Improved staff; incentives staff and administrative and professional capacity; reduced staff fluctuations

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Expected impacts


Elaborate compulsory curricula for the training in public procurement

Elaborate a specialised extended training programme in public procurement

Introduction of a professional certification in procurement/public procurement

All key stakeholders

training in public procurement designed

Training programme elaborated in collaboration with ANFP

Professional certification in procurement / public procurement introduced

Remuneration of the staff is not proportionate with the

Internal Assessment of options and analysis of costs and benefits for design and implementation

MPF ANAP

ANFP

Ministry of Labour

Reward scheme approved

December 2016 Ministry of Finance

A positive impact on staff motivation and retention in the public sector

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Expected impacts

complexity of the work

Lack of motivation of the procurement staff

of a reward system for procurement officers/professionals (outcome used as input for the feasibility referred in chapter E below)

All key stakeholders

D. Recourse to centralized procurement for the central administration for certain categories of procurement


Lack of adequate skills,

Set up of a centralised procurement unit within the Ministry of Finance (mandatory for selected supplies for central administration)

MPF Internal procedures, methodologies, organisational & functional rules established

Introduction of

July 2016

December 2016

Official Gazette Ensured professionalization and specialization of the procurement personnel; generated savings, increased of usage of electronic tools, standardization of goods and services

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Expected impacts

knowledge, and experience in managing the overall procurement process

central purchasing for a limited set of priority purchases (3 to 5)

Full roll-out of central purchasing

December 2017

E. Recourse to aggregated contracting systems for decentralised contracting authorities within a geographical area


Perform feasibility study for establishing the pertinence and cost effectiveness of recoursing to CPB or consortia, for identified sectors and detailing the implementation

ANAP

MPF and line

All stakeholders

Feasibility study

Results in September 2016 (tendering notice published in September 2015)

Official Gazette Generated savings from the public funds through economies of scale as a result of orders volume increase; efficiency and reduction of

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Expected impacts


models

Set up the legal framework for CPB functioning based on the result of the feasibility study (i.e. establish sectors)

Ensure CPB operational

Establish sectors for development of consortia of CA in compliance with the

ministries

MFP

Government decision establishing CPBs

Internal procedures, methodologies, organisational & functional rules established;

Number of procedures / CA supplied; purchase value;

October 2016

December 2016

October 2016

transaction costs; professionalization of public procurement

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Expected impacts

results of the feasibility study

Setting up the legal framework rending compulsory the recourse to CPB abd consortia in the identified sectors

Legal framework adopted

December 2016

F. Enhancing contracting authorities capacities in using online procedures

Competitive environment for access to public funds by implementing an improved portal for e-procurement

Implementation of an improved SICAP platform

Accessible and user- friendly manuals and guidelines, for both contracting authorities and

AADR All stakeholders

% of online procurement from total procurement both in value and volume.Overall level of satisfaction of users (both

December 2015

December 2015

Increased degree of transparency of public procurement processes through the use of open standards

Reduced administrative

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Expected impacts

Limited use of e-procurement due to technical short-comings

economic operators

Training of personnel for using the SICAP system (at CA’s level) and training of personnel involved in the maintenance of the system (at AADR level)

companies and contracting authorities) based on independent surveys.No. of CAs publishing online procurement

March 2016

costs

New functionalities

IncreasedIncreased use of e-procurement

Ensure future SICAP platform is user-friendly for both contracting authorities and economic operators (Eos). Ensure that foreign Eos do not have any difficulties in

Improve SICAP by requiring no national specific information for registration or access to the platform (such as a Romanian phone number, Romanian bank account etc.). Access to tender documents should be easy. Put at the disposal of

No national specific information required on SICAP.Quick and easy access to tender notices and tender documentation.All the recommendatio

December 2015 Increased confidence and user friendliness of the e-procurement system.

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Expected impacts

accessing the SICAP system.

Put in place safeguards which ensure that the system cannot be subject to fraud or misuse.

companies a direct link to the electronic signature enabling a quick opening of signed tender documentation. Ensure more intuitive access of users to tender notices and documents (no need to re-enter Captcha codes)

Implement all recommendations of the Commission’s Golden Book of e-procurement

Put in place controls to avoid any possible fraud.

ns of the Golden Book of e-procurement are implemented.Number of identified frauds, number of complaints against SICAP, number of times the system ceased to function.

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Expected impacts

Requirement in the EC Directive for full e-procurement documentation

Planning the transition to full e-procurement

ANAP AADR, key stakeholders

Operational plan elaborated

December 2016 Smooth and full transition to e-procurement

G. Reduce information asymmetries

Different approaches in conduction similar public procurement processes by CAs

Set up buyer platforms/forums

ANAP All stakeholders

No. of visits / visitors on the platform

No. of open subjects for discussion

No. of instructions/ guidance issued by ANAP

December 2016 Strengthened vertical and horizontal cooperation between the contracting authorities; increased best practice sharing

H. Perform feasibility study to assess the viability of list of approved economic operators for one pilot sector (roads and motorways)

Difficulties in Feasibility Study ANAP Responsible Option December 2016 ANAP website More efficient

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Expected impacts

selection procedure

stakeholders assessed selection process

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1.5 . List of Annexes corresponding to Pillar 4

(These annexes are working documents and are not designed for public disclosure)

Annex 1Annex 2

Capacity of Contracting Authorities at local levelConcept paper on professionalization

Annex 2 Concept paper centralised procurementAnnex 2 Concept paper e -procurement

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