CERN Procurement Procedures Rome, 28 th June 2016 Adam Horridge

CERN status and procurement policy Key figures and cooperation with Italian industry Procurement procedures Contacts Overview

Legal Framework Intergovernmental Organization established in July As an Intergovernmental Organization, CERN is not a legal entity under national law but governed by public international law. CERN benefits from immunity from national jurisdiction and execution. Thus, legal disputes between CERN and its suppliers and contractors are not submitted to national courts but solved via international arbitration. CERN is thus entitled to establish its own internal rules necessary for its proper functioning, such as the rules under which it purchases equipment and services.

Procurement Policy - Principles Based on transparency, equal treatment of bidders Ensure bids fulfil all the necessary technical, financial and delivery requirements; Keep overall costs for CERN as low as possible; Achieve balanced industrial returns for the Member States; Not less than three competitive tenders to be sought for the purchase of supplies (including construction works) and services; Invitations to tender to be limited to suppliers and contractors located within Member States.

Civil engineering Buildings, roadworks, Utilities Cooling & ventilation Power distribution, cables Infrastructure & services Metal structures Mechanical engineering Radiation shielding Transport & handling Safety & access control Installation, operation & maintenance Data acquisition, computing & networking Various supplies Furniture, tooling, gases, stationary, etc.. What do we buy? Recurrent supplies and services

Industrial controls & field buses Timing & “fast” real-time controls Beam collimation Beam injection, ejection & dump Radio-frequency equipment Power converters Beam instrumentation & diagnostics Permanent and electromagnets Cryogenic equipment Vacuum equipment What do we buy? Accelerator technologies required for consolidation projects and new developments

Supplies and Services Supply contracts: Contracts for supplies of equipment including R&D contracts, electricity, telecommunications and civil engineering work as well as maintenance and leasing contracts covering data processing, printing and telecommunication equipment. Country of origin: In accordance with standards defined by EU i.e. the country(ies) where the supplies (including their components and sub- assemblies) are manufactured or undergo the last major transformation by the contactor or his sub-contractor. Service contracts: Contracts for the provision of services to be executed on the CERN site. Country of origin: The country in which the bidder is established.

Member States’ Contribution 2016 (CHF) Total 1’127’836’550 Germany %227’506’500 United Kingdom % 162’375’900 France 14.61% 162’000’700 Italy % 122’445’150 Spain 7.61 % 84’421’350 Netherlands 4.74 % 52’603’200 Switzerland 4.03 % 44’646’150 Norway 2.90 % 32’208’600 Sweden 2.78 % 30’797’900 Poland 2.81 % 31’110’450 Belgium 2.74 % 30’416’150 Austria 2.20 % 24’381’400 Denmark 1.75 % 19’434’050 Israel 1.42 %15’728’950 Finland 1.36 % 15’133’450 Greece 1.32 % 14’612’200 Portugal 1.14 % 12’680’500 Czech Rep % 10’881’400 Hungary 0.61 % 6’741’250 Slovakia 0.49 % 5’412’150 Bulgaria 0.29 % 3’237’850 Romania* 10’912’650 Serbia** 1’317’000 Cyprus** 750’000 Pakistan*** 1’349’950 Turkey*** 4’751’750 * Candidate for Accession ** Associate Member State in the pre-stage to Membership *** Associate Member State

Industrial Return Coefficient The return coefficient of a Member State for Supply contracts for a given twelve-month period starting on 1 st March is defined as: The ratio between that Member State's percentage share of all purchases of supplies (excluding purchases funded by non-Member States) during the preceding four calendar years and that State's percentage contribution to the Budget over the same period.

For calls for tenders for Supply contracts issued between and , the following CERN Member States are considered to be well balanced: Bulgaria, Czech Republic, France, Italy, Hungary, Switzerland For calls for tenders issued between and , the following CERN Member States are well balanced for Industrial Service contracts: Austria, Denmark, France, Spain, Switzerland, United Kingdom Well Balanced Member States

Long term average

Collaboration with Italian industry Industrial return for supplies, Industrial return for services, target for 2016 = 0.90target for 2016 = 0.40

Procedures for obtaining offers Requirements not exceeding 10’000 CHF; Users may issue enquiries directly provided CERN procurement rules are followed; Purchases between 10’000 CHF and 200’000 CHF Price Enquiries issued by Procurement Service; Purchases exceeding 200’000 CHF Market Surveys & Calls for Tenders issued by Procurement Service.

Requirements between 10’000 and 200’000 CHF Price enquiries Deadline for bidders to submit bid is at least 4 weeks from mailing date; Invite min of 3 firms; All enquiries exceeding 50’000 CHF are also sent to Industrial Liaison Officers (ILOs) for information; Adjudication based on lowest compliant bid (FCA price) ie which complies with the technical, financial and delivery requirements, subject to the rules aimed at achieving well balanced industrial return coefficients for the Member States (from 100’000 CHF).

Requirements exceeding 200’000 CHF Market Survey (MS) followed by a Call for Tenders (IT) Announcement in the document “Advance information on Forthcoming Market Surveys and Calls for Tenders expected to exceed 200’000 Swiss francs”; Market survey: brief technical description (1-2 pages); qualification criteria (financial and technical); questionnaire. Current Market Surveys available on Procurement Service home page ext/found/CFTSearch.do

Requirements exceeding 200’000 CHF Call for tenders: Deadline for bidders to submit bid is at least 4 weeks from mailing date; Invite - 10 firms for contracts between 200’000 and 750’000 CHF; - 15 firms for contracts exceeding 750’000 CHF; All call for tenders are also sent to Industrial Liaison Officers (ILOs) for information;

Adjudication - Supplies Supply contracts whose estimated value exceeds CHF are awarded on the basis of the lowest compliant bid to the firm whose bid complies with the technical, financial and delivery requirements and is the lowest, subject, however, to the following rules aimed at achieving well balanced industrial return coefficients for the Member States:

Adjudication - Services Industrial Service contracts, whose estimated value exceeds CHF, are sometimes awarded according to the same lowest cost scenario, including being subject to the alignment rule, but are more often awarded on the basis of Best Value for Money (BVFM): Price (at least 50% of the total weight) and Quality (a maximum of 50% of the total weight) are taken into consideration; Double envelope procedure; Only technically compliant bids are evaluated and scored. Adjudications not be subject to the alignment rule;

Realignment Rule (Scenario 1) Lowest bid from a PB MS contract placed with it Poorly balanced MS Well balanced MS Bid (CHF) Contract

Realignment Rule (Scenario 2) Lowest bid from a WB MS realignment rule applies if bid difference <20% Poorly balanced MS Well balanced MS Bid (CHF) <20%

Realignment Rule (Scenario 2) Lowest bid from a WB MS (a) 1st bidder from PB MS aligns contract placed Contract Poorly balanced MS Well balanced MS Bid (CHF) <20%

Realignment Rule (Scenario 2) Lowest bid from a WB MS (b) if not, 2nd lowest bidder from PB MS aligns contract placed Contract Poorly balanced MS Well balanced MS Bid (CHF) <20%

Realignment Rule (Scenario 2) Lowest bid from a WB MS (c) if no alignment, contract placed with lowest bidder from WB MS Contract Poorly balanced MS Well balanced MS Bid (CHF) <20%

Indicative Procurement Timeline for HL-LHC  MS issued by CERN Q4 / 2016  MS responses due Q1 / 2017  IT issued by CERN Q2 / 2017  IT responses due Q3 / 2017  Bid clarification Q4 / 2017  Contract award Q1 / 2018 after CERN Finance Committee approval → Combined MS for Point 1 & Point 5; → Separate IT for Point 1 & Point 5.

HL-LHC Construction Contracts – Adjudication Considerations 1  Bids to be evaluated using a double envelope procedure  Submission of a technical and commercial bid in separate envelopes  If a technical bid is deemed not to be compliant, the corresponding commercial bid will not be opened  The content and criteria of the technical and commercial bids will be defined at IT stage  The same bidder cannot be awarded both contracts even if his is the lowest compliant in both cases  The highest value contract will be adjudicated first

HL-LHC Construction Contracts – Adjudication Considerations 2  Remeasurement basis (FIDIC red book)  With regard to the alignment rule, as per CERN’s selection and adjudication criteria (April 2016), any bid for which 60% of its value originates from poorly balanced member states will be considered as wholly originating from a poorly balanced member state

Registering as a Supplier

Contacts with CERN Procurement web page In the Procurement Group: Adam Horridge, senior procurement officer Lisa Bellini-Devictor, section leader Administration and Infrastructure Industrial liaison Officer (ILO) Mauro Morandin, Italian ILO

Thank you for your attention