European Bank for Reconstruction and Development Kiev, 3 February 2017 Marine Infrastructure Development This training course is designed to provide EBRD’s Operations Leaders an overview on public procurement and the Procurement Policies & Regulations of the Bank. The material may be shared with outside Bank audiences as it the Procurement Department of the Bank has sanctioned its content. The Module is numbered 2 as it follows a short procurement training module 1 developed as a tool to introduce procurement to new hires of the Bank. The majority of the pictures displayed in this Module are taken from official reports published by the Bank and they have only a decoration purpose. The abundance of female characters in different roles signifies gender equality and equal gender opportunities that the Bank strictly subscribes. European Bank for Reconstruction and Development Kiev, 3 February 2017

What is EBRD? European Bank for Reconstruction and Development International financial organisation established in 1991 Capital base – EUR 30 billion Credit rating of AAA by Standard & Poor's, Moody's and Fitch Shareholders of the Bank Two international organisations and 65 countries Mission The Bank promotes transition to market economies in 36 countries from Central Europe to Central Asia with an emphasis on working together with the private sector, we invest in projects, engage in policy dialogue and provide technical advice that fosters innovation and builds sustainable and open-market economies. The Bank promotes policy dialogue with regards to investment climate, business environment and policy matter. 4

EBRD Procurement Policies and Concession Policies DOCUMENT OF THE EUROPEAN BANK FOR RECONSTRUCTION AND DEVELOPMENT EBRD FINANCING OF PRIVATE PARTIES TO CONCESSIONS 1

Main principles ECONOMIC use of resources EFFICIENT project implementation Project results shall be of due QUALITY NON-DISCRIMINATORY process TRANSPARENT AND RESPONSIBLE use of public funds

Bank’s approach in public procurement Procurement – an integral part of project risk management Minimisation of risks – Maximisation of success Coverage of the entire project cycle Procurement – part of project delivery strategy Balanced risk distribution Use of standard tender documents and internationally recognised contract terms and conditions Aim of evaluation – best value for money Evaluation factors are usually expressed in monetary terms The key to success – people Assistance to the clients Prevention and fighting corruption Primary focus of the seminar is to equip Bank staff in review of the procurement plan and project implementation arrangements, i.e. the Project Delivery Strategy. Also useful for clients and consultants designing and preparing a project for Bank consideration.

The Client’s role Implement projects in line with agreements The clients are responsible for all aspects of the procurement of contracts. They invite, receive and evaluate tenders and awards contracts, which in all cases are concluded between the clients and the suppliers/contractors/consultants. Since the Client Agency is solely responsible for the procurement under the project financed by EBRD, the Agency will take all steps in the procurement process. Usually the Client agency will appoint staff and consultants in a project coordination or implementation unit to execute the project For larger contracts, EBRD will carry our prior reviews of the entire process and will issue letters of no objection to each step in the process For smaller contracts, the Bank will carry out reviews ex post on a sample of contracts. For these smaller contracts, the Agency will go through the whole tendering process without seeking EBRD’s opinion but will use the agreed procedures. If the Bank finds out that agreed procedures were not used, the Bank will refuse financing of the goods or services 6

The Bank’s role Advise clients Assist clients in the course of project implementation Ensure that the implementation is in line with agreements Review procurement actions Review complaints In private sector - undertake due diligence and monitor projects to ensure the best value for money EBRD carries out prior review of procurement notices for contracts subject to prior review as stipulated in the PP&R and carries ex post reviews for smaller contracts on a sample basis. The rules of procurement are known as Procurement Policies & Rules of EBRD and will govern the implementation of procurement activities by the Client Agency for the procurement of goods and services related to the project Often the agencies carry out procurement in accordance with the national law which in many cases are consistent with the EU Directives on Government Procurement; such rules and procedures might be applied inasmuch that they do not contradict PP&R. 7

Review of the dredging contracts procurement practice in Ukraine Overall observations Sufficiently complete set of documents reflecting the national public procurement and building regulatory requirements and the business customs of the sector Areas, which may be enhanced Qualification of tenderers Clear and non-restrictive low cost tendering procedure Fair and balanced contract conditions

Qualification criteria General Experience Specific Experience Personnel Capabilities Equipment Availability Financial Position Non-performance and Litigation History Current Obligations and Pending Awards JVCA specific requirements Subcontractors

Selection of contract terms and conditions

FIDIC Contracts The International Federation of Consulting Engineers (FIDIC) is an international standards organisation for the construction industry Fédération Internationale Des Ingénieurs-Conseils Best known for the FIDIC family of contract templates. It was established in 1913 The FIDIC founding member countries were Belgium, France and Switzerland More than 100 members

Dredgers Contracts Contract Employer Dredgers Contract 2nd Edition 2016 Blue-Green Book) Contract Employer Contractor Engineer

Roles and Responsibilities: the Employer Owner of the site The beneficiary of the Works Responsible for defining the intended purpose of the Works and for setting out the Employer’s Requirements Enters into a contract agreement with the Contractor Appoints a Representative/Engineer to oversee the execution of the Works Has the right to amend the contract Pay for the Works done Jointly with the Contractor, appoints a Dispute Board Takes over the Works, when completed

Roles and Responsibilities: the Contractor Design, as necessary, execute and complete the Works and remedy any defects Undertake all other responsibilities Manage staff and labour in accordance Abide by the laws and bylaws, as well as the instructions of the Engineer Complete all the Works within the Time for Completion

The importance of the Engineer Role of Engineer crucial The Engineer acts for the Employer in supervising the activities by the Contractor The Engineer issues all contractual notices to the Contractor The Engineer determines any variations The Engineer issues the Interim Payment Certificates Review the Contractor’s quality assurance syste Review the Contractor’s work programme For this reason care must be taken when reviewing the TOR for the engineers. They must be suitably experienced in similar works and FIDIC contract.

FIDIC CONDITIONS OF CONTRACT FOR DREDGING AND RECLAMATION WORKS FIDIC Blue-Green Book FIDIC CONDITIONS OF CONTRACT FOR DREDGING AND RECLAMATION WORKS General Provisions Remedying Defects The Employer Variations and Claims The Engineer Contract Price and Payment The Contractor Default Design Risk and Responsibility Defined Risks Insurance Time for Completion Resolution of Disputes Taking Over

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How to contact us Procurement Policy Department Tel: +44 20 7338 6807/Fax: +44 20 7338 7472 Procurement opportunities via website: http://www.ebrd.com/work-with-us/procurement/project-procurement.html Project enquiries (existing EBRD projects only) Tel: +44 20 7338 6372/Fax: +44 20 7338 7848 Business Development and project proposals General enquiries Tel: +44 20 7338 6629/Fax: +44 20 7338 6101 Publications Tel: +44 20 7338 7553/Fax: +44 20 7338 6102

Thank you very much! This training course is designed to provide EBRD’s Operations Leaders an overview on public procurement and the Procurement Policies & Regulations of the Bank. The material may be shared with outside Bank audiences as it the Procurement Department of the Bank has sanctioned its content. The Module is numbered 2 as it follows a short procurement training module 1 developed as a tool to introduce procurement to new hires of the Bank. The majority of the pictures displayed in this Module are taken from official reports published by the Bank and they have only a decoration purpose. The abundance of female characters in different roles signifies gender equality and equal gender opportunities that the Bank strictly subscribes. 19