1 Bulgaria – Serbia IPA Cross-border Programme CCI No 2007CB16IPO006 CENTRE FOR EXCHANGE OF INFORMATION ON CROSS-BORDER ECONOMIC COOPERATION "The project is co-funded by EU trough the Bulgaria – Serbia IPA Cross-border Programme”. PRAG

2  Open Tender Procedure  Restricted Tender Procedure  Competitive Negotiated Procedure  Simplified Procedure  Single Tender Practical Guide to Contract Procedures for EC External Actions Tender Procedures -General Procurement Rules

3 Tender decision Selection of procurement method Determination of the PQ criteria Collection of proposals Call for proposals Preparation of the tender documentEvaluation of PQ Evaluation of the proposals Selection of the eligible proposal Contract negotiationsContract Award Post-implementation liabilities Expiration of the Contract Dispute ManagementImplementation of the contract Preparation of the PQ documents

4 THE LOWEST OFFER IS NOT ALWAYS THE BEST! THE FOLLOWING CRITERIA SHOULD BE TAKEN INTO ACCOUNT: TO OFFER THE BEST PRICE AND QUALITY,TO BE A WELL KNOWN BRAND, TO BE ABLE TO SUPPLY THE CURRENT NEEDS, TO PROVIDE SECURITY, AFTER-SALES SERVICE, SPARE PARTS, TO PROVIDE EQUAL CONDITIONS TO POSSIBLE SUPPLIERS FOR PROCUREMENT AND TO AVOID CONFLICT OF INTERESTS. WHO CAN PROVIDE SERVICE? ALL THE SERVICE PROVIDERS WHO WILL PARTICIPATE IN THE TENDER SHOULD MEET THE REQUIREMENTS STATED IN THE TENDER DOCUMENTATIONS AND COME FROM AN ELIGIBLE COUNTRY THIS RULE IS EXACTLY APPLICABLE FOR THE EXPERTS WITHIN THE SERVICE PROJECTS WHERE MUST THE EQUIPMENT AND MATERIALS BE PROVIDED FROM? ALL SUPPLIES AND MATERIALS PURCHASED UNDER A CONTRACT FINANCED UNDER A COMMUNITY INSTRUMENT MUST ORIGINATE FROM THE COMMUNITY OR FROM AN ELIGIBLE COUNTRY THE TENDERERS MUST PROVIDE DOCUMENTARY PROOFS General Procurement Rules

5 General Rules Governing the Procurement of Services, Supplies Works and Grant Schemes and Small Grant Contracts PRAG work/procedures/index_en. htm Practical Guide to Contract Procedures for EC External Actions

6  Competitive tendering process  Transparent selection process  Support for the project of the successful offer  Contract setting the details of actions that will be implemented These actions are, Service Procurement of consultancy, research, know-how and training Procurement of supplies Procurement of equipment and materials WorksInfrastructure and other engineering works

7 Tresholds PRAG SERVICE S ≥ € 200,000 International restricted tender procedure 1. € 10,000 Framework contracts 2.Competitive negotiated procedure ≤ € 10,000 Single tender SUPPLIE S ≥ € 150,000 International open tender procedure < € 150,000 but ≥ € 60,000 Local open tender procedure € 10,000 Competitive negotiated procedure WORKS 1.≥ € 5,000,000 Inter national open tender procedure 2.International restricted tender procedure < € 5,000,000 but ≥ € 300,000 Local open tender procedure € 10,000 Competitive negotiated procedure 7

8 SERVICE CONTRACT THE CONTRACTS OF 200,000 € OR MORE 1 MUST BE CARRIED OUT ACCORDING TO INTERNATIONAL RESTRICTED TENDER PROCEDURES 2THE TENDERING TERMS AND CONDITIONS MUST BE PUBLISHED ON THE RADIO, TELEVISION, THE WEB SITE OF THE CONTRATCING AUTHORITY, INTERNATIONAL AND LOCAL NEWSPAPERS 3A SHORTLIST MUST BE ESTABISHED 4THE NUMBER OF SHORTLISTED TENDERERS (USUALLY BETWEEN 4 TO 8) MUST BE PUBLISHED 5THE EVALUATION OF PROPOSALS MUST BE UNDERTAKEN OBJECTIVELY AND INTEGRITY OF THE COMPETITIVE PROCESS MUST BE PRESERVED. 6ONLY THE CANDIDATES MEETING THE TENDERING CRITERIA STATED ON THE ANNOUNCEMENT AND THE ONES WHO ARE INVITED CAN SENT THEIR OFFERS

9 NEGOTIATION PROCEDURE EXCEPTIONAL CASES ONLY FOR THOSE SPECIFIED CONDITIONS BELOW ONLY ONE OFFER CAN BE ACCEPTED TO NEGOTIATE WHERE, FOR REASONS OF EXTREME URGENCY BROUGHT ABOUT BY EVENTS WHICH THE CONTRACTING AUTHORITIES COULD NOT HAVE FORESEEN OPERATIONS CARRIED OUT IN CRISIS SITUATIONS WHERE CONTRACTS EXTEND ACTIVITIES ALREADY UNDER WAY; WHERE THE TENDER PROCEDURE HAS BEEN UNSUCCESSFUL, THAT IS WHERE NO QUALITATIVELY AND/OR FINANCIALLY WORTHWHILE TENDER HAS BEEN RECEIVED. WHERE, FOR TECHNICAL REASONS, OR FOR REASONS CONNECTED WITH THE PROTECTION OF EXCLUSIVE RIGHTS, THE CONTRACT CAN BE AWARDED ONLY TO A PARTICULAR SERVICE PROVIDER. WHERE ONE ATTEMPT FOR THE USE OF THE COMPETITIVE NEGOTIATED PROCEDURE/SIMPLIFIED PROCEDURE FOLLOWING THE UNSUCCESSFUL USE OF A FRAMEWORK CONTRACT HAS FAILED. FOR CONTRACTS DECLARED TO BE SECRET, OR FOR CONTRACTS WHOSE PERFORMANCE MUST BE ACCOMPANIED BY SPECIAL SECURITY MEASURES OR WHEN THE PROTECTION OF THE ESSENTIAL INTERESTS OF THE EUROPEAN UNION OR THE BENEFICIARY COUNTRY SO REQUIRES.

10 Contract Execution

11 Service Contract Outline Contract Agreement and Special Conditions with annexes: General Conditions for service contracts Terms of Reference Organisation and Methodology (To be submitted by the tenderer according to the template provided) Key experts (including templates for the summary list of key experts and their CVs) Budget [For fee-based contracts: breakdown] Forms and other relevant documents

12 Contract Management Highlights

13 Basic Principals Identification and management of risks Effects of risk management to price Cost variation when risk is transferred to the contractor Methods of avoiding claims Identifying the hot spots Acting against problems at the beginning of the project Problem solving techniques Friction caused by claims Resolution of claims with cooperation

14 Basic Principals Amicable solution Identification of claims in advance Exaggerated claims ?? Financing Plan Budget Monitoring

15 Contract – Highlights Time Extension Additional Payment General Conditions Special Conditions

16 Contract – Highlights Delays Changed Circumstances Abandonment, Suspension or Termination Payment Outputs Conflict of Interest / Corruption and Fraud

17 Universal Law Systems German Law (Favouring the Employer and the Supplier) French Law (Favouring the Employee and the Buyer) British Law (in balance)

18 Reasons for Claims Misstatement Without anybody's fault Uncertainty of documents Wilful misinterpretation Legal negligence Direct breach of contract

19 Ambiguous Contracts General Ambiguity Hierarchy of the contract documents Fuzzy expressions "Eligible" Contractor and Consultant

20 Claims for Price Adjustments Claims due to delays Verification of the critical path Quantitative analysis Agreement on the secondary costs Claims due to time extension Overheads Claims concerning break-down of the activities

21 Changes Cardinal Change  Changes which highly affect the content of the work Constructive change  The instructions which are not defined clearly within the contract Formal change  Changes which do not affect the content of the contract significantly

22 Cost Increase Client's Requests Revisions Increase of decrease in the content of the Services Predefined variations and flexibilities Effects of increasing, decreasing of the content of the Services and break down

23 Delays  An extraordinary event or circumstance beyond control of the parties preventing both or one of the parties from fulfilling their liabilities is considered as a Force Majeure (Events from God)  Delays caused by the Client shall be accepted not in the responsibility of the other party  The circumstances and events which can be controlled by the Contractor shall not be considered as eligible reasons for delay  There is no time extension for ineligible delays and legal penalties shall be applied

24 Questions and Discussions.