This project is co-financed by the European Union and the Republic of Turkey REPUBLIC OF TURKEY MINISTRY OF SCIENCE, INDUSTRY AND TECHNOLOGY 1 Bölgesel Rekabet Edebilirlik Operasyonel Programı’nın Uygulanması için Kurumsal Kapasitenin Oluşturulmasına Yönelik Teknik Yardım Technical Assistance on Institutional Building for the Implementation of RCOP in Turkey Trainer: Aslı Gülgör Procurement of Contract Management Non Key Expert

This project is co-financed by the European Union and the Republic of Turkey REPUBLIC OF TURKEY MINISTRY OF SCIENCE, INDUSTRY AND TECHNOLOGY Procurement 2 Practical Guide to Contract procedures for EU external actions published on the EuropeAid web site in January 2012

This project is co-financed by the European Union and the Republic of Turkey REPUBLIC OF TURKEY MINISTRY OF SCIENCE, INDUSTRY AND TECHNOLOGY PRAG explains.. The Practical Guide explains the contracting procedures applying to all EU external aid contracts financed from the EU general budget (Budget) and the 10 th European Development Fund (EDF). 3

This project is co-financed by the European Union and the Republic of Turkey REPUBLIC OF TURKEY MINISTRY OF SCIENCE, INDUSTRY AND TECHNOLOGY What does the Practical Guide not cover? It does not apply to contracts for which the Commission acts as Contracting Authority on its own account. PRAG does not apply to operations implemented in the context of Humanitarian aid or emergency operations carried out by ECHO. Nor does it apply to the Contracting Authorities, such as beneficiary countries, international organisations or national bodies, where the Commission has authorised them to use their own procurement procedures. Direct labour operations are programmes executed by public or public-private agencies or services of the beneficiary country, where that country's administration possesses qualified managers. 4

This project is co-financed by the European Union and the Republic of Turkey REPUBLIC OF TURKEY MINISTRY OF SCIENCE, INDUSTRY AND TECHNOLOGY The PRAG First came into force in January 2001 Revised versions came out on 2003, 2006(2), 2007, 2008, 2009, 2010 and March 2011 with a corrigendum on September 2011, January 2012 with comments in August 2012 Explains in substantial detail the contracting procedures that apply to EU external aid for service, supply, works and grants projects (FWC and Twinning covered under separate manuals) Contains standard templates which are mandatory tion/practical_guide/index_en.htm tion/practical_guide/index_en.htm

This project is co-financed by the European Union and the Republic of Turkey REPUBLIC OF TURKEY MINISTRY OF SCIENCE, INDUSTRY AND TECHNOLOGY PRAG Layout Introduction Basic Rules Service Contracts Supply Contracts Works Contracts Grants Relations with international organisations and other donors Annexes for each type of contract

This project is co-financed by the European Union and the Republic of Turkey REPUBLIC OF TURKEY MINISTRY OF SCIENCE, INDUSTRY AND TECHNOLOGY Procurement 7

This project is co-financed by the European Union and the Republic of Turkey REPUBLIC OF TURKEY MINISTRY OF SCIENCE, INDUSTRY AND TECHNOLOGY Why are we using PRAG? 8

This project is co-financed by the European Union and the Republic of Turkey REPUBLIC OF TURKEY MINISTRY OF SCIENCE, INDUSTRY AND TECHNOLOGY Legislative underpinnings The Financial Regulation No. 1605/2002 of 25 June 2002 (General budget of European Communities ) Council Regulation (EC) No. 1085/2006 of 17 July 2006 – establishing the Instrument for Pre-Accession Assistance (IPA) Commission Regulation (EC) No. 718/2007 of 12 June 2007 laying down the implementing rules governing the provision by the Community of the pre-accession assistance established by Council Regulation (EC) No. 1085/2006 (IPA IR) Commission Regulation (EC) No. 80/2010 of 28 January 2010 amending Regulation (EC) No. 718/2007 implementing Council Regulation (EC) No. 1085/2006 establishing the Instrument for Pre-Accession Assistance (IPA) The relevant Framework Agreement (FWA) PRAG with its standard documents and templates

This project is co-financed by the European Union and the Republic of Turkey REPUBLIC OF TURKEY MINISTRY OF SCIENCE, INDUSTRY AND TECHNOLOGY Strict Rules Governed by PRAG Eligibility PRAG Ground for Exclution Visibility Essentialalities Confidentiality 10

This project is co-financed by the European Union and the Republic of Turkey REPUBLIC OF TURKEY MINISTRY OF SCIENCE, INDUSTRY AND TECHNOLOGY Eligibility Participation in the procurement and grant procedures is open on equal terms to all natural and legal persons of the EU member states and the countries covered by the Regulation under which the contract is financed No restrictions for individual experts Regulation No 2112/2005 Article 4: “All experts engaged by tenderers may be of any nationality” The rule on nationality

This project is co-financed by the European Union and the Republic of Turkey REPUBLIC OF TURKEY MINISTRY OF SCIENCE, INDUSTRY AND TECHNOLOGY Eligibility (2) Eligible Countries Member States of the European Community: Austria, Belgium, Bulgaria, Cyprus, Czech Republic, Denmark, Estonia, Finland, France, Germany, Greece, Hungary, Ireland, Italy, Latvia, Lithuania, Luxembourg, Malta, Netherlands, Poland, Portugal, Romania, Slovakia, Slovenia, Spain, Sweden, United Kingdom Member States of the European Economic Area: Liechtenstein, Norway Candidate Countries: Croatia, Former Yugoslav Republic of Macedonia, Iceland, Montenegro, Turkey Potential Candidate Countries: Albania, Bosnia and Herzegovina, Kosovo under UNSCR nº 1244, Serbia, ENPI Countries: Algeria, Armenia, Azerbaijan, Belarus, Egypt, Georgia, Israel, Jordan, Lebanon, Libya, Moldova, Morocco, Palestinian Authority of the West Bank and Gaza Strip, Russian Federation, Syria, Tunisia, Ukraine Participation is also open to: Developing Countries specified by the OECD DAC (thematic programmes) International Organisations Beneficiary Countries that have reciprocal access to External Aid A third country (with a derogation endorsed by the EC)

This project is co-financed by the European Union and the Republic of Turkey REPUBLIC OF TURKEY MINISTRY OF SCIENCE, INDUSTRY AND TECHNOLOGY Eligibility (3) All supplies and equipment purchased must originate in the EU or in an eligible country as defined above in the nationality rules In its tender, a tenderer must state the origin of supplies The rule of origin

This project is co-financed by the European Union and the Republic of Turkey REPUBLIC OF TURKEY MINISTRY OF SCIENCE, INDUSTRY AND TECHNOLOGY Eligibility (4) How to establish origin? Origin: Country where the goods have undergone their last, economically justified, substantial transformation Evidence: Certificate of Origin To be presented either: When bringing equipment to the beneficiary country When the first invoice is presented (pre-financing) When Provisional Acceptance takes place if not, breach of contract!

This project is co-financed by the European Union and the Republic of Turkey REPUBLIC OF TURKEY MINISTRY OF SCIENCE, INDUSTRY AND TECHNOLOGY Eligibility (5) Decided on case-by-case basis by the EC before the procedure is launched may extend eligibility to natural and legal persons from a country not eligible may allow the purchase of supplies and materials originating from a country not eligible (Price will not be accepted as justification) Any derogation must be foreseen at PN stage Exceptions to the rules

This project is co-financed by the European Union and the Republic of Turkey REPUBLIC OF TURKEY MINISTRY OF SCIENCE, INDUSTRY AND TECHNOLOGY Grounds for exclusion are in financial difficulties have been convicted of an offense concerning their professional conduct by a judgement have been guilty of grave professional misconduct have not fulfilled their obligations relating to social security contributions or taxes have been subject of a judgement for fraud, corruption, involvement in a criminal organisation or any other illegal activity are currently subject to an administrative penalty referred to relevant articles of the regulations

This project is co-financed by the European Union and the Republic of Turkey REPUBLIC OF TURKEY MINISTRY OF SCIENCE, INDUSTRY AND TECHNOLOGY Visibility Contractors for services, supplies, works or grant beneficiaries as well as entities managing funds on behalf of the EC must take the necessary measures to ensure the visibility of the EU financing or co- financing. Such measures must be in line with Communication and Visibility Manuals (EU adn Turkey): Obligation of submitting a communication plan to be approved by the CA. Communication and visibility manual

This project is co-financed by the European Union and the Republic of Turkey REPUBLIC OF TURKEY MINISTRY OF SCIENCE, INDUSTRY AND TECHNOLOGY Other essential points Conflict of Interest Awarding principles No retroactive awards Use of standard documents Record Keeping Availability of funds Environmental aspects

This project is co-financed by the European Union and the Republic of Turkey REPUBLIC OF TURKEY MINISTRY OF SCIENCE, INDUSTRY AND TECHNOLOGY Procurement Procedures 19

This project is co-financed by the European Union and the Republic of Turkey REPUBLIC OF TURKEY MINISTRY OF SCIENCE, INDUSTRY AND TECHNOLOGY The basic principle governing the award of contracts is competitive tendering. The purpose is twofold: to ensure the transparency of operations; to obtain the desired quality of services, supplies or works at the best possible price. There are several different procurement procedures, each allowing for a different degree of competition.

This project is co-financed by the European Union and the Republic of Turkey REPUBLIC OF TURKEY MINISTRY OF SCIENCE, INDUSTRY AND TECHNOLOGY Types of projects Services WHAT: provision of service e.g. Technical Assistance (TA), studies, training, designs, WHO: Contracting Authority & Consultant Supplies WHAT: the design, manufacture, delivery, assembly or commissioning of goods together with any other related tasks WHO: Contracting Authority & Supplier Works WHAT: the execution of works e.g. decommissioning of a nuclear power plant or the building of a structure WHO: Contracting Authority & Contractor, Engineer Contracting Authority & Supervising Engineer (separate services contract)

This project is co-financed by the European Union and the Republic of Turkey REPUBLIC OF TURKEY MINISTRY OF SCIENCE, INDUSTRY AND TECHNOLOGY Which procurment procedure to apply? Services TA, Studies, Provision of know-how, training ≥ € International restricted tender procedure > € but < € Framework contracts 2. Competitive negotiated procedure ≤ € Single tender Supplies Equipment and Materials ≥ € International open tender procedure ≥ € but < € Local open tender procedure > € but < € Competitive negotiated procedure Works Infrastrusture and other engineering works ≥ € International open tender procedure 2. International restricted tender procedure ≥ € but < € Local open tender procedure > € but < € Competitive negotiated procedure

This project is co-financed by the European Union and the Republic of Turkey REPUBLIC OF TURKEY MINISTRY OF SCIENCE, INDUSTRY AND TECHNOLOGY Open Procedure No publication of Contract Forecast required for local open tenders Publication of Procurement Notice Deadline for submission of tenders ( 30/60 days for local 60/90 days for international tenders) Additional info clarification meeting / site visit may be foreseen Tenderers may submit questions up to 21 days before the deadline for submission of tenders the Contracting Authority must reply at least 11 days before the deadline Submission of tenders Single envelope system Award criterion: price – cheapest compliant offer after conducting selection procedure (verification of the eligibility and of the financial, economic, technical and professional capacity of tenderers) and procurement procedure (comparison of tenders) No negotiation is allowed

This project is co-financed by the European Union and the Republic of Turkey REPUBLIC OF TURKEY MINISTRY OF SCIENCE, INDUSTRY AND TECHNOLOGY Restricted Procedure Shortlisting The PN should be clear enough to avoid candidates from having to request clarification or additional information during the procedure. Candidates may however submit questions should this be deemed necessary Objective: to identify between 4 to 8 candidates Procedure establish a long list administrative compliance check (evidence) check economic and financial status (capital resources) verify professional capacities (staff resources) verify technical capabilities (expertise & experience) Result if the number of candidates is less than 4, CA may invite only these candidates to submit a tender if the number of candidates is more than 8, re-examine to identify the best eight candidates Shortlist Notice candidates not selected (standard letter of regret) publication of approved shortlist on EU website candidates selected (Letter of Invitation to Tender and Tender Dossier)

This project is co-financed by the European Union and the Republic of Turkey REPUBLIC OF TURKEY MINISTRY OF SCIENCE, INDUSTRY AND TECHNOLOGY Restricted Procedure Objective: to identify between 4 to 8 candidates Result: Shortlist if the number of candidates is less than 4, CA may invite only these candidates to submit a tender if the number of candidates is more than 8, re-examine to identify the best eight candidates Shortlist Notice Tender dispatching the Contracting Authority must reply at least 11 days before the deadline Submission of tenders double envelope system Award criterion: best value for money (by weighing technical quality against price on 80/20 basis) No negotiation is allowed

This project is co-financed by the European Union and the Republic of Turkey REPUBLIC OF TURKEY MINISTRY OF SCIENCE, INDUSTRY AND TECHNOLOGY Competitive Negotiated Procedure EXCEPTIONAL for Services> € but < € for Supplies> € but < € for Works> € but < €

This project is co-financed by the European Union and the Republic of Turkey REPUBLIC OF TURKEY MINISTRY OF SCIENCE, INDUSTRY AND TECHNOLOGY Comptetitive Negotiated Procedure no publication of Procurement Notice/local advertisement bidders are sent a letter of Invitation to Tender accompanied by a Tender Dossier potential bidders are given at least 30 days to submit their technical and financial offers in separate envelopes Procedure for evaluating tenders and awarding the contract is the same as under the restricted procedure If following consultation of the tenderers, the CA receives only one tender that is administratively and technically valid, the contract may be awarded provided that the award criteria are met Award criterion: best value for money (services) Price – cheapest compliant offer (supply and works) CA invites candidates of its choice to submit tenders

This project is co-financed by the European Union and the Republic of Turkey REPUBLIC OF TURKEY MINISTRY OF SCIENCE, INDUSTRY AND TECHNOLOGY Framework contracts Special Type only for Service Contracts with shortlisted companies by EU. Services > € but < €

This project is co-financed by the European Union and the Republic of Turkey REPUBLIC OF TURKEY MINISTRY OF SCIENCE, INDUSTRY AND TECHNOLOGY Framework contracts Shortlist by Lots Lot 1: Rural development Lot 2: Transport and Infrastructures Lot 3: Telecommunications and information technologies Lot 4: Energy and nuclear safety Lot 5: Conferences Lot 6: Environment Lot 7: Governance and Home Affairs Lot 8: Health Lot 9: Culture, Education, Employment and Social Lot 10: Trade, Standards and Private sector Lot 11: Macro economy, Statistics, Public finance management Lot 12: Humanitarian Aid, Crisis Management and Post-Crisis assistance

This project is co-financed by the European Union and the Republic of Turkey REPUBLIC OF TURKEY MINISTRY OF SCIENCE, INDUSTRY AND TECHNOLOGY Dynamic Purchasing System For commonly used purchases Open to any economic operator who satisfies the selection criteria and has submitted an indicative tender CA publishes a simplified contract notice giving tenderers that have not yet been admitted to the system the possibility to submit an indicative tender within 15 days Then the CA invites all of the tenderers admitted to the system Award criterion: best value for money Defined for future use, IT tools to make it possible are not yet available in the Commission

This project is co-financed by the European Union and the Republic of Turkey REPUBLIC OF TURKEY MINISTRY OF SCIENCE, INDUSTRY AND TECHNOLOGY Competitive dialogue Contracts where CA is not objectively able to define the technical means capable of satisfying the needs or objectives or able to satisfy the legal or financial makeup of the project CA shall publish a contract notice setting out the needs and requirements Then CA opens a dialogue with the candidates satisfying the announced selection criteria The dialogue is conducted individually with each candidate on the basis of their proposed solutions and ideas Award criterion: best value for money The procedure should however be used with precaution, in view of its exceptional nature

This project is co-financed by the European Union and the Republic of Turkey REPUBLIC OF TURKEY MINISTRY OF SCIENCE, INDUSTRY AND TECHNOLOGY Negotiated/Single Tender procedure Where the contract to be concluded does not exceed Eur (‘single tender procedure’) In exceptional and duly justified cases, where the factual or legal circumstances defined in articles 242, 244 and 246 of the Implementing Rules of the Financial Regulation are met. No specific threshold applies in such cases (‘negotiated procedure’) The Contracting Authority must prepare a Report (Annex A10a) explaining the manner in which the participant(s) in the negotiations were identified and the price was established, and the grounds for the award decision

This project is co-financed by the European Union and the Republic of Turkey REPUBLIC OF TURKEY MINISTRY OF SCIENCE, INDUSTRY AND TECHNOLOGY /03/07 WHO COULD NOT PARTICIPATE TENDERS

This project is co-financed by the European Union and the Republic of Turkey REPUBLIC OF TURKEY MINISTRY OF SCIENCE, INDUSTRY AND TECHNOLOGY CAN THE SERVICE PROVIDER BE EXCLUDED FROM THE PROCUREMENT TENDER FOR ANY REASON? a) they are bankrupt or being wound up, are having their affairs administered by the courts, have entered into an arrangement with creditors, have suspended business activities, are the subject of proceedings concerning those matters, or are in any analogous situation arising from a similar procedure provided for in national legislation or regulations; b) they have been convicted of an offence concerning their professional conduct by a judgment which has the force of res judicata; (i.e. against which no appeal is possible); c) they have been guilty of grave professional misconduct proven by any means which the Contracting Authority can justify; d) they have not fulfilled obligations relating to the payment of social security contributions or the payment of taxes in accordance with the legal provisions of the country in which they are established or with those of the country of the Contracting Authority or those of the country where the contract is to be performed; e) they have been the subject of a judgment which has the force of res judicata for fraud, corruption, involvement in a criminal organisation or any other illegal activity detrimental to the Communities' financial interests; f) following another procurement procedure or grant financed by the Community budget, they have been declared to be in serious breach of contract for failure to comply with their contractual obligations. THE POTENTIAL TENDERERS MUST DOCUMENTATE THAT NON OF THE CONDITIONS LISTED ABOVE ARE VIABLE FOR THEM

This project is co-financed by the European Union and the Republic of Turkey REPUBLIC OF TURKEY MINISTRY OF SCIENCE, INDUSTRY AND TECHNOLOGY OTHER REASONS FOR EXCLUSIONS?  THOSE WHO COULD NOT PROVE TAHT THEY DID NOT FALL INTO THE ABOVE POINTS  THOSE WHO PROVIDE MISLEADING DECELARATION  THOSE WHO HAVE FOUND TO HAVE CONFLICT OF INTERESTS

This project is co-financed by the European Union and the Republic of Turkey REPUBLIC OF TURKEY MINISTRY OF SCIENCE, INDUSTRY AND TECHNOLOGY WHAT IS CONFLICT OF INTEREST?

This project is co-financed by the European Union and the Republic of Turkey REPUBLIC OF TURKEY MINISTRY OF SCIENCE, INDUSTRY AND TECHNOLOGY GENERAL DEFINITION A conflict between an individual’s personal interest and his or her public duty. This can exist whether or not money is involved, and whether the conflict is actual or only perceived. PRAGS DEFINITION (FOR TENDERS IN GENERAL) Any firm or expert participating in the preparation of a project must be excluded from participating in tenders based on this preparatory work, unless they can prove to the Contracting Authority that the involvement in previous stages of the project does not constitute unfair competition.

This project is co-financed by the European Union and the Republic of Turkey REPUBLIC OF TURKEY MINISTRY OF SCIENCE, INDUSTRY AND TECHNOLOGY A Public Officer's relatives participating in the tender when the Officer is the member of the tender evaluation committee, A relative of a Public Officer attending the Civil Service Examination when their relative is in the jury, A tax officer auditing the company where his/her wife/husband works, A Public Officer who is responsible for the credits and incentives accepting the credit and incentive application of the company that he/she is a shareholder of and conducting the process, Brother/sister of the Mayor participate the tenders Examples of Conflict of Interest

This project is co-financed by the European Union and the Republic of Turkey REPUBLIC OF TURKEY MINISTRY OF SCIENCE, INDUSTRY AND TECHNOLOGY Exeptions from PRAG With FIDIC 39

This project is co-financed by the European Union and the Republic of Turkey REPUBLIC OF TURKEY MINISTRY OF SCIENCE, INDUSTRY AND TECHNOLOGY For works.. 40

This project is co-financed by the European Union and the Republic of Turkey REPUBLIC OF TURKEY MINISTRY OF SCIENCE, INDUSTRY AND TECHNOLOGY Questions and answers 41