1 (Kiev, 1 December 2011) Seminar on public procurement and eProcurement policies eProcurement Policy in International Legal Documents

2  Reasons  improved value for money from access to more suppliers or more competitive techniques (such as auctions)  saving transaction costs  saving time (e.g. quicker communication)  improved compliance with rules (through better monitoring)  stimulating a more competitive local supply base (adoption of modern practices and promoting standardization)  enhancing transparency and thereby limiting corruption (reducing personal contacts)  e-procurement is used by contracting entities  for dealing with suppliers  in communicating with the public and other public bodies  in the government’s internal administrative process I. General Overview (1)

3  Opportunity for procurement regulators  many national and international regimes on procurement have gradually updated or reviewed their provision to take account of electronic procurement  (EU Public Procurement Directives)  WTO Government Procurement Agreement  UNCITRAL Model Law on Public Procurement  Multilateral Development Banks e-GP I. General Overview (2)

4  Revised GPA text 2010  Incorporates complete revision of wording (streamlined, easier to understand and user-friendly)  Use of electronic procurement  Preamble to the revised text recognizes “the importance of using, and encouraging use of, electronic means for procurement covered by [the agreement]”  Electronic Communication  Public notices  Annex 1 entities: Mandatory access of procurement notices by electronic means  Annex 2 and 3 entities: electronic accessibility is “encouraged”  Possibility for reducing minimum timescales (- 5 days) UNCITRAL Model LawII. WTO Government Procurement Agreement (1)

5  Excursus – why using electronic Auctions at all ?  Benefit from inducing tenderers to make more competitive offers  providing tenderers with information on competitors’ tenders through auction process  allowing them to adjust their own tenders accordingly  Benefits from limiting opportunities for corruption or discrimination  Procuring entity won’t pass information to favoured bidder since all bidders have the relevant information anyway  Removing face to face contact  Benefits from reduced administrative costs and procurement timescales UNCITRAL Model LawII. WTO Government Procurement Agreement (2)

6  Electronic Auctions  “an iterative process that involves the use of electronic means for the presentation by suppliers of either new prices, or new values for quantifiable non-price elements of the tender related to the evaluation criteria, or both, resulting a ranking or re-ranking of tenders”  online, real-time competition between a buyer and a number of suppliers  Automatic evaluation method (including the mathematical formula) must be disclosed  not only the price can be changed during auction  E.g. delivery time, warranty period UNCITRAL Model LawII. WTO Government Procurement Agreement (3)

7  Revised text 2011  Enables procuring entities to take advantage of modern technologies  “e-communication”  “e-tendering” (electronic reverse auctions)  Electronic Communication  no distinction between paper-based or electronic means  Electronic submission of tenders  Virtual meetings  Opening of tenders  Guide of enactment will address the virtual equivalent of public openings UNCITRAL Model Law and e-ProcurementIII. UNCITRAL Model Law (1)

8  Electronic Reverse Auction (1)  Conditions for using  Feasible to formulate a detailed and precise description of the procurement’s subject matter  Effective competition must be ensured  Award criteria must be quantifiable and be expressed in monetary terms  restriction to “standardized” goods/services  restriction to “quantifiable” criteria  Only criteria that can be applied without any subjective input  precludes non-price criteria (e.g. aesthetic merit, environmental impact) during auction ?  only non-price which can be quantified on an auditable basis (e.g. maintenance costs) ? UNCITRAL Model Law and e-ProcurementIII. UNCITRAL Model Law (2)

9  Electronic Reverse Auction (2)  Very detailed set of rules (chapter VI)  Procedure  Type 1: e-auctions as a stand-alone procurement method (Art 53)  Type 2: e-auction as a phase of normal procurement methods (Art 54)  Requirements during e-auction  Automatic evaluation of all bids  Instantaneously information of its bid vis-à-vis other bids  Requirements after e-auction  Rejection of unresponsive bids / unqualified suppliers in Type 2 e-auctions  Rejection of abnormally low bids in Type 1/2 e-auctions UNCITRAL Model Law and e-ProcurementIII. UNCITRAL Model Law (3)

10  Website  jointly sponsored by the Asian Development Bank (ADB), the Inter-American Development Bank (IADB), and the World Bank  e-GP as effective tool in the fight against corruption, the promotion of integration and the stimulation of greater productivity  e-GP group has achieved a high degree of harmonization in its approach to provide technical advice and support to member countries in developing national e-GP strategies and solutions  e-GP Tool Kit prepared by MDBs is the only updated international standard for e-tendering and e-auctions for the time being IV. Multilateral Development Banks e-GP (1)

11  E-GP Tool Kit  provides member countries with strategic guidelines on the planning, management, implementation and support of e-GP  E.g. e-GP Strategic Planning Guide, International Survey of e-Procurement Systems, e-GP Standards Framework IV. Multilateral Development Banks e-GP (2)

12  Excursus: World Bank  See Guidelines Procurement Under IBRD Loan And IDA Credits, May 2004, Revised October 1, 2006 at 2.11 and 2.44  Provided that Bank is satisfied with adequacy of system  Multilateral development banks have published information on criteria that e-tendering must meet  IV. Multilateral Development Banks e-GP (3)

13  e-procurement already under PPA 2002  PPA 2006 emphasizes greater extend on e-procurement  Shorter time scales when electronic means of communication are employed  e-auction  Dynamic purchasing system  Mandatory electronic publication of information  SIMAP; pep.online.at (below EU-thresholds)  Suppliers must announce electronic address ( )  Tender documents, communication via this address  Tender documents must be available electronically  Submission of RTP/bids if safe signature  “Law on signature” UNCITRAL Model LawV. Excursus – e-Procurement in Austria (1)

14  E-auctions  Only for “standardized” goods/services  E.g. not for intellectual services  Lowest bid or most economic advantageous bid  Example: UNCITRAL Model LawV. Excursus – e-Procurement in Austria (2) RoundsTimeAdmitted suppliers ABCDEFGHIJ ResultAward

15  Use of e-procurement depends on individual contracting authority  no Austrian-wide uniformed approach  Central Purchasing Entity (“Bundesbeschaffungs GmbH)   ASFINAG / Austrian Railways joint e-procurement plattform  UNCITRAL Model LawV. Excursus – e-Procurement in Austria (3)

16  Similar provisions in international texts  e-procurement – useful new tool  transparency, efficiency, integrity (anti-corruption), fair and equal treatment  e-procurement = reform process   Not just replacing letters with s  Developed e-procurement system in Austria UNCITRAL Model Law and e-ProcurementVI. Resumé

17 CONTACT Contact Johannes S. Schnitzer Senior Associate, Vienna WOLF THEISS Rechtsanwälte GmbH Schubertring 6, 1010 Vienna, Austria T: F: E: