1. PROCUREMENT RULES FOR EXPERIMENTS AT CERN Dante Gregorio CERN Procurement Service

2. Legal framework n CERN, an Intergovernmental Organization, was established in July 1953, by the “Convention for the establishment of a European Organization for Nuclear Research”. n As an Intergovernmental Organization, CERN is not a legal entity under national law but governed by public international law. n 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. n 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.

3. Introduction CERN has a dual role in the Collaborations: It is the Host Laboratory and a Collaborating Institute. As Host Laboratory, CERN provides essential services: n Particle beams and related equipment: shielding, monitoring equipment etc.; n Space: floor space in experimental areas, laboratory, hall, office space, storage space etc.; n General infrastructure services: assistance in installation and removal of detectors, transport of equipment, cranes, mains electricity, water, telephone and computer network connections etc.; n Central computing resources n Administrative services in financial matters: in accordance with the CERN Financial Rules.

4. Purchasing rules n CERN Purchasing Rules and Procedures apply to all contracts placed by CERN for the Collaborations; n The extent of application of the rules depends on the involvement of CERN funds; n Four cases have been identified in the document: “Financial Guidelines for LHC Collaborations” - CERN/FC/3796 and CERN/FC/3796 rev. which has recently been modified to: “Procurement Rules and Procedures for all Approved and Recognised Experiments at CERN” (PRAREC).

5. Case A Cases which do not involve CERN’s budget and the Collaborations do not desire CERN’s involvement n CERN shall not be the contract partner; n An institute participating in the Collaboration shall negotiate the contract itself; n CERN Purchasing Rules and Procedures shall not apply; n Approval from Finance Committee is not required.

6. Case B Cases which do not involve CERN’s budget but the Collaboration or its collaborating institutes request CERN to be the contracting party n Either the Collaboration selects the firm(s), certifying that the legislation of the country(ies) where Institutes providing the funds are based was followed; n Or the Collaboration requests CERN to perform the tendering. CERN shall contact firms in the States of the Collaboration.

7. Case B cont. n The selection process shall not be limited to firms in the State(s) providing the funds for the contract; n However, the Collaboration can request that contract is awarded on condition that at least 50% of the tender value originates from the country(ies) providing the funds for the contract; n Contract negotiations are conducted by CERN;

8. Case B cont. n General Conditions of CERN Contracts shall apply; n A condition of non-involvement of Finance Committee is the transfer of risks and liability associated with these contracts to participating Institutes; n The call for tenders shall be issued once CERN has received all the necessary financial guarantees from the Funding Agencies concerned.

9. Case C Cases where CERN contributes 100% of the financing n CERN Purchasing Rules and Procedures shall apply.

10. Case D Cases funded by the Common Fund established by the Collaboration at CERN (and to which CERN contributes) n CERN shall be the contract partner; n Call for tenders shall be issued by CERN to firms with a view to achieving a balanced distribution of purchases among all the States of the Collaboration; n General Conditions of CERN Contracts shall apply; n Contract negotiations are conducted by CERN;

11. Case D cont. n Finance Committee approval shall be required if CERN’s contribution exceeds 200 000 CHF (without competitive tendering) or 750 000 CHF (with competitive tendering); n Where CERN and institutes from CERN Non Member States contribute, the alignment rule and the limitation of tendering to CERN Member States shall be waived; n The call for tenders shall be issued once CERN has received all the necessary financial guarantees.

12. Procurement policy - 1 n Ensure bids fulfil all the necessary technical, financial and delivery requirements; n Keep overall costs for CERN as low as possible; n Achieve balanced industrial returns for the Member States

13. Procurement policy - 2 n Not less than three competitive tenders to be sought for the purchase of supplies and services; Invitations to tender to be limited to manufacturers and contractors located within the territories of Member States.

14. Procedures for obtaining offers n Requirements not exceeding 10 000 CHF: Users may issue price enquiries directly provided CERN procurement rules are followed; n Purchases between 10 000 CHF and 200 000 CHF: Price Enquiries (PE) issued by Procurement Service; n Purchases exceeding 200 000 CHF: Market Surveys (MS) & Invitations to Tender (IT) issued by Procurement Service.

15. Requirements from 10k to 200k CHF Price enquiries: n Drafted and issued by Procurement Service Documents (almost always in English) include: n Cover letter - including enclosures; n Technical specification - including technical annexes and technical drawings; n Tender form; n Technical questionnaire (not compulsory).

16. Requirements from 10k to 200k CHF Price enquiries: n Deadline for bidders to submit bid is at least 4 weeks from mailing date; n Number of firms to contact should be at least three and as a general guideline should not exceed five; n Market survey is not needed; n Price enquiries are not published but all enquiries exceeding 50k CHF are also sent to Industrial Liaison Officers (ILOs) for information.

17. Requirements exceeding 200k CHF Feb 201317 Market Surveys followed by Invitations to Tender: Announcement in the document “Forthcoming Market Surveys and Calls for Tenders” available on-line: https://found.cern.ch/java- ext/found/CFTSearch.do Market Survey: used to select the firms to be invited for tender; Technical auditing of market survey replies

18. Market surveys - 1 Purpose: n Pass information to industry on future requirements; n Allow delegates, ILOs to propose potential bidders; n Update and improve CERN’s supplier database; n Encourage firms to seek early exchange of technical information with CERN and vice-versa; n Allow CERN to draw up a final list of qualified bidders; n Allow CERN to draw up a final Technical specification for the Invitation to Tender.

19. Market surveys - 2 Drafted and issued by Procurement Service: Documents (in English) include: n Cover letter (including on which basis the Invitation to Tender will be adjudicated); n Brief technical description (few pages); n Qualification criteria (financial and technical); n Qualifying questionnaire. There is a minimum 4 weeks for suppliers to reply. A market survey is valid up to 12 months from the date of issue (or up to 18 months for prototypes).

20. Preliminary list of firms n Firms proposed by users; n Firms selected from CERN’s supplier database by the Procurement Service; n Firms from the Member States which have expressed an interest in a Market Survey or a similar requirement; n Firms proposed by ILOs and Finance Committee or Council Delegations.

21. Final selection of firms Only companies which have fulfilled the qualification criteria of the market survey concerned shall be considered. As a general guideline, the final list of firms to be invited to tender shall not exceed: - 10 firms for contracts between 200 000 and 750 000 CHF; - 15 firms for contracts exceeding 750 000 CHF.

22. Invitation to tender Contains (in English): n Cover letter - including enclosures; n Technical specification - including technical annexes and technical drawings; n Tender form; n Technical questionnaire (not compulsory). n Technical auditing is carried out to ensure that all the tendering documents are objective and unambiguous (e.g. technical specifications are based on international rather than local standards and concentrate on processes involved rather than on technical details). n Deadline for bidders to submit a bid is at least 4 weeks from mailing date (with a longer period for more complex requirements).