1. Procurement rules applied on non- purchasing organization in Lithuania regarding ESI funds (2007- 2013 and 2014-2020 programming periods); verification of procurement procedures in cases when beneficiary is civil society organization

2. Procurement rules applied on non-purchasing organization in Lithuania regarding ESI funds in 2007-2013 programming period

3. Non purchasing organizations All the procurements of State and Municipal institutions are regulated by Law on Public Procurement (Law) The exact list of purchasing organizations ( or rather features which let us assign institutions to this list)is identified by the Law itself All the organizations and entities which are not mentioned in the Law are not purchasing organizations

4. Non purchasing organizations Procurements of private entities are not regulated by any law. If private entity expects to receive funding from EU or state budget their procurements must comply with main principles of public procurements: equal treatment, non- discrimination, proportionality, the mutual recognition, transparancy.

5. Non purchasing organizations “Description of the procedure of execution and verification of procurements for the legal entities, which are not purchasing organizations according to the Law on Public Procurement” was approved by the order of the Minister of Finance Republic of Lithuania on 11 of June 2008.

6. Non-purchasing organizations The procedures set out in this Description are very similar to the procedures set out in the Law on Public Procurement, but are more simple. It makes no change who will execute the procurement the Beneficiary itself or its partner, both are bound by the rules set out in this Description.

7. Important: NPO may become purchasing organization if more than 50 % of their activity is financed by the State or Municipality or EU funds and this activity is related to public interests.

8. Requirements set out in the Description Main principles: – Equal treatment; – Non-discrimination; – Proportionality; – The mutual recognition; – Transparency;

9. Important: The requirements, set out in the Description are also applicable for procurements, which have started before signing the financing agreement or even before submitting the application. All Beneficiary costs, maid in breach with the Description’s requirements are non eligible.

10. Execution of Procurement First step is calculation of the value of the Intended Procurement. The calculation is very similar to the one, settled in the Law on Public Procurement: – Supplies and services – Works

11. Calculation of the value Supplies and Services: – the value of the intended procurement shall be the actual value of the supplies or services contracts of the same type awarded during the preceding financial year or the preceding 12 months; – The same type means, that supplies have the same first 3 numbers in the code by CPV. And services apply to the same category by CPV.

12. Calculating of the value Works – When calculating the value of procurement of works, account shall be taken of the estimated value of both the execution of the works and design (where the works are both executed and designed), and the supplies necessary for executing the works.

13. Calculation of the value Important: The value of supplies and services, which are not financed from the EU project budget are not summing into procurement value, even if they are the same. Example.1 If Beneficiary buys some computers for project’s purpose, from EU money, and some computers for other activities, not related with the project, from its own budget, it calculates the value of computers, financed by EU only.

14. Types of Award Procedures There are only 2 types of procedures set out in the description: – Inquiry – Tender There is only one assignment criteria- the value of intended procurement. The threshold of the tender procedure is 145 000 EUR for supplies and services and 1450000 EUR for works.

15. Types of Award Procedures InquiryTender Value of Procurement145000 EUR for supplies and services 1450000 EUR for works No matter Form of executionIn writing or using public data (from internet, advertisement etc.) In writing Procurement noticeNot obligatoryObligatory in website www.esparama.lt plus other sources if wanted www.esparama.lt

16. Types of Award Procedures InquiryTender Obligatory information for bidders 1.Technical specification; 2.Deadline for submission of proposals; 3.Procurement conditions; 4.Evaluation criteria. Not obligatory information1.Minimum qualification requirements (financial, economical, technical); 2.Tender evaluation conditions; 3.Tender submission conditions; 4.Conditions of the contract; 5.Tender security requirements and requirements for contract performance security. Minimum deadline for submission of proposals There is no minimum deadline 10 days from publication of the procurement notice

17. Types of Award Procedures InquiryTender Minimum amount of received bids, in order the procurement could considered to be fulfilled At least 3 proposals, corresponding to minimum requirements At least 1 proposal, corresponding to minimum requirements The possibility of negotiations Negotiations are available Evaluation criteriaThe lowest price or the most economical advantages proposal Evaluation is executing byAny responsible person, appointed by the Beneficiary Evaluation committee Evaluation documentsInquiry noteEvaluation reports Information about awarding the contract All interested candidates must be informed within 3 working days

18. Types of Award Procedures Important: If the Tender fails, the Beneficiary can repeat the procedure by inquiring interested suppliers, but essential conditions of the procurement can not be changed.

19. Exceptions There are exceptions, when less than 3 potential suppliers can be enquired: – When there are less than 3 suppliers in the market; – To enquire bigger amount of suppliers will require more time, efforts or additional costs. But in these cases the Beneficiaries must provide the justification of such choice.

20. Procurement from one supplier When for technical or artistic reasons or for reasons, related to the protection of exclusive rights, the supplies may be delivered, services rendered or works performed only by a particular supplier. Example: When the series of books were published by one editor and you want to publish one more book from this series. You want it to be similar with the previous books.

21. Procurement from one supplier Where the Beneficiary has procured supplies from a supplier under the original contract and established the expediency of additional deliveries by the supplier which are intended either as a partial replacement of existing and normal supplies or installations or as the extension of existing supplies or installations where a change of supplier would oblige the Beneficiary to acquire material having different technical characteristics which would result in incompatibility or disproportionate technical difficulties in operation and maintenance.

22. Procurement from one supplier for additional works or services not included in the original contract, but which have, through unforeseen circumstances, become necessary for the performance of the services or works described therein, where such additional services or works cannot be technically or economically separated from the initial contract without major inconvenience to the Beneficiary or where such works or services, although they may be separated from the original contract, are necessary for the completion of the contract. However, such a public contract for additional works or services may only be concluded with the supplier to whom the original contract was awarded and the aggregate value of all other additionally awarded contracts may not exceed 50% of the value of the main contract;

23. Procurement from one supplier Example: Construction works. You find out that the ground isn’t as steady, as you thought and you need to add additional layer into foundation of the building or of the road. Is it possible to hire new constructor?

24. Procurement from one supplier

25. Preparation of Procurement Documents The requirements are very similar to ones, for normal public procurement procedure for purchasing organizations. Obligatory documents: – Technical requirements; – Deadline; – Short procurement conditions (delivery terms, place of execution of contract, insurance, payment conditions et.c.); – Evaluation criteria.

26. Preparation of Procurement Documents The most common mistakes: – There are indicated registered trademarks; – The requirements are copied from the requirements of some specific supplier; – There are too many specific parameters; – Parameters are too precise ( the height, the weight); – It is forgotten to insert “or equivalent”; – There is requirement to provide very specific and not necessary certificates; – The subject of Procurement and its extent doesn’t meet the description of the project.

27. Execution of Procurement The most common mistake- lack of documenting: – The Procedure is not fixed in notes or evaluation reports; – There is no legal documents, confirming appointment of members of evaluation committee or person, responsible for procurement; – The negotiation process is not fixed.

28. Verification of Procurement Procedures In Lithuania the Implementing agencies are responsible for verification of Procurement Procedures. The task of Implementing Agency is to assure, that all the procurements, executed by the Beneficiary are in compliance with the Description and, that purchased supplies, services or works are the same, as were foreseen in the financing agreement.

29. Verification of Procurement Procedures The Implementing Agency also must assure, that prices of purchased supplies, services or works do not exceed the average market price. The Implementing Agencies have the right to verify procurement documents before publishing procurement notice or signing the contract as well as verify already completed procedure.

30. Environmental Projects Managing Agency's procedures Environmental Projects Managing Agency has it’s own Procedure Manual where verification procedure is foreseen and described. There are 2 types of verification foreseen in Manual: – Ex-ante; – Ex-post;

31. Environmental Projects Managing Agency's procedures 1. Ex-ante verification- when we verify procurement documents before the notice is published or the request for proposals is sent or the contract is signed. 2. Ex-post verification- when we verify procurement documents after procurement is completed.

32. Assistance for Non-purchasing organizations In 2009 Lithuanian Managing Authority (Ministry of Finance) published special manual for Non-purchasing organizations which is very clear and very useful (with examples and full explanations). It was financed from technical assistance project’s budget and is available for everybody for free.

33. Procurement rules applied on non-purchasing organization in Lithuania regarding ESI funds in 2014-2020 programming period The rules for non-purchasing organizations in 2014-2020 programming period were changed.

34. Non-purchasing organizations The definition of non-purchasing organization is the same. The requirements for non-purchasing organizations procurements now are stated in “Projects management and funding rules”, approved by the order of the Ministry of Finance on 8 of October 2014.

35. Non-purchasing organizations Non-purchasing organizations, organizing their procurements should follow the principles, stated in The Treaty on the functioning of European Union: – Free movements of goods; – Freedom to provide services; – Non- discrimination; – Transparency; – Proportionality; – The mutual recognition.

36. Key differences in 2007-2013 and 2014-2020 periods. All the requests for proposals are send through Data exchange service.(DES) DES provides a unique code to every procurement. The request for proposals is published automatically on special website www.esinvesticijos.lt and it is open for any supplier, because it is directed to indeterminate number of suppliers. www.esinvesticijos.lt

37. Key differences in 2007-2013 and 2014-2020 periods. Non-purchasing organizations in their requests for proposals must provide obligatory information: – Type of the procurement (tender or negotiations); – Deadline; – The description of the procurement object (technical specification); – Qualification requirements; – Evaluation criteria (the lowest price or the most economical advantages proposal); – Whether negotiations are available or not; – The essential contract’s conditions.

38. Key differences in 2007-2013 and 2014-2020 periods. The requirements for technical specifications and for procurement conditions are the same as in 2007-2013 programming period and very similar to the requirements stated in the Law on Public Procurement. May be, just more common. Minimum deadline for submission of proposals is 7 days.

39. Key differences in 2007-2013 and 2014-2020 periods. For verification of tender non-purchasing organization must establish evaluation committee or set up their interim rules. Negotiations are available and it is allowed to negotiate the price, the quality, the quantity, environmental and social issues. It is forbidden negotiate minimum requirements for purchased object, for supplier’s qualification, evaluation criteria and essential contract’s conditions.

40. Key differences in 2007-2013 and 2014-2020 periods. Invitations to negotiations should be send to all suppliers, whose proposals comply with the minimum requirements for proposals and for supplier’s qualification. The contract is awarded to the tenderer whose proposal is recognised as the successful proposal.

41. Key differences in 2007-2013 and 2014-2020 periods. When awarding the public contract, the price given in the successful proposal, the final negotiations price recorded in the negotiations minutes as well as the contract terms and conditions specified in the contract documents and in the proposal may not be altered.

42. Key differences in 2007-2013 and 2014-2020 periods. In new programming period there are more possibilities to procure from one supplier: – The same reasons as were set out in 2007-2013 programming period; – When no proposal or no suitable proposal has been submitted in response to request; – When are purchased research and development services, materials, reagents and related products, directly related to the research and (or) development activities;

43. Key differences in 2007-2013 and 2014-2020 periods. – When are purchased the services of literary, scientific and artistic works authors, performers or group thereof, as well as scientific, cultural and artistic projects in the areas of assessment and applicants receive according to the laws established awards in the following areas of activity evaluation services.

44. Key differences in 2007-2013 and 2014-2020 periods. – The common value of all contracts for one type of supplies or services or works (one object) is less than 60 000 EUR.

45. Pros and Cons The Inquiry is not foreseen, so there is no possibility to trespass and simulate the inquiry by sending requests to friends or fake suppliers. There is possibility to procure from one supplier up to the 60 000 EUR and there is no requirement to provide the justification of such choice. There is possibility to procure from one supplier if no tenders were submitted.

46. Pros and Cons There is no instructions how to calculate value of the procurement. There is no manual for non-purchasing organizations. The procedure is more transparence, but more complicated.

47. THANK YOU FOR YOUR ATTENTION! DO YOU HAVE ANY QUESTIONS?