1. CERN Procurement Procedures for the HL-LHC project Civil Engineering work London, 24 June 2016 Lisa Bellini-Devictor, CERN/IPT-PI

2. LEGAL FRAMEWORK CERN, an Intergovernmental Organization, was established in July 1953, by the “Convention for the establishment of a European Organization for Nuclear Research”. As an Intergovernmental Organization, CERN is not a legal entity under national law but governed by public international law. 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. 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. PROCUREMENT POLICY Transparency, equal treatment of bidders Ensure bids fulfil all the necessary technical, financial and delivery requirements; Keep overall costs for CERN as low as possible; Not less than three competitive tenders to be sought for the purchase of supplies (including construction works) and services; Invitations to tender to be limited to manufacturers and contractors located within the territories of CERN Member States; Achieve balanced industrial returns for the Member States;

4. Supplies, Services, Country of origin 2 categories of contracts in CERN Procurement rules: - Supply contracts which include civil engineering work contracts - Service contracts: Contracts for the provision of services to be executed on the CERN site Country of origin for Civil Engineering contracts: - For all work activities, the country where the firm in charge of the related activity is established. - In case any activity includes a significant part of goods and materials (e.g. steel frame), the country of origin of such goods and materials is the country where the goods and materials, including their components and subassemblies, are manufactured or undergo the last major transformation by the contractor or his subcontractors.

5. Member States’ Contribution 2016 (CHF) Total 1’127’836’550 Germany 20.52 %227’506’500 United Kingdom 14.64 % 162’375’900 France 14.61% 162’000’700 Italy 11.04 % 122’445’150 Spain 7.61 % 84’421’350 Netherlands 4.74 % 52’603’200 Switzerland 4.03 % 44’646’150 Norway 2.90 % 32’208’600 Sweden 2.78 % 30’797’900 Poland 2.81 % 31’110’450 Belgium 2.74 % 30’416’150 Austria 2.20 % 24’381’400 Denmark 1.75 % 19’434’050 Israel 1.42 %15’728’950 Finland 1.36 % 15’133’450 Greece 1.32 % 14’612’200 Portugal 1.14 % 12’680’500 Czech Rep. 1.00 % 10’881’400 Hungary 0.61 % 6’741’250 Slovakia 0.49 % 5’412’150 Bulgaria 0.29 % 3’237’850 Romania* 10’912’650 Serbia** 1’317’000 Cyprus** 750’000 Pakistan*** 1’349’950 Turkey*** 4’751’750 * Candidate for Accession ** Associate Member State in the pre-stage to Membership *** Associate Member State

6. INDUSTRIAL RETURN COEFFICIENT The return coefficient of a Member State for Supply contracts for a given twelve-month period starting on 1 st March is defined as: The ratio between that Member State's percentage share of all purchases of supplies (excluding purchases funded by non-Member States) during the preceding four calendar years and that State's percentage contribution to the Budget over the same period.

7. For the period 01.03.2016 to 28.02.2017, a CERN Member State is considered to be poorly balanced if its Industrial Return Coefficient is: < 0.90 for Supply contracts; < 0.40 for Industrial Service contracts. Otherwise, it is considered to be well balanced. BALANCED MEMBER STATES

8. For calls for tenders for Supply contracts (including civil engineering contracts) issued between 01.03.2016 and 28.02.2017, the following CERN Member States are considered to be well balanced: Bulgaria, Czech Republic, France, Italy, Hungary, Switzerland For calls for tenders issued between 01.03.2016 and 28.02.2017, the following CERN Member States are well balanced for Industrial Service contracts: Austria, Denmark, France, Spain, Switzerland, United Kingdom WELL BALANCED MEMBER STATES

9. Procedures for obtaining offers Requirements not exceeding 10’000 CHF; Users may issue enquiries directly provided CERN procurement rules are followed; Purchases between 10’000 CHF and 200’000 CHF Price Enquiries issued by Procurement Service; Purchases exceeding 200’000 CHF Market Surveys & Calls for Tenders issued by Procurement Service.

10. Requirements exceeding 200’000 CHF Market Survey (MS) followed by a Call for Tenders (IT) Announcement in the document “Advance information on Forthcoming Market Surveys and Calls for Tenders expected to exceed 200’000 Swiss francs”; Market survey: brief technical description (1-2 pages); qualification criteria (financial and technical); questionnaire. Current Market Surveys available on Procurement Service home page http://procurement.web.cern.ch/

11. Requirements exceeding 200’000 CHF Call for tenders: Deadline for bidders to submit bid is at least 4 weeks from mailing date; Invite - 10 firms for contracts between 200’000 and 750’000 CHF; - 15 firms for contracts exceeding 750’000 CHF; All call for tenders are also sent to Industrial Liaison Officers (ILOs) for information;

12. ADJUDICATION - SUPPLIES Supply contracts whose estimated value exceeds 100 000 CHF are awarded on the basis of the lowest compliant bid to the firm whose bid complies with the technical, financial and delivery requirements and is the lowest, subject, however, to the following rules aimed at improving the distribution of CERN’s purchases among its Member States:

13. Realignment Rule (Scenario 1) Lowest bid from a PB MS contract placed with it Poorly balanced MS Well balanced MS Bid (CHF) Contract

14. Realignment Rule (Scenario 2) Lowest bid from a WB MS realignment rule applies if bid difference <20% Poorly balanced MS Well balanced MS Bid (CHF) <20%

15. Realignment Rule (Scenario 2) Lowest bid from a WB MS (a) 1st bidder from PB MS aligns contract placed Contract Poorly balanced MS Well balanced MS Bid (CHF) <20%

16. Realignment Rule (Scenario 2) Lowest bid from a WB MS (b) if not, 2nd lowest bidder from PB MS aligns contract placed Contract Poorly balanced MS Well balanced MS Bid (CHF) <20%

17. Realignment Rule (Scenario 2) Lowest bid from a WB MS (c) if no alignment, contract placed with lowest bidder from WB MS Contract Poorly balanced MS Well balanced MS Bid (CHF) <20%

18. Indicative Procurement Timeline for HL-LHC  MS issued by CERN Q4 / 2016  MS reponses due Q1 / 2017  IT issued by CERN Q2 / 2017  IT responses due Q3 / 2017  Bid clarification Q4 / 2017  Contract award Q1 / 2018 after CERN Finance Committee approval → Combined MS for Point 1 & Point 5; → Separate IT for Point 1 & Point 5.

19. REGISTERING AS A SUPPLIER

20. Contacts with CERN Procurement web page http://procurement.web.cern.ch/ In the Procurement Group: Adam Horridge, senior procurement officer adam.horridge@cern.chadam.horridge@cern.ch +41 22 766 3054 Lisa Bellini-Devictor, section leader Administration and Infrastructure lisa.bellini.devictor@cern.chlisa.bellini.devictor@cern.ch +41 22 767 3626 Industrial liaison Officers (ILOs) Julie Bellingham, UK ILO Julie.Bellingham@stfc.ac.ukJulie.Bellingham@stfc.ac.uk +44 1793 442 060 Alan Silverman, UK ILO Assistant Alan.Silverman@cern.chAlan.Silverman@cern.ch +41 76 332 7047

21. Thank you for your attention