1. EuropeAid How can a private entity benefit from EU external action contracts ? Riga, 24 September 2010 Agneta Lindqvist EuropeAid Cooperation, Unit G7 Resources Financial and contractual matters and legal affairs Photos external actions: copyright European Commission

2. EuropeAid Summary 1. Who manages the contracts? Which rules to follow? 2. Award procedures and publication requirements 3. Evaluation and contract award 4. Submission of the application or tender 5. Implementation of the EU contracts: payments, reporting, visibility etc. 6. Useful tips

3. EuropeAid 1 Who manages the contract?

4. EuropeAid Who does what? Multi-annual Programming Evaluation Implementation Formulation Identification Financing DG Development DG External Relations DG ELARG Joint responsibility EuropeAid Elarg EuropeAid Elarg EuropeAid Elarg EuropeAid Elarg

5. EuropeAid Who manages? executive agencies bodies set up by Communities "(tradit. agencies) " bodies with a public service mission "(nat. agencies)" centralised jointly with international organisations shared (Member States ) directindirect decentralised (Third Countries)

6. EuropeAid EC External Actions Instruments from 2007 Geographical coverage Pre-accession: IPA Neighbourhood: ENPI Development: DCI and EDF Industrialised countries: ICI General coverage Thematic programmes (included in DCI) Human rights: EIDHR Stability: IFS Nuclear safety: NSI Humanitarian aid and Macro-financial aid

7. EuropeAid Volume of assistance 2008 Commitments in million € ENPI, South1,165 ENPI, East 570 DCI, Latin America 348 DCI, Asia 840 DCI, 5 thematic programmes 740 EDF 4,890 Budget ACP 327 EIDHR 143 INSC 71 Ifs (part II) 38 TOTAL9.132 Total7,690

8. EuropeAid What is a procurement contract? -comparison with a grant ProcurementGrant Purchase of services/supplies/ works Object -Action proposed by a potential beneficiary, intended to achieve an EU-policy objective; or -Functioning of a body Contracting Authority Owner of results Grant beneficiary 100% Financial contribution Co-financing - % of total eligible costs Reimbursement of the actual eligible cost incurred Tenders Procedure Calls for proposal PROFITNO PROFIT ALLOWED

9. EuropeAid ELIGIBILITY – GENERAL PRINCIPLES 1) Thematic programmes (+ ACP) 2) Geographical programmes 1) Member States + European Economic Area + officially recognized candidate countries + reciprocity cases + Developing countries (Annex 1 DCI Regulation) + international organisations 2) Member States + European Economic Area + officially recognized candidate countries + reciprocity cases + Countries mentioned in the basic act or covered by the Instruments + International organisations ---- a) Expert : any nationality b) Rules of origin: follow the eligibility rules – possible derogations c) Reciprocity : case by case (Australia; automatic reciprocity Least Developed Countries)

10. EuropeAid 2 Award procedures and publication requirements

11. EuropeAid Where are the procedures described? Practical Guide to contract procedures for EU External Actions o Harmonisation of procedures o Sole working tool o Coherent application of rules http://ec.europa.eu/europeaid/work/procedures/implementation/practical_guide/index_en.htm

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14. Legal Bases Budget 10th EDF Council regulation Legal base of programme Financial Regulation Comm decision AIDCO Rules and Procedures Comm regulation Implementing Rules of FR AIDCO decision Practical Guides (Contract/Finance/Programme estimates) Instruction Notes Cotonou Agreement Internal Agreement Council regulation Financial Regulation

15. EuropeAid Award procedures & publication requirements - How to award a contract? Call for Tenders: o Open or restricted - International/Local o Competitive Negotiated Procedure o FrameWorkContract o Single tenders o Competitive Dialogue Very detailed exceptions where direct award of contract may be allowed. PRAG 6.3

16. EuropeAid > 200.000 International restricted tender 10.000 (BUD) Rule: Framework contract Exception: Comp neg proc > 150.000 Open international tender 60.000 Open local tender 10.000 Comp neg proc > €5.000.000 1. Open international tender 2. Int. Res. Proc 300.000 Open local tender 10.000 Comp neg proc Exceptional procedures: -competitive dialogue -negotiated procedure WORKS SERVICE SUPPLY < 10.000 Single offer €

17. EuropeAid Publication Forecast Procurement Notice o Launch the procedure o Content legally binding o Deadline for reply o Defines criteriacriteria Award Notice

18. EuropeAid Criteria Exclusion o Bancruptcy, taxes…(art 93 FR) Selection o Experience, financial capacity…(art 135-7 IR) Evaluation o Quality of offer (art 97 FR) Award o Price, best value for money (art 138 IR)

19. EuropeAid Point 21- Procurement Notice 1) Economic and financial standing of candidate The average annual turnover of the candidate must exceed the annualised maximum budget of the contract 2) Professional capacity of candidate At least 5 permanent staff members currently work in fields related to this contract. 3) Technical capacity of candidate a) The candidate has worked successfully on at least one project with a budget of at least €500.000 in fields related to this contract in the past three years. b) The candidate must have experience in … If more than 8 eligible candidates: a)Preference will be given to candidates that have managed projects with similar objectives within … sector of xyz country. b)Highest number of project in 3 a)

20. EuropeAid Service Contracts International Restricted Procedure Publication * Shortlist * Tender launch Tenders received Evaluation Contract Award * Contract Signature * * EC approval if decentralised ex-ante control

21. EuropeAid Shortlist Selection criteria applied 4-8 companies will be invited to tender Result = Shortlist Report approved by Contracting Authority SERVICES

22. EuropeAid Tender Launch Dispatch Tender Dossier Unsuccessful candidates informed + publication of shortlist notice Deadline for Submission = min. 50 days Questions 21 days – Answers 11 days Tenders are valid 90 days SERVICES

23. EuropeAid 3 Evaluation and contract award

24. EuropeAid Evaluation Odd number of voting members + secretary + chairperson Held “in camera” in 5 phases: o Tender Opening Session o Administrative compliance o Technical Evaluation o Financial Evaluation o Conclusion

25. EuropeAid Tender Opening Session Not public Declarations of impartiality & confidentiality Double Envelope System Check offers arrive sealed and within deadline Tender Opening Report SERVICES

26. EuropeAid Administrative Compliance Fill in Administrative Compliance Grid o Documentation complete as required o Evidence exclusion criteria o Nationality of Sub-Contractors May request clarifications SERVICES

27. EuropeAid Technical Evaluation Individual Evaluation Grids Evaluators give scores and comments Calculate average score for each offer Interviews if 80 of more Calculates technical score only if average >80 Technical score = average score x 100 Highest scoring tender = 100 points highest score SERVICES

28. EuropeAid Financial Evaluation Open financial envelopes Check arithmetical errors Financial offer within maximum budget Financial score = lowest fees x 100 Cheapest offer = 100 points actual fees SERVICES

29. EuropeAid Conclusion Technical Score x 0.80 + Financial Score x 0.20 Best value for money wins! SERVICES

30. EuropeAid Contract Award Committee recommends to Award the contract to the best value for money OR Cancel the procedure Contracting Authority must approve the evaluation report SERVICES

31. EuropeAid Contract Signature Inform successful Tenderer and ask for evidence of selection criteria Prepare contract Sign and send contract Publish Contract Award Notice Inform unsuccessful Tenderers SERVICES

32. EuropeAid Time Line Service Contract Forecast 30 days Procurement Notice 30 days Shortlist Tender Launch 50 days MarchJune Procedure takes at least 6-7 months Contract Award Evaluation Contract Signature

33. EuropeAid Supply/Works Contracts International Open Procedure Publication * Tenders received Evaluation Contract Award * Contract Signature * * EC approval if decentralised ex-ante control

34. EuropeAid Tender Opening Session Public opening 1 envelope system Announced: name of tenderer, price, offers arrive sealed, within deadline, guarantee Tender Opening Report last step Minutes are available upon request SUPPLY/WORKS

35. EuropeAid Administrative Compliance Fill in Administrative Compliance Grid o Documentation complete as required o Nationality of Sub-Contractors o Close checking of origin of goods May request clarifications SUPPLY/WORKS

36. EuropeAid Technical Evaluation Individual Evaluation Grids Use published evaluation grids Check if offers comply with TS: YES/NO May request clarifications SUPPLY/WORKS

37. EuropeAid Financial Evaluation Check arithmetical errors Financial offer within maximum budget Award of contract to the tenderer with lowest price Discounts PRAG 4.3.9.5 SUPPLY/WORKS

38. EuropeAid Contract Award Committee recommends to Award the contract to the compliant offer with lowest price OR Cancel the procedure Contracting Authority must approve the evaluation report SUPPLY/WORKS

39. EuropeAid Contract Signature Inform successful Tenderer and ask for evidence of selection criteria and exclusion criteria Prepare contract Sign and send contract Publish Contract Award Notice Inform unsuccessful Tenderers SUPPLY/WORKS

40. EuropeAid Time Line Forecast 30 days Procurement Notice 60 days MarchJune Procedure takes at least 6-7 months Contract Award Contract Signature Evaluation

41. EuropeAid Case study The EC Delegation in Kenya is going to launch a call for tender for the supply of goods where the overall budget is €140.000. a) Which procedure should they use? b) There are not many local suppliers on the market in Kenya. How may this be tackled?

42. EuropeAid Award procedures & publication requirements - How to award a contract? Call for Tenders: o Open or restricted - International/Local o Competitive Negotiated Procedure o FrameWorkContract o Single tenders o Competitive Dialogue Very detailed exceptions where direct award of contract may be allowed. PRAG 6.3

43. EuropeAid 4 Submission of the application/tender

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46. Submission of applications Only for international restricted service procedure Reply to a Procurement Notice. Candidate demonstrate its capacity. Respons period after the publication of the procurement notice o 30 days PN should be clear enough to avoid questions but questions/clarifications are still allowed up to 21 days before submission deadline The application must reach the Contracting Authority by the deadline

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52. Submission of tenders Reply to an invitation to tender Respons period depending on type of procedure. o 30, 50, 60, 90 days Questions/clarifications may be made up to 21 days before submission deadline. Response by Contracting Authority, to all tenderers simultaneously, no later than 11 days before the same deadline. The tender must reach the Contracting Authority by the deadline

53. EuropeAid Case study The deadline for receiving tenders is Monday 15/11 at 16:00 You send your proposal by DHL on Friday 12/11 There is bad weather during the weekend and flight is cancelled. The offer arrives to the Contracting Authority on Monday at 16.10 Should in your opinion the tender be accepted by the Contracting Authority?

54. EuropeAid Contract award - Publication of contractors

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56. 5 Implementation of the EC contracts

57. EuropeAid The standard contracts Contract Annexes: Special Conditions General Conditions Terms of Reference / Technical Spec Technical Offer from tenderer Financial offer Expenditure verification report (services) Financial guarantee forms Various annexes depending on contract

58. EuropeAid The standard contracts Payments o Options for payment, pre-financing, financial guarantees Reports o Financial & Technical, expenditure verification (service) Visibility o Communication and Visibility Manual for EU External Actions http://ec.europa.eu/europeaid/work/visibility/index_en.htm

59. EuropeAid Contract amendments General Principles Addendum - major modifications o Extend contract duration o Major budget changes o Additional or complementary services o Replacement of key expert Administrative order - minor modifications o Address or bank account o Auditor o Within budget heading +/- 15% o Approval of non-key experts SERVICES

60. EuropeAid Contract amendments General Principles Addendum - major modifications o Budget change o Additional supplies Administrative order - minor modifications o Extend contract duration o Address or bank account SUPPLY

61. EuropeAid Contract amendments General Principles Addendum - major modifications o Additional works - max 50% o Extend contract duration if contractor at fault Administrative order - minor modifications o Address or bank account o Additional works - max 15% o Extend contract duration if contractor not at fault WORKS

62. EuropeAid 6 Useful tips

63. EuropeAid Common mistakes made by candidates, tenderers What can go wrong?

64. EuropeAid Administrative reasons Late arrival Incomplete documentation Not in accordance with templates Lack of required translations Not signed Lack of or copy of Tender Guarantee (Supplies and Works) Tenderer/Applicant/partner not eligible Financial offer not in separate envelope (Service)

65. EuropeAid Technical reasons Service: Experts are not available on required dates Experts do not have the required experience Copy and paste of Terms of Reference Supply, Works: Offer not exactly compliant with Technical Specification Ineligible origin of supply

66. EuropeAid My company does not fulfill the selection criteria…. - Form a consortium (the consortium as a whole must meet the criteria, not each individual company)! -Try and gain relevant experience as consortium partner or subcontractor! -An economic operator may rely on the capacities of other entities for a particular contract (undertaking)!

67. EuropeAid Further information… General http://ec.europa.eu/development/index_en.cfm http://ec.europa.eu/external_relations/index_en.htm http://ec.europa.eu/europeaid/index_en.htm Specific The Contracting Authority The Delegation in the beneficiary country Procedures http://ec.europa.eu/europeaid/work/index_en.htm

68. EuropeAid 68 Thank you for your attention