Transcript A project funded by the European Union
Project funded by The European Union Government of the Republic of Serbia European Integration Office
INDUCTION TRAINING SEIO
Implementation: Tendering, Procurement and Budget Support
Training Objectives
Overall the training will provide basic information on EU contracting procedures so that these can be taken into account when preparing implementation plans, sequencing and monitoring of future IPA Actions. Specifically, the training will explain: the PRAG and its relationship to the EU Financial Regulation; contract types and their uses; required documents for each contract type and procurement procedure contract value and its effect on procurement procedures time taken to complete the various procurement procedures and how to incorporate this into the development of realistic
implementation plans
requirements for budget support Project funded by The European Union Government of the Republic of Serbia European Integration Office
Contracts
Contracts are the normal legal basis for the disbursement of IPA finances (there are others e.g. Delegated Agreements, Sector Budget Support) In EU pre-accession funds a distinction is made between procurement contracts and grant contracts.
In procurement, the clients requirements are specified in contract documents (e.g. Terms of Reference for consultants). By contrast, in grant schemes the client explains the problems and potential grant contractors make proposals to address these problems. The client chooses the best proposal and awards the grant i.e. The grant awardees design the solutions and not the clients (as in procurement). Project funded by The European Union Government of the Republic of Serbia European Integration Office
PRAG
Practical Guide to Contract Procedures for EU External Actions (PRAG)
http://ec.europa.eu/europeaid/prag/document .do?locale=en
Regulation No. 966 /2012 of the European Parliament and the Council on the Financial Rules applicable to the general budget of the Union Commission Delegated Regulation No. 1268/2012 of 29 October 2012 on the Rules of Application of Regulation No 966/2012 of the European Parliament and Council on the financial rules applicable to the general budget of the Union
http://ec.europa.eu/budget/documents/financi al_regulation_en.htm
Project funded by Government of the Republic of Serbia The European Union European Integration Office
Types of Contract and Associated Documents IPA Action Document
r P o c u r e m e t n
SERVICES SUPPLIES WORKS Terms of Reference Technical Specifications Bills of Quantity GRANTS
Project funded by The European Union
Guidelines for Applicants
Government of the Republic of Serbia European Integration Office
Tendering Procedures
SERVICES SUPPLIES WORKS GRANTS >€300,000 International restricted procedure > €300,000 International open procedure < €300,000 but > €20,000 1.Framework contracts 2.Competitive negotiated procedure <€300,000 but > €100,000 Local open procedure <€100,000 but > €20,000 Competitive negotiated procedure >€5,000,000 1.International open procedure 2.International restricted procedure <€ 5,000,000 but > €300,000 Local open procedure < € 300,000 but > €20,000 Competitive negotiated procedure < €20,000 Single tender < €20,000 Single tender < €20,000 Single tender >€2,000,000 International call for proposals >€2,000,000 Local call for proposals
For any amount in cases of urgency
Direct grant
Project funded by The European Union Government of the Republic of Serbia European Integration Office
Contracting Times
Contract Type
SERVICE SUPPLIES WORKS GRANTS
Procurement Procedure
International Restricted Tender Framework International Open Tender Local Open Tender International Open Tender Local Open Tender International Call for Proposals Local Call for Proposals
Average Time Taken
(9)-12 months (3)-5 months 9 months 6 months 12+ months 9-12 months 12+ months (6)-9 months Project funded by The European Union Government of the Republic of Serbia European Integration Office
Service Contracts: International Restricted Tender Procedures Prepare ToR Negotiations with EC Publication of Procurement Notice Establish Sort List and prepare tender dossier Negotiations with EC Tender preparation /submission Tender evaluation, prepare Evaluation Report and contract dossier Negotiations with EC Contract Signature
Project funded by The European Union
Months 1 2 3 4 5 6 7 8 9
of Serbia European Integration Office
Service Tender Dossier
A. Instructions to the tenderers
Letter of invitation to tender Instructions to tenderers
B. Contract
Contract, Special Conditions
Terms of Reference
Organisation and Methodologies Key Experts
General Budget breakdown Conditions for service contracts
C. Other information
Shortlist notice Administrative compliance grid Evaluation grid
D. Tender submission form
Project funded by The European Union Government of the Republic of Serbia European Integration Office
Supply Tender Dossier
A. Instructions to the tenderers
Letter of invitation to tender Instructions to tenderers
b. Contract
Contract Special conditions Annexes General conditions for supply contracts
Technical specifications
Budget breakdown Model for performance guarantee Model for advance guarantee
C. Other information
Glossary of terms Administrative compliance grid Evaluation grid The European Union Government of the Republic of Serbia European Integration Office
Works Contracts
Works contracts cover construction, there are many national ‘standard’ forms of contract. Despite this, the EC have standardised on the use of an international contract format developed by the Federation Internationale des Ingenieurs-Conseils (FIDIC). It should be noted that IFIs (WB, EBRD) have their own standard documents which must be used by recipients . The most commonly used forms of contract available under FIDIC are: Conditions of Contract for Works of Civil Engineering Construction
(The ‘Red Book’)
Conditions of Contract for Design –Build and Turnkey
(The ‘Orange Book’)
Conditions of Contract for Electrical and Mechanical Works
(The ‘Yellow Book’)
Short Form of Contract
(The ‘Short Form’).
Project funded by The European Union Government of the Republic of Serbia European Integration Office
Works Tender Dossier
Most works contract dossiers contain the following documents:
The Tender (Contractor’s offer) The General Conditions of Contract (FIDIC Part I) The Conditions of Particular Application (FIDIC Part II Clauses)
The Technical Specifications
The Design Documents (Drawings)
The priced Bill of Quantities /Schedule of Rates
Any other document forming part of the contract e.g. letters of clarification Project funded by The European Union Government of the Republic of Serbia European Integration Office
Bills of Quantity (BoQ)
An itemised list showing the number/ quantity of items required to complete the works, the units of measure, the rate per unit of quantity and the consequent total cost for that item.
The BoQ may contain a number of bills classified by structure, trade, or standard method of measurement. In turn each bill will be broken down into separate items covering all elements of the works. The total number of items can be many hundreds.
During construction the quantity of each item is re- measured and using the Contractors quoted unit rates, the value of the actual works completed by the
Contractor is measured
Project funded by The European Union Government of the Republic of Serbia European Integration Office
Role of the ‘Engineer’
One of the main aims of Contractors, whilst making every effort to complete the works according to the contract, is to maximise profits wherever possible.
This means the Contractor will interpret contract provisions to maximise advantage e.g. providing the
cheapest materials to meet the minimum requirements
in the specifications or by requesting frequent time
extensions.
Under FIDIC conditions an independent ‘Engineer’ must be appointed to supervise the works and to ensure that they are carried out according to the contract. The Engineer issues ‘Take Over’ and ‘Default Liability’ Certificates when the works are completed Project funded by Government of the Republic of Serbia The European Union European Integration Office
Responsibilities of the Employer
Ensure that the works are legally acceptable
Appoint the Engineer
Define the scope of the Engineer’s responsibilities Ensure that the site is freely available Provide for the Contractor's needs
Pay the Contractor
Consult with the Engineer on contractual obligations e.g. delays (time & cost to Contractor); rejection (cost to Employer); default of the Contractor (cost to Employer) before determining the amount due. Project funded by The European Union Government of the Republic of Serbia European Integration Office
SPD: Implementation Planning
SECTOR TITLE 2014
Q3 Q4 Q1
2015 2016 2017 2018 2019 2020
Q 2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 ACTION 1
P P C C C/I I I I I I I I I I I I I I
Activity 1.1
Activity 1.2
…..
P P P P C C I I C I I I I I I C C C I I I I I I I I I I I I I I
ACTION 2 Activity 2.1
Activity 2.2
P P P P P P C C C C/I I I I I I I I I I I C C C C I I I I I I I I I I I I P P P C C I I I I I I I I I I I
P = programming (period when the IPA action programme is expected to be adopted C = procurement and grant award procedure I = implementation period Project funded by The European Union
I
Government of the Republic of Serbia European Integration Office
Contracting & Disbursement Deadlines Deadline for concluding the Financing Agreement Contracting deadline Deadline for the execution of contracts Disbursement deadline Final date for the implementation of the Financing Agreement
Project funded by The European Union
The final date for the signature of the Financing Agreement is X+1 (where X=year in which budgetary commitment was made). Conclusion of FA=year N
The end date for the signature of contracts (including grant contracts) is 3 years from
the date of conclusion of the Financing Agreement i.e. N+3
The end date by which contracts (including grant contracts) must be finished is 3 years
from the contract signature. The
contracting deadline for the FA=N+3+3 The end date for making payments to contractors is 1 year after the deadline for
executing contracts i.e. N+3+3+1
The end date for closure of the Financing Agreement is 8 years. After this date no financial transactions can be made legally under the Financial Agreement concerned Government of the Republic of Serbia European Integration Office
Programme Intervention Logic
Operations
Collective rural projects
Activities Result
s
Reinforcement of rural producers Improved productivity
Specific Objectives
Land consolidation Increased revenues
Overall Objective
Modernisation and adaptation Development of existing activities Improved farming tools Jobs created & safeguarded Stopping rural exodus Attraction of outside companies New activities (tourism) Industrial buildings for new companies Better living conditions Improved value of natural areas Better image of rural areas Restoration of the environment / rural landscape
Project funded by The European Union 18 Government of the Republic of Serbia European Integration Office
Project funded by The European Union Government of the Republic of Serbia European Integration Office
INDUCTION TRAINING SEIO
Budget Support
What is Budget Support (BS)?
BS is a method of delivering financial assistance which normally has 4 steps: (Sector) Policy Dialogue
Financial Transfers (in ‘tranches’) to National Treasury Account
Performance Assessment Capacity Development BS is delivered by means of ‘Sector Reform Contracts’. Project funded by The European Union Government of the Republic of Serbia European Integration Office
Political and Economic Focus of IPA-BS
Compliance with the political criteria should be the primary focus of IPA2 BS. In particular, assistance should support preparations for acquis chapters 23 and 24 (The ‘Rule of Law’) For the economic criteria, the main focus of IPA2 BS should be on supporting the establishment of a functioning market economy (Copenhagen Criteria: i.e. ‘The ability to withstand the pressures of the internal market’) Project funded by The European Union Government of the Republic of Serbia European Integration Office
Assessment of Eligibility
Assessment takes place at 2 stages in the programme cycle.
During programme preparation: assessment of relevance (are key constraints /weaknesses addressed?) and credibility (realism, institutional capacity, track record, political commitment) During programme implementation: assessment of progress made in policy implementation (benchmarked against reform commitments) Project funded by The European Union Government of the Republic of Serbia European Integration Office
Risk Management Framework
Risk management is an internal assessment of risk levels based on the analysis of replies to questionnaires in 5 categories, namely: 1. Political
2. Macroeconomic
3. Developmental
4. Public Financial Management
5. Corruption /Fraud There are 4 risk levels: Low Moderate Substantial High Beneficiaries are expected to define their risk response by means of ‘Mitigation Measures’ (these are monitored) Project funded by The European Union Government of the Republic of Serbia European Integration Office
Whether to Provide BS?
The EC decision on providing BS is based on 3 assessments: 1. Assessment of political commitment to a reform agenda (in line with EU accession) 2. Assessment of eligibility 3. Assessment of risks and mitigation
measures
Project funded by The European Union Government of the Republic of Serbia European Integration Office
Variable Tranches: Performance Reserves
‘A Performance Monitoring System and related disbursement criteria is at the heart of any budget support operation’ (EC) BS disbursements are of 2 sorts: Base (or fixed) tranches: these are linked to eligibility criteria Variable tranches: these are intended to create an incentive for improved performance and are based on performance indicators. The EC limit (cap) the use of variable tranches to avoid unpredictability /volatility of disbursements. Typically, Sector Reform Contracts cover commitments for 3 years with an upper limit of 40% variable tranches Project funded by The European Union Government of the Republic of Serbia European Integration Office
Variable Tranche (Performance) Indicators
The following principles should be applied: 1. Targets and indicators should be Coherent with sector problem analysis and programme objectives 2. Whilst combined indicators may be used, the emphasis should be on Results 3. Number of indicators should be limited to a maximum of 8 per Tranche (to avoid loss of policy focus) 4. Indicators, targets and assessment methodology should be defined during programme preparation Project funded by The European Union Government of the Republic of Serbia European Integration Office
Project funded by The European Union Government of the Republic of Serbia European Integration Office