Ministry of Foreign Affairs, Latvia

EC Cooperation with Third Countries EC Procurement

to Third Countries

prepared by Mauro Napodano [email protected]

Development Strategies

The author accepts sole responsibility for this presentation. Its content does not necessarily reflect the views of the EC which funded the project and of the Ministry of Foreign Affairs who organised the seminar.

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Ministry of Foreign Affairs, Latvia Principles of Procurement

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Need for economy, efficiency, effectiveness (value for money)

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Give all eligible (qualified) bidders opportunity to compete

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Procurement process to be transparent

This presentation draws from the Practical Guide to contract procedures for EC external actions

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Ministry of Foreign Affairs, Latvia Rules of Origin Definition A product can not originate in a country in which no production process has taken place. The country of origin is deemed to be the country in which the goods have undergone their last, economically justified, substantial transformation.

The rule of origin applies to all items tendered and supplied. It is insufficient that only a certain percentage of the goods tendered and supplied or a certain percentage of the total tender and contract value comply with this requirement.

Chambers of Commerce issue certificates of origin.

Countries of origin All supplies and materials purchased under a contract financed under a Community instrument must originate from the Community or from an eligible country, including case-by-case: official candidate countries; development countries (ACP); any country where reciprocal access to their external assistance has been established.

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Ministry of Foreign Affairs, Latvia Grounds for company exclusion from tendering process

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They are bankrupt or being wound up;

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They have been convicted of an offence concerning their professional conduct by a judgment (i.e. against which no appeal is possible);

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They have been guilty of grave professional misconduct proven by any means which the Contracting Authority can justify;

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They have not fulfilled obligations relating to the payment of social security contributions or the payment of taxes;

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They have been the subject of a judgment which has the force of res judicata for fraud, corruption, involvement in a criminal organisation or any other illegal activity;

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Following another procurement procedure or grant financed by the Community budget, they have been declared to be in serious breach of contract for failure to comply with their contractual obligations.

In cases of failing to meet contractual obligations a company may be blacklisted (up to 2-3 years) or being imposed financial penalties equal to 2-10% of contract value.

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Ministry of Foreign Affairs, Latvia Choice grid for procurement procedures

The practice to artificially split the project to circumvent the threshold is illegal

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Ministry of Foreign Affairs, Latvia Typology of EC procurement procedures a Open Procedure Restricted Procedure b

Calls for tender are open where all interested companies may submit a tender. No negotiation is allowed.

All companies may ask to take part but only candidates satisfying the selection criteria may submit a tender (long and short list).

No negotiation is allowed.

Procurment Procedures c Competitive Negotiated Procedure

The Contracting Authority invites tenders from candidates of its choice. It selects the most economical tender in case of services and the cheapest compliant offer in case of supplies/works.

Framework Contract d

Contract between a Contracting Authority and a company, defining the general terms governing a series of specific contracts to be awarded during a given period, They are often multiple framework contracts.

Other procedures seldom used are: Dynamic Purchasing System; and Competitive Dialogue

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Ministry of Foreign Affairs, Latvia 1 Other factors to consider when tendering Validity of tender

 The period of validity of tenders is fixed at 90 days from the deadline for the submission of tenders.

 The Contracting Authority may request an extension of validity, for a maximum of 40 additional days.

 The successful tenderer must maintain its tender for a further 60 days from the date of notification of award.

2 Appeals

 In case of perceived errors and/or irregularities, the tenderer can contact the Contracting Authority directly.   The Contracting Authority has 90 days to respond. If not satisfied by the reply, the tenderer can refer to the Office of the European Ombudsman.

3 Modifying contracts

 Contract modifications must be formalised through an administrative order or an addendum (the latter in case of substantial changes).

  Justification must be provided.

Requests for contract modifications must be made and signed before the end of the implementation period.

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Ministry of Foreign Affairs, Latvia Technical specifications in the tender dossier 1

Supply contracts

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the quality levels and environmental performance;

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the levels and procedures of conformity assessment;

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fitness for use; safety or dimensions, including, the sales name and user instructions, terminology, symbols, test methods, packaging, marking and labelling, production procedures and methods;

Works contracts

In service contracts, terms of references are the core section in the tender dossier

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same as supply contracts plus:

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the procedures relating to quality assurance and the rules relating to design and costing, the test, inspection and acceptance conditions for works and methods or techniques of construction 8

Ministry of Foreign Affairs, Latvia Tender evaluation: a three step process a Administrative Compliance Evaluation Steps Technical Compliance c Evaluation of Financial Offers b 9

Ministry of Foreign Affairs, Latvia Tips on how to win 1/2

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Prepare yourself by reading on the subject

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Make contacts in the beneficiary country

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Identify local partners

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Respect local customs

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Solve the client

’

s problem. Don

’

t impose your view.

More on these points later in the seminar

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Ministry of Foreign Affairs, Latvia Tips on how to win

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Respond precisely to technical specifications.

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If unclear, ask up front; do not guess or assume.

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Submit bid/proposals in time.

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Compete where you are competitive.

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