Transcript seminar Ankara, february 2005

Workshop on Public Procurement
Ankara, February
21, 2005
Ankara, February 21, 2005
Economics of Procurement,
Project management tools,
Evaluation techniques and
Public Procurement policy in a
Member State
Ankara, February 21, 2005
Public Procurement Policy in the
Netherlands:
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Very simple: WE HAVE NO PUBLIC
PROCUREMENT POLICY IN THE
NETHERLANDS!
We do not even have national public
procurement legislation!
Only exception: public works.
Here we have “ uniform procurement
guidelines”
Ankara, February 21, 2005
Procurement in the Netherlands
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These are compulsory for Central
Government, but all other public
bodies are free to do what they like
For Central Government there is only
one other obligation: for every
contract exceeding 50.000 euro a
minimum of three potential
contractors must be asked to make
an offer
Ankara, February 21, 2005
Procurement in the Netherlands
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Means that participating in
procurement processes can be
extremely difficult and risky
Therefore contractors should
evaluate every invitation to tender
very carefully.
Participating without careful
evaluation/examination beforehand
may KILL your company
Ankara, February 21, 2005
Incorporation in acquisition policy
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Participation in the public procurement
process must be part of the contractors
aquisition policy because: it takes time, it
costs money, it requires knowledge of the
rules!
It has to be laid down in internal
administrative procedures
It should be communicated through all
levels of the organization
Ankara, February 21, 2005
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Ideally, one department should be
made responsible for organizing,
coordinating and facilitating
participation in procurement
procedures and for keeping up with
changes in the regulations
This department should also draw up
a timetable and have the (delegated)
authority to force people to deliver
the information that is needed
according to this timetable
Ankara, February 21, 2005
Always remember and remind the
contracting authority:
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Public procurement is a
COMMERCIAL process rather than a
legal process: Lawyers are necessary
to see that it is executed according
to the law but the COMMERCIAL
specialist should be leading!!
Ankara, February 21, 2005
Strategic partnerships
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Contractors should ask themselves
whether it is advisable to form
strategic partnerships in order to
become more succesfull:
By participating with strategic
partners ( maybe even in the form
of a European Economic
partnership) you wil be able to
offer:
Ankara, February 21, 2005
Partnerships
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More turnover
More experience
Bigger workforce
More reference projects
Better quality control(?)
More innovation strength
Ankara, February 21, 2005
Exclusion from participation
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1.
2.
Contracting Authorities can exclude
potential contractors from participation
when the candidate is:
Bankrupt or being wound up, has not
paid his taxes or social security
contributions, has been convicted for
grave professional misconduct, has
deliberately given false information
They are allowed to ask for official proof
that no such circumstance is the case
Ankara, February 21, 2005
Exclusion from participation
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If they do so, ask them to issue a so
called “ own declaration” in which you
declare that you are in no such
circumstances and that you will come up
will all official proof (official documents)
once they have selected you as their
preferred contractor
This saves time, money and
bureaucracy!
Ankara, February 21, 2005
Criteria for qualitative selection
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According to the directives certain
documents, declarations and other data
can be asked for in order to be certain
about the applicants abilities
These concern: Enrolment in the
professional or trade register, financial and
economic standing, technical capacity etc.
This can be proved by all kinds of official
documents
Ankara, February 21, 2005
BEWARE:
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Criteria for qualitative selection are
about the contractors situation, not
about his offer.
To evaluate an offer you need
awarding criteria.
These two are completely different,
so beware of mixing them!
Ankara, February 21, 2005
Criteria for qualitative selection
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In general: Be clear!
Don’t ask: “recent declaration” but be
specific: “ not older than three months
from the day of sending the notification”
Don’t ask: “last three years” but be
specific: “ balance sheets of the year
2000, 2001, 2002” .
Be sure why you ask something and how
you are going to weigh/assess it; If you
are not: DON’T ASK IT!
Ankara, February 21, 2005
Compulsory notifications
- Notice of open, restricted or negotiated
procedures
- Notice of contract award. This notice must
include the name of the selected
contractor and the value of the contract
awarded.
For EU-tenders all notices must be in
conformity with the standard format as
published on the Internet
(www.simap.eu.int).
In the near future it will only be possible to
send the notices to the Bureau of Official
Publications in Luxemburg BY MAIL
Ankara, February 21, 2005
Time limits
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All time limits in EU-legislation are
governed by regulation 1182/71/EEC
All time limits are minimum limits
(more time may be granted and you
even have the right to demand more
time if the minimum time limit is not
sufficient
The directives say: 52 day from the
time of sending the notice.
Ankara, February 21, 2005
Beware:
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Regulation 1182/71 says: A time limit
starts only the day after a legal act has
been performed.
Sending the notification to Luxemburg is
the legal act.
This means that the time limit starts the
next day.
A time limit ends at 24.00 hours of the
last day, so opening of the offers can start
taking place only the day following the
expiration of the time limit.
Note: All days are calendar days.
Ankara, February 21, 2005
Restricted Procedure
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Free choice between open and
restricted procedure.
Restricted procedure means one can
limit the amount of candidates to be
invited to submit an offer to a
MINIMUM OF 5
Problem is that the directives do not
indicate how this limitation has to be
done
This is therefore at the discretion of
the contracting authority
Ankara, February 21, 2005
Beware:
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Contracting authorities are advised to
perform this selection very cautiously and
in a very transparent way.
This can be achieved either by a public
draw (not allowed in every EU country) or
by selecting on the basis of an objective
weighing instrument, where only the best
scoring candidates will be selected. In the
interest of transparancy this instrument
should be made public.
Ankara, February 21, 2005
Advantages/disadvantages of
various procedures
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Open procedure:
Advantages: Unlimited amount of offers,
therefore unlimited competition. Relatively
quick
Disadvantages: Risk of huge piles of
paper, all to be examined by the
contracting authority. Besides coming up
with all papers to meet the selection
criteria, all candidates have to submit
offers in the mean time, which means an
lot of calculating. This increases the cost
of participating in the tender procedure
and eventually leads to higher prices
Ankara, February 21, 2005
Advantages/disadvantages
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Restricted procedure:
Advantages: Preliminary selection of
candidates based on qualitative criteria.
Candidates know beforehand how many
competitors there are so can calculate
their chances. By reducing the number of
candidates: less paperwork to examine by
the contracting authority
Disadvantages: Longer and sometimes
more complicated procedure, higher risk
of complaints if not properly executed.
Ankara, February 21, 2005
Contact between Contracting
authorities and candidates
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Contact is permitted but contracting
authorities must ensure that this
does not impair fair competition.
It is up to the contracting authority
to decide how he will deal with this.
If he includes a name of a contact
person and a telephone number or
personal e-mail address, he indicates
that he does not object to contact
Ankara, February 21, 2005
Contact (continued)
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He should in any case organize a question
and answer round ca. halfway procedure
(one in case of open procedure, two in
case of restricted procedure).
He should allow all candidates to submit
their questions till a certain date and hour,
then answer ALL questions and send them
(anonimized) together with answers, to all
candidates. This creates a level playing
field.
Ankara, February 21, 2005
Submission of Tenders
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Contracting authorities should be
clear about what they want to
receive
It is advisable to be rather rigid in
this, for instance” Your balance
sheets over the years 2000, 2001
and 2002 must be included in annex
1, your proof of membership of the
Chamber of Commerce must be
included in annex 2 etc. Failure to
obey this will lead to rejection of
your offer”
Ankara, February 21, 2005
Submission of Tenders
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Also be clear regarding:
Final date of submission (date, time)
Note: Always make it very clear that this
is a fatal time limit: One minute too late
means rejection!
Whether the opening is public or not
Where to submit. Note: not only the place,
for instance “ municipality hall” but very
specific: “ room 210” or “ secretariat of
the director general for public works” or
even: “Miss X” (who is the administrative
secretary and does not know anything
about the tender procedure…)
Ankara, February 21, 2005
Submission of Tenders
Also be clear about:
- how many examples should be send
whether you want one example on CDrom
whether they should be send under
closed cover
- how to submit (personally against receipt,
by post etc)
NOTE: Keep tender documents closed till
after the date and time of closing of the
submission period
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Ankara, February 21, 2005
Submission of Tenders
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Last but not least contracting authorities
should instruct personnel on key-posts,
that a closing date is imminent.
Many candidates wait till the last minute
to submit their tenders as they are afraid
that these might otherwise be opened
before the closing moment (and
information be leaked to competitors)
Therefore people in the mail-handling
department and behind the reception
should be well instructed.
Ankara, February 21, 2005
Rules for Tenders
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The European directives do not specify
anything as to how tenders should look
like
Contracting authorities can therefore
determine themselves what they want to
receive and how. Standard formats will
help evaluating the documentation
received
Main rule is to be utterly clear about what
one wants to receive
Ankara, February 21, 2005
General Conditions applicable
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Contracting authorities should draw up
their own general conditions (terms)
It is wise to have separate terms for
works, supplies and services
We always tell Contracting authorities to
insist that only the general terms of the
contracting authority are applicable, with
the exclusion of contractors conditions
(otherwise they will end up with offers
that are not comparable)
However, if they don’t, see that your own
conditions are applicable!
Ankara, February 21, 2005
Checklists
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Make checklists to monitor the whole
process and its progress
Draw up a timetable and send this to
everybody involved in the
procurement process, making clear
that it is everybody’s responsibility to
respect the timetable
Ankara, February 21, 2005
Awarding of the Contract
The European directives state two
awarding criteria:
- Lowest price
- Economically most advantageous offer
Note: Lowest price IS lowest price and is
not, repeat not, negotiable
Choice between awarding criteria is free and
should be subject of thorough
considerations
Leading thought should be that “total cost of
ownership” is much more important than
price alone
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Ankara, February 21, 2005
Awarding of contract
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Economic most advantageous offer can
include many aspects that are of
importance to the contracting authority.
These aspects may be:
Quality
Functionality
Service
Warranty
Aesthetic characteristics
Price
Environmental aspects etc.
Ankara, February 21, 2005
Awarding of contract
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All these are more or less subjective
criteria.
It is up to the contracting authority
to make sure that they are being
judged upon as objectively as
possible and that this judgment
process is transparent
The same applies to the judgment of
criteria for qualitative selection
Ankara, February 21, 2005
Awarding of contract
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One way of creating an objective system
is a system of musts and wants
(requirements and desires)
Meeting the musts is a conditio sine qua
non (Knock-out criterion)
Concerning the wants all candidates will
be compared in relation to the others in
order to determine who meets the wants
best, who ends up worst and what is the
position of the other candidates
Ankara, February 21, 2005
Awarding of contract
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Examples of must and wants:
Must: it is not allowed to offer a price
higher than € 500.000
Want: the price should be as low as
possible
Must: A service engineer must be
available within two hours
Want: A service engineer is available
as soon as possible
Ankara, February 21, 2005
Awarding of contract
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In this system all “wants” will get their
own rating (for instance on a scale from 1
to 10)
The rating reflects the ranking of the
wants between each other
All candidates will be compared in relation
to the others to determine who responds
best to a want, who responds worst and
the position of the remaining candidates.
This is expressed in a mark (on a scale
from 1 to 10)
The best candidate scores 10 points, the
worst 1 point
Ankara, February 21, 2005
Award
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Explanation:
O = Offer
R= Rating in comparison with other
competitors
T= Total score on this “ Want”
Price= in 100.000 Euro
Available= availability of engineer in hours
Warranty= warranty in years
User panel= evaluation figure on scale of
1-10 (1 is worst, 10 is best) by evaluation
team
Ankara, February 21, 2005
awardmatrix
contractor
→
A
B
C
D
wants
↓
price
rating
↓
6
o r t
o r t o r t o r t
6
1
6
5,
8
2
12
5
5
30
4
1
0
60
available
8
1
10
80
1,
5
7,
5
60
2
5
40
3
1
3
warranty
3
3
1
3
5
4
12
1
0
10
30
5
4
12
user panel 5
8
10
50
6
4
20
7
7
35
5
1
5
Total
139
Ankara, February 21, 2005
10
4
13
5
80
Alcatel period
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Since EC court ruling in Alcatel case,
memberstates are forced to
announce intended award
Rejected bidders get possibility to
oppose award during restricted timelimit.
In some memberstates this limit is
only 14 days!
Greatly increases amount of legal
proceedings.
Ankara, February 21, 2005
Checklists
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Make several checklists for the monitoring
of your participation:
First one when first reading the invitation:
Who is the contracting authority, what are
they procuring, what procedure, do we
have enough time, financial means, know
how to offer them, what are the
specifications, have they been drawn up
with someone in mind, is there a
reference to certain suppliers or products
Ankara, February 21, 2005
Checklists
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Second one:
Who is responsible for what
What do we need to submit
What did the contracting authority
forget (this is where we start earning
money!!!)
What is the cost of investment
against the possible net profit (roi)
or its marketing value
Ankara, February 21, 2005
Checklists
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Do we need to form some kind of
strategic alliance in order to create
more critical mass
Who else might be competing and
what is our added value over them
and /or local contractors
Ankara, February 21, 2005
Other things to check
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You name it, I will answer it!!
Ankara, February 21, 2005