MEDIA Training on Public Procurement

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1 Improving Administrative Capacities in the Area of Public Procurement in Kosovo EuropeAid/132388/C/SER/XK MEDIA Training on Public Procurement February 2014 in Kosovo and implemented by

2 Training objective The aim of the training is : a) to have a general overview and understanding on the PP; b) to see the complexity of the PP; and c) to be informed precisely and objectively on different up-todate procurement related issues. in Kosovo and implemented by 2

3 Outline of the training 1. Main principles of PP, general rules, types of procedures 2. Roles, functions, responsibilities of PPRC, PRB, CPA and CA 3. Contracting authorities' obligations and rights 4. Bidders obligations and rights 5. Common errors and omissions in the implementation of the Law 6. Cheatings and points of influence 7. Tools and methods to safeguard the integrity of PP 8. Goal of the monitoring activity in Kosovo and implemented by 3

4 Main principles of public procurement 1 st PP legislation has its genesis on Treaty of Rome 1957 The essential purpose of the Treaty was the establishment of a common market for member states Although the purpose of the establishment of the Treaty was not the regulation of PP area, the Treaty established the fundamental basis (basic principles) based on which the secondary legislation in the field of procurement (Directives) was established In order to understand the basics of PP in the EU, it is necessary to look not only at the procurement Directives themselves but also at the context within which they were adopted in Kosovo and implemented by 4

5 Treaty of Rome The Treaty is somehow "the Constitution of the European Union" which should be implemented by Member States National laws of the Member States should be in accordance with the Treaty The Treaty does not include any explicit provisions relating to PP This does not mean that it does not contain provisions that affect PP On the contrary, the Treaty establishes a number of fundamental principles that underpin the EU These principles apply equally to the field of PP in Kosovo and implemented by 5

6 Treaty of Rome (2) Fundamental principles, the most relevant in terms of PP are: q Prohibition against discrimination on grounds of nationality q Free movement of goods and prohibition of quantitative restrictions on imports and exports and measures having equivalent effect q Freedom of establishment q Freedom to provide services - Treaty on the Functioning of the EU (TFEU) in Kosovo and implemented by 6

7 General principles of law In addition to these fundamental Treaty principles, some general principles of law have emerged from the case law of the ECJ These general principles are important because they will often be used by the ECJ: to fill in gaps in the legislation; and to provide solutions to situations that are often very complex. The most important in the procurement context are: equality of treatment transparency mutual recognition proportionality in Kosovo and implemented by 7

8 EU Directives The treaty is in some way "the Constitution of the EU The Directives are secondary legislation (Regulations) that to regulate specific relevant areas mentioned in the EU Treaty To support the principles of the Treaty in the field of PP and to provide the necessary guidance to Member States, the Community has adopted a series of procurement Directives 1. The public sector Directive - Directive 2004/18/EC 2. The utilities sector Directive - Directive 2004/17/EC 3. The Remedies Directive - Directive 2007/66/EC 4. New defense sector Directive - Directive 2009/81 in Kosovo and implemented by 8

9 What is the scope of the Directives? The Directives do not seek to impose a new common regulatory regime on EU Member States Member states have 2 years Member states can continue to apply their national procedures and adopt new procedures which are not in conflict with the Directives or with Treaty provisions EO shall take into consideration the Directives and the national regulations The member states remain free to regulate a number of issues, mainly practical matters such as for example: specific standard form tender and contract documents, opening procedures, tender submission procedures securities etc. in Kosovo and implemented by 9

10 What is the scope of the Directives? (2) In essence, the common rules of the Directives consist of applying the basic principles, notably non-discrimination, equal treatment and transparency in the: publicity of proposed procurement contracts; design of technical specifications; choice of procurement procedure; qualification and selection of candidates and tenderers; award of contracts. in Kosovo and implemented by 10

11 What are the basic principles of public procurement? Main objectives of the EU has been to create a common market that eliminates barriers to trade in goods and services Creating a common procurement market means removing any barriers to trade arising from the procurement context. Barriers to trade can be erected by Ø means of legislation - by imposing buy national requirements Ø The actions of CA - by making discriminatory award decisions Ø The action of EO - by colluding together to rig tender prices The primary purposes of PP legislation is to eliminate existing barriers and prevent the erection of new barriers It does so by applying the basic principles in Kosovo and implemented by 11

12 What are the basic principles of public procurement? (2) Treaty Principles General Principles of Law At national level, often articulated differently or supplemented by additional (legitimate) objectives, e.g.: q Economy and efficiency q Value for money (cf. most economically advantageous tender) q Probity and integrity in Kosovo and implemented by 12

13 New PP Directives New EU rules on public procurement and concession contracts approved by EU Parliament will ensure better quality and value for money when public authorities buy or lease works, goods or services. They will also make it easier for small and medium-sized firms to bid and include tougher provisions on subcontracting. The directives will enter into force 20 days after publication in the Official Journal of the European Union. After this date, member states will have 24 months to implement the provisions of the new rules into national law. Question: Does Kosovo want to adopt the new directives, and if yes, when? in Kosovo and implemented by 13

14 The main provisions of the current Law No. 04 L/042 Principles: The purpose of this law is to ensure the most efficient, cost-effective, transparent and fair use of public funds, public resources and any other funds and resources of contracting authorities in Kosovo by establishing the requirements and rules that shall be observed, the procedures that shall be followed, the rights that shall be respected, and the obligations that shall be performed, by persons, economic operators, undertakings, contracting authorities, works concessionaires and public bodies conducting, or involved, participating or interested in, a procurement activity involving or relating to the use of such funds and/or resources. This law also aims to ensure the integrity and accountability of public officials, civil servants and other persons conducting or involved in a procurement activity by requiring that the decisions of such individuals, and the legal and factual bases for such decisions, are free of any personal interest, are characterized by non-discrimination and a high degree of transparency, and are in compliance with the procedural and substantive requirements of the present law. Finally, this law is intended to promote the establishment of an institutional culture of unbiased, ethical and materially disinterested professionalism among all public officials, civil servants and other persons conducting or involved in a procurement activity by requiring such individuals to conduct themselves in a manner that is informed solely by the objective of achieving the most efficient, costeffective, transparent and fair use of public funds and public resources while strictly complying with the procedural and substantive requirements of the present law. The main question: Does the procedure and contract reflects the followings: Efficiency, cost-effective, transparent, fair use of public fund, integrity, accountability? in Kosovo and implemented by

15 Public Procurement law Kosovo PPL is in full compliance with the principles of the EU directives In Kosovo PPL, Nr. 04/L-042 q Transparency q Equal treatment q Economy and efficiency q Non-discrimination PP legislation consists of q national procurement law; q secondary legislation; and q standards documents. PPRC website in Kosovo and implemented by 15

16 Flow chart of a procedure 1. Determination of needs and availability of funds 2. Prepare Tender Dossier 3. Prepare the Contract Notice 4. Publish the contract notice 5. Send Tender Dossier upon receipt of request 6. Send additional or clarifying information, if needed 7. Extend time limit for receipt of tenders, if needed 8. Receive and open the tenders 9. Record announced information in Minutes in Kosovo and implemented by 16

17 Flow chart of a procedure (2) 10. Send Minutes to all tenderers 11. Evaluate the offers 12. Prepare Tender Evaluation Report 13. Prepare and send the Contract Award Notice to PPRC for publication 14. Notify eliminated EOs and the successful EO 15. Standstill period 16. Reconfirm Funds Availability 17. Sign contract 18. Contract management in Kosovo and implemented by 17

18 General rules (1) Article 10 - Means to promote Transparency The CA Ø Besides documents classified as confidential business information Ø shall provide to any person who makes the request access to documentation relating to any procurement activity that has been concluded A procurement activity is considered concluded on: a. the date of publication of the contract award ; b. if canceled on the date of publication of the notice of cancellation; c. on the date of the award of the concerned contract in case of minimal value contracts in Kosovo and implemented by 18

19 General rules (2) Article 32 General rules ü CA shall use open or restricted procedure ü If PPL specifically authorizes the use of different procedure, CA may use other procedures ü If less than 2 responsive tenders are received the CA shall cancel ü CA may waive the requirement of 2 responsive bids ü Notify PPRC Article 42 Publication of Notices ü Large and medium value contracts ü All notices published at PPRC s website Article 26 Contract Signatures ü Large value contracts ü PM & CAO & Minister in Kosovo and implemented by 19

20 General rules (3) Time limits Procedures Open Restricted Negotiated after publication of contract notice Large Value 40 days 20 days receipt of requests 40 days receipt of tenders Medium Value 20 days 15 days receipt of requests 20 days receipt of tenders Low Value 5 days / / Minimal value 1 day / / 20 days receipt of requests 40 days receipt of tenders 15 days receipt of requests 20 days receipt of tenders in Kosovo and implemented by 20

21 General rules (4) Thresholds Estimated Supply & Services Works LARGE VALUE 125, ,000 MEDIUM VALUE < 125,000 < 500,000 10,000 10,000 LOW VALUE < 10,000 < 10,000 1,000 1,000 MINIMAL VALUE < 1,000 < 1,000 in Kosovo and implemented by 21

22 Procurement procedures 1 Open procedure 2 Restricted procedure 3 Design contest 4 Negotiated procedure after publication of a contract notice 5 Negotiated procedure without publication of a contract notice 6 Price quotation procedure 7 Minimal value procedure in Kosovo and implemented by 22

23 Roles, functions, responsibilities of PPRC, PRB, CPA and CA Public Procurement Regulatory Commission legislative body Procurement Review Body executive body Central Procurement Agency Contracting Authority in Kosovo and implemented by 23

24 Roles, functions, responsibilities of PPRC Public Procurement Regulatory Commission ü an independent regulatory agency ü comprised of 3 individuals ü PPRC s members are appointed for a term of 5 years ü nominated by the Government and appointed by the Assembly Responsible for the overall development, operation and supervision of the public procurement system in Kosovo in Kosovo and implemented by 24

25 Roles, functions, responsibilities of PPRC (2) PPRC has the responsibility and authority to: ü Publish in the official web site all kinds of contract notices ü Establish detailed rules to ensure proper implementation ü Prepare and distribute procurement manuals, instructions, forms ü Increase awareness among CA and EO ü Provide technical assistance and advice CA and EO ü Provide and publish written interpretations of AI ü Monitor the CA on the implementation of the law ü Support KIPA on training the PO ü Support the development of electronic procurement in Kosovo and implemented by 25

26 Roles, functions, responsibilities of PRB Public Review Body ü an independent administrative review body ü comprised of 5 Board Members ü PRB s members are appointed for a term of 5 years ü nominated by the Government and appointed by the Assembly responsible for implementing the procurement review procedures in Kosovo and implemented by 26

27 Roles, functions, responsibilities of PRB (2) PRB has the responsibility and authority to: ü review complaints from interested parties containing allegations of violations of the law; q Re-evaluation q Approval q Cancellation ü issue an order to a CA requiring such CA q to pay compensation to a complainant q to correct an alleged violation q to remove discriminatory technical, economic, financial or selection specifications q issue order that renders a concluded and signed contract ineffective and impose penalties on any CA if continue in Kosovo and implemented by 27

28 Roles, functions, responsibilities of CPA Central Procurement Agency ü established under the Ministry of Finance ü administered by a Director appointed for a term of 3 years ü appointed in accordance with procedures determined in the Law on Civil Servants in Kosovo and implemented by 28

29 Roles, functions, responsibilities of CPA (2) CPA has the responsibility and authority to: 1. if designated, by the MoF, conduct the procurement activity for a CA (for reasons of professional expertise, costeffectiveness, efficiency or other legitimate) 2. if authorized, by the Government, conduct centralized procurement activities on behalf of CAs 3. if requested, conduct a procurement activity on CA behalf 4. if requested, assist a CA in the conduct of any procurement activity being conducted by such contracting authority in Kosovo and implemented by 29

30 Centralised procurement What does it mean? Why is it good? CPA acting on behalf of several contracting authorities Advantages: Improve efficiency Administration HR / work-load Rationalize the resources Savings / lower prices economy of scale Professionalization Standardization transparency - simplification in Kosovo and implemented by 30

31 Roles, functions, responsibilities of CA Chief Administrative Officer (=CAO) Requesting Unit Procurement manager in Kosovo and implemented by 31

32 Roles, functions, responsibilities of CA (2) CAO has the overall responsibility: Ø of ensuring that the formal needs assessment is conducted for each procurement activity; Ø of approving the initiation of each activity; Ø of designating one person to act as an Authorizing Officer for each procurement activity; Ø of designating one person to serve as the PM; Ø take steps to remove the PO if he/she becomes ineligible in accordance with the CS Law; Ø of appointing a Project Manager for each contract; Ø of signing large value contracts; and Ø of approving the Tender Evaluation Committee in Kosovo and implemented by 32

33 Roles, functions, responsibilities of CA (3) The Requesting Unit has the overall responsibility: Ø Prepare a procurement request; Ø Prepare/propose technical specifications (TS); Ø Ensure there are no restrictions in the specifications, so as to ensure that competition is maximized Ø Issue reports on the receipt of the goods, services/ works; Ø Report to the procurement department any departures from the terms and conditions of the contract; in Kosovo and implemented by 33

34 Roles, functions, responsibilities of CA (4) The procurement manager is responsible for the management of all procurement activities of the CA within its jurisdiction and in accordance with the provisions of the PPL. in Kosovo and implemented by 34

35 Thank you for your attention! Further information: Safet Hoxha, .. Skender Bucolli, .. in Kosovo and implemented by 35

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