PUBLIC PROCUREMENT LAW OF MONGOLIA CHAPTER ONE GENERAL PROVISIONS

Transcription

1 PUBLIC PROCUREMENT LAW OF MONGOLIA CHAPTER ONE GENERAL PROVISIONS Article 1. Purpose of the Law 1.1. The purpose of the Law is to govern matters of planning, organizing, overseeing, and settling disputes pertaining to public procurement of goods, works, and services with state and local funds and of holding responsible the violators of the law. Article 2. Legislation on Public Procurement 2.1. Legislation on public procurement consists of the Constitution of Mongolia 1, the Civil Code 2, this law and other legislative acts issued in conformity with them If an international treaty, to which Mongolia is a party, is inconsistent with the Law, the provisions of the international treaty shall prevail. Article 3. Scope of the Law 3.1. The Law shall be applied to the public procurement of goods, works and services In case of procurement of goods, works and services funded by foreign grants or loans, this law shall apply unless the relevant international treaty expressly specifies different procedures and/or conditions for the procurement The Law does not apply to procurement of special purpose equipment and facilities, works, services, and weapons by law included in the state secret and pertaining to national security provision The Law does not apply to procurement of works and services related to maintenance of national roads, executed by the state owned legal entity pursuant to its powers by law. Article 4. Procuring entity 4.1. The following bodies shall be the "Procuring entity": legal entity with state and local ownership; legal entity with partial state and local ownership of 50% and more; the project implementing entity defined in provision of the Law on coordination of foreign loans and assistance 3 ; Article 5. Terms of the Law 1 The Constitution of Mongolia published in State bulletin compilation No. 1 of The Civil Code published in State bulletin compilation No. 7 of The law on coordination of foreign loans and assistance - published in State bulletin compliation No. 24 of 2003.

2 5.1. In this law the following terms shall have the following meanings: a tender means a proposal of an interested entity to execute goods, works, and services, worked out in accordance with the terms and conditions set out by the procuring entity and submitted to it; Tendering means selecting the best evaluated tender in accordance with the procedures set forth in this law, authorizing a contract to provide goods, works or services and signing the contract; Threshold Value means a maximum or minimum ceiling of the value to be followed in the tendering in accordance with procedures of this law subject to the budgeted bost of goods, works, and services; Invitation to tender means a document through which the procuring entity gives a notice of tendering or informs through mass media; "Tender document" means a document prepared by the procuring entity for potential tenderers defining tendering conditions and requirements; "Tenderer" means the following entities independent from the procuring entities: a. a sole tenderer; b. several entities who submitted one tender on the basis of a cooperation contract; Tender security means a bank guarantee, Treasury bond, and/or Government authorized securities submitted by the tenderer to the procuring entity as a guarantee to maintain the validity of the tender until the contract is signed or until the expiration of the tendering period, and to sign a contract in case of qualifying in the tendering ; Advance payment security" means a bank guarantee, Treasury bond, and/or Government authorized securities submitted by the tenderer to the procuring entity as a guarantee of the former s obligation to dispose the advance payment according to the purpose stated in the contract when such an advance payment is made by the procuring entity; Evaluation committee means a working group established by the procuring entity for the purpose of organizing the tendering in accordance with procedures of the Law; "Goods" mean items with an economic utility and/or value, which can be exchanged or traded and works necessary for supplying those goods. Where the cost of the works exceeds the cost of the goods, the contract shall be regarded as a contract for works ; "Works" mean construction works, assemply, installation, and configuration and trial operation of construction equipment, and procurement of goods required for execution of those works. Where the cost of goods procurement exceeds the cost of the works, the contract shall be regarded as s contract for goods ; "Civil works" mean activities involving construction, extension, rehabilitation, capital repair and/or works of drilling and prospecting requiring combined use of labor, machinery, inventory, and technology; "Assembly, installation, configuration and trial operation of equipment" means an activity involving equipment assembly, installation, and configuration and trial operation other than specified in provision of the Law; "Services" mean consulting and other services; "Consulting services" mean expert services provided by the contractor based on specialized expertise and skills as to prepare and implement a project, conduct training, provide technical assistance, conduct a research and analysis, work out a design, and supervise the contract execution; 2

3 "Key turnover contract" means a sole contract under which several goods, works, and/or services involved in preparing a design, doing engineering estimations, supplying and installing equipment, and completing a building and/or facility; "Performance security" means a bank guarantee, Treasury bond, and/or Government authorized securities submitted by the tenderer, authorized to sign a conctract, to the procuring entity prior to signing the contract as a guarantee to fully perform contractual obligations; "Authorizing a contract" means the notification of the procuring entity s decision to sign a contract to a tenderer who submitted the best evaluated tender; Technical specification means a set of documents whre the procuring entity indicates technical specifications, production and operational methods and technology, technological requirements for the goods, works or services to be procured; "Goods of Mongolian origin" mean goods that are extracted, grown, reared, produced, processed, and/or created in Mongolia and/or new goods majority of whose parts were assembled and whose basic characteristics, quality, purpose, and utilization modes were explicitly altered; A foreign body means a foreign and/or international organization, foreign legal entity, foreign individual, and stateless person that is registered with taxation and other agencies authorized to register in accordance with the Mongolian legislations and that is defined as a taxpayer under the taxation legislation; Least-cost method means selecting a consultant offering the lowest price among those consultants who got the minimum or higher scores for technical proposals set by the procuring entity; Article 6. Principles of procurement 6.1. Transparency, equal opportunity to compete, economy and efficiency, and responsibility are the principles which shall be pursued in Public Procurement. Article 7. Procurement procedure 7.1. The procuring entity shall select a contractor and enter into a contract guided by the following procurement procedures in procurement of goods, works or services: open procurement procedure; exceptional procurement procedure; selection of a contractor of consulting services All procurement shall be carried out in accordance with open procurement procedure unless a provision indicates the use of procedures specified in provisions of the Law The procuring entity may directly procure goods, works and/or services when their cost estimates are less than the threshold value stated in provision of this law not following the procedure set out in provision 7.1 of this law. Article 8. Selection of procurement procedure 8.1. The Cabinet shall determine the following threshold values distinguishing between goods, works and services: upper ceiling for cost estimate of goods, works or services available under comparison method; 3

4 upper ceiling for cost estimate of goods, works or services available under direct procurement; upper ceiling for cost estimate of consulting service available under least-cost consultant selection procedure; lower ceiling for cost estimate of goods, works or services that require authorization from the state administrative body for budgetary matters; lower ceiling for cost estimate of goods, works or services whose invitation to tender is posted onto a web site mentioned in provision of this law; 8.2. The open procurement procedure shall be applied to procurement of goods, works and/or services whose cost estimates exceed the threshold value set forth in provision of this law unless the law provides otherwise The threshold value set forth in provision 8.1 of this law shall be reset by the Cabinet subject to recommendations of the state administrative body agency for budgetary matters on each occasion of the consumer price index fluactuating by more than 25% The selection of the procurement procedure shall be based on the total cost estimate of the goods, works or services It is prohibited to conduct several tendering s by splitting the total cost estimate for the purpose of satisfying the threshold value requirement set forth in provision 8.1 of this law or for the purpose of refraining from the use of the open procurement procedure For the purpose of promoting competition, the procuring entity may split the goods, works or services into a series of packages and conduct a number of tenderings by type and similarity subject to their purpose, types, and geographical locations The procuring entity shall meet the following requirements in case of conducting tenderings in packages as specified in provision 8.6 of this law: the total cost of all packages shall be used in determing the procurement procedure to apply; the procuring entity shall indicate the existence of packages in the invitation to tender and tender documents and the right of tenderers to submit their proposals on one, some, and/or all of tender packages; evaluate each package; opt for the procurement procedure in which the total cost of all contracts to be signed is at its minimum; 8.8. Authorization to enter into a contract may be given for each package, a number of packages and/or all packages If it is decided to authorize to one tenderer to enter into a contract for more than one goods, works or services, the matter shall be mentiond in the procurement report. Article 9. Foreign tenderers participating in tenders 9.1. A foreign body is entitled to participate in the tendering in accordance with procedures of this law The procuring entity may not exclude foreign tenderers in tenders for works with cost estimates of more than MNT 1,000, and goods and/or services with cost estimates of more than MNT 100,

5 9.3. The procuring entity shall decide whether to accept foreign tenderers in other tendering s except those specified in provision 9.2 of this law. In case of excluding foreign tenderers, the matter shall be indicated in the tender documents and invitations for tendering. Article 10. Granting a margin of preference to tenderers The procuring entity may grant a margin of preference to the following bodies in evaluating tendering proposals: A tenderer tendering to supply goods of Mongolian origin; The following bodies tendering to execute at least 50% of works independetly: a. citizen or legal entity of Monglia; b. foreign investment legal entity registered in Mongolia whose at least 50% of equity is owned by a Mongolian citizen and/or legal entity; has the largest use of locally produced goods, materials and services; employs tha largest share of local labor In case of granting a margin of preference to tenderers specified in provisions and of this law, the tendering price shall be discounted subjectively by 10 percent for goods of Mongolian origin and by 7.5 percent for works executed by tenderers specified in provisions and , respectively for the purpose of comparing with tendering prices of other tenderers The subjective estimations of prices for goods to be supplied and works to be executed, as specified in provision 10.2 of this law, shall not be a justification to decrease and alter the tendering price of tenderers specified in provisions of this law In case of granting a margin of preference to the body specified in 10.1 of this law during evaluation of tenders, the matter shall be clearly indicated in the tendering document. A tenderer interest to obtain a margin of preference shall deliver information on origin and cost of goods or a document to prove the provisions set forth in provisions of this law The Cabinet member for budgetary matters shall adopt the methodology and instructions to be followed in granting a margin of preference. Article 11. Technical Specifications The procuring entity shall satisfy the following requirements in setting out technical specifications: define given goods, works or services not in terms of their design or descriptive characteristics but in terms of their purpose, application, use, quality, and technical merits; define subject to international standards accepted in Mongolia; if such standards do not exist, subject to national standards, technical requirements, regulations, and instructions; not specify particular requirements and conditions indicating a trademark, name, design, type, origin, manufacturing method, and manufacturer and/or supplier; 5

6 if it is required to specify the requirements and conditions set forth in provision of this law, the requirements and conditions shall be followed by "or its equivalent" In defining technical specifications the procuring entity is prohibited from obtaining advice that may restrict the competition among bodies interested in the tendering. Article 12. Qualifying tenderers capacity For the purpose of providing equal opportunities to tenderers and securing fair competition, overall, financial, and technical qualification and expertise of tenderers shall be examined and evaluated by indicators set forth in provision of this Law The procuring entity shall set out and enclose to the tendering document the criteria and requirements for qualification necessary in the tendering consistent with Articles of this law Tenders that do not satisfy the procuring entity s criteria and requirements as set forth in provision 12.2 of this law shall be declined; the matter shall be informed to the tenderer in writing Prior to authorizing the qualified tenderer to enter into a contract, the procuring entity may reassess the qualification criteria set forth in provision 12.2 of this law The procuring entity shall maintain privacy of technical and business information of tenderers obtained during the assessment of their qualification. Article 13. Pre-qualification The procuring entity may conduct a pre-qualification prior to submittion of tenders for the purpose of assessing the capactity of bodies interested in the tendering. The following procedures shall prevail during pre-qualification: Prepare a pre-qualification document to indicate the criteria for qualification of bodies interested in the tendering, requirements, and proof of satisfaction of requirements; Make an announcement of pre-qualification as specified in provisions of this Law; Inform only those tenderers who satisfied the criteria for qualification specified in the pre-qualification document to submit a tender; During pre-qualification, the "invitation to tender" specified in provision 17.1, 21.1, 21.3 and 21.4 of this law and "tendering document" specified in Articles 19, 22, and 23 of this Law shall be understood as "invitation for pre-qualification" and "pre-qualification document", respectively; The Cabinet member for budgetary matters shall adopt procedures and instructions for conducting pre-qualification. Article 14. Assessing general conditions A tenderer shall be regarded as not qualifying general conditions if the following circumstances are proven: 6

7 became insolvent, in receivership, entered into an arrangement with creditors to escape bankruptcy; business operations were suspended, or is in an analogous situation as mentioned above pursuant to the legislation of the country of establishment; not fulfilled its tax, fee, and payment liabilities pursuant to the legislation of Mongolia or the country of establishment; operations of a legal entity with whole or partial state ownership йжу are dependent on the procuring entity; while engaging in procurement in recent three years, critically violated and did not execute contractual obligations, or the court and authorities have proven an oversight in professional operations; the tenderer has common interests with a body who prepared the design, technical specifications, and other documents of goods, works or services or who was nominated to supervise the contract execution and provide consulting services; authorities have proven the submission of a tender with false information; the court has proven the fact of committing a corruption crime in recent three years; A legal entity may participate in tendering s related to its key operations no more than six times during a given year and shall be prohibited to participate if it was qualified three times a year The tenderer may establish the evidence of occurrence of circumstances set forth in provision 14.1 of this law with the following documents appropriate for Mongolia and the country of establishment: a court ruling and/or official document issued by the competent public administrative authority; a certificate and/or other equivalent documents issued by the competent authorities of the country of establishment; Those documents that must be submitted for the tender among the documents specified in provision 14.3 of this law shall be outlined separately in the tender documents On the basis of decisions from competent authorities establishing the occurrence of circumstances specified in , and of this law the state administrative body for budgetary matters shall keep the register of bodies whose rights to tender were restricted and disclose publicly The tenderer shall notify in writing the absence of circumstances under provision 14.1 of this law Upon demand from the procuring entity, the tenderer shall deliver in writing information on the contract being executed and/or authorized for execution The procuring entity shall take account of the information specified in 14.7 of this law in evaluating financial and technical qualification of the tenderer in executing a given contract. Article 15. Evaluating financial qualification 7

8 15.1. The procuring entity may require tenderers to furnish evidence of their financial qualification to fulfill contractual onligations The procuring entity shall indicate requirements for financial qualification in the tendering and/or pre-qualification documents Evidence of financial qualification may be established by the following documents: statements by a correspondent bank; tenderer s self-confirmed financial statements, if required, along with an audit opinion; table of consulting staff, remuneration, and other cost estimations; reports on tenderer s annual sales of works, goods or services similar to a given contract executed in upto last five years Those documents to be submitted for the tendering among the documents specified in 15.3 of this law shall be indicated in the tender documents. Article 16. Evaluating technical qualification and expertise The tenderer's technical cpacity and expertise shall be determined subject to any of the following indicators depending on the nature, specifics, and quantity of the works, goods or services: education and professional qualifications of management, supervision, and execution staff of the tenderer; a list of works carried out over the last 5 years, cost, timeframe, and location of similar works, reference on complete execution issued by previous clients; a list of goods and services delivered over the last 5 years, their total cost, timeframe, and buyers, if required, a reference on execution of goods and services by previous buyers; specifications of tenderer s instruments and technical facilities, list of of plants and equipment; quality control measures to be carried out directly or under sub-contracting; samples, descriptions and/or photographs of the goods to be supplied, and certificate of authenticity; in case of goods, quality certificates issued by competent authorities and producer s proxy; Those documents to be submitted for the tendering among the documents specified in 16.1 of this law and requirements to them shall be indicated in the tender documents. CHAPTER TWO OPEN PROCUREMENT PROCEDURES Article 17. Open tendering Invitation for open tendering shall be announced in accordance with Article 21 of this law, and all interested tenderers shall be given an equal opportunity to participate Interested tenderers shall submit their technical and financial proposals concurrently by the deadline fixed by the procuring entity. 8

9 17.3. Open tendering shall be carried out in one stage except as provided in Article 18 of this Law. Article 18. Conducting two-stage open tendering The two-stage open tendering may be adopted by the procuring entity in the following ciscumstances: the procuring entity considers that the scope of works is large, cost estimates are high, there is a need to conclude a contract to supply a number of goods, works or services interrelated with each other, technically unequal proposals are likely to be submitted, or two and more technical solutions will satisfy the applied requirements and are equally acceptable; the procuring entity is unable to establish technical specifications in advance and needs to assistance from experienced contractors and suppliers in order to finalize the scope of work and establish technical specifications; Two-stage open tendering shall be conducted as follows: tenderers are first invited to submit their technical proposals, which are then assessed by the procuring entity, and revisions and clarification to which are agreed with individual tenderers tenderers are then invited to submit their financial proposals based on clarified and revised technical proposals, and the procuring entity shall do the evaluation The procuring entity shall indicate two-stage open tendering in the invitation to tender and tender documents. Article 19. Preparing tender documents The procuring entity shall prepare tender documents pursuant to template tender documents, contract templates, other procedures and methodology pertiaining to tendering adopted by the Cabinet member for budgetary matters Tender documents shall include all information required for tenderers to submit a satisfactory tender, inter alia requirements to tenderers, instructions for tenderers, criteria and methods for selecting qualified tenders, contract terms and conditions offered by the procuring entity, technical specifications, designs, templates of tender documents, and terms of reference in case of consulting service. Article 20. Tender security The procuring entity shall require tenderers participating in tenders for goods, works or services to be procured at a cost above the threshold value specified in of this law to submit a tender security A legal entity of Mongolia may submit a bank guarantee and Treasury bonds, while a foreign legal entity a guarantee from a Mongolian or foreign bank or Treasury bonds of Mongolia, or securities authorized by the Government of Mongolia, A list of securities that can be used as a tender, execution, and/or advance payment security of foreign legal entities shall be adopted by the Cabinet The procuring entity may set the amount of tender security as follows: 9

10 indicate in the tendering document that the tenderer is required to submit a guarantee estimated at 1-2% of its tender price; if required, the procuring entity may set tender security to be equal to 1-2% of the cost estimate given goods, works and/or services and indicate in the tendering document Tenders shall be declined if no guarantees were submitted or the submitted guarantee does not satisfy requiments set forth in this law in cases where the guarantees were required The tender security shall be made void after the procuring entity signs a contract with the qualified tenderer The tender security shall be taken into budget revenue in following circumstances: a tenderer withdraws its tender after the tendering was opend and has not expired yet; the qualified tenderer fails to furnish the execution guarantee within the time specified in the notification of authorization to sign a contract or refused to sign the contract. Article 21. Public announcement of invitations for tendering The procuring entity shall announce publicly the invitation to tender through nationwide daily newspapers and other forms of mass media The procuring entity shall announce detailed information on the tendering openly and transparently and provide to any interested body without delay For works with cost estimate exceeding MNT 1,000, and goods or services with cost estimate exceeding MNT 100, , the invitation to tender shall be published through mass media in the language widely used in international trade The procuring entity shall put the invitation to tender whose value exceeds the threshold value set forth in of this law on the web site specified in of this law and brief on tender selections as they take place The invitation to tender shall indicate the following information: identity of the procuring entity; brief summary of the works, goods or services to be procured; address at which tender documents and other information are available and to which tenders should be submitted; cost of tender documents; special requirements to tender selection; deadline for tender submission; time of commencing the tendering ; participation of foreign tenderers allowed or not; granting a margin of preference; Article 22. Tender documents and provision of related information The procuring entity is obliged to make tender documents available prior to the day of publishing the invitation to tender. 10

11 22.2. The tender documents shall be priced at the cost of reproducing and delivering the documents, and organizing the tendering and given without unreasonable delay to any interested tenderers at the price Additional information or clarifications of the tender documents may be requested from the procuring entity in writing by tenderers at least 5 working days prior to the tender submission deadline The procuring entity shall provide the additional information and/or clarification along with a copy of the request specified in 22.3 of this law to all interested parties who have bought the tender documents simultaneously in writing; the additional information or clarification shall be considered as delivered after its submission to the post office. Article 23. Preparation and dissemination of tender documents and invitation to tender in foreign language The tender documents and invitation to tender shall be prepared in Mongolian language as well as in the language widely used in international trade in the following cases: participation of foreign tenderers is allowed in the tendering in accordance with Article 9 of this law; the procuring entity considers that the cost estimates and characteristics of goods, works or services would attract interests of foreign parties. Article 24. Deadline for submission and validity period of tenders The procuring entity shall provide tenderers a sufficient and equal time to tenderers to prepare and submit their tenders The procuring entity shall determine the submission deadline of tenders from the day of initial announcement of the tender For open tendering, the deadline timeframe shall be 30 days or more If it is required to make a field visit for tender preparation, the time necessary for the visit shall be included in the deadline timeframe The procuring entity shall set the timeframe for organizing the tender after its openment; the time shall be specified in the invitation to tender and tender documents. The tender shall be valid during that time. Article 25. Submission of tenders Tenders shall be submitted within the fixed deadline, to the mentioned addressed, and in the form specified in the tender documents. Tenderers may submit their amendments and withdrawal request during this period Any tender received after the deadline specified in of this law or in a form not consistent with that specified in the tender documents shall be returned to the tenderer at their address. 11

12 25.3. Information other than specified in Article 26 of this Law, related to the content of tenders, evaluation and qualification of tenderers capacity shall remain confidential until a contract is signed. Article 26. Opening tenders The procuring entity shall open all tenders, it has received, publicly at the place and time stipulated in the tender documents. The time for opening tenders shall be scheduled as to be within 1 hour after the deadline for submission of tenders Tenderers or their representatives and other interested bodies shall be entitled to attend the tender opening At the opening of tenders, the procuring entity shall announce and make relevant notes of tenderers names, tendering price, if alternatives have been permitted, alternative tendering price, price discounts offered, whether the tender security was submitted or not, and any changes to the tender and/or withdrawal request The body specified in 26.2 of this law and representative of the procuring entity shall sign the notes specified in 26.3 of this law The notes specified in 26.3 of this law shall be made available to any interested party At the opening of tenders, it is prohibited to conduct activities and make decisions except those provided for in of this Law Any tendering price, price discount, and alternative tendering price not announced at the opening of tenders shall not be considered in tender evaluation The procuring entity is prohibited from making negotiations with tenderers on the content of the tender and price following the opening of tenders The procuring entity may demand a tenderer to provide explanatory notes in writing on issues except the content of the tender and changing the price The procuring entity shall register and safekeep explanatory notes provided from tenderers as specified in 26.9 of this law. Article 27. Review of tenders Following the opening of tenders, individual tenders shall be reviewed to check whether they satisfy the following requirements: capacity qualifications set by the procuring entity subject to provisions of Articles of this Law; technical specifications; other terms and conditions set out in the tender documents; Following criteria shall prevail in the review of requirements specified in 27.1 of this law: negative influence on the scope, quality and performance of goods, works or services; whether, the contract terms offered by the procuring entity have any inconsistency with the law; 12

13 whether accepting provisions in , of this law would have unfair influence on competition of other responsive tenders A tender shall be considered as a responsive tender when it satisfies all conditions under 27.1 of this law Other tenders except those specified in 27.3 of this law shall be considered as irresponsive and rejected by the procuring entity. Article 28. Evaluation of tenders During the one-stage selection, a review shall be carried out in accordance with Article 27 of this Law, and potentially responsive tenders shall be evaluated The evaluation of tenders shall be completed in a time as short as possible within the tender validity period The key criterion in evaluating responsive tenders shall be the tendering price The procuring entity may select appropriate factors that affect its economic efficiency mentioned below taking into account the feature of goods, works or services to be procured except consultant services. The factors shall be shown in monetary terms and included in the tendering price: the time of completion of works and services and/or delivery of goods; current expenses or cost and efficiency estimations; after-sales service and technical assistance; commitments to supply spare parts and the price thereof; quality and technical merits of works, goods and services; other criteria consistent with this law; The additional evaluation specified in 28.4 of this law is done only for the purpose of comparing tenders and shall not be a justification for changing the tendering price The tendering price shall include taxes, insurance, transportation and all other expenses associated with the execution of the contract unless the tender documents provides otherwise. The procuring entity shall consider these costs be included in the tendering price if their estimations are not made specifically in the tendering price Responsive tenders shall be evaluated by the following comparison: in case of adjusting an arithmetical error and/or small amount of discrepancy in the tendering price, reducing the tendering price subject to the price discount, and the procuring entity s selecting other evaluation criteria as provided under this law, the corresponding estimations shall be shown in monetary terms, and the tender evalutation price shall be determined by adding them to the tendering price; in case the tender document provides for a margin of preference, the comparison price of a tenderer eligible to a margin of preference shall be adjusted to include the persentage stipulated in 10.2 of this law; all tenders shall be ordered from the lowest to the highest comparison price with a tender with the lowest price being selected; a tender with the lowest price shall be considered as the «best» evaluated tender. 13

14 28.8. Proposals of consulting services shall be evaluated following provisions set out in Article 37, 38 and 39 of this law In case the procuring entity is to use some of criteria stated in 28.4 of this law, the criteria shall be denominated into monetary terms. The conditions and methodology to be taken into evaluation shall be set consistent with this law and stipulated in the tender document Qualification indicators of tenderer shall not be included in the criteria specified in 28.4 of this law. Satisfaction of the procuring entity s minimum requirements to a higher degree as specified in Articles of this law can not be a justification for qualifying that tenderer s tender In evaluating responsive tenders and qualifying the «best» tender, the procuring entity shall use the criteria pursuant to the procedures specified in the tender documents Tender documents shall specify the foreign currency where it is used for the tender evaluation In case of using a foreign currency not specified in the tender document for payments and settlements, the currency shall be converted at the Mongolbank (the Central Bank of Mongolia) rate effective on the day of tender announcement In the two-stage open tendering, evaluation of tenders shall be done in the following manner: technical proposals shall be reviewed to check their responsiveness to the requirements according to provisions of Article 27 of this Law; on each technical proposal that satisfies the requirements specified in 27.1 of this law a discussion shall be made with a given tenderer in order to prepare a standard technical specification that better satisfies the procuring entity s requirements; following the discussions, the procuring entity shall issue a standard technical specification; the tenderer shall conduct an additional review of its technical proposal to comply with the standard technical specification set out in of this law and submit the updated version along with a financial proposal; the subscfriber shall open financial proposals publicly on a fixed date; financial proposals shall be evaluated in accordance with of this law, and the tenderer with the «best» evaluated tender shall be authorized to sign a contract If a tenderer considers that it is impossible to revise its tender in accordance with the standard technical proposal set out by the procuring entity pursuant to of this law, the procuring entity has the right to reject the tender. Article 29. Authorization to enter into a contract The procuring entity shall authorize the tenderer, who has satisfied the requirements specified in Article 27 of this law and submitted the best evaluated tender as specified in Article 28 of this law, to enter into a contract. The tenderer and other tenderer shall be informed about this decision simultaneously in writing. 14

15 29.2. The contract shall be signed after at least 5 working days following the notification of the authorization to contracting and within the tender validity period If the tenderer, who has submitted the «best» evaluated tender, refused to enter into a contract, or the condition specified in of this law has taken place, the procuring entity shall annul the authorization to contracting and enter into a contract with the second best evaluated tenderer in accordance with the provisions of this law. In the absence of such a tenderer, the procuring entity shall make any of the decisions specified in 30.4 of this law The procuring entity may extend the tender validity period, if it became impossinel to sign a contract due to reasons not dependent on the procuring entity If the procuring entity extended the validity period as specified in 29.4 of this law, it shall state the justification for doing so in its decision. Article 30. Rejecting all tenders The procuring entity shall reject all tenders in the following cases: all tenders that were submitted are not responsive; the court or competent authority determines that the tendering price was negotiated and agreed upon prior to the tendering, conditions of the tendering were not provided accurately to competitors, or competitors were put under pressure; tendering prices of all responsive tenders exceeded the procuring entity s cost estimate by more than 5%; the negotiation specified in 30.2 of this law was failed; If tendering prices of all responsive tenders exceeded the procuring entity s cost estimate, the procuring entity shall make negotiations with a tenderer whose tendering price exceed by less than 5% in order to reduce the tendering price down to the cost estimate. The procuring entity shall be prohibited from reducing the tenderer s price without justification If the procuring entity rejects all tenders in accordance with provision 30.1 of this law, it shall not bear any liability to tenderers The procuring entity shall make any of the following decisions if it rejected all tenders: examine the reasons that resulted in failure of the tendering, conduct an open tendering after making relevant amendments to the content of the tender document; if the conditions set out in and of this law took place and the tendering failed only due to the quantity and scope of goods, works or services to be procured, a limited tendering shall be carried out after making relevant modifications to the tender document; Direct contracting procedure shall take place where the condition set out in 30.1 reoccurred after carrying out the tendering in accordance with and of this law. CHAPTER THREE EXCEPTIONAL PROCUREMENT PROCEDURES 15

16 Article 31. Application of the Exceptional procurement procedure Exceptional procurement procedures shall be carried out in the following ways: limited tendering; comparison; direct contracting Matters pertaining to the exceptional procurement procedure but not regulated under Articles of this law shall be governed by the appropriate articles and provisions set out in Chapter 2 of this law. Article 32. Limited Tendering Limited tendering shall be applied in the following cases: the number of bodies capables of executing complicated goods, works or services requiring high qualification, expertise, equipment, and technology is limited; the condition specified in of this law In carrying out an open tendering, the procuring entity shall simultaneously send an invitation to tender for all bodies with capacity to execute the contract pursuant to Articles of this law thereby providing an equal opportunity to submit a tender The invitation to tender must include the information specified in Article 21.5 of this law The tender document shall be provided to interested tenderers without unreasonable delay in accordance with 22.2 of this law The tender submission deadline shall be set to 15 or more days following the delivery of the invitation to tender. Article 33. Comparison method The the comparison procedure may be used where the cost estimate of the goods,works or services does not exceed the threshold values set out in of this Law The comparison procedure shall be applied as follows: invite 3 or more bodies that satisfy the technical specification and other conditions and requirement to submit their prise proposals; authorize a tenderer, who satisfied technical and other conditions and requirements and quoting the lowest price, to sign a contract as specified in 29.1 of this Law The timeframe for submission of the price proposal specified in of this law shall be no less than 5 working days from the day the invitation was delivered In case no authorization was provided due to failure to compare, the direct contracting procedure may be applied. Article 34. Direct Contracting method The direct contracting procedure may only be used in the following cases: the condition specified in provisions and 33.4 of this law; 16

17 given the necessity to protect copyright, a contract can be signed only with one body, and no substitute exists for the body; given additional supplies do not exceed 20% of the value of the initial contract, and there is a need of replacing, repairing and making additional supplies of some parts of the goods and equipment provided under the initial agreement, the procuring entity has to change the supplier and such a change leads to procurement of supplies with different technical specifications, which cause a technical difficulty in the application and maintenance or incur costinefficiency; Comment: is not translated when the cost of additional works does not exceed the least of 15% of the value of the initial contract and comparison threshold price specified in of this law, it was considered that repeating the competitive tendering would not result in better proposals for repeating the additional and/or similar works for the works procured through the tendering ; it is impossible to adhere to the tender submission deadline pursuant to the open and limited procurement procedure as a result of unforeseeable and force major circumstances During direct contracting in accordance with the condition specified in 34.1 of this law, the procuring entity shall make negotiations with one or more bodies, that satisfy the requirements in Artciles of this law and are capable of executing given goods, works or services, and enter into a contract with the body that best satisfies the technical specifications and other conditions and requirements as specified in this law. Any agreement reached during the negotiations shall be included in the contract In case of direct contracting under the conditions set out in 34.1 of this law, a copy of the contract and a statement justifying the application of the procedure shall be sent to the central administrative authority fir budgetary issues. CHAPTER FOUR PROCUREMENT OF CONSULTING SERVICES Article 35. Selecting Consultants An individual and/or legal entity may provide consulting services If a given consulting service involves the application of multi-disciplinary expertise and specialized personnel, services of a legal entity shall be used If a given consulting service is best provided by an indivisual with necessary qualification and expertise, those services shall be used. Article 36. General Procedure of Selecting Consultants The procuring entity shall prepare the terms of reference ("TOR") that define the objectives, expected outcome and other relevant information relating to the service in request. 17

18 36.2. TOR along with their amendments shall form an integral part of the contract to be made with a consultant The procuring entity shall make cost estimations of the service in request. The cost estimation shall give consideration to the type and level of personnel background, time required for works at the field and office, office supplies and other expenses required for a given service After preparing the TOR and making cost estimations, the procuring entity shall publish an invitation to submit proposals to be listed as potential consultants through daily and other mass media The general list may be compiled from the following bodies: consultants who has responded to the invitation specified in 36.4 of this law; national and/or international consultants providing services in Mongolia; consultants listed in the register specified in Article 51 of this law; consultants affiliated with professional associations, and international financial and organizations The procuring entity will draw up a shortlist from the general list consisting of three and more consultants that satisfy the requirements set out in Article of this law and qualification requirements determined by the procuring entity The procuring entity shall provide a request for proposals ("RFP") and the TOR to the shortlisted consultants RFP shall contain: brief description of the assignment and details of financing; TOR; qualification requirements determined by the procuring entity based on criteria ser out in Articles of this law and evaluation criteria and methodology established by the procuring entity in accordance with provisions in of this law; the name of legal entities and/or individuals invited; draft contract; instructions for submitting proposals; evaluation method to be used The deadline for submitting proposals shall be no more than 60 days; however, it shall be set to more than 30 days for a legal entity and more than 7 days for an individual and stated in the RFP clearly The consultant shall prepare technical and financial proposals separately The technical proposal shall contain information relating to the consultant's professional qualification and expertise, and in case of a legal entity, lead specialists and operating pratice The financial proposal shall contain the price at the contract would be executed on the terms stated in the technical proposal. 18

19 The financial proposal shall only be evaluated after evaluating the technical proposal Financial and technical proposals shall be submitted concurrently and contained in a separate sealed envelope if RFP requires so The procuring entity shall evaluate technical and financial proposals in accordance with Articles of this law, and authorize a contract as specified in Article 29 in case negotiations with a selected consultant succeed. Article 37. Evaluation Methods for Selecting Consultants The procuring entity shall determine the evaluation method for selecting consultants prior to delivering the REP The evaluation method for selecting consultant shall have qualification, quality, and combined evaluation forms The Qualification evaluation method shall be used for selecting an individual consultant. The Qualification evaluation shall be based on the consultant s knowledge, expertise, professional level, and other professional skills In selecting a consulting firm either Quality evaluation method or Combined evaluation method shall be used In case of a contract involving simultaneous execution of a number of services requiring comprehensive qualification extertise and technical qualification or having interdependence, a consulting firm shall be selected using the Quality evaluation method In all cases other than those specified in 37.3 and 37.5 of this Law, the Combined evaluation method shall be used. Article 38. Quality Evaluation Method for selecting consultants Proposals shall be analysized for comparison taking into account operating practice and work schedule of the proposed consulting services, personnel s expertise and capacbilities, and quality of the servce and technical appliances Technical proposals shall be assigned a score on the basis of the requirements and criteria set out in Articles of this law The procuring entity shall then open the financial proposal submitted by the consultant who was ranked first in terms of technical proposal and make negotiations to agree on financial and other conditions with the given consultant During the negotiations specified in 38.3 of this law, the procuring entity shall not require the consultant to reduce the proposed price without unreasonable justification The consultant or its authorized representative is obliged to provide the procuring entity with relevant documents, cost estimates, and other information and evidence. 19