How can an entity apply for EU external actions contracts?
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1 How can an entity apply for EU external actions contracts? Lisbon 24 November 2015 Agneta Lindqvist International Cooperation and Development Unit E.3 Finance, Contract and Audit for Sub-Saharan Africa 1
2 Content Instruments for financing Practical Guide to contract procedures for EU external actions (PRAG) Eligibility Funding opportunities Implementation of contracts Common mistakes More information? 2
3 LEGAL INSTRUMENTS EDF / DCI ENI IPA English (en) THEMATIC PROGRAMMES
4 Who does what? Mainly EEAS supported by International Cooperation and Development DG DEVCO Multi-annual Programming DG DEVCO with Delegations Joint responsibility Evaluation Identification DG DEVCO with Delegations DG DEVCO with Delegations Implementation Commission's Financing Decision Formulation Financing
5 Who launches the tender - who is the Contracting Authority? Management Modes DIRECT INDIRECT SHARED Headquarters EU Delegations Partner Countries International Organisations EU MS Agencies EU Member States Management modes in force from 01/01/2014
6 The Practical Guide - PRAG 6
7 The Practical Guide to contract procedures for European Union external actions Why to we have it? Harmonisation of procedures Sole working tool Coherent application of rules Where do I find it? 7
8 8
9 9
10 How is the PRAG structured? As per type of contract 1. Services 2. Supplies 3. Works 4. Grants + Introduction and basic rules
11 Principles 11
12 Core principles Why? - Transparency - Proportionality - Sound financial management - Equal treatment and non-discrimination - Avoidance of any conflict of interests - Widest competition - Non-retroactivity 2 interests: - Contracting Authority: to get a good deal - Contractors: to get a fair chance to compete for the contract 12
13 Procurement Procedures 13
14 Award procedures & publication requirements - How to award a contract? Call for Tenders: Open or restricted - International/Local Competitive Negotiated Procedure FrameWorkContract Single tenders Competitive Dialogue Very detailed exceptions where direct award of contract may be allowed. 14
15 Procurement procedures Open tender / call for proposals Any operator can send a bid/proposal. Restricted tender / call for proposals Any bidder or applicant may apply to participate, but only some will be invited to submit a bid/proposal following the results of the pre-selection phase (selection criteria). There are therefore two phases in the restricted procedure. 15
16 SERVICES Service contract: Contract between a service provider and the Contracting Authority for the provision of services such as technical assistance or studies Technical assistance: The service provider is called on to play an advisory role, to manage or supervise a project, or to provide the expertise specified in the contract Studies: It includes studies for the identification and preparation of projects, feasibility studies, economic and market studies, technical studies, evaluations and audits. 16
17 Types of service contracts Global Price Fee-based Specifies an outcome Specifies the means Final Product E.g. Study, audits, training, conferences Tasks performed Payment linked to services actually provided E.g. Technical Assistance, Supervision.
18 SUPPLIES Supplies contract: They cover the purchase, leasing, rental or hire purchase (with or without option to buy) of goods. The contract may include commissioning, spares, maintenance, after-sales service, training and/or other ancillary services. 18
19 WORKS Works contract: Cover either the execution, or both the execution and design, of works or the realisation by whatever means of a work corresponding to the requirements specified by the contracting authority. A "work" is the outcome of building or civil engineering works taken as a whole that is sufficient of itself to fulfill an economic or technical function. 19
20 GRANTS Grants are direct financial contributions, by the way of donation, from the budget in order to finance any of the following: An action intended to help to achieve a Union policy objective ("action grants") The functioning of a body which pursues an aim of general Union interest or has an objective forming part of, and supporting, a Union policy ("operating grants") 20
21 Which procedure for which amount? < but > SERVICE CONTRACTS International restricted tender procedure -Framework contracts or -Competitive negotiated procedure < but < but > Single tender SUPPLY CONTRACTS WORKS CONTRACTS International open tender procedure International open tender procedure or -International restricted tender procedure -Local open tender procedure or -Frame work contract < but Local open tender procedure -Competitive negotiated procedure or -Frame work contract < but> Competitive negotiated procedure For service, and supply contracts, a payment may be made against invoice without prior acceptance of a tender if the expenditure is 2 500
22 Competitive Dialogue Negotiated procedure (exceptional) Procedures for service contracts International restricted FWC OR Competitive Negotiated Procedure Single offer 0 Invoice 22
23 International Restricted Tender for service contract "Step by step" 1. Publication 2. Shortlist * 3. Tender launch * 4. Tenders received 5. Evaluation 6. Contract Award 7. Contract Signature * International Restricted Tender for services or works 23
24 Publications Pre-information notice Contract notice Launch the procedure Content legally binding Deadline for reply Defines criteria Shortlist Award notice 24
25 Shortlist Selection criteria will be applied Financial capacity Professional capacity Technical capacity Additional criteria 4-8 candidates will be invited to tender Report approved by Contracting Authority 25
26 Tender Launch Dispatch Tender Dossier Unsuccessful candidates informed + publication of shortlist notice Deadline for submission = minimum 50 days Questions 21 days Answers 11 days Tenders are valid 90 days (extension 40 days) 26
27 Key documents: Instructions to Tenderers & Terms of Reference Different templates for global price and fee based Requirements: min. quality standard Contract objectives Tasks Info session / site visit Logistics & timing Expertise required Key / non-key experts Budget for fee based: Fees Incidental Expenditure Lump sums Expenditure Verification 27
28 Evaluation Odd number of voting members + secretary + chairperson Declaration of impartiality and confidentiality Held in camera in 5 phases: Tender Opening Session Administrative compliance Technical Evaluation (weighting 80%) Financial Evaluation (weighting 20%) Conclusion 28
29 Tender Opening Session Not public Check offers arrive sealed and within deadline Double Envelope System Declarations of impartiality & confidentiality Tender Opening Report 29
30 Administrative Compliance Fill in Administrative Compliance Grid Documentation complete as required Nationality of Sub-Contractors May request clarifications 30
31 Technical Evaluation Individual Evaluation Grids Evaluators give scores and comments Calculate average score for each offer Calculates technical score only if average 80% or more Possible interviews with key experts Technical score = average score x 100 highest score Highest scoring tender = 100 points 31
32 Financial Evaluation Open financial envelopes Check arithmetical errors Financial offer within maximum budget Financial score = lowest fees x 100 actual fees Cheapest offer = 100 points 32
33 Conclusion Technical Score x Financial Score x
34 Contract Award The Committee recommends to Award the contract to the best value for money or Cancel the procedure Contracting Authority must approve the evaluation report 34
35 Contract Signature Inform successful Tenderer and verify that the key experts are available Information is simultaneously sent to all tenderers Prepare contract Sign and send contract Publish contract award 35
36 Notification of results will be sent simultaneously to all tenderers immediately after the evaluation approval 3 types of information letters 36
37 a) successful tenderer b) second best tenderer c) unsuccessful tenderers Validity of tender only kept for a+b 40 days extension of validity only exceptionally 37
38 The successful tenderer which is notified of award must confirm that the key experts are availabile or unavailable within 5 days of notification. If the key experts are available the contract signature process is started. The key expert must accept the first post which is proposed chronologically. Date of notification counts. 38
39 If a key expert is unavailable the tenderer may propose replacement experts within 15 days of notification. Justification for unavailability must be given. Several experts may be proposed but within the 15 days The CA shall choose expert 39
40 The replacement must be at least equally good The total scores of the original key expert and the replacement are compared not each heading The CA compares not evaluation committee If no equally good replacement expert? 2nd best tender cancel 40
41 The approval dossier for the 2nd best tenderer shall contain justification for rejection of the proposed replacements. When the 2nd best tenderer is notified of award it will be the successful tenderer and the same award procedure is repeated. If the contract may not be signed with the 2nd best tenderer the procedure will be cancelled. 41
42 The evaluation committee shall evaluate the original tender including original key experts regardless if these are available or not. Even if informed about unavailaility? YES Should a tenderer deliberately conceal the fact that a key expert is unavailable the evaluation committee may recommend exlusion from the procedure. 42
43 Time Line for Service Contract Procedure takes at least 6-7 months! Pre-information notice 30 days Contract Notice 30 days Tender invitation 50 days Award of contract Signature of contract Short List Evaluation
44 Framework Contract Published procedure to select contractors Valid 2 years may be extended once Lots to divide the service areas Specific contracts when using the FWC At least 4 FWC will be consulted - must reply Contract within 14 days usually 44
45 The main on-going framework contracts are: 1. Beneficiaries 2013 The FWC BENEF 2013 provides short-term technical assistance assignments covering the entire range of project cycle operations in the field of external aid and in the exclusive interest of the beneficiary country. 2. Commission 2011 The FWC COM 2011 is an instrument for recruiting expertise / logistics within 3 lots for activities in the interest of the EC (or mixed interest EC+ beneficiary country). 3. Audit 2014 The FWC Audit 2014 provides services by professional firms for auditing programmes and projects of external aid for development financed by the EU. The audits can also cover contributions of the EU to international organisations in the context of development aid. 45
46 Supplies and Works contracts 46
47 Competitive Dialogue Negotiated procedure (exceptional) Procedures International open tender Local open tender Competitive negotiated procedure Artificially splitting related activities into smaller lot sizes or contracts to circumvent the procurement thresholds is prohibited Single tender Invoice 47
48 Time Line International Open call for tender Procedure takes at least 6-7 months Contract Notice 60 days Contract Award Contract Signature Prior information notice 30 days Evaluation March June 48
49 Competitive Dialogue Negotiated procedure (exceptional) Procedures International open tender 2. International restricted tender Local open tender Artificially splitting related activities into smaller lot sizes or contracts to circumvent the procurement thresholds is prohibited Competitive negotiated procedure Single tender 0 49
50 Time Line International Open call for tender Procedure takes at least 7 months Contract Signature Contract Notice 90 days Contract Award Prior information 30 days Evaluation March June 50
51 Supply/Works Contracts International Open Procedure Publication Tenders received Evaluation Contract Award Contract Signature 51
52 Differences with service tender Tender dossier is published (supply) or purchased (works) Information meeting and site visit Rules of Origin Incoterms One envelope system No budget published Tender guarantee (1-2% of budget) Financing (co-financed/financed) Sub-contractors and suppliers (to be named if more than 10%) 52
53 Supervisor The person or body who supervises the work The supervisor has the power to issue an administrative order to change any part of the works if necessary for the proper completion and/or functioning of the works. May include additions, omissions, substitutions, changes in quality, quantity, form, character, kind, position, dimension, level or line and changes in the specified sequence, method or timing of execution of the works. Power of supervisor clearly indicated in contract 53
54 Contract Notice Tender dossier is ready Published at least 60/90 days before deadline Tender guarantee (1-2%) No budget Defines criteria 54
55 Tender Period Contract Notice + Tender dossier published Deadline for submission = min. 60/90 days Questions 21 days answers 11 days Tenders are valid for 90 days only! 55
56 Tender Opening Session Public One Envelope System Announced: name of tenderer, price, offers arrive sealed, within deadline, guarantee Tender Opening Report Only accepted offers go on to next phase! 56
57 Administrative Compliance As from this phase the evaluation is not public Fill in Administrative Compliance Grid Documentation complete as required May request clarifications Only compliant offers go on to next phase! 57
58 Technical Evaluation Individual Evaluation Grids Use published evaluation grids Close checking of origin of goods Check if offers comply with TS May request clarifications Only technically compliant offers go on to next phase! 58
59 Financial Evaluation Check arithmetical errors Financial offer within maximum budget Discounts Evalutaion of variants Award of contract to the tenderer with lowest price 59
60 Contract Award Committee recommends to Award the contract to the compliant offer with lowest price within the budget available OR Cancel the procedure Contracting Authority must approve the evaluation report 60
61 Contract Signature Inform successful Tenderer and ask for Proof documents (15 days) Prepare contract Sign and send contract (30 days) Publish Contract Award Notice Inform unsuccessful Tenderers (15 days) 61
62 Time Line restricted call for tender Procedure takes at least 7 months Contract Notice 30 days Tender Launch 60 days Contract Award Contract Signature Prior information Notice 30 days Evaluation Shortlist March June
63 Case study The EC Delegation in Kenya is going to launch a call for tender for the supply of goods where the overall budget is a) Which procedure should they use? b) There are not many local suppliers on the market in Kenya. How may this be tackled? 63
64 Open local tender No prior information notice required No publication in OJ Contract notice published on EuropeAid, and summary published locally with address where to find Tender documents Tendering period is minimum 30 days 64
65 Competitive negotiated procedure No publication Invitation of at least 3 firms to submit an offer within at least 30 days To proceed with contracting, at least 1 fully compliant offer is required If not cancellation and possibility to negotiate Other rules of open tender apply by analogy 65
66 Competitive Dialogue Exceptional procedure To be used in the case of particularly complex contracts where it is not possible to define the technical means required or the legal or financial makeup of the project Contract notice individual dialogue with at least 3 candidates which meet the selection criteria Ensure: equal treatment, confidentiality 66
67 Negotiated Procedure No threshold any amount Only applicable in those cases: 1. In case of urgency 2. With public entities/non-profit institutions (social/institutional purpose) 3. Extends ongoing activities 4. When Tender procedure unsuccessful 5. Design competition (after contest) 6. Monopoly situation/exclusive rights 7. For contracts declared to be secret/protection of essential interests 8. After early termination of an ongoing contract Negotiation report
68 Supplies also: Additional deliveries by the original supplier Commodity market Advantageous terms Works also: Additional works (not exceeding 50% of the amount of the main contract) 68
69 What is a grant? Payment of non-commercial nature Achievement of an objective forming part of a European Union policy (or of the EU-ACP Agreement) Implementation of an action or functioning of a body 69
70 What is a procurement Comparison contract? with a grant Procurement Grant Purchase of services/supplies/ works Contracting Authority Object Owner of results -Action proposed by a potential beneficiary, intended to achieve an EU-policy objective; or -Functioning of a body Grant beneficiary 100% Financial contribution Co-financing - % of total eligible costs Reimbursement of the actual eligible cost incurred Tenders Procedure Calls for proposal PROFIT NO PROFIT ALLOWED 70
71 Basic rules grants Programming Transparency Equal treatment No cumulative grants No retroactivity Co-financing No profit annual work programme publicity of calls for proposals impartial evaluation on the basis of published criteria only one grant per action except in crisis situations and some particular cases unless a) necessary (certain actions) b) interest of the Community balance between income and expenditure 71
72 Open call for proposals: steps 1. Publicity 2. Receipt and registration 3. Opening and administrative check 4. Assessment of the quality of the concept notes 5. Assessment of the technical and financial quality of the proposal 6. Eligibility 7. Committee s recommendations 8. Approval of the Evaluation Report (award) + reserve list 9. Contract preparation 10. Publicity 72
73 Eligibility Origin 73
74 Common eligibility Member States EEA Beneficiary countries of the programme Candidate and potential candidate countries International Organisations Reciprocity Natural and legal persons Individual expert any nationality
75 Particularities in eligibility IcSP and EIDHR Developing countries Overseas Countries and Territories (OCTs) Preference rules EDF 3rd states in case of co-financing with other donors
76 Rules of origin Follow nationality rules All materials, equipment and services to be purchased under the contract Tenderer must provide a statement Derogation 76
77 My opportunities and how to apply
78 78
79 Searching for contract notices 79
80 80
81 81
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84 84
85 Submission of applications Only for international restricted procedures Reply to a Contract Notice. Candidate demonstrate its capacity. Respons period after the publication of the notice 30 days CN should be clear enough to avoid questions but questions/clarifications are still allowed up to 21 days before submission deadline The application must reach the Contracting Authority by the deadline
86 Submission of tenders Reply to an invitation to tender Respons period depending on type of procedure. 30, 50, 60, 90 days Questions/clarifications may be made up to 21 days before submission deadline. Response by Contracting Authority, to all tenderers simultaneously, no later than 11 days before the same deadline. The tender must reach the Contracting Authority by the deadline
87 Case study The deadline for receiving tenders is Monday 15/11 at 16:00. You send your proposal by DHL on Friday 12/11. There is bad weather during the weekend and flight is cancelled. The offer arrives to the Contracting Authority on Monday at Should in your opinion the tender be accepted by the Contracting Authority?
88 Implementation of the EC contracts 88
89 The standard contracts Contract Annexes: Special Conditions General Conditions Terms of Reference / Technical Specification Technical Offer from tenderer Financial offer (budget) Expenditure verification report (services) Financial guarantee forms Various annexes depending on contract + clarifications from tender period and evaluation
90 Payments Pre-financing: Services (global price) => 40% Services (fee based) => 20% Works => 10% ( 20% ) Supplies => 40% Interim payments Services (fee based) Works Final payment Services (global price) => 60% Services (fee based) => 10% Supplies => 60% Works contract balance
91 Pre-financing guarantee Below only if: No proof docs Risk analysis Performance guarantee Supplies and works 5-10 % of contract value Retention guarantee Works 10% of the interim payments
92 Implementation Measurements Interim payments Price revision Contingency Defect liability period 92
93 Contract amendments General Principles Addendum - major modifications Extend contract duration Major budget changes Additional or complementary services Replacement of key expert Administrative order - minor modifications Address or bank account Auditor Within budget headings. From Fees to Incidentals Approval of non-key experts
94 Contract amendments Addendum - major modifications Budget change Additional supplies Administrative order - minor modifications Extend contract duration Address or bank account
95 Contract amendments Addendum - major modifications Additional works - max 50% Extend contract duration if contractor at fault Administrative order - minor modifications Address or bank account Additional works - max 15% Extend contract duration if contractor not at fault
96 Common mistakes 96
97 Common mistakes made by candidates and tenderers Administrative reasons Late arrival Incomplete documentation Not in accordance with templates Tenderer/Applicant/partner not eligible Financial offer not in a separate envelope (only for service tenders) Not signed Do not fulfil the selection criteria Financial offer is visible in technical offer (service contracts) Technical reasons Experts do not have the required experience Copy and paste of Terms of Reference 97
98 Some recommedations and suggestions Pay extra attention to: Criteria on Contract notice Eligibility: especially nationality Evaluation Grids Questions during procedure Quality of the Offer Respect of formal submission requirements 98
99 Useful tips Stay informed! Website, Platforma etc Need people who know how to write well Need good CVs Don't hesitate to ask questions What is not prohibited is allowed The number of companies in a consortium can be freely decided but the rationale needs to be explained If not successful you may ask for reasons Verify your own tender/proposal by using the evaluation grid Lesson s learnt from earlier applications/tenders 99
100 My company does not fulfill the selection criteria Form a consortium (the consortium as a whole must meet the criteria, not each individual company) Try and gain relevant experience as consortium partner or subcontractor Rely on a third party in some cases 100
101 Legal remedies Accept to lose in a fair procedure Need for facts/basis for argument Formal channels Contracting Authority Ombudsman National court PRAG Legal remedies 101
102 More information 102
103 Information Tools EuropeAid webpage: search engine for contract notices, PRAG, annexes, news Training/presentations Helpdesk:
104 What to do next? Some ideas: Closer to the action: Country/Countries - Country Strategy Paper (CSP) and Multi-Annual Indicative Programme Embassy/EU Delegation EuropeAid Annual Report EuropeAid Info Point
105 Questions? 105
106
107 Criteria Exclusion Purpose: to determine if the operator is allowed to participate, be awarded or implement a contract Selection Purpose: to determine if the operator has the necessary capacity to implement the contract Evaluation Purpose: to assess if the quality of the offer is according to the requirements Award Purpose: to determine which the best offer is
108 Criteria 1. Exclusion criteria Operators will be excluded if: Bankruptcy, affairs administered by court, arrangement with creditors, suspension of business activities Convicted of an offence concerning their professional conduct Guilty of grave professional misconduct Not in compliance with social security contributions or payment of taxes Fraud, corruption, money laundering, involvement in a criminal organisation Subject to an administrative penalty by the EU Financial regulation 108
109 Criteria 2. Selection criteria Economic and financial capacity Example: the tenderer's average annual turnover in the last three years must exceed the annualized maximum budget of the contract / financial proposal of the tender Professional capacity Examples: - number of permanent staff or in a concrete field in last 3 years - the tenderer has an ISO 9000 certificate Technical capacity Example: "x" implemented projects in the last 3 years (5 for works) of at least a certain amount 109
110 Criteria 3. Award criteria Purpose: to determine which the best offer is Price: The award of the contract is made to the cheapest bid amongst those technically compliant. For supply and works. Best value for money: Used in services or very complex tenders. The award is a combination of price and quality 110
111 Point 21- Contract Notice 1) Economic and financial standing of candidate The average annual turnover of the candidate must exceed 3 times the annualised maximum budget of the contract 2) Professional capacity of candidate At least 7 permanent staff members currently work in fields related to this contract. 3) Technical capacity of candidate a) The candidate has worked successfully on at least one project with a budget of at least X in fields related to this contract in the past three years. b) The candidate must have experience in
112 LOT No. 1. FWC BENEF LOT Title NUMBERS OF FWC CONTRACTORS in the LOT 1 Rural Development and food security 6 2 Transport and Insfractructures 6 3 Telecommunications and information technologies 3 4 Energy and nuclear safety 4 5 Conferences 4 6 Environment 4 7 Governance and Home Affairs 6 8 Health 3 9 Culture, Education, employment, and Social 6 10 Trade, Standards and Private sector 6 11 Macro economy, Statistics, Public finance management 4 12 Humanitarian Aid, Crisis Management and Post-crisis assistance 3 TOTAL 55 7
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