PRAG 2020 Overview Dolores Dominguez Perez Nicolas Provençal European Commission DG International Cooperation and Development DEVCO Unit R.3 Legal ...
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PRAG 2020 Overview Dolores Dominguez Perez Nicolas Provençal European Commission DG International Cooperation and Development DEVCO Unit R.3 Legal Affairs Brussels 26 November 2020 1
What is the PRAG? Practical Guide to procurement and grant award procedures for European Union external actions It explains the contracting procedures applying to all EU external actions financed by the EU budget and the European Development Fund (EDF). Which DGs in the Commission use the PRAG? DG DEVCO, DG NEAR, FPI, DG REFORM (for Turkish Cypriot community aid programme) 3
Sources of funding EU external actions: MFF 2014-2020 • Union budget: DCI, ENI, IPA II, EIDHR, EINS, IcSP. • • European Development Fund: ACP countries and Overseas Countries and Territories • Different set of rules. Regulatory convergence.
Sources of funding EU external actions: MFF 2021-2027 • European Development Fund: “budgetisation” • • Union budget: NDICI, IPA III, EINS, ODA- Greenland • Off budget: European Peace Facility
Where do I find the PRAG? Public document, available at: • http://ec.europa.eu/europeaid/prag Financial Regulation 02/08/2018 https://myintracomm.ec.europa.eu/budgweb/EN/leg/finrules/Pages /financial-regulation.aspx 6
The PRAG and all related contractual annexes are available for consultation and download. Previous versions are also accessible.
Core principles of procurement - Transparency - Proportionality - Sound financial management - Equal treatment and non-discrimination - Avoidance of any conflict of interests - Non-retroactivity Why? 2 interests: - Contracting Authority: gets a good deal - Contractors: get a fair chance to compete for the contract 8
Procurement procedures with publication 1. Open tender Any operator can send a bid/proposal. It is a one phase procedure. 2. Restricted tender Any interested applicants may apply to participate, but only selected ones will be invited to submit an offer following the results of the selection phase (selection criteria). There are therefore two phases in the restricted procedure. International => OJEU, DEVCO website, any appropriate media Local => National gazette, DEVCO website, any appropriate media 10
Funding and tender opportunities On the website of DG International Cooperation and Development – soon to be renamed DG International Partnerships – at: https://ec.europa.eu/international-partnerships/home_en the funding tab or the right box below will direct you to the funding and tenders opportunities hosted on the F&T portal
Searching for procurement notices All Commission published tender opportunities can be found on the F&T portal; when selecting tenders related to external actions you will access a search engine
Searching for procurement notices Search engine for tenders launched by DG International Cooperation and Development 13
Searching for procurement notices Alternatively, tenders above the thresholds for international tender procedures are also published on TED which is a supplement to the OJEU
Procurement procedures without publication 1. Simplified procedure (ex competitive negotiated procedure) /Single tender procedure The contracting authority invites at least three/one candidate(s) of its choice to submit tenders. Shorter deadline for tendering. 2. Negotiated procedure The contract is awarded directly to a company/consortium following a negotiation. It is used in defined cases, such as: • Following an unsuccessful tender • Extreme urgency or operations carried out in crisis situations • For the repetition of similar supplies/services/works • Secret contracts, cases of monopoly, etc. 15
Other important rules - Nationality/Establishment (annex a2a PRAG) - Origin (annex a2a PRAG) - Exclusion criteria - Code of conduct and respect of ethical clauses (art.8 GC for service contracts, SEA explicitly referred to in art.8.2) - Administrative and financial sanctions (art. 10 GC for service contracts: grave professional misconduct, fraud, corruption (…); financial penalties up to 10% of contract value) 16
Exclusion and selection Criteria 1. Exclusion criteria (Art. 136 FR) See full list of cases in PRAG 2.6.10.1.1 Purpose: to determine if the operator is allowed to participate. Operators will be excluded if (non exhaustive list !): • Bankruptcy, affairs administered by court, arrangement with creditors, suspension of business activities • 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/terrorist offences, child labour • Subject to penalty under the EU Financial regulation or the contract • Committed an irregularity • Empty Shell Company 17
Exclusion criteria • Evidence to be provided: PRAG 2.6.10.1.3 • A) Declaration on honour (PRAG annex a14) • Candidates, tenderers and applicants must sign a declaration together with their applications, certifying that they do not fall into any of the exclusion situations cited under Sections 2.6.10.1.1 and 2.6.10.1.2 and, where applicable, that they has taken adequate measures to remedy the situation. • Where the candidate or tenderer intends to rely on capacity providing entities or subcontractor(s), he shall provide the same declaration signed by this/these entity(ies). 18
Exclusion criteria • B) Documentary evidence • In the case of restricted procedures for services, the supporting documents must be sent by all shortlisted candidates together with the tender and verified by the contracting authority before signature of the contract with the successful tenderer(s). • In restricted procedures for works, these supporting documents must be sent by all candidates together with the application. Evidence of non-exclusion must be verified for all candidates invited to tender. In addition, the tenderers and candidates must certify that the situation has not altered since the date of issue of the evidence. • See PRAG 2.6.10.1.3 for satisfactory evidence to be provided. 19
Documentary evidence Please indicate on each document the name of the exclusion criteria they refer to 20
Selection criteria Purpose: to determine if the operator has the necessary capacity to perform the contract. 3 types: • Economic and financial capacity (in the last 3 years) Financial standing: the awarded tenderer is not living of the EU-funded project. • Professional capacity (in the last 3 years) Available resources, qualifications. • Technical capacity (in the last 3(service) -5 (works) years) Past experience in similar activities. 21
Selection criteria Example: service contract worth 600 000 € of 2-year duration for automated customs systems • Economic and financial capacity tenderer's average annual turnover between 300 000 € < 600 000 € (FR, Annex I, point 19: minimum yearly turnover shall not exceed two times the estimated annual contract value) • Professional capacity - at least 5 permanent staff currently work in fields related to the contract - the tenderer has an ISO 9000 certificate • Technical capacity at least 1 contract of at least 500 000 € in the fields of automated customs systems and/or computerised transit system 22
Award criteria • Lowest price: in supplies and works tender procedures The contract is awarded to the cheapest offer amongst those technically compliant. • Best price-quality ratio: in services procedures Used always in services and sometimes in works and supplies. The award criterion is a combination of price and quality according to a fixed weighting: 80% to the technical score and 20% to the financial score. 23
• Main steps of procurement procedures 1. Publication* 2. Shortlist** 3. Tender launch*** 4. Tenders received 5. Evaluation 6. Contract Award 7. Standstill Period 8. Contract Signature * Not for competitive negotiated, single tender, negotiated procedures. ** Only international restricted procedures. 24 *** Not for open procedure.
• Time Line for Service Contract - international restricted Procedure takes at least 6-7 months! Contract Notice 30 days Tender invitation 50 days Award of contract Standstill period Signature of contract Evaluation Short List 25 3 6
Evaluation Normally in 5 phases: • Tender Opening Session • Administrative compliance • Technical Evaluation • Financial Evaluation • Conclusion
Specificities of service contracts 27
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 (generally a fee-based contract) Studies: It includes studies for the identification and preparation of projects, feasibility studies, economic and market studies, technical studies and audits (global price contract) 28
Types of service contracts Global Price Fee-based Specifies an outcome Specifies the means Final Product Tasks performed Payment linked to services actually provided E.g. Study, audits, training, E.g. Technical Assistance, conferences Supervision.
Key documents: Instructions to Tenderers (ITT) Terms of Reference (ToRs) o Different templates for global price and fee based o Requirements: min. quality standard o Contract objectives o Tasks o Logistics & timing o Expertise required o Key / non-key experts Budget for fee based : Fees - Incidental Expenditure – Lump sums - Expenditure Verification 30
Remember for services… Technical Score x 0.80 (organisation and methodology, CVs of Experts) + Financial Score x 0.20 (price) Best value for money wins!
Novelties 32
Reminder: novelties for procurement since FR 2018 • Possibility to ask clarifications on the contract notice, provided the Contracting Authority has indicated a functional mailbox • System of submission of applications and offers aligned to the one in force in internal procedures (sent before deadline vs arrived before deadline) • Candidates included in the lists of EU restrictive measures (see Section 2.4. of the PRAG) at the moment of the award decision cannot be awarded the contract (not from FR but Council Decision; see website sanctionsmap.eu). 33
Novelties in PRAG 2020 • Publication of contract notices and other procurement related publications: • As from 1st August 2020, DEVCO, NEAR and FPI have adopted the same corporate system for publication as all other DGs and Agencies, namely PPMT (“Public Procurement Management Tool”). • As a consequence, new Contract Notices (including Prior Information Notices and Contract Award Notices) and Calls for Tenders will be published in TED and F&T (and no longer on EuropeAid). • The related Tender Dossiers will also be uploaded in PPMT. • A single set of templates for all procurement related notices is now used (PRAG annexes A5a to A5g) and replaces the former notices that were specific to each contract type (ser, sup, wks). 34
Funding and tender opportunities On the website of DG International Cooperation and Development – soon to be renamed DG International Partnerships – at: https://ec.europa.eu/international-partnerships/home_en the funding tab or the right box below will direct you to the funding and tenders opportunities hosted on the F&T portal
Searching for procurement notices All Commission published tender opportunities can be found on the F&T portal; when selecting tenders related to external actions you will access a search engine
Searching for procurement notices Search engine for tenders launched by DG International Cooperation and Development 37
Searching for procurement notices Alternatively, tenders above the thresholds for international tender procedures are also published on TED which is a supplement to the OJEU
Novelties in PRAG 2020 • Technical & professional capacity criteria • The reference period for technical & professional capacity was aligned in the PRAG 2018 with the provisions of point 20.2 (b) (i) and second subparagraph of Annex I to the FR, which were consistent in that regard since the 2012 rules of application. • The reference period as reflected in PRAG 2020 is by default set at 3 years, except where, in order to broaden the access of economic operators to procurement opportunities, the Contracting Authority wishes to extend this reference period beyond three years. • The PRAG has therefore included the possibility to take a longer period into account. This has been highlighted in the PRAG and in point 18 of the annex complementing the contract notice, named “additional information about the Contract Notice” (PRAG Annex A5f). 39
Novelties in PRAG 2020 • New restrictions with the reference period • for the technical capacity selection criteria • PRAG 2020 clarifies the period taken into account for the references to be provided under the technical selection criterion, by removing the distinction which existed until then between the references relating to projects in progress and those relating to projects completed. • • This decision has been taken with the aim of a uniform application of this selection criterion, and in compliance with the principle of equal treatment. 40
Novelties in PRAG 2020 ▪ Declaration on honour: PRAG Annex A14 is now split into two different annexes: A14a for procurement and A14b for grants ▪ Capacity providing entities: PRAG 2020 also further details the obligations of capacity- providing entities when they provide the technical or financial capacity for a tenderer to meet the selection criteria. ▪ Prior information notice (PIN): The publication of the prior information notice becomes optional, although still recommended. 41
What’s next? 42
What’s next • PRAG 2021 • New MFF funding instruments • Transition to digital: e-management and e- submission 43
Take part! 44
What if my company does not fulfill the selection criteria? • A candidate/tenderer may, where appropriate and for a particular contract, rely on the capacity of other entities, regardless of the legal nature of the links which it has with them– PRAG 2.6.11.1. • Try and gain relevant experience as consortium partner or subcontractor • Form a consortium (the consortium as a whole must meet the criteria, not each individual company) 45
Capacity providing entities • Requirements: • - The CA cannot impose a legal form but a can ask a written commitment • - Compliance with eligibility rules + exclusion criteria + relevant selection criteria • Financial/Economic capacity -> joint liability • Technical/Professional capacity -> subcontractor • With regard to technical and professional criteria, an economic operator may only rely on the capacities of other entities where the latter will perform the works or services for which these capacities are required. • Where an economic operator relies on the capacities of other entities with regard to criteria relating to economic and financial capacity, the economic operator and those entities are jointly liable for the performance of the contract • 46
Sub-contracting Subcontracting must be indicated by the main Contractor to the Contracting Authority: - At tendering stage: in the tender (if known) - During the implementation of the contract: for prior autorisation. Sub-contractors need to meet same non-exclusion and eligibility criteria as main contractors. No direct link with the Contracting Authority. 47
Consortium (1) • A grouping of eligible natural and legal persons or public entities which submits jointly a tender under a tender procedure. • It may be a permanent, legally-established grouping, or a grouping which has been constituted for a specific call for tenders, formalised by the statement signed by the Lead applicant on behalf of consortium members. • All members of a consortium (i.e., the leader and all other partners) are jointly and severally liable to the Contracting Authority. 48
Consortium (2) Exclusion criteria apply separately to each member of the consortium Eligibility rules apply to the tenderer Selection criteria (consortium) as a whole, with exceptions (financial ratios) Being part of a consortium, is therefore a solution when a company does not meet the selection criteria on its own. 49
Example Selection Member A Member B Member C Result criterion Economic/ Financial Annual turnover X √ X √ Liquidity ratio √ √ √ √ Professional No. of staff √ √ X √ Cert. ISO √ X X √ Technical Projects of same √ √ X √ size Projects in a X X √ √ certain region 50
Practical advice 51
• Common mistakes made by tenderers and applicants (1) Administrative reasons • Late dispatch • Tender guarantee missing or not in right format • Incomplete documentation • Not in accordance with templates • Tenderer/applicant/member of consortium/sub-contractor not eligible • Offer not signed (tender submission form) • Offer not in the currency/language required • Selection criteria not fulfilled • Financial offer not in a separate envelope or visible in the technical offer (service contracts) Not a reason for rejection since PRAG 201852
• Common mistakes made by tenderers and applicants (2) Technical reasons In Services: • Experts do not have the required experience/qualifications • Copy and paste of terms of reference • Experts not available during required dates • Unclear methodology 53
Some recommendations and Suggestions (1) 1. Define your strategy! Calls for tenders: Will you be a tenderer / member of a consortium / sub- contractor ? 2. Use the clarification period to ask whatever is not clear in the contract notice or tender dossier 54
Some recommendations and Suggestions (2) 3. Pay attention to all the instructions in the Call for tenders Pay extra attention to what is asked in: - Terms of reference (services) - Technical specifications (supplies) - Bill of quantities (works) 55
Some recommendations and Suggestions (3) 4. The consortium leader must check carefully: • Eligibility: nationality (all members of consortium, capacity providing entities and sub-contractors) Origin of goods (for supplies and works) • Selection criteria on Contract notice • Evaluation Grids (services) • Respect of formal submission requirements 5. Ask for an extension if it is a complex tender or if there are many clarifications 56
Useful tips (1) • Stay informed! Check the tenders published frequently! • Make yourself known in the business community • Select staff with writing skills (services) to draft offers • Choose carefully your partners • Check carefully all the elements of your offer prior to submission • Capitalise on lessons learnt and strenghts/weaknesses of earlier applications/tenders 57
Useful tips (2) • Check your prices. Try to be competitive. DON'T: • Contact the Contracting Authority / EU DEL concerning a Call for Tenders outside the communication channel opened for this purpose • Try to influence the outcome of the procedure • Ask for a prior opinion to the CA / EU of your bid • Forget to ask for a reference letter to the CA for contracts successfully implemented • Desperate if you don't get contracts in your first attempts!58
Useful tips (3) LinkedIn groups for Consultancies (not endorsed by EC/EU): 1. EC-EuropeAid-Framework-Contracts-Projects https://www.linkedin.com/groups/2953810 2. Technical Assistance Consultancy Network; EU, Worldbank, Calls, Grants, International Development https://www.linkedin.com/groups/82619/profile Platforma (European local and regional authorities in development): http://www.platforma-dev.eu/ 59
Questions? 60
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