Session: “Best Practice for Procurement of Services”

1. Session: “Best Practice for Procurement of Services” How to avoid the most common mistakes when procuring services Lenka Krutakova EBRD-Consultant, WOLF THEISS Kiev, November 2012

2. Agenda The most commonmistakes: 1. Duringpreparationoftheawardprocedure 2. Duringtheawardprocedure 3. Afterthecompletionoftheawardprocedure Case law Questions and Answers

3. 1. Mistakes occurringduringpreparation of award procedure onservices Failure to respect the aggregation rules - division of public procurement on services Mixing qualification and evaluation criteria Discriminating technical conditions and evaluation criteria

4. a) Failure to respecttheaggregationrules - divisionof public procurement on services Contracting authority cannot (but oftendoes) forcibly divide public servicecontract with evident time and matter relation into several parts split purchases into separate contracts each of whichfalls below the threshold with a view to taking the purchase outside the ambit of the European public procurement regime. The aggregation rules require that a contracting authority adds together the value of the purchases made under a number ofsimilar contracts if they are a single requirement and the European public procurement rules will apply if the value of thecontracts taken together exceeds the thresholds. Vs. newawardingDirectives – support of SME

5. b) Mixingqualification and evaluationcriteria (1/3) Qualificationcriteria and evaluationcriteria are governed by different sets of rules Qualificationcriteria: related to company, to assess quality ofcandidates Evaluationcriteria: related to offer, to select most economicallyadvantageousoffers Contracting authorities must take care not toconfuse criteria used to select providers to tender (qualificationcriteria) and evaluationcriteria used later on in the procurementprocess to award the contract. EU Directives do not explicitly ban the use of evaluation criteria related to the characteristics of the applicant.

6. b) Mixingqualification and evaluationcriteria(2/3)C-532/06 Lianakis (24.1.2008) Subjectmatterofthe public contractwas a study related to recordoflands, urbandevelopment and implementationmeasuresforthe part oftheAlexandroupolis city Followingevaluationcriteriawereused in this Case: the proven experience of the expert on projects carried out over the last three years; the firm’s manpower and equipment; and the ability to complete the project by the anticipated deadline, together with the firm’s commitments and its professional potential “Therefore, ‘award criteria’ do not include criteria that are not aimed at identifying the tender which is economically the most advantageous, but are instead essentially linked to the evaluation of the tenderers’ ability to perform the contract in question.” ECJ statedthattheabovecriteria are qualificationrequirementsand cannotbeused as evaluationcriteria

7. b) Mixingqualification and evaluationcriteria(3/3)C-199/07 Commissionvs. Hellenic Republic (12.11.2009) Thesubjectmatterofthe public contractwaselaborationofthe study in connectionwiththeconstruction and electromechanicalprojectsrelated to constructionofrailway station Following evaluation criteria were used in this Case: specificand general experience, in particular design work on similar projects either by consultancy firms or consultants and their scientific staff realcapacity to conduct a study within the timescale planned together with obligations assumed regarding the carrying-out of other studies and the specific scientific and operational staff proposed to conduct the study in question as well as the equipment in relation to the object of the study ECJ statedthattheabovecriteria are qualificationrequirementsand cannotbeused as evaluationcriteria

8. c) Discriminating technical conditions and evaluationcriteria Case C-234/03 Contse SA and Others v InstitutoNacional de GestiónSanitaria Thesubjectmatterofthe public contractwerehealth services of home respiratory treatments and other assisted breathing techniques ECJ: Contractingauthority cannotstate in the tender documents an admission condition which requires an undertaking submitting a tender to have, at the time the tender is submitted, an office open to the public in the capital of the province where the service is to be supplied theevaluation criteria which reward, by awarding extra points, the existence at the time the tender is submitted of oxygen production, conditioning and bottling plants situated within 1000 km of that province or offices open to the public in other specified towns in that province, and which, in the case of a tie between a number of tenders, favours the undertaking which was previously providing the service concerned Those criteria are appliedin a discriminatory manner

9. 2. Mistakes occurringduringaward procedureofservices Improper way of publication Tight time schedule Non-disqualification of candidate when he does not comply with requirements

10. a) Improper way of publication (1/2) Reasonable method of publication of the selection process is precisely defined by the law according to the estimated value of the public servicecontract. Insufficient number of addressed suppliersorit is obvious that the contract of this dimension is not interesting for theaddressedsuppliers The method of selection of suppliers, including their ability to carry out the subject matter of the public procurement shall always be well documented. Direct awardingwithoutpublication Publicationonly on regional/nationalinsteadof EU level Failure to disclosure all evaluation criteria and weights

11. a) Improper way of publication(2/2):Failure to disclosure all evaluation criteria and weights Allevaluationcriteria(including any sub-criteria) and all weightings mustbeset out in the OJEU notice and/or thecontract documents (principleoftransparency). The most common mistake is that even though the evaluation criteria are stipulated in the tender documentation, it is not specified how these criteria shall be evaluated. Tenderers are not informed neither according what facts shall bewithinthespecific criteriaevaluated, nor how many percentage or points can be obtained for individual criterion. The contracting authority must therefore be very careful in providing detailed description of facts which will be evaluated – otherwiselackoftransparency in evaluationofoffers.

12. b) Tighttimeschedule Allowenough time for procurement when developing project! Negotiatedprocedure without prior publication extreme urgency due to unforeseeable events appliesto natural disasters rather to tight time schedules The law clearly provides for each type of award procedure many deadlines which shall be followed. The contracting authority often provides unreasonably short period, e.g. when providing tender documentation for submitting tenders forproviding additional information. major impact on the quantity and quality of submitted tenders and therefore directly affect the competition

13. c) Non-disqualification of candidate when he does not comply with requirements If the candidate fails to prove his qualification within the provided deadline, his tender shall not be evaluated and this candidate must be disqualified – withexcemptionsregardingupdates and lateraddeddocumentsaccording to law. Most commonmistakes: Incorrect wording of affidavits Outdated documents Signatures of unauthorized persons A member/advisor of the evaluation committee - the one who prepared the tender documentation and knows exactly what was required Providing of model forms in tender documentation

14. 3. Mistakes occurringaftercompletion of award procedureofservices Change of contract conditions Archiving documents

15. a) Change of contract conditions Editing text of the submitted contract is only possible from the formal-legal view. Facts which have been already evaluated or have been crucial for submission of tenders shall not be modified, not even by the amendment to the contract. Contracting authorities very often make mistakes by concluding amendments substantially expanding the subject matter of the public procurement or substantially changing the original terms and conditions (e.g. price, payment terms, etc.). If it is absolutely necessary to modify the contract, the contracting authority should consider whether it is not necessary to initiate a new award procedure. C-454/06pressetextNachrichtenagentur GmbH

16. b) Archiving documents Contracting authorities are obliged to store the tender documentation. A common mistake is the removal of some documents from the archivesince the contracting authority believes that there is no need to keep tenders of unsuccessful applicants. Similarly, the contracting authorities often mistakenly do not archive electronic documentation to the tender, such as tenderers‘ questions submitted electronically.

17. Thank you for your attention!

18. Contact Mgr. PhDr. Lenka Krutakova Tel: + 420 234 765 111 Fax: +420 234 765 110 E-Mail: lenka.krutakova@wolftheiss.com WOLF THEISS advokati s.r.o.Pobrezni 394/12186 00 PragueCzech Republic