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European Structural and Investment Funds Masterclass

Learn about the reformed public procurement rules, ESIF procurement guidance, treaty principles in procurement, procurement thresholds, single tender actions (STAs), and the procurement process in this European Structural and Investment Funds Masterclass.

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European Structural and Investment Funds Masterclass

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  1. European Structural and Investment Funds Masterclass How to Deliver Compliant Procurement in ESIF Projects Andy Luff LLB (Hons.) – ACL European

  2. Presentation Structure • Overview of reformed public procurement rules • ESIF Procurement Guidance • Treaty principles in procurement • Procurement Thresholds • Single Tender Actions (STAs) • Basic run through – Procurement Process • Error rates in Structural Funds – Procurement • Summary/questions

  3. Reformed Procurement Directives (2014) • February 2014 • EU Council and Parliament Adopted two new procurement directives • Directive 2014/24/EU Public Procurement • Directive 2014/25/EU Procurement by Utilities • By April 2016 • To transpose into National Law (except e-procurement by October 2018) • UK - Public Contracts Regulations 2015

  4. Reformed Procurement Directives (2014) - Aims • Simplification • Flexibility • Greater inclusion: • Environmental protection (full life costing) • Social responsibility • Innovation • Allows: • Innovation partnerships (for R&D and subsequent purchase) • Consulting the market – preliminary market consultation with suppliers to get advice

  5. Below EU Directive Level – Treaty Principles or National Rules apply (UK examples). Procurement Rules/ ESIF Guidance – National Rules Contracting Authority (yes): Public Contracts Regulations 2015 apply. Treaty Principles a. Equal treatment & non-discrimination b. Transparency; c. Mutual recognition; and d. Proportionality

  6. Reformed Procurement Directives (2014) - Thresholds EU Public Procurement Directive Thresholds Central Government and sub-central contracting authorities (i.e. Local Authorities in the UK)

  7. Low Level Procurement Thresholds Contracts within the scope of the interpretative communication are required to apply “a degree of advertising sufficient to enable the… market to be opened up to competition and the impartiality of procedures to be reviewed”.

  8. STA Justification Form and Declaration When? Extreme urgency (unforeseen) Only one supplier No organisations have responded to advertisement Must have prior approval (of DCLG/DWP)Note disclaimer Procurement Rules – Single Tender Action (STA)

  9. Procurement – Treaty Principles Source – European Court of Auditors

  10. Procurement – Stages of a Procurement Process Basic Stages of a Procurement Preparation and planning Invitation to bid (advertising) Submission and selection of bids (selection criteria) Evaluation of bids (award criteria) Awarding the contract (contracting phase) Contract implementation

  11. Procurement Stage 1 • Preparation and planning • Procurement plan (ESIF requirement) • Procurement route/contracting authority • Choose process (see next slide) • Apply thresholds • Scoping of the specification • Choose selection and award criteria • Identify conflicts of interest • Timescales (for procurement stages and delivery) • Arrangements for a clear audit trail • Type of contract envisaged (e.g. performance related)

  12. Procurement Stage 1 Choosing a Procedure • Preparation and planning (2) – Choosing procedure • Open procedure • Restricted procedure • Competitive procedure with negotiation • Competitive dialogue • Innovation partnership • Negotiated procedure without prior publication • Also consider: • Framework agreements • Dynamic purchasing system

  13. Procurement – Types of Procedure • The six main types of public procurement procedure • Open procedure • The most often used, accounting for 51 % of all contracts awarded. Offers have to be submitted by a certain date and all admissible offers are evaluated • Restricted procedure. • Interested suppliers are first asked to provide their qualifications, then a shortlist is drawn up and only the shortlisted suppliers are invited to tender. • Competitive dialogue • Used for more complex procurements. The procedure involves a dialogue between the contracting authority and potential suppliers, with the aim of identifying and defining the best legal and/ or financial set‑up of a project to satisfy the contracting authority’s needs or objectives.

  14. Procurement – Types of Procedure (2) The six main types of public procurement procedure Competitive procedure with negotiation After a call for tender and an initial evaluation, the contracting authority invites its chosen economic operators to submit an initial tender. It then negotiates the initial and all subsequent tenders submitted, except for the final tender, with a view to improving their content. Negotiated procedure without publication Can be used only in a small number of pre‑determined cases. The contracting authority enters into contract negotiations with one or more suppliers. Innovation partnership The contracting authority selects suppliers following an advertisement, and uses a negotiated approach to invite them to submit ideas to develop innovative works, supplies or services aimed at meeting a need for which there is no suitable existing ‘product’ on the market. The contracting authority can award such partnerships to more than one supplier.

  15. Procurement – Stage 2 – Invitation to Bid (Advertising) • 2. Invitation to Bid • Choose route to advertise • Contracts above thresholds – OJEU • Contracts below thresholds – National Rules apply • Follow Treaty principles • Clarifications – Must be made available for all potential bidders

  16. Procurement - Stage 3 & 4 Submission and Evaluation • 3. Submission and Selection of Bids • Based only on information in bid criteria • Minimum criteria (pass/fail) • Late bids must be rejected • Selection criteria applied • Evaluation of Bids • Bids reviewed and given scores against award criteria • Keep detailed audit trial and evaluation documentation • No negotiations at this stage

  17. Procurement Stages 5 & 6 Award and Contracting • 5. Award Stage • Contract award notice to OJEU (within 30 days) • Contact successful organisation • Contact all bidders after decision (name of contractor and basis for decision) • Standstill period (not less than 10 days) • Appeals • Contract Implementation • Exchange of contracts • Careful with modifications (keep as minimum) • Inception, review process agreed

  18. Procurement Selection Criteria Selection Criteria To assess the suitability of bidders (not the bid) Must be relevant to the contract (e.g. qualifications) May set minimum criteria Examples:

  19. Procurement Award Criteria Award Criteria To assess, based on the bid, which bidder is best placed to deliver and should be awarded the contract. Must be clearly defined in the specification. Examples:

  20. Procurement Evaluation Criteria Matrix Scoring Matrix (Example) May also include weighting on award criteria

  21. Cohesion Policy Error Rates 2014

  22. Public Procurement and EU Cohesion Expenditure Court of Auditors report 2015 Failure to comply with public procurement rules has been a perennial and significant source of error. Serious errors resulted in a lack, or complete absence, of fair competition and/or in the award of contracts to those who were not the best bidders.

  23. Public Procurement and EU Cohesion Expenditure

  24. Analysis of Procurement Errors in Cohesion Policy • Pre-Tendering • Direct award of contracts • Split contracts into smaller tenders to avoid thresholds • Inappropriate tendering procedure used • 82% of errors at this stage found to be serious by C of A • Tendering • Problems with publication and transparency requirements and in tender specification (highest % of errors) • Specification of unlawful, and incorrect application of, selection and award criteria • Procedural weaknesses, including lack of appropriate documentation • Contract Management • Modifying or extending the scope of contracts without using procurement procedure

  25. Procurement Errors and Possible Flat Rate Corrections

  26. Summary • Overview reformed public procurement rules • Treaty principles in procurement • Basic run through – Procurement Process • Error rates in Structural Funds – Procurement • Summary/questions

  27. Contacts Cornwall Facilitation Team E: accesstotheprogramme@cornwalldevelopmentcompany.co.uk T: +44 (0) 1872 224770 Website http://www.cornwallislesofscillygrowthprogramme.org.uk/ ACL European Andy Luff E: andy.luff@europeanfunding.org.uk T: +44 (0) 1223 968878 M: + 44 (0) 7825 827210 Linked In https://www.linkedin.com/in/andyluff/

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