ogc buying.solutions
DESCRIPTION
OGC buying.solutions. Procurement of Projects. Presented by Andy Hamer Pre Accession Advisor, Finance Ministry. To cover: EU legislative background Key concept Typical procurement process Comparison of EU to Latvia Open Competition – steps Restricted Competition – steps - PowerPoint PPT PresentationTRANSCRIPT
VALUE FOR MONEY
1
OGC buying.solutions
Procurement of ProjectsProcurement of Projects
Presented by Andy HamerPre Accession Advisor, Finance Ministry
VALUE FOR MONEY
2
To cover:
EU legislative background
Key concept
Typical procurement process
Comparison of EU to Latvia
Open Competition – steps
Restricted Competition – steps
Structural / Cohesion Funds
Final thoughts
Introduction
VALUE FOR MONEY
3
Objective of purchasing
To obtain:
the RIGHT Quality Product / Service
in the RIGHT Quantity
in the RIGHT Place
at the RIGHT Time
at the RIGHT Price
= VALUE FOR MONEY!!
Basic principles
VALUE FOR MONEY
4
EC Procurement
EU Objectives
Achievement of the Single Market via the four freedoms: free movement of people freedom of establishment and services free movement of capital free movement of goods
Basic principles
VALUE FOR MONEY
5
EC Procurement
Legislative Framework• European Community Treaties European Community Regulations European Community Directives European Commission and National policies
Practical experiences Member state examples Court of Justice decisions
Basic principles
VALUE FOR MONEY
6
EU Directives
There are three kinds of procedures:
Open – all interested parties may tender for the contract
Restricted – only selected persons may submit tenders
Negotiated – purchaser may negotiate with one or more selected person(s)
Basic principles
VALUE FOR MONEY
7
EC Procurement
Impact on Procurement
Non-discrimination Transparency Mutual Recognition Competition Fairness
= VALUE FOR MONEY!!
Basic principles
VALUE FOR MONEY
8
Typical Tender Process (in EU; eg UK)
Business Case Development and Approval Advertise in OJEC Receive and Evaluate Expressions of Interest (Supplier Appraisal) Shortlist and Produce Tender List Site Visits Produce Invitation to Tender Package Set Evaluation Criteria Issue ITT Receive Responses Undertake Evaluation Contract Award Debriefing
The Procurement Cycle
VALUE FOR MONEY
9
Identify NeedFinancial Approval
•Option Appraisal•Business Case
Develop•Specification•Contract Strategy•Evaluation Criteria
Identify Suitable Suppliers•Source the Market•Appraise Suppliers
Compile Tender Documents•Specification•Terms and Conditions•Pricing Schedule
Invite Tenders
Receive Tenders•Open Tenders•Evaluate Tenders
Post Tender Negotiation
(not Latvia)
Award Contract
Manage Contract
Vendor Rating
•Supplier Evaluation
VALUE FOR MONEY
10
LATVIA EU
Open competitionGoods, services
10 000
Construction works
50 000
Goods, services 162 000 EUR
(> 104 000 LVL)
Construction works 6 200 000 EUR
(> 3 970 000 LVL)
Restricted
competition Services only
10 000
Goods, services 162 000 EUR
(> 104 000 LVL)
Construction works 6 200 000 EUR
(> 3 970 000 LVL)
Value levels – comparison with EU
VALUE FOR MONEY
11
PRICE QUOTATION OPEN COMPETITION RESTRICTED
COMPETITION
SERVICES1 000 – 10 000 lats
Lowest price
Over 10 000 lats
Economically most
advantageous
Over 10 000 lats
Economically most
advantageous
GOODS1 000 – 10 000 lats
Lowest price
Over 10 000 lats
Lowest price_____
WORKS1 000 – 50 000 lats
Lowest price
Over 50 000 lats
Lowest price_____
Latvian selection process
VALUE FOR MONEY
12
Section 1 – Concepts behind large competitions
VALUE FOR MONEY
13
The two main procurement procedures
•Open competition (Latvia)
•Restricted competition (Latvia)
VALUE FOR MONEY
14
1. Identify purchasing need
2. Form procurement commission
3. Draft tender documentation and specifications
4. Formal announcements
5. Respond to any requests for information
6. Competition regulation sent to tenderers
7. Submission of tenders
Open competition (Latvia) – 13 key steps
8. Tender opening
9. Evaluation of tenders
10. Announcement of results
11. Complaints period
12. Proceed with contract
13. Retain records
VALUE FOR MONEY
15
Step 1 – Identify purchasing need
• Do we need ?
• Have we got budget ?
• What will it cost ?
• Business case & option appraisal
• Project strategy
= Project pipeline and associated tasks!
VALUE FOR MONEY
16
Step 2 – Form procurement commission
• Section 23 of the Law
• Competent + authorised person
• Minimum 5 persons
• Relevant experience / construction specialists
• Additional person from official approved list for construction works over 500 000 lats
VALUE FOR MONEY
17
Step 3 – Draft tender documentation and specifications
Technical specifications:
• Procurement Commission approves technical specifications
Competition Regulations:
• Requirements that each supplier must meet
(e.g.Track record, technical competence, quality, place and time of delivery, deadline for submission of tenders)
Invitation to tender package = Competition Regulations + Technical specifications + draft contract + templates
VALUE FOR MONEY
18
Step 4 – Formal announcements
• Send notice to PMB
• Publication on Internet + “Latvijas Vēstnesis”
• Does not meet EC-Directives
• Send notice to PMB
• Publication on Internet + “Latvijas Vēstnesis”
• Does not meet EC-Directives
VALUE FOR MONEY
19
Step 5 – Send invitation to tender packages
•Package sent to all interested suppliers
•Technical specification
•Competition Regulations
•Draft contract
•Templates for replies
VALUE FOR MONEY
20
Step 6 – Respond to any requests for information
• All requests for information on Competition Regulations treated equally
• Any responses copied to all suppliers
• Retain audit trail
VALUE FOR MONEY
21
Step 7 – Submission of tenders
• All tenders are submitted to the Procurement Commission
• Record date and time of receipt
VALUE FOR MONEY
22
Step 8 – Tender opening
• Members of the Procurement Commission to sign declaration of Impartiality and Confidentiality
• At time and date specified in Competition Regulations – the applications are opened
•Procurement Commission must read out the values
• Persons who submitted are permitted to attend
•Procurement Commission record the meeting
VALUE FOR MONEY
23
Step 9 – Evaluation of tenders
• The evaluation is carried out in accordance with the descriptions given in the Competition Regulations
• 3 main aspects of evaluation:
•Candidate compliance
•Technical compliance
•Lowest price / economically most advantageous tender
• Each member of the Procurement Commission should complete a written evaluation form
VALUE FOR MONEY
24
Step 9 – Evaluation of tenders (2)
Evaluation tools:
•The Procurement Commission has designed the competition and chosen the balance between candidate ability, technical competence and price/MEAT
•Using weighted criteria
Example on weighting
Concept of most economically advantageous versus lowest price
VALUE FOR MONEY
25
Step 10 – Announcement of result • Procurement Commission select one tenderer, done within 1 month of tender deadline as a result of their evaluation
• Procurement Commission must complete formal report on the procedure to Contracting authority
•The decision must be published:
• by PMB on the Internet
• by Contracting Authority in “Latvijas Vēstnesis”
•Termination of tender process can happen if :•No tenders received
•No compliance
•PMB prohibits
VALUE FOR MONEY
26
Step 11 – Complaints periods
1. Before submission deadline (to Contracting authority)
2. Between decision of Procurement Commission and the time of entering into contract, minimum 10 days (to PMB)
3. After contract award (to Latvian courts)
VALUE FOR MONEY
27
Step 12 – Proceed with contract
• Note the job of the Procurement Commission has finished and the Contracting authority proceeds with the contracting process
•Can’t enter into contract until at least 10 days after publication of the notice
• Contract is between Contracting authority and successful tenderer
VALUE FOR MONEY
28
Step 13 – Retain records
• Records have been made throughout the process:•Retain for accessibility
• keep copies of report of Procurement Commission
• for use as management information (e.g. Technical specifications)
VALUE FOR MONEY
29
Control of major projects • Procurement is one step in the project cycle:
• Identify need
• Research (option appraisals, business case)
• Design
• Investigate market
• Procurement
• Enter into contract
• Run and manage contract (many years)
• UK OGC – sponsored Gateway process
VALUE FOR MONEY
30
Restricted competition (Latvia) – 16 key steps
1. Identify purchasing need
2. Form procurement commission
3. Draft tender documentation and specifications
4. Formal announcements
5. Selection Regulations sent to candidates
6. Respond to any requests for information
7. Sumbission of applications by candidates
8. Selection of candidates
9. Preparation of tender documentation and invitations to tender
10. Submission of tenders
11. Tender opening
12. Evaluation of tenders
13. Announcement of results
14. Complaints period
15. Proceed with contract
16. Retain records
VALUE FOR MONEY
31
Steps 1 – 6 1. Identify purchasing need
2. Form procurement commission
3. Draft tender documentation and specifications
4. Formal announcements
5. Selection Regulations sent to candidates
6. Respond to any requests for information
VALUE FOR MONEY
32
Step 7 – Submission of applications by candidates
• Expressions of interest at first stage
VALUE FOR MONEY
33
Step 8 – Selection of candidates
• may not be by weighted evaluation
• can be by compliance only
• Within 10 days of closing date specified in Selection Regulations
• additional information can be obtained from supplier (clarification)
•Notify unsuccessful candidates within 3 days of taking decision
• Aiming to have between 5 and 20 tenderers
VALUE FOR MONEY
34
Step 9 – Preparation of tender documentation and invitations to tender
• Only sent to the selected candidates
• Time periods:•40 days above 120 000 Ls
•25 days less than 120 000 Ls
•15 days less than 50 000 Ls
• Gives time for good tenders
VALUE FOR MONEY
35
Steps 10 - 16• Submission of tenders
• Tender opening
• Evaluation of tenders
• Announcement of results
• Complaints period
• Proceed with contract
• Retain records
VALUE FOR MONEY
36
MAIN points from SF / CF regulations• Project procurement must comply with EU rules on award of public contracts [SF1260/99 Art 12; CF1164/94 Art 8-1]
• Publication notice in OJEC [SF; CF 1164/94, Annex II Art I]
• CF: Implementing body shall retain all tendering and contracting documents as part of the required ‘audit trail’ for each Project [1386/02 Annex I para 3]
• SF: documents on tendering and contracting procedures required for ‘audit trail’ [438/01 Annex I para 3]
• Contracts to include access clause for all persons [SF 448/01 Art 7-3c; CF1386/02, Art 6-4c]
VALUE FOR MONEY
37
Possible issues to consider
• When do we begin to plan the procurement?
• Who is the contracting authority?
• Do we have an option over procurement strategy?
• Who needs to be involved the procurement process?
• How to identify any risks beyond the Latvian Law (from EU rules)