pres decree ppp

8/8/2019 Pres Decree PPP

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The Presidential Decree regarding Partnership of Government with Business Entity

in the Provisioning of Infrastructure

(Presidential decree No. 67 Year 2005 , Revised by Presidential Decree No. 13 year

2010)

CHAPTER I

GENERAL STIPULATION

Article 1

1. Minister / Head of Institution / agency are the leader of ministry /

institution whose his / her scope, task and responsibility include the

infrastructure sector which regulated in this Presidential Decree

2. Head of region are governor for provincial region, or bupati for kabupaten

region, or mayor for municipal region

3. The provisioning of infrastructure are activities which include construction

work to build or improve infrastructures capability and/or infrastructure

management activity and/or infrastructure maintenance in frame work of

improving infrastructures benefit.

4. Business entity are private business entity in form of incorporated

company, State Owned Business Entity (BUMN), Regional Owned

Business Entity (BUMD), and cooperation.

5. Partnership project are Infrastructure Provisioning which conducted

through Partnership Agreement or undertaking permit granting betweenMinister / Head of Institution/agency / Head of Region with Business Entity.

6. Partnership agreement is written agreement for provisioning of

infrastructure between Minister / Head of Institution/agency / Head of

Region with Business Entity which established through general

auction/tender

7. Undertaking Permit is permit for Infrastructure Provisioning which given by

Minister / Head of Institution/agency / Head of Region to the Business

Entity which is established through general auction/tender.

8. *) Government support is fiscal or non fiscal contribution given by Minister

/ Head of Institution/agency / Head of Region and / or Minister of Finance

according to each authority based on regulatory law in framework of

improving financial viability of partnership project.

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9. *) Government guarantee is financial compensation and/or other form of

compensation given by Ministry of Finance to the Business Entity through

risk sharing scheme for partnership project

CHAPTER II

GOAL, TYPE, FORM AND PRINCIPLE OF PARTNERSHIP

Article 2

(1) Minister / Head of Institution/agency / Head of Region can conduct

partnership with Business Entity in Infrastructure Provisioning

(2) In conducting the partnership as meant in sub-clause (1). Minister / Head

of Institution/agency / Head of Region acted as the one that responsiblefor Partnership Project.

(3) *) In case that the regulatory law regarding pertinent infrastructure

sector stated that Infrastructure Provisioning by Government is conducted

or carried out by State Owned Business Entity / Region Owned Business

Entity , then the pertinent State Owned Business Entity / Region Owned

Business Entity acted as the one that responsible for Partnership Project

(4) *) Stipulation which regulate task and authority of Minister / Head of

Institution/agency / Head of Region in this Presidential Decree, is also

valid for State Owned Business Entity/Region Owned Business Entity asmeant in sub clause (3), except for the task and authority of Minister /

Head of Institution/agency / Head of Region which is public in nature

which cannot be transferred

Article 3

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Partnership project of Infrastructure Provision between Minister / Head of

Institution/agency / Head of Region with Business Entity is conducted with

goals :

a. To fulfill the funding necessity continually in Infrastructure Provisionthrough exertion of private fund

b. To improve the quantity, quality and efficiency of service through healthy

competition

c. To improve the quality of management and maintenance in Infrastructure

provision ;

d. To stimulate the usage of user pays the received service principle, or in

certain instance consider the users affordability to pay

Article 4

(1) Types of infrastructures which can be done in partnership with Business

Entity include:

a. *) Transportation Infrastructure, include airport management service,

provision and / or management service of seaport, railway means and

infrastructure

b. Road infrastructure, include toll road and toll bridge

c. Water resource infrastructure, include canal to bring raw water

d. Drinking water infrastructure which include raw water intake building,

transmission network, distribution network, drinking water treatment

installation

e. Sewerage infrastructure which include sewage treatment installation,

collecting network and main network, and solid waste means which

include transport and dumping site.

f. *) Telecommunication infrastructure and informatics, includingtelecommunication network and e-government infrastructure

g. *) Electricity resource infrastructure, including power generators,

include the development of electric power which comes from

geothermal , transmission and distribution of electric power.

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h. *) Oil and gas infrastructure, include transmission and/or distribution of

oil and gas

(2) Infrastructure as meant in sub clause (1), is being done as partnership on

according to regulatory laws hold in the pertinent sector

Article 5

(1) The partnership of Minister / Head of Institution/agency / Head of Region

with business entity in infrastructure provisioning as meant in Article 2

sub-clause (1), can be conducted through :

a. Partnership agreement; or

b. Undertaking Permit

(2) The form of partnership of Minister / Head of Institution/agency / Head of

Region with business entity in infrastructure provision, is established

based on agreement between Minister / Head of Institution/agency / Head

of Region with business entity as long as it doesnt contradictive with the

current regulatory law.

Article 6

The infrastructure provision partnership between Minister / Head of

Institution/agency / Head of Region with Business Entity is conducted based

on following principles :

a. Just, it means all business entity that participated in

procurement process must get the same treatment

b. Open, it means all procurement process has open characteristic

for Business entity that fulfill the required qualification

c. Transparent, it means all stipulation and information relatedwith Infrastructure Provision include the technical requirement of

selection administration, evaluation procedure, and establishment of

Business Entity are open in nature for all Business Entity and general

public,

d. Competitive, it means the selection of Business Entity is through

tender process;

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e. Accountability, it means the result of Business Entity selection

must be able to be accountable.

f. Mutual benefit , it means partnership with Business entity in

Infrastructure provision is being done based on equal stipulation and

requirement so as to give the benefit for both parties and communityby calculating the basic need of community;

g. Mutual need, it means the partnership with business entity in

provision of infrastructure is being done based on stipulation and

requirement that consider the need of both parties

h. Mutual support , it means the partnership with business entity

in provision of infrastructure is being done with spirit to fill each other

of both parties.

CHAPTER III

IDENTFICATION AND ESTABLISHMENT OF PROJECT WHICH IS

CONDUCTED BASED ON PARTNERSHIP AGREEMENT

Article 7

(1) Minister / Head of Institution/agency / Head of Region conduct

identification of Infrastructure Provision Projects which will be made as

partnership with Business Entity, with considering at least:

a. The conformity with national / regional mid term development plan and

infrastructure sector strategic plan

b. The conformity of project location with the Areas Spatial Structuring

Plan;

c. Interrelatedness among infrastructure sectors and among regions

d. Analysis of social cost and benefit

(2) Each project proposal which are going to be made as partnership must

be embedded with:

a. Pre feasibility study

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b. The plan of partnership form

c. Plan of project financing and source of fund

d. Plan for partnership overture which include schedule, process and

method of appraisal

Article 8

In conducting identification of project that will be made as partnership as

meant in Article 7, the Minister / Head of Institution/agency / Head of Region

conduct public consultation

Article 9

(1) Based on result of identification as meant in Article 7 and result of public

consultation as meant in Article 8, the Minister / Head of

Institution/agency / Head of Region establish the priority of projects that

will go into partnership in list of project priorities.

(2) List of project priorities as meant in sub-clause (1) , is stated as open for

public and being distributed to the community

CHAPTER IV

PARTNERSHIP PROJECT ON INITIATIVE OF BUSINESS ENTITY

Article 10

*) The business entity can propose the initiative of Partnership Project of

Infrastructure Provision to The Minister / Head of Institution/agency / Head

of Region with following criteria :

a. Does not included in the master plan of pertinent sector

b. Technically integrated to the master plan of pertinent sector

c. Economically and financially viable

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d. Does not require government support in form of fiscal contribution

Article 11

(1) The project of Business Entitys Initiative must be accompanied with :

a. Feasibility Study

b. Plan of partnership form

c. Plan of project financing and its source of fund; and

d. Plan of partnership overture which include schedule, process and

method of appraisal

(2) Project on Business Entity Initiative as meant in sub-clause (1), is

considering also the stipulation as meant in Article 7 sub-clause (1)

Article 12

(1) The Minister / Head of Institution/agency / Head of Region evaluates the

project on Business Entitys initiative as meant in article 11

(2) In case that based on the evaluation as meant in the above sub-clause

(1) the project on business entitys initiative fulfill the viability

requirement, the project on the Business Entitys initiative is processed

through general tender/auction according to the stipulation in this

Presidential Decree

Article 13

(1) *) Business entity which acted as Partnership Project Initiator and alreadyapproved by Minister / Head of Institution/agency / Head of Region , willbe compensated

(2) *) The compensation as meant in sub-clause (1), can take form of:

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a. Awarding of additional value, or

b. Awarding the right to make bid by initiator Business Entity to the bestbidder (right to match) according to valuation result in the auction /tender process; or

c. Buying of Partnership Project Initiative including the embeddedintellectual property right by Minister / Head of Institution/agency /Head of Region of by the auction winner.

(3) *) Awarding of compensation forms as meant in sub clause (2) will bementioned in the Minister / Head of Institution/agency / Head of Regionsapproval

(4) *) The initiator of Partnership project who already get the approval ofMinister / Head of Institution/agency / Head of Region as meant in sub-clause (2) letter a and b still must follow the bidding as required ingeneral auction document

(5) *) The initiator of Partnership project who already get the approval ofMinister / Head of Institution/agency / Head of Region as meant in sub-clause (2) letter c cannot follow the bidding as required in general auctiondocument.

Article 14

(1) *) Awarding of additional value as meant in Article 13, sub-clause (2)

letter a, is as of 10% at the highest from initiators tender valuation and

should be mentioned clearly in the auction document

(2) *) The amount of cost which already spent by initiator business entity as

meant in Article 13 sub-clause (2) letter c is established by Minister / Head

of Institution/agency / Head of Region based on appraisal conducted by

independent evaluator appointed by Minister / Head of Institution/agency /

Head of Region

(3) *) The Buying of Partnership Project Initiative as meant in Article 13 sub-

clause (2) letter c, constitute the replacement by Minister / Head of

Institution/agency / Head of Region or by the tender winner on amount of

direct cost which related to the preparation of partnership project whichalready spent by initiator business entity.

(4) *) The Awarding of the right to make the bidding change (right to match)

to the initiator business entity as meant in Article 13 sub-clause (2) letter

b constitute awarding of right to initiator of partnership project business

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entity to make bidding change if based on the result of tender there are

other business entity who give the better bid

(5) *) Time period for initiator business entity to put forth right to make

bidding change as meant in sub-clause (4) is as of 30 (thirty) days at the

longest since the establishment of the best bidder of the general auctionof partnership project which established based on valuation criteria from

pertinent sector

CHAPTER V

INITIAL TARIFF AND TARIFF ADJUSTMENT

Article 15

(1) The initial tariff and its adjustment is periodically established to ensurethe level of investment return which include coverage of capital cost,

operational cost and reasonable profit in certain time period.

(2) In case that establishment of initial tariff and its adjustment cannot be

done according to stipulation as meant in sub-clause (1), the tariff is

established based on the level of users affordability

(3) In case that tariff is established based on the level of users affordability

as meant in sub-clause (2), The Minister/ Head of Institution/agency / Head

of Region give compensation so that the reasonable level of investment

return and profit can be obtained.

(4) The amount of compensation as meant in sub-clause (3) , based on

obtained competition results among the auction participant and is chosen

based on bid of lowest amount of compensation

(5) The compensation only being given to Infrastructure Provision Partnership

Project which have the social interest and benefit, after The Minister/ Head

of Institution/agency / Head of Region making complete and

comprehensive study on the social benefit

CHAPTER VI

RISK MANAGEMENT *)

Article 16

(1) The risk is managed based on risk allocation principle between Minister/

Head of Institution/agency / Head of Region and Business Entity by

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allocating the risk to party which most capable to control the risk in

framework of making guarantee of efficiency and effectiveness in

Infrastructure Provision

(2) Risk management as meant in sub-clause (1), is stated in Partnership

Agreement

CHAPTER VI A *)

GOVERNMENT SUPPORT AND GOVERNMENT GUARANTEE

Article 17 A *)

(1) Minister/ Head of Institution/agency / Head of Region can give

Government Support to Partnership Project according scope of activity of

Partnership Project *)

(2) Government support in form of fiscal contribution must be mentioned in

States Revenue and Spending Budget and / or Regionals Revenue and

Spending Budget *)

(3) Government Support in form of permit, land procurement, support of part

of construction, and / or other form according to effective regulatory law is

established by Minister/ Head of Institution/agency / Head of Region *)

(4) Minister of finance can approve Government Support awarding in form of

tax incentive based on Minister/ Head of Institution/agency / Head of

Regions proposal *)

(5) Government support must be mentioned in general auction document *)

(6) Land procurement as meant in sub-clause (3) is conducted by Minister/

Head of Institution/agency / Head of Region before the process of Business

Entity procurement *)

(7) In case that partnership project is financially feasible, the auction winner

business entity can pat back the land procurement cost which had been

made by Minister/ Head of Institution/agency / Head of Region as meant in

sub-clause (6) either in part or as a whole, and that must be mentioned in

general auction document *)

(8) The stipulation as meant in sub-clause (6) and sub-clause (7) is being

done if it does not contradictive to the effective regulatory law in the

pertinent sector *)

(9) Other than government support as meant in sub-clause (3). The

Government can provide government guarantee to partnership project *)

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Article 17B *)

(1) The Government guarantee is being given by addressing principle of

financial risk management and control in States Revenue and Spending

Budget *)

(2) Control and management of risk on government guarantee as meant in

sub-clause (1) is conducted by Minister of Finance *)

(3) In implementing the task and function as meant in sub-clause (2), Minister

of Finance is having the authority to : *)

a. To establish the criteria of government guarantee awarding which will

be given to partnership project

b. To request and obtain the data and information needed from parties

related with partnership project which are being proposed to getGovernment Guarantee

c. To approve or reject the proposal of Government Guarantee Awarding

to Business entity in framework infrastructure provision

d. To establish form or type of government guarantee which being given

to a partnership project

(4) The government guarantee to Business entity must be mentioned in

general auction document *)

(5) Further stipulation regarding form, type, and procedure of Governmentguarantee awarding are regulated with Minister of Finances decree. *)

Article 17C *)

(1) The government guarantee in form of financial compensation can be

given by Minister of Finance through business entity that specially formed

by government for the purpose of infrastructure guarantee *)

(2) The stipulation regarding governments guarantee awarding as meant in

sub-clause (1), is further regulated by separate Presidential Decree *)

CHAPTER VII

THE PROCEDURE OF BUSINESS ENTITY PROCUREMENT

IN FRAMEWORK OF PARTNERSHIP AGREEMENT

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Article 18

The Procurement of Business Entity in framework of Partnership Agreement is

implemented through general auction.

Article 19

Minister/ Head of Institution/agency / Head of Region make the procurement

committee.

Article 20 *)

The procurement procedure as meant in Article 18, include *)

a. Procurement plan

b. Procurement implementation

Article 21

Minister/ Head of Institution/agency / Head of Region establish the auctionwinner based on proposal from procurement committee

Article 22

The Stipulation as meant in Article 18, 19,20 and 21 are further regulated in

appendix of this Presidential decree, which constitute inseparable part of this

presidential decree

CHAPTER VIII

PARTNERSHIP AGREEMENT

Article 23

(1) The partnership agreement at least contains stipulation regarding

a. Scope of work

b. Duration of time

c. Guarantee of implementation

d. Tariff and its adjustment mechanism

e. Right and obligation, include risk allocation

f. Service performance standard

g. Transfer of shares before partnership Project operated commerciallyh. Sanction in case the parties do not fulfill the stipulation of agreement

i. Cut off or termination agreement

j. The financial report of business entity in frame work of agreements

implementation, which are examined yearly by independent auditor

and its announcement in national printed media of national scale

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k. Mechanism of dispute settlement which are regulated in stages,

namely consultative, mediation, arbitration/court

l. Performance monitoring mechanism on business entity in the

implementation of procurement

m. The usage and ownership of infrastructures asset

n. Return of infrastructures asset and / or its management to Minister/Head of Institution/agency / Head of Region

o. Force majeure

p. Statement and guarantee of parties that partnership agreement is

legally binding the parties and already conform with current regulatory

law

q. Usage of Indonesian Language in partnership agreement . If the

partnership agreement is signed in more that one language, the one

that is valid is the one use Indonesian Language

r. The effective law, namely Indonesian law.

(2) In case that Infrastructure provision is implemented by conducting land

acquisition by Business Entity , the amount of implementation guarantee

as meant in sub-clause (1), letter c, can be determined with calculating

cost which already spent by Business Entity for pertinent land acquisition.

(3) Partnership agreement clearly mention the status of asset ownership

which acquired during duration period of agreement

(4) The transfer of share of the Business Entity holding the partnership

agreement before infrastructure provision operated commercially as

meant in sub-clause (1) letter g, can only be done after getting the

approval and based on criteria established by Minister/ Head of

Institution/agency / Head of Region with stipulation that the transfer of

share does not postpone the schedule of operation starting of thepartnership project.

Article 24

(1) In the period of 12 month at the longest after the business entity signing

the partnership program, the business entity must already obtain the

financing on partnership project

(1a) The obtained financing as meant in sub-clause (1) is declared as being

already implemented if :

a. Loan agreement has already signed to finance whole partnership

projectb. Part of loan as meant in letter a has already able to be converted into

cash to start the construction work

(1b) The time period as meant in sub-clause (1) can be lengthen by Minister/

Head of Institution/agency / Head of Region as long as 12 month at the

longest , if the failure to obtain financing is not caused by business

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entitys negligence according to criteria established by Minister/ Head of

Institution/agency / Head of Region

(2) In case the time period as meant in sub-clause (1) or

lengthening time as meant in sub-clause (1b) cannot be fulfilled by

Business Entity then the partnership agreement is terminated and

implementation guarantee is can be drawn by Minister/ Head ofInstitution/agency / Head of Region

Article 25

(1) In case there are submission of assets owned or controlled by Minister/

Head of Institution/agency / Head of Region to business entity for

implementation of partnership project, in the partnership agreement

must be arranged :

a. The purpose of asset usage and prohibition to use the asset for the

purpose other than the one that has already agreed upon.b. Responsibility of operation and maintenance include tax payment and

other obligation which arose as consequences of the assets usage

c. Right and obligation of party who controlled the asset to supervise and

maintain the performance of the asset during its usage

d. Prohibition for Business entity to guaranteed the asset as a collateral

to third party

e. Procedure of submission and/or return of asset

(2) In case the partnership agreement arrange the submission of asset

control that is conducted during the period of agreement, the partnership

agreement should regulate :

a. The condition of asset to be transferred

b. The procedure of transferring the asset

c. The assets status that should be free from all of property guarantee or

charge of any form at the moment when the asset is submitted to the

Minister/ Head of Institution/agency / Head of Region;

d. The assets status that is free from third partys claim

e. The release of Minister/ Head of Institution/agency / Head of Region

from all claim that arise after submission of asset

f. The compensation to business entity who release the asset

Article 26

In the connection with the usage of intellectual property rights, The

Partnership agreement should contain the guarantee from the business

entity that:

a. The intellectual property right used is fully freed from all kind of law

violation

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b. Minister/ Head of Institution/agency / Head of Region will be freed from

all sue or claim from any third party in relation with the usage of

intellectual property right in provision of infrastructure

c. While the settlement of case still on going because of the presence of

sue or claim as meant in letter b then:

1) The provision of infrastructure still can be implemented2) To work out the license so that the usage of intellectual property

right still can be continued

CHAPTER IX

PROVISION OF INFRASTRUCTURE BASED ON THE UNDERTAKING

PERMIT

Article 27

The procurement of business entity in provision of infrastructure which isbased on Undertaking Permit is conducted through permit auction

Article 28

The procedure of permit auction as meant in Article 27, is further

regulated by Minister/ Head of Institution/agency / Head of Region, by

application of principle as meant in Article 6

CHAPTER X

TRANSITIONAL STIPULATION

Article 29

1. By the validityof this Presidential decree :

a. The Partnership agreement already signed before the

effectiveness of this Presidential decree is still effective

b. The business entity procurement process which is still

conducted and whose the winner is has not yet established then

The business entity procurement process is later to be conducted

in accordance this Presidential Decree

c. The business entity procurement process which has been

conducted and whose the winner has been established, but Thepartnership agreement has not been signed then the Partnership

agreement is made according to this Presidential Decree

d. The Partnership agreement which already been signed but the

financing fulfillment has net boon attained in accordance with the

time period stipulated in partnership agreement then the

stipulation on fulfillment of financing obligation is carried out

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according to this presidential decree after Minister/ Head of

Institution/agency / Head of Region make evaluation to the business

entity and partnership project based on criteria established by

Minister/ Head of Institution/agency / Head of Region

e. The partnership agreement which already been signed but the

land acquisition has not been finished yet, then the land acquisitionprocess will be adjusted according to this Presidential Decree, and

Minister/ Head of Institution/agency / Head of Region can make

adjustment on partnership agreement after conducting evaluation

to the business entity and partnership project with criteria

stipulated by Minister/ Head of Institution/agency / Head of Region

f. The transfer of share before the partnership project operated

commercially which already made before the .. of this presidential

decree is stated as legal and effective

2. This presidential decree is effective started from the date it is

stipulated

The *) mark refer to Presidential Decree No. 13 year 2010

APPENDIX TO THE PRESIDENTIAL DECREE NO. 13 YEAR 2010

THE PROCEDURE OF BUSINESS ENTITY PROCUREMENT IN FRAMEWORK OF

PARTNERSHIP AGREEMENT

1. Procurement Plan

1. Minister/ Head of Institution/agency / Head of Region establish the

procurement committee

2. Member of procurement committee consist of elements which

comprehend :

a. Procurement procedure

b. Substance of pertinent work/activity

c. Agreements Law

d. Technical aspect

e. Financial aspect

3. Schedule of procurement implementation: the making of procurement

administration schedule should give enough time allocation for allstage of procurement process

4. Own Calculation Price should be done correctly

5. The document of general auction at least should contain:

a. invitation to all auction participants

b. instruction to all auction participant at least contain :

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1) general: scope of work, source of financing, requirements and

qualification of auction participants, number of tender document

submitted, the review of work location

2) the contents of general tender document, explanation of

contents of general tender document, and changes of contents

of general auction document3) language requirement used in tender, the writing of offered

price, offered currency, and the way of payment, the validity of

offer, the offers letter of guarantee, proposal of bid alternative

by auction participants, type of bid, and signature of bids letter

4) the way to enveloped and marking the bids envelope, time

limit of the bid delivery, the treatment to the late bid, prohibition

to change and withdraw of the already submitted bid

5) Bid opening procedure, secrecy and prohibition, clarification of

the bid document, examination on the bid documents

completeness, aritmethics correction, conversion to single

currency, the bids evaluation system include criteria,

formulation and procedure of evaluation, as well as price

preference appraisal

c. Design of partnership agreement

d. List of quantity and price

e. Drawing and technical specification

f. Type of bid letter

g. Type partnership

h. Type of bid collateral letter

i. Type of implementation collateral letter

j. In general auction document the method of bid document deliveryshould be explained

2. Procurement implementation

1. Announcement and Registration of participant

a. The procurement committee must announce extensively regarding

the existence of General Auction

b. The content of announcement is at least contains name and

address of Minister/ Head of Institution/agency / Head of Region

which are going to conduct general auction, short description

regarding the work to be done, estimate of the works value,

requirement of auction participants, place, date, day, and time totake the general auction document.

c. In order for the announcement as meant in letter a can reach the

target widely, efficient and timely according to the extent of the

targeted community and business person, the announcement is

arranged as follows:

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The announcement of auction / prequalification is using newspaper

and regional governments / private radio broadcast which having

the reach of national/international reader and listener

2. The prequalification include the appraisal on:

a. Business permit letter on its business sector

b. The authority to sign the contract legallyc. The companys legal status, meant that the company are not under

supervision of court, not bankrupt, the business activity are not

being cancelled, and / or not undergo criminal sanction

d. Experience in similar Partnership project of infrastructure provision

e. The capability to provide facilities, equipment and personnel

f. Audited financial statements which include last three book year

g. Letter of Financial support from bank

h. Availability of special equipment, needed special experts or certain

experience for special work / high technology

3. Prequalification procedure

a. Prequalification announcement for general auction

b. Registration and taking of prequalification document

c. Delivery of prequalification document by auction participants

d. Evaluation and clarification of prequalification document

e. The establishment of list of the auction participant who pass the

prequalification by procurement committee

f. Legalization of prequalification result by Prequalification

committee

g. Announcement Prequalification Result

h. The objection submitted by the auction participant which does

not pass the prequalification to Minister/ Head ofInstitution/agency / Head of Region, if any

i. Examination and follow up on refutation to the prequalification

result

j. Re evaluation by procurement committee if the

refutation/objection of material / service provider is proven to be

right and announcement of re evaluation results

k. If the auction participant which passing the prequalification are

less than 3 then the repeat announcement and repeat

prequalification process is made by inviting the new participant.

l. If after the auction announcement / prequalification is repeated,there are no new additional candidate of auction participant or all

the auction participant are still less than 3, then Procurement

committee continue the general auction process.

4. Forming of participant list, delivery of Invitation and taking of

general auction document

a. The list of participant which are going to be invited must be

legalized by Minister/ Head of Institution/agency / Head of Region

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b. All the candidate of auction participant listed in the list of auction

participant must be invited to take the document of general auction

c. The invited auction participant has the right to take the general

auction document from Procurement Committee

5. The Auction Explanation

a. The auction explanation is being made in determined place and thetime, attended by the auction participants listed on the list of

auction participants

b. The absence of the auction participant on the time of auction

explanation cannot be made as base to reject / abort The auction

participant

c. In the agenda of general auction explanation, the things must be

explained to participants regarding :

1) Method of auction

2) Way to deliver the bid

3) The documents that must be attached in the bid document

4) Agenda of bid document opening

5) Evaluation method

6) Things that abort the bid

7) Form of partnership agreement

8) Stipulation and way of evaluation regarding the price preference

on usage of domestic production

9) The amount, validity and the party who can issue the bid

collateral

d. If deemed necessary the Procurement Committee can give further

explanation by way of making the field review

e. The delivery of explanation regarding the articles / Article ofgeneral auction document in form of question from the participant

and answer from procurement committee as well as other

information include its change and field review, must be written in

official report of explanation signed by Procurement Committee and

minimum of one representative from the attend participant, which

constitute inseparable part of general auction document.

f. If in the official report of explanation as meant in letter e there are

new things / stipulation or important changes that necessary to be

accommodate, then the procurement committee should put it in

addendum of general auction document6. Submitting and Opening of Bid Document

a. Method of bid document submitting using two envelope method,

namely envelope # 1 contains administration and technical bid

document, and envelope #2 contain financial bid document, then

the twos envelope are put into one enclosure envelope and is

submitted altogether to the Procurement Committee

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b. The method of submitting and the documents way of opening must

follow the stipulation required in general auction document

c. The method of submitting the bid document and time duration of

submitting the bid document must be explained in the occasion of

explanation delivery

d. The Procurement Committee stipulate place, date and time toreceive the bid document

e. The bid document must be submitted directly to the Procurement

Committee on the place, date and time stipulated

f. It is not allowed to change the closing time of bid document

delivery

g. At the end of time limit of bid document delivery , the Procurement

Committee open the meeting of bid document opening, declare in

front of the auction participant that the time to enter the bid

document is already closed according to the stipulated time, and

reject the late bid document and/or additional bid document,

afterward the committee open the entered bid document.

h. The opening of bid document

1) The procurement committee ask for the willingness of at least

two representative of attended auction participant as witness. If

there are no witness from the attended participant, the

Procurement Committee postpone the opening of box / place to

enter the bid document until certain time stipulated by

Procurement Committee. If until the stipulated time, the

representative of the auction participant still not attend, the

agenda of opening box/place to enter the bid document is held

with witnessed by 2 person outside the Procurement Committeethat were appointed in written by The Procurement Committee.

2) The Procurement committee examined the content of box /

place to enter the bid document and counting the number

entered bid envelope (the letter of resignation is not counted)

3) The opening of bid document is being held according to the

stipulation arranged in the auction document

4) The procurement committee examined, show and read in front

of the auction participant about the completeness of bid

document, which consist of :

a) Bid letter in which the validity of bidding is mentioned butthe bid price is not mentioned

b) Original bid collateral

c) The technical bid document and other supporting document

required in general bid document

5) The procurement committee can abort the bid in the moment of

bid opening, if the submitting and completeness of bid

document is not in accordance with the auction document

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6) The procurement committee make the official report on opening

of bid on all entered bid

7) After being read out clearly, the official report of opening of the

bid is signed by the attended member of Procurement

Committee and by two representative of legally auction

participants which appointed by attended auction participants.In case there are only one bid, the official report is signed by the

attended Procurement Committee and , representative of

auction participant, and two witnesses appointed by

Procurement Committee.

8) The official report is distributed to the attended representative

of auction participant without attachment of bid document

7. The evaluation of bid is conducted in accordance with the

stipulation which already regulated in auction document

8. The making of Auction Result official report

a. The Procurement Committee make the conclusion from result of

evaluation which were put in official report of auction result. The

report contain the result of auction conduct, include method of

valuation, used formula, until the establishment of order of the

winner in form of auction participants list. The official report is

signed by the chairman and all the member of procurement

committee or at least two third of the number of The committees

members.

b. The official report of auction result is secret in nature until the

moment of contract signature

c. The official report of auction result must contain following things

1) Name of all auction participants and bidding price and/orcorrected bidding price from each of the auction participants.

2) Method of evaluation used

3) Formula used

4) Other information which considered necessary regarding the

conduct of auction

5) Date of making of the official report as well as numbers of

passed auction participants and the participant which are not

passed on every stage of evaluation

6) The establishment of order of the one winner nominee and two

spareIf there are no bid that fulfill the requirement, then the official

report of auction results must mention statement that the general

auction is declared as failed and the repeat procurement will be

held. If the auction participant that fulfill the requirement is only 2

(two) bidder, then one nominee for winner and one spare is

established. If the auction participant that fulfill the requirement is

only one bidder then, in official report of auction result it can be

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written the statement that the general auction is declared as failed,

and the repeat procurement will be conducted or in the official

report it is mentioned that the bidder is established as the single

bidder nominee.

9. Establishment of the auction winner

a. The procurement committee established the nominee of auctionwinner based on result of evaluation

b. The procurement committee make and submit the report to

Minister/ Head of Institution/agency / Head of Region to establish

the auction winner.

The report is accompanied with the proposed winner candidate and

explanation or other information which is considered to be

necessary as consideration to make the decision.

c. The Minister/ Head of Institution/agency / Head of Region establish

the auction winner based on proposal from the auction committee

d. The supporting data needed for establishing the auction winner

are :

1) Document of general auction, along with its addendum (if any)

2) Official Report of Bid Opening

3) Official Report of Auction Result

4) Summary of the auction process and result of the auction

5) Bid document from the nominee of auction winner and spare of

the winner nominee which already verified by Procurement

Committee and two representative of the auction participant.

6) If delay Is happened in establishing the auction winner and

inflict expiration of the bid / bid collateral , then confirmation is

given to all auction participant to extend the bid letter and bidcollateral without being sanctioned

The Nominee of auction winner can resign without being

sanctioned

10. Establishment of Single Bidder

a. The auction committee establish the single bidder nominee based

on evaluation result

b. Procurement committee make and submit the report to Minister/

Head of Institution/agency / Head of Region to establish negotiation

agreement with single bidder nominee

c. Minister/ Head of Institution/agency / Head of Region can reject orapprove the conduct of negotiation with single bidder nominee

d. The supporting data needed for establishing conduct of negotiation

are

1) General auction document, with addendum (if any)

2) Official report of Bid Opening

3) Official report of auction result

4) Summary of auction process and result of auction

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5) Bid document of single bidder nominee which already verified by

Procurement Committee and representative of single bidder

nominee

6) If there is delay happened in establishing the conduct of

negotiation with single bidder nominee and inflict the bid/bid

collateral to be expired then the confirmation is given to singlebidder nominee to extend the bid letter and bid guarantee. The

single bidder nominee can resign without being sanctioned

7) In case the Minister/ Head of Institution/agency / Head of Region

reject the agreement of negotiation conduct, then the

procurement process is reiterated

8) In case the Minister/ Head of Institution/agency / Head of Region

approve the negotiation conduct, then the Procurement

Committee carry out negotiation with single bidder nominee

with referring to general auction document. Procurement

committee make Official Report of negotiation result

9) Procurement committee make and submit the official report of

negotiation result and other information to Minister/ Head of

Institution/agency / Head of Region to establish the single bidder

10) Minister/ Head of Institution/agency / Head of Region

establish the single bidder

11. The announcement of the auction winner or the single bidder

auction winner or single bidder is announced and informed by

Procurement Committee to the auction participant at least 2 working

days after auction winner or single bidder establishment letter is

received from Minister/ Head of Institution/agency / Head of Region

12. The Auction Participants Refutationa. To the auction participant who objected on establishment of auction

winner or single bidder the opportunity is given to put forth written

refutation, at least in adequate period of time

b. The refutation is submitted to the Minister/ Head of

Institution/agency / Head of Region, enclosed with prove of

irregularities

c. The refutation is put forth either individually of altogether with

other auction participant

13. Issuance of Establishment Letter of Auction Winner

a. Minister/ Head of Institution/agency / Head of Region issue theEstablishment Letter of Auction Winner as the executor of

Partnership project, with stipulation:

1) There are no refutation from the auction participant; or

2) The refutation received by authorized official in the refutation

period is declared as not true, or the refutation is received

exceed the refutation period

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b. The auction participant established as the winner is obliged to

accept the decision. If the pertinent is resign and its bid period is

still valid then the resignation can only be made based on reason

acceptable objectively by Minister/ Head of Institution/agency /

Head of Region, with the stipulation that the auction participant bid

collateral to become state owned property.c. To the auction winner that resign with the un acceptable reason

and the bid period is still valid, beside the bid collateral of the

pertinent become state owned property, the winner also being

sanctioned in form of prohibition to follow general auction activities

for partnership project in two years time

d. If the first order auction winner which established as the winner is

resign, then the establishment can be made to second rank of

auction winner nominee (if any), with stipulation :

1) The establishment of the second order auction winner must be

previously get the establishment of Minister/ Head of

Institution/agency / Head of Region

2) The bid validity period of second rank auction winner nominee is

still effective or the validity has been extended

e. If the second order auction winner nominee is also resign then the

establishment of winner can be made to third order winner nominee

(if any) with stipulation:

1) The establishment of auction winner must previously get the

establishment of Minister/ Head of Institution/agency / Head of

Region

2) The bid validity of the third order auction winner nominee is still

effective or already extended.3) The bid collateral from second order auction winner become

state owned property

4) If the second winner nominee resigned, with unacceptable

reason , the sanction is incurred as mentioned in the above

point 13 c

f. If the third winner nominee resigned, with unacceptable reason,

then sanction is incurred as mentioned in the above point 13 c.

Then the procurement committee make repeat auction, with

stipulation that bid collateral from third order auction winner

nominee is become State owned propertyg. The winner establishment letter must be made at least five working

days after the announcement of auction winner establishment and

soon it be delivered to the auction winner

h. One of the carbon copy from the establishment letter of auction

winner is delivered (without attachment of agreement/contract) at

least to the internal control unit

14. Issuance of Letter of Single Bidder Establishment

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a. Minister/ Head of Institution/agency / Head of Region issue the

Letter of Single Bidder Establishment as the executor of Partnership

Project, with stipulation:

1) There is no refutation from the auction participants

2) The refutation received by authorized official in the refutation

period turn out to be not true, or the refutation is receivedexceed the refutation time period

b. The single bidder established as the executor of Partnership Project

must accept the decision. If the pertinent resign and the bid time

period is still valid then the resignation can only be made based on

reason acceptable objectively by Minister/ Head of

Institution/agency / Head of Region with stipulation that bid

collateral of the single bidder is become the state property

c. To the single bidder which resign with the reason unacceptable and

the bid time period still valid, beside the bid collateral of the

pertinent become state own property, the single bidder also being

sanctioned in form of prohibition to follow general auction activity

for partnership project as long as two years.

d. If the single bidder is resigned, The Procurement Committee can

conduct repeat procurement.

e. The letter of single bidder establishment must be made at least five

working days after the announcement of establishment of the

single bidder and soon it be submitted to the single bidder.

f. One of copy from Letter of Single Bidder Establishment is delivered

(without attachment of agreement / contract) at least to internal

control unit.

The articles with asterisk mark refer to : PRESIDENTIAL DECREE NO. 13YEAR 2010

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pres decree ppp

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