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PUBLIC PROCUREMENT AND USE OF FIDIC CONTRACTS IN LATVIA

Procurement Monitoring BureauProcurement Monitoring Bureau20132013

Procurement Monitoring Bureau(PMB)

State direct administration institution supervised by the Ministry of Finance.

Functionally the highest authority in examining complaints regarding violations of the procurement procedure.

Functions of the PMB

to monitor the conformity of the procurement procedures with the requirements of the law;

to compile and analyse statistical information regarding procurements in the State,

to provide methodological assistance and consultations, and to organise training for commissioning parties, sellers of goods, lessors, performers of works and providers of services;

Functions of the PMB

to examine complaints regarding violations of the procurement procedure;

to publish the notices specified in Public Procurement Law on the Internet home page of the PMB and send them for publication in the Official Journal of the European Union, as well as send information to the European Commission, which has been requested thereby;

to ensure selective pre-examination of the procurement documentation and the process of the procurement procedure of European Union funds.

Public Procurement Procedures in 2012

The Amount of Public Procurement in 2012

The use of FIDIC Contracts

In EU Funds projects, e.g. in water handling infrastructure projects (Yellow Book);

in significant large objects, e.g. National Library of Latvia.

The Use of FIDIC Contracts

May FIDIC Contracts be used in public procurement?

As far as the terms of the contracts comply with the provisions of EU public procurement directives, the principles of public procurement and national laws and regulations in public procurement and construction field.

National Laws

Public Procurement Law (adopted in 6th April, 2006; last amendments in 21st June, 2012);

Law On The Procurement of Public Service Providers (adopted in 25th August 2010);

Construction Law (adopted in 10th August, 1995; last amendments in 29th November, 2012).

Public Procurement Principles

In order to ensure transparency of public procurement procedures and equal treatment of tenderers material amendments to a procurement contract are not admissible.

(ECJ Case 454/06) An amendment to a public contract during its currency may be regarded as being material:

when it introduces conditions which, had they been part of the initial award procedure, would have allowed for the admission of tenderers other than those initially admitted or would have allowed for the acceptance of a tender other than the one initially accepted;

when it extends the scope of the contract considerably to encompass services not initially covered.

 when it changes the economic balance of the contract in favour of the contractor in a manner which was not provided for in the terms of the initial contract.

Public Procurement Principles

Essential amendments to a procurement contract shall be admissible in case the procurement contract clearly and unmistakably provides for a possibility of amendments, the cases when amendments are admissible, the amount and essence of amendments (Public Procerement Law, Section 67.1 ).

FIDIC Contracts and National Regulations

Joint design and construction work: construction work is performed concurrently with the designing

of a structure, if the technical design for works to be performed has been developed on the basis of the accepted expanded design sketch (General Construction Regulations);

shall not be applied for projects financed by the State or local government or in the amount of at least 40% by international financial authorities, the European Union or a Member State (General Construction Regulations).

FIDIC Contracts and National Regulations

Risks and difficulties in joint desing and construction works projects:

one contractor for the desing and construction works; the client should ensure the serious and precise preparatory works for the project (the planning and architectural order, expanded design sketch), ensure the effective control of the contract in order to reduce the risk that the needs of the client are not taken into account fully.

FIDIC Contracts and National Regulations

The Engineer in FIDIC Contract:

lack of the definiton in national laws and regulations;

what are its tasks and duties during contract;

what qualification does the Engineer need?

Positive Aspects in the Use of FIDIC Contract Forms

The terms and conditions of the contracts are developed by professionals;

different forms for different subject matters (Yellow, Red, Silver and Green Book);

the contract forms include detailed provisions regarding different situations during the execution of the contract (e.g., liability of the contracting parties, amendments of the subject matter);

contribution of more united understanding and practice between the participants in the field of construction.

Thank You for Your Attention!

Questions?