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Istvan HEINCZINGER, Senior Sector Economist

EIB Procurement Policy Kick Off Meeting of Ukraine Urban Public Transport KIEV, 13 th December 2016. Istvan HEINCZINGER, Senior Sector Economist. Presentation outline. 1 . General Principles 1.1 Introduction 1.2 Guide to Procurement 1.3 Key points 2. Operations Outside the EU

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Istvan HEINCZINGER, Senior Sector Economist

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  1. EIB Procurement PolicyKick Off Meeting of Ukraine Urban Public TransportKIEV, 13th December 2016 Istvan HEINCZINGER, Senior Sector Economist European Investment Bank

  2. Presentation outline • 1. General Principles • 1.1 Introduction • 1.2 Guide to Procurement • 1.3 Key points • 2. Operations Outside the EU • 2.1 Eligibility • 2.2 Public sector operations • 2.3 Procurement monitoring procedures • 2.4 Co-financing • 3. Covenant of Integrity • 4. Differences between EIB and EBRD procedure • 4.1 Standstill period and Remedies • 4.2 Tender publication European Investment Bank

  3. 1.1 Procurement: what is it for? • The Bank will ensure that its funds are employed as rationally as possible in the interest of the Union (EIB statute). • The objective of procurement: procure in the economically most advantageous way works, goods and services to implement a project. • Why are there strict and formal rules for public procurement? • The promoter is using public money. Therefore, the proccess must be: • Transparent • Fair and non-discriminatory • Traceable • Full access of EU firms to procurement under EIB financed projects. European Investment Bank

  4. 1.1 Procurement: Cornerstone of project implementation • Procurement is an integral part of project implementation, and necessary for a promoter to be able to contract firms for physical works and equipment supplies. • An inadequate procurement strategy results in delays and cost overruns. • The aim of procurement rules is also to keep the process free of corruption, fraud and other prohibited practices, thus reducing the reputational risk for EIB. • Good procurement practices allow faster implementation and therefore faster disbursements with lower risks. European Investment Bank

  5. 1.2 Guide to Procurement: What is it? The Guide to Procurement is the main reference document regarding EIB Procurement Policy. Sets the requirements for the procurement of the project to be acceptable to the Bank. Produced by EIB in collaboration and consultation with the EC, MDBs and other stakeholders. Enforceable through the Finance Contract. 20/12/2019 European Investment Bank 5

  6. 1.3 Key points outside the EU (GP §3.1) • Countries outside the EU, the Bank requires that the main mechanisms of the EU Procurement Directives be complied with, with the necessary procedural adaptations. (2014/24 Directive for Public Sector and 2014/25 Directive for Public Utilities.) • Procurement of works, goods and services financed by the Bank must be carried out in accordance with the EIB Guide to Procurement. • The Bank monitors the procurement process to ensure that it is compliant with the Guide to Procurement. European Investment Bank

  7. 2.1 Eligibility (GP §3.2) • Financed from the Bank’s own resources: Open to nationals of all countries. (GP §3.2.1) • Financed partially or completely from resources from third parties (GP §3.2.2): • Other instruments (NIF, MPSF, etc.): Depends on the rules of the instrument. At least EU and parties to or beneficiaries of such agreement. • Co-financed from own resources (GP §3.2.3): • Joint co-financing: Open as much as possible, at least EU and beneficiary country. • Parallel co-financing: Normal EIB eligibility rules European Investment Bank

  8. The following types of schemes, alone or in combination, are targeted as eligible provided they meet the eligibility and appraisal standards to be defined in the Programme Procedures Manual (PPM): 2.1 Eligibility (2) European Investment Bank

  9. 2.1 Eligibility (3) The Bank’s funds will be allocated according to the scheme size in line with applicable framework loan procedures: • a) Eligible schemes with a total investment cost below EUR 25m are selected by the Promoter. The choices are subject to ex-post confirmation of eligibility by the Bank’s services. The Promoter is to submit an allocation request in a form required by the Bank (as defined in the PPM). • b) Eligible schemes with a cost between EUR 25m and including EUR 50m are submitted ex-ante to the Bank for approval before funding, using a template as defined in the PPM or a feasibility study. The Bank keeps the right to ask for additional information; partial or in-depth appraisal of the scheme will be undertaken, if judged necessary. • c) Eligible schemes with a cost above EUR 50m are to be treated, in principle, like separate loans and appraised separately by the Bank’s services. Schemes will be subject to approval before disbursement of the Bank’s funds to the final beneficiaries. The Bank will request documentation, at its discretion, as individually indicated by the Bank to the Promoter. European Investment Bank

  10. 2.2 Thresholds (GP §3.4.1) • There are thresholds in PPM over which it is mandatory to use international procurement procedures: European Investment Bank

  11. 2.2 Procurement procedures for public sector operations (GP §3.3) • International procurement procedures (GP §3.3.2) • Open procedure: allow all interested parties to submit tenders Strict requirements: • International Notification (OJEU) and national • Clear and comprehensive tender documents • Fair and transparent tendering, evaluation and award practices • Restricted procedure (with pre-qualification) • National procurement procedures (below GP thresholds) (GP §3.3.3) • National Notification European Investment Bank

  12. 2.2 Consultancy Services (GP §4.2.2) Section 4 of the GP sets the requirements for consultancy services contracts. There are specific procedures and thresholds for consultancy services: The cases where a direct negotiated procedure is allowed are listed in GP §4.2.2 European Investment Bank

  13. 2.2 Local Preference (GP §3.7.9) • Available for equipment/goods/supply contracts outside EU, except in candidate countries. • NOT accepted: local preference on works or services contracts. • 15% margin of preference on price. • NOT accepted: mandatory local component. • In line with other MDBs (except EBRD). European Investment Bank

  14. 2.2 Tender Documents (GP §3.7.4) The conditions of contracts: • Use internationally-recognised standard procurement documentation such as • the World Bank tender documents (website www.worldbank.org, Projects & Operations) • the FIDIC (Fédération Internationale des Ingénieurs-Conseils) {website www.fidic.org} provided that these are compatible with the provisions of this GtP. (Site visit, briefing, time: 35 days) The tender documents should include a statement to the effect that tenderers should alert the promoter in writing, with a copy to the Bank, in case they should consider that certain clauses or technical specifications of the tender documents might limit international competition or introduce an unfair advantage to some tenderers. European Investment Bank

  15. 2.2 Tender Evaluation Criteria (GP §3.7.10) Either the lowest price of the compliant and technically responsive tenders; or The most economically advantageous tender, applying a number of criteria adapted to the contract in question: e.g. price, payment terms, construction or delivery period, technical merit (proposed staff, equipment, construction method and planning, technical characteristics, etc.), environmental characteristics, technical compatibility with other equipment, availability of service and spare parts, operating costs, maintenance costs, etc. 20/12/2019 European Investment Bank 15

  16. 2.2 Non-objections (international procedures) Given to pre-qualification reports and/or tender evaluation reports which should include a clear recommendation for prequalification or contract award. The pre-qualification of tenderers, the evaluation of bids and the proposed decision on the award of contracts must obtain the non-objection from the Bank based on appropriate documents; Not given to tender documents (only commented on). Procurement Notice, the documents relating to the pre-qualification stage and the tender documents must be sent to the Bank for information and possible comments before being published or given to potential tenderers (ANNEX 2 GtP) Formal communication (letter or fax). No email. A signed and scanned pdf version must be archived. 20/12/2019 European Investment Bank 16

  17. 2.3 Procurement monitoring procedures (GP §3.5) International procurement procedures (GP §3.7, Annex 2) Ex-ante monitoring The Bank requires promoters to seek its concurrence for all major procurement decisions and monitors the procurement process The Covenant of Integrity must be sent to the Bank together with the contract Other procurement procedures (GP Annex 2) Ex-post monitoring The promoter must obtain the non-objection from the Bank for the procurement procedure chosen and the final selection of the tenderer on the basis of adequate justifications The Covenant of Integrity is kept by the promoter and available upon request 20/12/2019 European Investment Bank 17

  18. 2.4 Joint Co-financing (GP §3.4.5) (I) Minimum requirements and standards: • Eligibility open as much as possible (in line with GP §3.2, at least EU Member States and the beneficiary country). • Adequate publicity to ensure wide international competition. (OJEU) • Basic EU principles are respected: • Non discrimination of tenderers. • Fairness and transparency of the process. • Contract award to most economically advantageous offer. European Investment Bank

  19. 2.4 Joint Co-financing (GP §3.4.5) (II) Various degrees of reliance possible: • Use the procurement procedures of the co-financing institution • Entrust the co-financing institution with the supervision of procurement • Entrust the co-financing institution to appraise and/or monitor the project on its behalf: “Mutual Reliance” European Investment Bank

  20. 2.4 “Mutual Reliance” (GP §3.4.5) (III) • The Lead Institution is fully in charge of procurement and applies its own rules and procedures, as long as they meet the Bank’s minimum requirements and standards as described in previous slides. • Mutual Reliance Initiative with EBRD and KfW: Operational Guidelines, describing more precisely how to handle, among other, procurement matters have been produced. European Investment Bank

  21. 3. Covenant of Integrity (GP §3.5 and Annex 3) • The Bank operations are free from prohibited conduct (including but not limited to, fraud, corruption, collusion, coercion and obstruction and money laundering and terrorist financing). The promoters must insert in the tender documents or in the contract in a clause: • requires any tenderer for works, goods or services, as a condition of admission to eligibility, to execute and attach to its tender a Covenant of Integrity in the form indicated in Annex 3; • grants the promoter, the Bank and auditors appointed by either of them, as well as any authority or European Union institution or body having competence under European Union law, the right of inspection of the records of the contractor, supplier or consultant in connection with any Bank-financed contract. European Investment Bank

  22. 3. Covenant of Integrity (GP §3.6 and Annex 3) Applicable to all contracts outside the EU • No threshold • Public and Private sector operations • Undertaking not to engage in Prohibited Practice extended to the tenderers’ sub-contractors • Obligation for tenderers to declare if they have been excluded by the European Institutions or the main MDBs • Obligation of keeping records for possible auditing extended to the tenderers’ sub-contractors European Investment Bank

  23. 4.1 Standstill period and remedies (GP §1.3) • Standstill period: to allow tenderers to access the remedies mechanism before all decision and contract is signed • Bank remedies requirement originates form EU “remedies Directives 89/665/EEC and 92/13/EEC • Remedies procedure: EIB requires to ensure the review procedures for effectives remedies are available to any party having or having had an interest in obtaining a particular contract and who has been or risk being harmed by an alleged infringement. • National remedies mechanism European Investment Bank

  24. 4.2 Publication Notice – Award Notice (GP §3.7.2 - 3.7.14.) Publication Notice: Invitation fro tender has to be published in OJEU • o promoter’s title, project’s name and reference to the Bank’s potential financing; • o description of the works or nature of the supplies or services to be furnished; • o projected timetable; • o list of tender evaluation criteria in decreasing order of importance; • o place where tender documents can be obtained; • o final date for receipt of tenders; and • o date and place of public opening of tenders. Award Notice: The result of the approved tender evaluation has to be published in OJEU immediately after the signature of the contract Project title and number; • Lot number and name; • Publication reference; • Publication date of the Procurement Notice; • Promoter’s name; • Reference of the Bank’s financing; • Contract value (only when price is the evaluation criterion); • Date of award of contract; • Number of bids received; and • Name and address of successful bidder. European Investment Bank

  25. Thank you for your kind attention More information at: www.eib.org info@eib.org Tel.: +380 44 390 80 37 Tel.: +380 67 326 0720 i.heinczinger@eib.org European Investment Bank

  26. Distribution of Sub-projects between IFIs (I) European Investment Bank

  27. Distribution of Sub-projects between IFIs (II) European Investment Bank

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