PRAG service – management of contracts, future aspects

1. PRAG service – management of contracts, future aspects Gabriela Tanase Kristel Haiba-Rillo

2. Contract preparation (1) – PRAG 2.9.1.2 • Contract will be compiled based on the draft contract included in the Tender Dossier and tenderers original offer • Slight amendment can be allowed: e.g if there were arithmetical mistakes in the financial offer the consultant should sign and submit a correct version • No modifications in the contract conditions declared during the tendering phase !!! Only the Special Conditions should need to be completed by the CA in general

3. Contract preparation (2) In more detail: • The Contract should be compiled taking into account the following documents: • Financing Agreement authorising the project • Tender announcements (forecast, PN, shortlist), Shortlist Report, Tender Opening Report, Evaluation Report and any other relevant information • Three originals of the proposed contract (for the Consultants, Contracting Authority, EC Delegation?) The number of originals can be increased + Explanatory note (A6) to be compiled

4. Contract preparation (3) • DIS ex-ante: Prior approval to the contracts from the ECD • When sending the contracts for ECD approval the contracts should be signed, dated and all pages of Special Conditions initialled by the PAO/Contracting Authority • After ECD approval contracts to be sent for signature to the successful tenderer, who must sign the contracts within 30 days of receipt (and in any case within the tender validity period) * When you already foresee during the TD preparation that the contracting will be very close to the commitment deadline – apply for deviation from the Instructions to tenderers A 14.2 to reduce the period of 30 days

5. Contract preparation (5) • Successful tenderer returns two originals to the CA with the eventual financial guarantee required in the contract • If successful tenderer fails to do the latter or indicates at any stage that it is not willing or able to sign the contract – the tenderer cannot be awarded the contract → the contract preparation will be started again with the second best (compliant) tenderer

6. Contract start • The contract takes effect earliest on the date of the later (tenderer) signature or as stated in the Special Conditions. • The contract cannot cover earlier services or enter into force before this date • Explanation: in the PRAG there are deviations from procedures allowed regarding Programme Estimates. Please note that the Programme Estimates are only applicable to EDF NOT budget

7. Financial aspects • Financial Guarantee • Incidental Expenditure • Time Sheets – weekends, holidays? • Supporting documents (not) to be controlled /template for financial offer and financial offer itself (if keen on controlling the doc’s, then modify the template accordingly) + the additional audit verification aspects

8. Reporting • The reporting requirements are stated in the Terms of Reference. Generally there are three kind of reports:

9. Reporting – Inception Report (1) • Inception report – to be submitted in the very beginning of the project. It should reflect the common understanding of the project beneficiary and the Contractor. In addition, a realistic timetable of activities should be presented. • The inception report should be approved by the relevant organisations (especially the beneficiary, PIU?). Depending on project specifics but the IR may be sent to the PAO and ECD (until EDIS) only for information • Be aware! – no modification to the contract can be made with the IR

10. Reporting – Inception Report (2) The recommended table of contents of the inception report is the following: • Project synopsis • Analysis of the project • Start situation • Project Planning • Co-ordination with other projects • Project goals and objectives • Project approach • Intended results – by component • Planning duration of project - timetable • Constraints, risks and assumptions – measures for minimising risks

11. Reporting – Interim Reports (1) • Interim report – Major progress reports are usually prepared quarterly or on a half-yearly basis, starting form the very beginning of the project. The interval is specified in the Terms of Reference. In defining the time frame, care has to be taken that the payment schedule is linked to the reporting schedule. • Approval as stated in the ToR – Steering Committee can be involved

12. Reporting – Interim Reports (2) A suggested table of contents for Interim Report is given below: • Project synopsis • Project progress in the reporting period • Project planning for the next reporting period • Summary of project planning for the remainder of the project • Information regarding the commitment of the parties involved • If applicable: updated timetable • Technical annexes, project findings, recommendations, annexes

13. Reporting – Final Reports (1) • Final Reports: The ultimate progress report is the Final Report. The report includes a summary of progress since the project beginning. The report should reply to every requirement set in the Terms of Reference reflecting all activities carried out and results achieved etc. The Final Report should be approved by the relevant institutions stated in the ToR (including Contracting Authority)

14. Reporting – Final Reports (2) The suggested table of contents for the Final Report is as follows: • Project synopsis • Summary of progress since the start of project • Summary of progress in final project period • Overall report on total project • Project completion report (including executive summary and recommendations) • Other issues, observations and recommendations related to project implementation • Annexes - outcomes of the project • Achieving indicators (if feasible) – for the evaluation purposes (project fiche)

15. Contract Assessment Form (B15) (1) • To be completed by the Project Manager for every service contract and attached to the final report on the contract when submitting to the CA for approval

16. Contract Assessment Form (B15) (2) • Contractor data • Performance period of contract – the period should be coherent with the initial contract (and addenda, if applicable) • Performance rating of contractor (scale 1(excellent) to 5 (unsatisfactory) • Achievement of contract objectives (as specified in the ToR • Ability to meet deadlines • Quality of services /*if rating is lower than 3 comment needed/

17. Contract Assessment Form (B15) (3) 4. Performance rating of key experts (scale 1 to 5) • Client relations • Written communication • Verbal communication • Drive and determination • Job management • Personal effectiveness • Technical competence FORM TO BE SIGNED BY THE PROJECT MANAGER

18. Group exercise • Elaborate at least 5 technical and 3 financial (not for inception report) important questions/control points per each type of report.

19. Contract modifications (PRAG 2.10) (1) Contract modification must be formalised through an administrative order or an addendum to the contract in accordance with the general conditions of the contract • Substantional modification = addendum • Addendum to be signed by contracting parties (incl ECD until EDIS)

20. Contract modifications (2) • Simple modification to be only notified to the contracting parties – changes in address, change of bank account, change of auditor. → the CA can still oppose the ocntractor’s choice of bank account or auditor • Substantional modification = addendum • Addendum to be signed by contracting parties (incl ECD until EDIS)

21. Contract modifications (3) • General principles: 1. Contractor’s request should not automatically be accepted – there must be justified reasons for modifying a contract 2. Contracts can be modified within the execution period of the contract 3. Request for addendum should be submitted to the CA at least 30 days before the amendment is intended to enter into force (except for the duly justified cases and CA’s acceptance) 4. The purpose of the addendum must be closely connected with the nature of the project covered by the initial contract

22. Contract modifications (4) cont. General principles: 5. Major changes, such as fundamental alteration of the ToR, cannot be made by means of an addendum – fair competition! 6. For complementary services, a new contract should be signed (by means of negotiated procedure if relevant) 7. For additional services, an addendum should be prepared

23. Contract modifications (5) • For an addendum standard template should be used (B16) • The modified articles should refer to the article numbers of the initial contract • NEW! Any addendum modifying the budget must include a replacement budget showing how the full budget breakdown of the initial contract has been modified by this addendum (and any previous addenda) (B17)

24. Contract modifications (6) • If the budget is modified or the contract is extended the payment schedule shold be also reviewed and modified if relevant • Any modification extending the period of implementation must be such that implementation and final payment can be completed on time – leave financial specialists time / disbursement deadline • Until EDIS ECD’s approval needed for addenda, signature round the same as for the contract ADDENDUM FORM B16 (and B17 if applicable)

25. Contract modification based on General Conditions (Article 20) • Article 20.2 “..where the amendment does not affect the basic purpose of the contract and, for fee-based contract, the financial impact is limited to a transfer within the Fees or between the provision for incidental expenditure and the provision for expenditure verification considering that latter provision cannot be decreased, involving less than 15% of the original amount for the relevant line in the Budget Breakdown in Annex V, the Project Manager shall have the power to order any variation to any part of services necessary for the proper execution of the contract, without changing the object or scope of the contract. Such variations may include additions, omissions, substitutions, changes in quality, quantity, specified sequence, method or timing of performance of the services”

26. Post EDIS

27. Procurement • After EDIS accreditation local procurement legislation must be applied • All specific requirements should be maintained if not instructed otherwise by the EC (for example: origin for supplies in case of Phare) – does it fit into the local legislation?

28. EDIS • Chain shorter – no more approvals needed from the ECD • 100% responsibility on beneficiary country • Use your own language (+ and -)

29. EDIS • With the EDIS report there may be findings of different level (level 1:blocking findings; and level 2 and 3 as findings that should be dealt with during certain period • EDIS follow-up audit • No substantial changes in the system accredited can be made without prior authorisation from EC

30. Conclusion

31. Day 1 - What did we learn? • Essentials (eligibility, grounds for exclusion, penalties, visibility, conflict of interest, awarding principals, no retroactivity, use of standard documents, record keeping for 7 years) • Service procurement procedures: FWC, CNP, IRP + single, competitive dialogue and negotiated procedure • Service forecast, procurement notice and short-listing • Only phase to assess the capacity of a company (no criteria should be set on key expert at this stage) • Clear, measurable and reasonable criteria

32. Day 2 - What did we learn? • Preparation of TD (incl. ToR) and tendering • Clear objectives, activities and achievable results • Reasonable and measurable criteria on key experts You get what you ask!

33. Day 3 - What did we learn? • Evaluation Process – equal treatment! • Evaluation Committee composition approved on time • EvC members informed about the basis of the evaluation beforehand • Compliance of offers with formal submission requirements controlled and relevant information recorded in the Tender Opening Report • Technical evaluation carried out based on TD, procedure regarding asking clarifications and arranging interviews correct; rejections justified; • Financial evaluation performed only to the technically compliant tenders. The total fees of financially compliant tenders (i.e does not exceed the budget available, the incidental exp. and provision for verification is not changed) will be compared CONFIDENTIALITY and IMPARTIALITY!!!

34. Day 4 - What did we learn? • Contract should be prepared based on the documents included in the TD and also the original offer of tenderer • Reporting – the main instrument for monitoring contract implementation. Specific requirements as stated in the ToR / general conditions • Contract modification – substantial modifications and simple modifications

35. Assessment test • 10 questions (true/false)

36. Thank you for your attention!