Procurement rules

1. Procurement rules Beneficiary Seminar Joint Technical Secretariat

2. What is procurement? • Procurement is the timely acquisition of goods, works, and services, which respects the following condition in accordance with the Article 1 and 2 of Annex IV to the Grant Contract: • the objectives of organisation are concerned; • fairness, integrity and transparency through competition; • economy and effectiveness; • best value for money; • avoid any conflicts of interest. 2

3. ATTENTION! Project Beneficiaries and partners form Estonia and Latvia, as well as Russian Federation public entities, should follow their NATIONAL PROCUREMENT PROCEDURES and additionally follow the rules of nationality and origin set out in Article 2 of Annex IV to the Grant Contract. Russian Beneficiaries and partners that are not public entities must respect Article 1 to 7 of Annex IV to the Grant Contract. It is recommended to use PRAG (chapters 2 to 5 and templates) as a model of “best international practice” (Article 3 of Annex IV).

4. Good procurement principles 1 • Strict rules should be followed in each procurement procedure in order to acquire best price-quality ratio. • No discrimination – against product, services, suppliers, contractors or service providers on grounds of nationality, as long as the rules of origin and nationality are respected. • Fair competition – all tenderers must be given the same information and the same opportunities to come up with winning bids. • Clear specification – tenderers cannot complete effectively unless they know precisely the requirements of the purchaser.

5. Good procurement principles 2 • Effective publicity (announcement) –particularly important for publicly funded procurement where, typically the purchasers are not experts in the field. This is where use of the internet is increasingly important. For publications in the national or regional press the EU guidelines on visibility should be followed. • Adequate timescales – bidders are given sufficient time to respond to advertisements expressing an interest in the purchaser’s requirement, to respond to invitations to participate in the bidding and to prepare and submit their offers. • (PRAG: 60 days for Supplies and 90 days for Works in international tenders, 30 for Supplies and 60 for Works in local tenders)

6. Good procurement principles 3 • Use of relevant objective criteria –it is crucial that the criteria used for the elimination of unsuitable candidates, the selection of participants in contract award procedures and the award of contracts on the basis of the offer(s) economically most advantageous to the purchaser are both objective and relevant to the requirement. • Adequate records -it is essential to be able to justify decisions later on if there are any challenges or doubts about the decisions that were made.

7. General rules of procurement • Every procurement procedure should follow two selection criteria: • the eligibility check of the tenderer or candidate to take part in the procure needs to be carried out in order to identify possible grounds for exclusion in advance; • criteria for assessing its financial, economic, technical and professional capacity.

8. Basic steps in procurement • Development of Procurement Plan; • Development of technical specification or Terms of Reference (if nessesary); • The Call Forwarding / Publication/ Request for offers; • Receiving tenders from potential suppliers/ service providers/ contractors; • Making the decision on the offers; • Notification of the decision to the responsible bodies and possible contractors; • Document issued by the responsible authority/authorities confirming that procurement documentation is in compliance with the requirements set in the national legislation (if applicable); • Contract procedure with the winner of the procurement.

9. Types of contracts Service contracts: • Studies: identification and preparation of projects, feasibility studies, economic and market studies, technical studies, evaluations and audits • Technical assistance: advisory role, to manage or supervise a project, or to provide the experts specified in the contract Supply contracts: • Purchase, leasing, rental or hire (with or without option to buy) of equipment • A contract for the supply of equipment and, incidentally, for installation Works contract: • The execution, or both the execution and design, of works • Outcome of building or civil engineering works

10. Mixed contracts Mixed (hybrid) contracts (PRAG Article 2.4.9): • Contract between the Beneficiary or partner and a service provider, supplier or construction firm covering two or more of the following: works, supplies and services. • Beneficiary or partner determines the procurement procedure to be used depending on which of the components (works, supplies or services) prevails. This assessment must be made on the basis of: • the value, and • the strategic importance of each component relative to the contract as a whole.

11. Important • Follow national procurement procedures rules (consult with the national office of Procurement) • If national rules not for you, follow PRAG, as a model of “best international practise” (Article 3 of Annex IV) • Follow the rules of nationality and origin • The contract must be awarded to the most economically advantageous tender in accordance with the principles of transparency, fair competition for potential contactors, and taking care of avoiding any conflict of interest.

12. Programmas nākotne.. • Thanksforattention! 12