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PUBLIC PROCUREMENT AUDIT

PUBLIC PROCUREMENT AUDIT

Lisboa 2010

Documents prepared by:• EUContactCommitteePublicProcurementWorkingGroup• EUContactCommitteePublicProcurementUpdatingGroup(SAIs of Belgium, Cyprus, Czech Republic, Denmark, European Court of Auditors, Finland, Germany, Hungary, Ireland, Luxembourg, Portugal, Slovenia and Unitek Kingdom)

EditedbyTribunal de Contas,Portugal,2010

Output:500

Legaldeposit:317040/10

www.tcontas.pt

3Public Procurement Audit

Index

Beginning ..................................................................................................... 5

Foreword ..................................................................................................... 7

Principles of Public Procurement ................................................................ 11

Guideline for Auditors ................................................................................. 21

Procurement Performance Model ............................................................... 79

Checklists for financial and compliance audit of public procurement.......... 107

Summaries of SAIs audit reports ................................................................. 185

Public Procurement Audit 5

Tribunal de Contas,memberofboththeContactCommittee“PublicProcure-mentWorkingGroup”and“PublicProcurementUpdatingGroup”,hasagreathonourtoeditthisbookletnamedas“Public Procurement Audit”, prepared asaresultoftheactivityofthoseWorkingGroups.

For Tribunal de Contas,auditingpublicprocurementisakeyissue,duetoitsrelevancewithinpublicspendingandtoitsimportancetothesoundfunction-ingoftheeconomicmarket.Asinotherareas,auditingpublicprocurementenforcesaccountabilityforsucharelevantpublicactivity,whichisessentialforthecitizens’confidenceinthebestuseofpublicfundsandintheruleoflaw.

Wearesurethatthedocumentsincludedinthisbook,astheyareusefultoolsforauditorsthatneedtolookintopublicprocurementprocessesandissues,aswellashelpfulanalysisforresearchers,addconsiderablevaluetotheauditcapabilitiesandtotheprocurementactivities.

Themodernizationofthoughtandmethodsofauditareenhancedbythead-vancesthatarepossibleoverthiswork.Itspotentialitiesareclearlyevidencedinthehighqualityofthepresentedguidelines.

Guilhermed’OliveiraMartins

PresidentoftheTribunal de Contas ofPortugal

Beginning ...

Accountability is condition of trust

Public Procurement Audit

Foreword


PublicprocurementaccountsforasignificantproportionofEUexpenditure.In2008,the27EUMemberStatesspentaround€2155bn,or17,2%ofGDP,onpublicprocurement(works,goodsandservices)1.

ThePublicProcurementDirectivesandtheprinciplesderivedfromtheECTreaty,namelytheprincipleoffreemovementofgoodsandservices,aswellastheprincipleofnon-discrimination,areintendedtoensurethatcontractsareawardedinanopen,fairandtransparentmanner,allowingdomesticandnon-domesticfirmstocompeteforbusinessonanequalbasis,withtheintentionofimprovingthequalityand/orloweringthepriceofpurchasesmadebyAwardingAuthorities.

Inaddition,inamarketofthissizeitisclearthatifthelawsgoverningpublicprocurementarenotappliedcorrectly,therebyleadingtosomecontractsbeingawardedtowhatisnotthemosteconomicallyadvantageousorlowestbid,thefinancialconsequencesalonecanbesignificant.

Inviewofthisreality,theContactCommitteeoftheSupremeAuditInstitutions(SAI)oftheEuropeanUnionsetup,in2004,aPublicProcurementWorkingGroup,ontheIrishSAI’sinitiative.

Actually,SAIsaudittheuseofthesepublicresourcesand,dependingonmandates,mayalsopromotesoundmanagementprinciplesandtheattainmentofvalue.TheauditorfromaSAImayexaminetheprocurementfunctionaspartofanauditoftheaccountsofaspecificpublicauthority.Alternativelyhe/shemaybeinterestedinexaminingspecificareasorproceduresand in consideringefficiency, competition, regularity,fitness forpurposeorvalueadded,fraudandcorruption.SomeSAIsmaystrivetorecommendgoodpracticewhileothersmayconcentrateonmattersofcomplianceandtheactiontakeninresponsetoidentifiedirregularities.

UnderthedynamicleadershipofMr.JohnPurcell,formerComptrollerandAuditorGeneralofIreland,theWorkingGroupdrewupfourdocumentsmeanttohelpauditorsinthepublicprocurementrelatedaudits.

1 Source: European Commission, Public Procurement Indicators 2008, 27 April 2010


Foreword

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TheContactCommitteeapprovedthesedocumentsanddecidedin2008tosetupaPublicProcurementUpdatingGroupthatwouldberesponsibleforupdatingandfurtheranalyzingthem:

•AGuideline for Auditors,basedontheEUPublicSectorProcurementDirective2004/18/ECand includingsummariesof themost important judgmentsof theEuropeanCourtofJustice;

•AProcurement Performance Model,includingkeyquestionsdevelopedasreferen-cepointersforauditorsevaluatingtheperformanceoftheprocurementfunctioninpublicsectorbodies;

•Checklists for Financial and Compliance Audit of Public Procurement, to be used whenauditingpublicprocurementprocesses.Thechecklistisrelevantandapplica-bletoauditorsoperatingwithindifferentframeworksandwithdifferentobjectives,requirementsandproceduresandincludesfraudandcorruptionrisks;

•Summaries of audit reports published by EU SAIstobeincludedandstructuredinadatabaseonpublicprocurement.

Thesedocumentsarenowbeingpresentedtogetherinthisbooklet,whichismeanttobeasimple,user-friendlyandefficienttool.

PhilippeRoland

SeniorPresidentofSAIofBelgium

Co-Chair

IgorŠoltes

PresidentoftheSAIofSlovenia

Co-Chair


Principles of Public Procurement


1. BASIC PRINCIPLES OF PUBLIC PROCUREMENT

Knowledgeofbasicprinciplesisveryimportantbecause,duetodiversityoflivingsitu-ations,legislationcannotestablishnormsforeachcircumstance.

Alsoinpublicprocurementprocedures,itisnecessarytounderstandlegalregulationsthroughcertainprinciples,guidingthecontractingauthority,initsdecision-making,andthetenderer,intheassessmentofitsrights.

Inthisarea,onemusttake intoconsiderationbothprincipleshavingbecomecom-monvaluecriteriaofourcivilizationandcoveringthewholelegalsystemandpublicprocurementspecificprinciples.

Publicprocurementsystemsetup,developmentandimplementationmustbebasedontheprinciplesoffreemovementofgoods,freedomofestablishmentandfreedomtoprovideservices,allderivingfromtheTreatyestablishingtheEuropeanCommu-nity,andalsoontheprinciplesofeconomy,efficiencyandeffectiveness,ofensuringcompetitionamongtenderers,oftransparency,ofequaltreatmentoftenderersandofproportionality.

ThebasicprinciplesarespecifiedinArticle2ofDirective2004/18/EC,asfollows:

• Principleofequaltreatment,

• Non-discriminationand

• Transparency.

TheTreatyestablishingtheEuropeanEconomicCommunity(hereinafterreferredtoasEECTreaty)providesthebasicframeworkforEuropeanpublicprocurementlegalregula-


Principles of public procurement

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tions.ThisactwasprimarilyaimedatestablishingarelevantcommoninternalmarketofMemberStatesbyprohibitinganynationaldiscriminationandanyrestrictionintheselectionofproductsandservices,includingthefreemovementofgoodsexclusiveofallcustomsduties,aswellasprohibitingquantitativelimits(quotas)andmeasureshavingequivalenteffectovercustomsdutiesandquotasamongMemberStates.

TheobjectiveoftheEECTreatywouldbebestattainedalsobyprohibitingrestrictionstothefreemovementoflabourforceandservices,capital,salariesandself-employment,aswellasbythefreedomofchoiceofestablishmentofenterprisesinMemberStates.

Theattainmentof theTreatyobjective is to include thedevelopmentofEuropeanCommunitysignificantpolicies,notablyintheareasofcompetitionlaw,stateaidandagriculture.

TheEECTreatydoesnotspecificallymentionpublicprocurement,exceptinthecon-textoffundingCommunitycontracts inoverseascountriesandwheninrelationtoindustrialpolicy.

Nevertheless,provisionsmightbefoundintheEECTreatyconstitutingabasisforpublicprocurementsystemestablishing.Theseareprincipallyprovisionsreferringtothefreemovementofgoods(Article28),thefreedomofestablishment(Article43),andthefreedomtoprovideservices(Article49)(Arrowsmith2005:182).Otherprovisionsareequallyimportantrelatingtotheprohibitionofdiscrimination(Article12)andtotheissueofacquiredundertaking(Articles81,86,and87).

Theregimeof freemovementofgoodsandservices is themost important fortheareaofpublicprocurement.TreatyestablishingtheEuropeanCommunity(hereinafterreferredtoasECTreaty)containsthebasicobjectiveofthepublicprocurementacquis,meaningtheopeningofthepublicprocurementmarketamongMemberStatesandallowingtendererstoparticipateinpubliccontactawardingproceduresbeyondthefrontiersofindividualMemberStates.



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SinceitwouldnotbepossibleforMemberStates,nearlyonthebasisoftheECTreaty,toestablishmorespecificpublicprocurementrules,publicprocurementdirectiveshavebeenadoptedasasecondarylegalsource.

Understandingbasicprinciplesandestablishingthereof toa legislationsystemisevenmoresignificantinviewofthefactthat,thoughtheimplementationofthedi-rectiveswasnoteffectiveeverywhere,theprinciplesassuchcreateasinglecoreforinterpretingandattainingobjectivesaccompanyingthepublicprocurementsystemthroughfoundingcontractsandrelevantdirectives.

Theprincipleshaveanimportantroletoplay,bothindirectingthelegislatorwhenadoptingthecontentoflegalnormsandintheunderstandingoflegalprovisions,particularly in casesof imprecisedetermination thereof.Primarilyproperunder-standingand interpretationof certainprinciples facilitates the interpretationoflegalnormsintermsofcontent,context,andpurpose.Legalprinciplesconnectlegalnormstoasinglewholeprovidingsuchnormswiththerequiredcontent,particu-larlyincaseswheretheflamboyanceanddiversityofactualcircumstancescannotalwaysbecoveredbyalegalnorm.Alegalruleneedstobeunderstoodbymeansofaspecificprincipleconstitutingboththedirectionandthepurposeofdraftingaparticularlegalnorm.

2. CONFLICT OF PRINCIPLES IN PRACTICE THROUGH VALUES, NORMS AND RELATIONS

Properunderstandingofpublicprocurementprinciplesisimportantforcontractingauthoritiesalsointermsofawarenessonthelimitationofrightswhileusingpublicassetsforpublicprocurementpurposes.Thisusemustnotbedirectedtowardstheattainingofpersonalbenefitorofthebenefitofspecificgroups,rathertothemeet-ingofthepublicinterest«inlargosensu»...Theimportanceofprinciplesalsoreflectsitselfintheirrestrictivestatefunctionwithinitsregulatoryattributes.



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Interestingquestionsoccurringwiththepresentationoffundamentalprinciplesarewhethertheseprinciplesaremutuallyequalinrankorwhethertheyareplacedinasubordinate-superiororder,whethertheyaremutuallyexclusiveorcomplementary,andwhethertheysupportpublicprocurementobjectivestoasamedirection.

Sofar,therelationbetweentheprincipleofformalityandtheprincipleofeconomy

(oftenopposedtoeachother)hasshownitselftobeaproblematicone.

Contractingauthoritiesexperiencethisconflictincaseswhen,duetoformalreasons,

anoffermustberejected–whichisnotregularduetoamissingdocumentthatis

actuallynon-essential forgoodperformanceof theworkbuthasbeendemanded

bythecontractingauthorityinthedocumentation–althoughthatparticularofferis

mostappropriateaccordingtotenderdocumentationcriteria.Suchanoffermustbe

rejectedinordertoabidebytheformalityprincipleintermsofthepracticeofcontrol

institutions,thoughadecisioninfavourofthisofferwouldbeinaccordancewiththe

principleofeconomy.

Thenwhereistheboundaryintheweightingbetweensignificanceandrelationwhen

thesetwoprinciplesareracing?Isitevenpossibletoplacethemwithinasystemof

valueswhichwould,inarelativelyobjectivemanner,establishinadvanceboundaries

andcircumstancesunderwhichoneoftheprinciplesbecomesmoreappropriatethan

theother?Orshouldtheformalityprinciplebesimplyplacedabovetheprincipleof

economynottakingintoaccountanyeconomicimplications?

Itwouldbeidealifwecouldofferananswer.Yet,unfortunately,itcannotbegiventill

thetimewiderconsensusisreachedamongvariousinstitutionsontheimportanceof

aspecificprincipleinrelationtootherprinciples.

Whilesolvingthisproblem,wecouldconsiderasaninitialpointthecaselawofthe

ConstitutionalCourtof theRepublicof Slovenia in theprocessof itsevaluationof



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proportionality,whensignificanceisweightedagainsttheinterventionwithaspecific

rightinthecaseofarighttendingtoprotectitselfagainstsuchintervention,andwhen

itjudgestherehasbeenmoresevereinterventionproportionatetothehigherlevel

ofsuchrightbeingaffected.IftheConstitutionalCourtfindsthattheimportanceof

therightwhichistobeprotectedbyinterventionprevailsovertheimportanceofthe

interventiontotherightinquestion,theinterventionwillundergothisaspectofthe

proportionalitytest.

Acertainformofaproportionalitytestcouldbeestablishedalsointhecaseofpublicprocurement,whenanattemptismadetoprotectaprinciplebyviolatinganotherone.Thismayoccurincaseswhere,forexample,forthepurposeofprotectionoftheprinciplesofeconomy,efficiencyandeffectiveness,theformalityprincipleisviolatedunderassumptionsdeterminedinadvance,onthebasisofwhichtheproportionalitytestcouldbeexamined.

Acertainright(inourtheoreticalcase,theprincipleofformality)maybelimitedonlyincaseswhereit isnecessaryforthepurposeofprotectionofotherrights(inourtheoreticalcase,protectionof theprincipleofeconomy),where it isnecessary torespecttheconstitutionalprincipleofproportionality,thismeaningthatitisobliga-torytofulfilthreeconditionsforadmissibilityofthoselimitationsorinterventions:urgency,adequacyandproportionalityinthenarrowsense.

Theinterventiontotheconstitutionalrightisallowedonlyincaseswheresuchin-terventionisnecessary(inevitable)fortheprotectionofotherhumanrights,whichmeansthatalegislativeobjectivecannotbeachievedwithonemorelenientinterven-tionintheconstitutionalrightorwithoutit.Theinterventionmustbeappropriateforachievementofadesired,constitutionallyallowedobjective(forexample,protectionoftherightsofothersorofpublicinterest,wheretheprotectionofthepublicinterestrepresents a constitutionally allowedobjective.). The intervention shouldnotbeexcessive,thismeaningthatonlythemildestofallpossibleinterventionsisallowed



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wherebyaconstitutionallyallowedandwantedobjectivecanbeachieved,aswellasprotectionofequallyimportantrightsofothers.Withintheframesofproportional-ity,theimportanceoftheinterventionshouldbealsoassessedcomparedwiththeimportanceoftherightwhichistobeprotectedbytheintervention.

Ofcourse,wedonotmakedirectequationbetweenpublicprocurementandconstitu-tionalrights.Someofthemmayevenbederivedfromtheuseofpublicprocurementorareviolatedforthepurposeofmisuseorlimitationthroughlegalorexecutiveacts,orbydecisionsofcertaininstitutionsorauthorities.Inspiteofthis,mentionedcondi-tionsallowinginterventionstoconstitutionalrightscould,inareasonableadjustment,createassumptionsandbasis forassessmentof theadmissibilityof the limitationandexclusionofonefundamentalprincipleofpublicprocurementforthepurposeofimplementationofanotherprinciple.

Notonlynecessity,butalsoadequacyandproportionalitymaybeconsideredinputelementsinthetestofproportionalityintheareaofpublicprocurement,inwhichcasewewouldalsohavetoassessthenuisanceoftheimplicationsofviolationofoneoftheprinciplesinviewofthebenefitandobjectiveswhicharetobeachievedthroughtheimplementationofanotherprincipleandwhichmustbebasedonthelaw.

Inthisway,determinedformalinsufficiencyorviolationwouldnotnecessarilymeantheexclusionofatendererfromaprocedure,incasesuchinsufficiencyorviolationwouldnothaveanynegativeoradverse implicationsonotherprinciplesofpublicprocurement(theprinciplesofequaltreatmentoftenderers,non-discriminationetc.).

Thisdisregardwouldthenenabletheselectionofanofferthatwouldmeanimplemen-tationoftheprincipleofeconomyforthepurposeofeconomicallymostadvantageousconditions,appropriaterelationshipbetweeninvestmentsandobtainedvalue.Thedisregardoftheprincipleofformalityonbehalfoftheprincipleofeconomyinthiscasewouldalsobenecessary,appropriate,andproportional.



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Theabovediscussedcouldrepresentaconsiderationregardingtheformulationoftheproportionalitytestintheareaofpublicprocurement,whichwouldrepresentanimpor-tantandnecessarystepaheadinviewofrecentpractice,bothforcontractingauthoritiesandinstitutionsmonitoringregularityanddecidingonviolationsinpublicprocurementprocedures,aswellasonviolationsoffundamentalprinciples.

Oneofthemoredifficulttasksoflegalregulationandpracticeistofindanappropriateratiobetweenfundamentalprinciplesofpublicprocurement.

Wecansaythatnoprinciplecanbeexcluded,butnoprinciplecanalsobedefinitelyimplemented.

IgorŠoltes

PresidentoftheSAIofSlovenia

Co-Chair


Guideline for Auditors


Disclaimer

Thisguideline–whichisintendedtoservegeneralinformationpurposesonly–hasbeencompiledwiththegreatestcare.Undernocircumstanceswill liabilitybeacceptedfordamagesofwhatevernature,inanywayresultingfromtheuseofthisguidelineorresultingfromorrelatedtotheuseofinformationpresentedinormadeavailablethroughthisguideline.

TheuserisrecommendedtocheckperiodicallythewebsitesmentionedinAppendixIXandofcoursetousethetextofthemostrecentversionofthePublicSectorDirective2004/18/EC.


Guideline for auditors

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TABLE OF CONTENTS

1. Introduction

2. Scope of Directive 2004/18/EC

3. Obligations imposed by Directive 2004/18/EC

4. Criteria for awarding contracts

5. AdvertisingintheOfficialJournaloftheEuropeanUnion(OJEU)

6. Common Procurement Vocabulary

7. PriorInformationNoticesandBuyerProfiles

8. Thresholds

9. The Principle of Non Discrimination

10. Estimation of Contract Values

11. Priority and Non-Priority Services

12. Tendering Procedures

13. Time-limits for Replies

14. Issue of Documents

15. Receipt and Opening of Tenders

16.ClarificationofTenders

17. Evaluation of Tenderers and Tenders and Award of Contract

18. Abnormally Low Tenders

19. Disclosure of Information: Notifying Tenderers and Contract Award Notice

INDEX



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APPENDICES1

Appendix I: Glossary of Terms

AppendixII: Mainthresholds(exclusiveofVAT)abovewhichadvertisingofcontractsintheOfficialJournaloftheEUisobligatory,applicablefrom1January2010to31December2011

Appendix III: Overview of priority and non-priority services

AppendixIV: Guidanceforauditorsoncontractsbelowthreshold,andcontractsforserviceslistedin annex IIb

Appendix V: Public Sector Timescales

AppendixVI: StepsinconductingaCompetitiveProcessforcontractsaboveEUThresholds(Diagram)

AppendixVII: FrameworkAgreementsandFrameworkcalloffstage(Diagram)

AppendixVIII: CompetitiveDialogueProcedure(Diagram)

AppendixIX: ElectronicAuctions(Diagram)

AppendixX: DynamicPurchasingSystems(Diagram)

Appendix XI: Information Sources on Public Procurement

AppendixXII: CaselawoftheEuropeanCourtofJusticeconcerningpublicprocurement(1982-2009)

Appendix XIII: Tender documents. An auditor’s view

AppendixXIV: Priceandqualitycoefficientsintheevaluationoftenders

AppendixXV: Directive2009/81/ECof13July2009ontheawardofworkscontracts,supplycontractsandservicecontractsinthefieldsofdefenceandsecurity

1 The complete appendices can be found in the CD-ROM which is annexed at the back of the booklet.



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1. Introduction

TheEC-Treatyprovidesforfreemovementandnon-discriminationonthegroundsofna-tionalityintheprovisionofgoodsandservices.TheTreatyexpressestheseprovisionsasbasicprinciples.ProcurementDirectivesadoptedbytheEUsetoutinlawwhatMemberStatesmustdoinexercisingthepublicprocurementfunctiontogiveeffecttotheprinciplesoftheTreatyandtorealisethebenefitsoftheInternalMarket.

PublicprocurementaccountsforasignificantproportionofEUexpenditure.In2008,the27EUMemberStatesspentaround€2155bn,or17,2%ofGDP,onpublicprocurement(works,goodsandservices)2.ThePublicProcurementDirectivesandtheprinciplesderivedfromtheECTreatyareintendedtoensurethatcontractsareawardedinanopen,fairandtransparentmanner,allowingdomesticandnon-domesticfirmstocompeteforbusinessonanequalbasis,withtheintentionofimprovingthequalityand/orloweringthepriceofpurchasesmadebyAwardingAuthorities.Inaddition,inamarketofthissizeitisclearthatifthelawsgoverningpublicprocurementarenotalwaysbeingappliedcorrectly,leadingtosomecontractsbeingawardedtowhatisnotthemosteconomicallyadvantageousorlowestbid,thefinancialconsequencesalonecanbesignificant.

ItisthereforeveryimportantfortheSupremeAuditInstitutionsoftheMemberStatesoftheEuropeanUniontoaudit(important)publicprocurementcontracts.

Revision of Directives

ArevisionoftheEUpublicprocurementDirectiveswascompletedin2004.ThreeformerpublicsectorDirectivesforworks,suppliesandserviceshavebeenconsolidatedinonenewtext:Directive2004/18/EC3,coveringprocurementproceduresofpublicsectorbodies.AlsonewisDirective2004/17/EC,coveringprocurementproceduresofentitiesoperating

2 Source: European Commission, Public Procurement Indicators 2008, 27 April 2010.3 The most recent (consolidated) version of this directive can be found at: http://eur-lex.europa.eu



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intheutilitiessector4.TheDirectiveshavebeenadaptedtomodernmarketconditionsbyprovidingformeasuressuchastheuseofelectronicmeansofprocurementandtendering(e-procurement)5, providingforframeworkagreementsandformoreflexibleproceduresforawardingcomplexcon-tracts,suchaspublicprivatepartnershipprojects(PPP’s),inthepublicsector.

ThisguidelinesummarisestheprincipalfeaturesandprovisionsoftheEUpublicsectorprocurementDirective2004/18/EC.6Toaidcomprehension,theuserisinvitedtohaveregardtotheadditionalinformationprovidedintheappendices.7

It is very important that thepublicprocurement function isdischargedhonestly, fairlyand inamannerthatsecuresbestvalueforpublicmoney.Contractingauthoritiesmuststrivetowardscosteffectivenesswhileupholdinghighstandardsofprobityandintegrity.

Procurementpracticesaresubjecttoauditandscrutiny.

2. Scope of Directive 2004/18/EC

TheDirectiveisapplicabletomanybutnotallpubliccontracts.

Firstly,thecontractmustbeawardedbyacontracting authority.

4 The utilities Directive 2004/17/EC covers entities operating in the water, energy, transport and postal services sectors. Private sector entities which operate under special or exclusive rights in the utilities sector are also covered by the utilities Directive. Most features of the Directives are common to both sectors. However, the utilities Directive provides more flexibility in tendering procedures, reflecting the more commercial remit of the entities it covers. For example, higher thresholds apply to supplies and service contracts under the utilities Directive and there is wider scope to negotiate contracts.

5 The 12th consideration of Directive 2004/18/EC states that: “Certain new electronic purchasing techniques are continually being developed. Such techniques help to increase competition and streamline public purchasing, particularly in terms of the savings in time and money which their use will allow. Contracting authorities may make use of electronic purchasing techniques, providing such use complies with the rules drawn up under this Directive and the principles of equal treatment, non-discrimination and transparency”.

6 This guideline has taken as format the publication of the “Public Procurement Guidelines – Competitive Process, 2004” by the Irish Department of Finance.

7 The appendices can be found in the CD-ROM which is annexed at the back of this booklet.



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‘Contractingauthority’meanstheState,regionalorlocalauthorities,bodiesgovernedbypubliclaw,associationsformedbyoneorseveralofsuchauthoritiesoroneorseveralofsuchbodiesgovernedbypubliclaw.

A‘bodygovernedbypubliclaw’meansanybody:

(a)establishedforthespecificpurposeofmeetingneedsinthegeneralinterest,nothavingan

industrialorcommercialcharacter;

(b)havinglegalpersonality;and

(c)financed,forthemostpart,bytheState,regionalorlocalauthorities,orotherbodiesgoverned

bypubliclaw;orsubjecttomanagementsupervisionbythosebodies;orhavinganadminis-

trative,managerialorsupervisoryboard,morethanhalfofwhosemembersareappointed

bytheState,regionalorlocalauthorities,orbyotherbodiesgovernedbypubliclaw.

Thedefinitionof“bodiesgovernedbypubliclaw”isnotveryclearandhasbeenclarifiedbyseveraljudgments8oftheEuropeanCourtofJustice9.

Secondly,theestimatedvalueofthecontractplacedbyapublicbodymusthavereachedthefinancialthresholdsmentionedintheDirective.Thethresholdsapplyingfrom1January2010to31December2011aresetoutinAppendixII.

Regardingtheprinciplesthatgovernthetenderingofpubliccontractsthatarenotoronlypartiallycoveredbythepublicprocurementdirective(e.g.contractsbelowthethresholdsorpublicserviceconcessions),seesection9.

8 See the relevant case-law, mentioned in Appendix XII.9 Non-exhaustive lists of bodies and categories of bodies governed by public law which fulfil the criteria referred to in

(a), (b) and (c) are set out in Annex III of the Directive. Member States have to notify the Commission periodically of any changes to their lists of bodies and categories of bodies.



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3. Obligations imposed by Directive 2004/18/EC

Directive2004/18/ECimposesobligationsoncontractingauthoritiesto:

• advertisetheirrequirementsintheOfficialJournaloftheEuropeanUnion(OJEU);

• useprocurementproceduresthatprovideopenandtransparentcompetition;

• applyclearandobjectivecriteria,notifiedtoallinterestedparties,inselectingtenderersand

awardingcontracts;

• usebroadlybasednon-discriminatorytechnicalspecifications;

• allowsufficienttimeforsubmissionofexpressionsofinterestandtenders.

Itisalegalrequirementthatcontractswithestimatedvaluesabovethethresholds10 set outintheDirective(apartfromsomedefinedexceptions)beadvertisedintheOJEUandawardedinaccordancewiththeprovisionsoftheDirective.Contractingauthoritiesmustalsoensurethatmostworkscontractsandrelatedservicescontracts,whichtheysubsidiseby50%ormore,areawardedinaccordancewiththeprovisionsoftheDirective.Anyin-fringementofthetermsoftheDirectivecangiverisetoseriouslegalorfinancialsanctions.

Directive2004/18/ECcoverscontractsfor:

Works- buildingsandcivilengineeringcontracts

Supplies-purchasingofgoodsandsupplies

Services-allofthemostcommonlyprocuredservices,includingadvertising,propertymanage-

ment, cleaning,management consultancy,financial and ICT related services. (See

Section11).

10 The current value thresholds (applicable from 1 January 2010 to 31 December 2011) above which contracts are subject to the Directives are set out in Appendix II.



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4. Criteria for awarding contracts11

Contractingauthoritiesmaychoosetoawardcontractsonthebasisof

• themosteconomicallyadvantageoustender(specifying,inadditiontoprice,variousothercriteriaincludingrunningcosts,servicingcosts,aftersalesservice,technicalas-sistance,technicalmerit,environmentalcharacteristics)or

• thelowestpricedtender

Whenacontract isbeingawardedonthemosteconomicallyadvantageousbasis, thenoticeorthetenderdocumentsmuststateallofthecriteriabeingappliedintheawardprocess,givingtherelativeweightingsforeachcriterion.

Ifitisnottechnicallypossibletoindicatecriteriaweightingsinadvance,theymustbelistedindescendingorderofimportance.Neworamendedcriteriamustnotbeintroducedinthecourseofthecontractawardprocedure.Ifsignificantadditionalinformationormaterialissuppliedtoacandidate,onrequestorotherwise,itmustbesuppliedtoallcandidates.

5. Advertising in the Official Journal of the European Union (OJEU)12

OJEUNoticesmustbedrawnupinaccordancewiththestandardformssetoutinCommis-sionRegulation(EC)No1564/2005,of7September2005,establishingstandardformsforthepublicationofnoticesintheframeworkofpublicprocurementprocedurespursuanttoDirectives2004/17/ECand2004/18/EC.

Advertisements in theOJEUmaybe supplementedbyadvertisements in thenationalmedia toensure thewidestpossible competition for the contract.However,nationaladvertisementsmustnotappearbeforethedateofdispatchtotheOJEUandmustnot

11 Directive 2004/18/EC, article 53.12 Directive 2004/18/EC, articles 35 and 36.



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containanyinformationadditionaltothatintheOJEUadvertisement.Wheresupplementarynationalmediaadvertisingisconsiderednecessary,contractingauthoritiesareadvised,intheinterestsofeconomy,toplaceabbreviatednoticesinthemediareferringinterestedpartiestotheOJEUnoticeforfulldetails.

6. Common Procurement Vocabulary13

TheCommonProcurementVocabulary(CPV)isaclassificationcodedevelopedbytheEUCommission todescribe thousandsof typesofworks, suppliesand services. It isbeingadoptedastheofficialcodeforclassifyingpubliccontractsandismaintainedandrevisedbytheCommissionasmarketsevolveanddevelop.TheCPVcanbeaccessedonthehttp://simap.europa.eu/ websiteand theappropriate code shouldbeused fordescribing thesubjectofthecontractonthestandardformswhenadvertisingintheOJEU.14

7. Prior Information Notices and Buyer Profiles15

Contractingauthoritieswithanaggregatedprocurementrequirementinexcessof€750,000foranyproductareaofsuppliesorcategoryofservicesorforpublicworkscontracts inexcessof€4,845,00016areencouragedtopublishanannualnoticecalledaPriorInformationNotice(PIN)intheOJEU.ThePINisnormallysubmittedbythecontractingauthorityatthestartofthebudgetaryyearandsetsoutthecategoriesofproductsandserviceslikelytobeprocuredduringtheyear.

AccordingtotheDirective,contractingauthoritiesarealsoencouragedtopublish‘buyerprofiles’ontheirwebsiteswithgeneral informationontheirprocurementrequirementsandtopublicisetheexistenceoftheseprofilesinaPIN.

13 Directive 2004/18/EC, article 1 (14).14 For references, see Appendix XI.15 Directive 2004/18/EC, articles 35 and 36.16 The attention of the user is brought to the fact that the thresholds are subject to change every two years. The thresholds

mentioned in the guideline are valid for the period 2010-2011.



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InsertionofaPINdoesnotcommitcontractingauthoritiestopurchasingorproceedingwithaprojectifcircumstanceschange.Itisintendedasanaidtotransparencyandisforthebenefitofsuppliers.PublicationofaPINpermitsacontractingauthoritytoreducetheminimumtimefortenderingifthePIN,withthenecessaryamountofinformationspecified,hasbeendispatchedtotheOJEUatleast52daysbefore,andwithintwelvemonthsof,dispatchingthecontractnotice.17

8. Thresholds18

AnycontractplacedbyapublicbodyoverthefinancialthresholdsetoutintheDirectivemustbeprocessedandawardedinaccordancewiththeprovisionsoftheDirective,unlessitiscoveredbyaclearlydefinedexception.

Thethresholdsapplyingfrom1January2010to31December2011aresetoutinAppendixII.ThethresholdsintheDirectivesarerevisedbytheCommission,underthetermsoftheDirectives,attwo-yearlyintervalsandarepublishedintheOJEU.

It isworthmentioning that according Article 9(3) of theDirective, the process ofsegmentationofapubliccontractisforbidden:“Noworksprojectorproposedpurchaseofacertainquantityofsuppliesand/orservicesmaybesubdividedtopreventitscomingwithinthescopeofthisDirective”.

9. The Principle of Non Discrimination

Principles governing the tendering of contracts under the European thresholds or excluded altogether from the scope of the Community directives

WhilethefullproceduresoftheDirectivesdonotapplytotheawardofcontractsunderthethresholds,theEuropeanCourthasruledthatTreatyprinciplessuchasnon-discrimination,

17 Directive 2004/18/EC, articles 35 and 38.18 Directive 2004/18/EC, articles 7 and 78.



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transparency,freedomofmovementandfreedomtoprovidegoodsandservicesmustbeobserved.ThisimpliesarequirementtoadvertisesuchcontractsofsignificantvaluetoadegreewhichallowspartiesinotherMemberStatestheopportunitytoexpressaninterestortosubmittenders.

TheEuropeanCourtofJustice(ECJ)hasdevelopedasetofbasicstandardsfortheawardofpubliccontractswhicharederiveddirectlyfromtherulesandprinciplesoftheTreatyontheFunctioningoftheEuropeanUnion(TFEU),theformerEuropeanCommunityTreaty.Theprinciplesofequaltreatmentandnon-discriminationongroundsofnationalityimplyanobligationoftransparencywhich,accordingtotheECJcase-law19,consistsinensuring,forthebenefitofanypotentialtenderer,adegreeofadvertisingsufficienttoenabletheservicesmarkettobeopeneduptocompetitionandtheimpartialityoftheprocedurestobereviewed20.

Thesestandardsapplytotheawardofservicesconcessions,tocontractsbelowthethresh-olds21,andtocontractsforserviceslistedinAnnexIIBtoDirective2004/18/ECinrespectofissuesnotdealtwithbythisDirective22.

TheECJhasstatedexplicitlythatalthoughcertaincontractsareexcludedfromthescopeoftheCommunitydirectivesinthefieldofpublicprocurement,thecontractingauthori-tieswhichconcludethemareneverthelessboundtocomplywiththefundamentalrulesof the Treaty23.

ThestandardsderivedfromtheTreatyapplyonlytocontractawardshavingasufficientconnectionwiththefunctioningoftheInternalMarket.Inthisregard,theECJconsidered

19 Cases C-324/98, Telaustria, [2000] ECR I-10745, paragraph 62, C-231/03, Coname, judgment of 21.7.2005, para-graphs 16 to 19 and C-458/03, Parking Brixen, judgment of 13.10.2005, paragraph 49.

20 Telaustria case, paragraph 62 and Parking Brixen case, paragraph 49.21 See Cases C-59/00, Bent Mousten Vestergaard [2001] ECR I-9505, paragraph 20 and C-264/03, Commission v

France, judgment of 20.10.2005, paragraphs 32 and 33.22 Case C-234/03, Contse, judgment of 27.10.2005, paragraphs 47 to 49. The Public Procurement Directives provide

only a limited set of rules for these contracts, see Article 21 of Directive 2004/18/EC and Article 32 of Directive 2004/17/EC.

23 Bent Mousten Vestergaard case, paragraph 20.



35

thatinindividualcases,becauseofspecialcircumstances,suchasaverymodesteconomicinterestatstake,acontractawardwouldbeofnointeresttoeconomicoperatorslocatedinotherMemberStates.Insuchacase,theeffectsonthefundamentalfreedomsaretoberegardedastoouncertainandindirecttowarranttheapplicationofstandardsderivedfromprimaryCommunitylaw24.

ItistheresponsibilityoftheindividualcontractingentitiestodecidewhetheranintendedcontractawardmightpotentiallybeofinteresttoeconomicoperatorslocatedinotherMemberStates.IntheviewoftheCommission,thisdecisionhastobebasedonanevalua-tionoftheindividualcircumstancesofthecase,suchasthesubject-matterofthecontract,itsestimatedvalue,thespecificsofthesectorconcerned(sizeandstructureofthemarket,commercialpractices,etc.)andthegeographiclocationoftheplaceofperformance.

IfthecontractingentitycomestotheconclusionthatthecontractinquestionisrelevanttotheInternalMarket,ithastoawarditinconformitywiththebasicstandardsderivedfromCommunitylaw.25

AccordingtotheECJ26,theprinciplesofequaltreatmentandofnon-discriminationimplyanobligationoftransparencywhichconsistsinensuring,forthebenefitofanypotentialtenderer, adegreeofadvertising sufficient toenable themarket tobeopenedup tocompetition.

24 Coname case, paragraph 20.25 In it’s Interpretative Communication on the Community law applicable to contract awards not or not fully subject to

the provisions of the Public Procurement Directives of 24 July 2006 (OJ C 179/4 of 1 August 2006) the European Commission has stated that when it becomes aware of a potential violation of the basic standards for the award of public contracts not covered by the Public Procurement Directives, it will assess the Internal Market relevance of the contract in question in the light of the individual circumstances of each case. Infringement proceedings under Article 258 TFEU will be opened only in cases where this appears appropriate in view of the gravity of the infringement and its impact on the Internal Market.

26 Telaustria case, paragraph 62 and Parking Brixen case, paragraph 49.



36

TheobligationoftransparencyrequiresthatanundertakinglocatedinanotherMemberStatehasaccesstoappropriateinformationregardingthecontractbeforeitisawarded,sothat,ifitsowishes,itwouldbeinapositiontoexpressitsinterestinobtainingthatcontract27.

TheEuropeanCommission isof theview that thepracticeof contactinganumberofpotentialtendererswouldnotbesufficientinthisrespect,evenifthecontractingentityincludesundertakingsfromotherMemberStatesorattemptstoreachallpotentialsuppli-ers.SuchaselectiveapproachcannotexcludediscriminationagainstpotentialtenderersfromotherMemberStates,inparticularnewentrantstothemarket.Thesameappliestoallformsof‘passive’publicitywhereacontractingentityabstainsfromactiveadvertisingbutrepliestorequestsforinformationfromapplicantswhofoundoutbytheirownmeansabouttheintendedcontractaward.Asimplereferencetomediareports,parliamentaryorpoliticaldebatesoreventssuchascongressesforinformationwouldlikewisenotconstituteadequateadvertising.StillaccordingtotheEuropeanCommission,theonlywaythattherequirementslaiddownbytheECJcanbemetisbypublicationofasufficientlyaccessibleadvertisementpriortotheawardofthecontract.Thisadvertisementshouldbepublishedbythecontractingentityinordertoopenthecontractawardtocompetition.28

10. Estimation of Contract Values29

TheestimationofcontractvaluesforOJEUpublicationpurposesmustberealisticandcredibleandtakeaccountofthetotalamount, includinganyformofoptionandanyrenewalsofthecontract.Problemsarefairlyoftenfoundinthoselastcases.

Noprojectorpurchasemaybesub-dividedtopreventitcomingwithinthescopeoftheDirectives.Whereaprojectorpurchaseinvolvesseparatelotsthevalueofalllotsmustbeincludedinestimatingthevalueofthecontract.

27 Coname case, paragraph 21.28 European Commission, Interpretative Communication on the Community law applicable to contract awards not or not

fully subject to the provisions of the Public Procurement Directives, Section 2.1.1. Regarding the means to ensure the obligation of adequate advertising, see Section 2.1.2 of the Interpretative Communication.

29 Directive 2004/18/EC, article 9.



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Ifacontract,notadvertisedintheOJEU,attractstendersinexcessoftheEUthresholds,thereisariskthattheawardcouldbesubjecttoinfringementproceedings.30

Insuchanevent,acontractingauthoritywouldberequiredtojustifytheoriginales-timation.

Anotherimportantpurposeofthecostestimateisitsuseasatoolofcomparisonwithtendersreceivedwhichmayassistinthepreventionofcollusionormonopolisticexploi-tation.ItsimportanceisamplifiedinthecaseofRestrictedorNegotiatedproceduresandFrameworkAgreementswherethepossibilityofcollusionisgreaterascomparedtoanopenprocedure.Determinationofthecostestimatemusttakeplacebeforeten-dersareopenedornegotiationscommenced.Thebasisofthecostestimatecanvarywiththeproductorservicesoughtandcanbebasedonmarketprices(e.g.machinery,plant),previoustenders(e.g.medicines),theInternet,(e.g.spareparts)ortheCon-tractingAuthority’sowndatabank(e.g.theconstructionprojects).Inthelattercase,wheretendersareinvitedonthebasisofBillsofQuantitiesandthecontractistobeadmeasuredorremeasured,itisrecommendedthattheestimatebederivedfromtheindividualquantitiesandunitratesorpriceswhichreflectcompetitivemarketcondi-tions.Itisgoodpracticetoreport,togetherwiththecostestimate,anyrevisionsandamendmentsmadebecauseoffactorscontributingtopricechangese.g.labourandfuelcostfluctuationstogetherwithanyassumptionsmadeandthesourceofinformationusedtoextrapolatetheestimate.

11. Priority and Non-Priority Services31

UndertheprocurementDirectives,servicesaredividedintotwocategoriesdescribedas‘priority’and‘non-priority’services(setoutinAnnexIIAandAnnexIIBofthepublicsec-

30 The infringement procedure is a procedure conducted before the European Court of Justice by the European Commission. Its purpose is to establish whether a Member State has failed to fulfill an obligation imposed on it by Community law (see articles 258 and 260 TFEU).

31 Directive 2004/18/EC, article 1 (2) (d).



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torDirective2004/18/EU).ThetwocategoriesofservicesarelistedinAppendixIIIAandAppendixIIIBofthisguideline.32

Onlythe‘priority’servicesaresubjecttothefullprovisionsoftheDirective.

While the full proceduresof theDirectivesdonotapply to theawardof contracts for‘non–priority’services33,theEuropeanCourthasruledthatTreatyprinciplessuchasnon-discrimination,transparency,freedomofmovementandfreedomtoprovideservicesmustbeobserved.ThisimpliesarequirementtoadvertisesuchcontractsofsignificantvaluetoadegreewhichallowspartiesinotherMemberStatestheopportunitytoexpressaninterestortosubmittenders.

12. Tendering Procedures34

TheEUPublicSectorDirectivepermitsfourtenderingprocedures:

(i)Open35.Underthisprocedureallinterestedpartiesmaysubmittenders.Informationontenderers’capacityandexpertisemaybesoughtandonlythetendersofthosedeemedtomeetminimumlevelsoftechnicalandfinancialcapacityandexpertiseareevaluated.Ifthereareminimumrequirementsitisimportantthattheybemadeclearinthenoticeortherequestfortenders(RFT)toavoidunqualifiedbiddersincurringtheexpenseofpreparingandsubmittingtenders.

(ii)Restricted36.Thisisatwo-stageprocesswhereonlythosepartieswhomeetminimumrequirementsinregardtoprofessionalortechnicalcapability,experienceandexpertiseandfinancialcapacitytocarryoutaprojectareinvitedtotender.

32 As ratio legis for the distinction, the 19th consideration of the Directive states: “As regards public service contracts, full application of this Directive should be limited, for a transitional period, to contracts where its provisions will permit the full potential for increased cross-frontier trade to be realised. Contracts for other services need to be monitored during this transitional period before a decision is taken on the full application of this Directive. In this respect, the mechanism for such monitoring needs to be defined. This mechanism should, at the same time, enable interested parties to have access to the relevant information”.

33 ’Non–priority’ services shall be subject solely to Article 23 and Article 35(4) of Directive 2004/18/EC.34 Directive 2004/18/EC, articles 28 to 34.35 Directive 2004/18/EC, article 28.36 Directive 2004/18/EC, article 28.



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• Asafirststep,therequirementsofthecontractingauthorityaresetoutthroughacontractnoticeintheOJEUandexpressionsofinterestareinvitedfrompotentialtenderers.Thecontractnoticemayindicatetherelevantinformationtobesubmit-tedortheinformationmaybesoughtviaadetailedquestionnairetointerestedparties.

• Thesecondstepinvolvesissuingthecompletespecificationsandtenderdocumentswithaninvitationtosubmittendersonlytothosewhopossesstherequisitelevelofprofessional,technicalandfinancialexpertiseandcapacity.Itisimportanttonotethat,asabasisforpre-qualifyingcandidates,onlythecriteriarelatingtopersonalsituation,financialcapacity,technicalcapacity,relevantexperience,expertiseandcompetencyofcandidatessetoutintheDirective37arepermissible.TheEuropeanCourtofJusticeandtheEUCommissionhaveruledclearlyonthis.

Contractingauthoritiesmayopttoshortlistqualifiedcandidatesifthisintentionisindicatedinthecontractnoticeandthenumberorrangeofcandidatesindicated.Shortlistingof candidateswhomeet theminimumqualificationcriteriamustbecarriedoutbynon-discriminatoryandtransparentrulesandcriteriamadeknowntocandidates.TheDirectiverequiresthatanumbersufficienttoensureadequatecompetitionisinvitedtosubmitbidsandindicateaminimumoffive(providedthereisatleastthisnumberwhomeetthequalificationcriteria)anduptoatotalof20.

(iii)Competitive Dialogue38.Thisisanewproceduredesignedtoprovidemoreflexibilityinthetenderingprocessformorecomplexcontracts,forexamplepublicprivatepartner-ships(PPP’s).Contractingauthoritiesmustadvertisetheirrequirementsandenterdialoguewithinterestedparties,(pre-qualifiedonthesamebasisasforrestrictedprocedure).Throughtheprocessofdialoguewitharangeofcandidates,acontract-ingauthoritymayidentifyarrangementsorsolutionswhichmeetitsrequirements.Provideditsintentionisindicatedinthecontractnoticeorindescriptivedocumentssuppliedtocandidates,acontractingauthoritymayprovidefortheprocedureto

37 Directive 2004/18/EC, articles 45 to 48.38 Directive 2004/18/EC, article 29, and see Appendix VIII.



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takeplaceinsuccessivestagesinordertoreducethenumberofsolutionsorproposalsbeingdiscussed.Thereductionmustbeachievedbyreferencetotheawardcriteriaforthecontract.

Inconductingthedialogue,contractingauthoritiesmustensureequalityoftreatmentandrespectfortheintellectualpropertyrightsofallcandidates.Whensatisfiedaboutthebestmeansofmeetingitsrequirements,thecontractingauthoritymustspecifythemandinviteatleastthreecandidatestosubmittenders.Themosteconomicallyadvantageoustenderwillthenbeselected.Aspectsoftendersmaybeclarifiedorfinetunedprovidedthatthereisnodistortionofcompetitionordiscriminationagainstanytenderer.

(iv)Negotiated39.ThisisanexceptionalprocedurethatmaybeusedonlyinthelimitedcircumstancessetoutinArticles30and31ofDirective2004/18/EC.Therearetwotypesofnegotiatedprocedure:

(a)Contractingauthoritiesadvertiseandnegotiate the termsof thecontract.Thisprocessshouldnormallyinvolvethesubmissionofformaltendersbyatleastthreecandidates(pre-qualifiedonthesamebasisasfortherestrictedprocedure,pro-videdthereareatleastthisnumberwhomeettheminimumqualificationcriteria)withnegotiationonfinaltermsinacompetitiveprocess.Thisproceduremaybeusedmainly:

• whereanopen,restrictedorcompetitivedialogueprocedurehasnotattractedacceptabletenders;

• wherethenatureoftherequirementdoesnotpermitoverallpricing;

• whereitisnotpossibletospecifyrequirementsforaservicewithsufficientpreci-siontoenabletendererstorespondwithpricedtenders;

(b)Contractingauthoritiesnegotiate,withoutadvertising,thetermsofthecontractdirectlywithoneormoreparties.Thisisadeparturefromthecoreprinciplesof

39 Directive 2004/18/EC, articles 28, 30 and 31.



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openness,transparencyandcompetitionandisaveryexceptionalprocedure.Themaininstanceswherethisproceduremaybeusedare:

• incasesofextremeurgency;

• when, for technicalorartistic reasonsordue to theexistenceof specialorexclusiverights,thereisonlyonepossiblesupplierorserviceprovider;

• whenanopenorrestrictedprocedurehasnotattractedappropriatetenders(providedallthosewhosubmittedtendersareincludedinthenegotiationsandthespecificationsoftherequirementarenotalteredsubstantially);

• extensionofexistingcontractsandrepeatcontractssubjecttocertaincondi-tions40;

• forthepurchaseofsuppliesonparticularlyadvantageousterms,fromeitherasupplierdefinitivelywindingupabusinessorthereceiverorliquidatorofabankruptcy,anarrangementwithcreditorsorsimilarlegalorregulatorypro-cedure.

Contractingauthoritiesshouldensurethattheprecisecircumstancesjustifyingnegotiation,as setout in thepublic sectorDirective,existbeforedecidingontheuseofthisprocedure.Itshouldbenotedthatdefinitionsof‘exceptions’and‘urgency’arestrictlyinterpretedbytheCommissionandtheCourts.Factorsgivingrisetourgencymustbeunforeseeableandoutsidethecontrolofthecontractingauthority.Whereoneoftheseexemptionsisinvoked,thecontractingauthoritymustbeabletojustifytheuseoftheexemption.41Candidatesmustalwaysbetreatedfairlyandobjectivelyinnegotiations.

40 As a general rule the provisions confine extension of contracts to 50 pct. of the original value of the contract. See Directive 2004/18/EC, article 31 (2, b) concerning supply contracts and article 31 (4, a) concerning public works and service contracts.

41 See the illustrative case law of the Court of Justice in Appendix XII.



42

Framework Agreements42

ThepublicsectorDirectiveprovidesfor“frameworkagreements”underwhichcontractingauthoritiesenterintoarrangementswithsuppliersorserviceproviderstosupplygoodsorservicesunderagreedconditionsforaperiodoftime,normallynotmorethanfouryears.

Frameworkagreementscanbewithonesupplierorserviceprovider,selectedfollowingacompetitiveprocess,tofulfilordersorsupplyservicesovertheperiodoftheagree-ment.Alternatively,theymaybewithanumberof(atleastthree)pre-qualifiedsuppliersorserviceproviders.Inthelattercase,acontractmaybeawardedtoonepartytotheagreementifthetermsoftheagreementsopermit,oracontractmaybethesubjectofasub-competitionbetweenpartiestotheframeworkagreement.

Contractingauthoritieshavetofollowtherulesofprocedurereferredtointhedirectiveforallphasesuptotheawardofcontractsbasedontheframeworkagreement.Underframeworkagreements,someelementsoftherequirement,forexamplequantity,price,preciseproductspecification,willgenerallynotbefullyestablishedatthestartoftheagreement.Advertisingforframeworkagreementsshouldsetouttheprecisenatureoftheproposedprocurementstothehighestdegreepossible.

Dynamic purchasing systems43

Adynamicpurchasingsystemisdefinedasacompletelyelectronicprocessformakingcommonlyusedpurchases.Inordertosetupadynamicpurchasingsystem,contractingauthoritieshavetofollowtherulesoftheopenprocedureinall itsphasesuptotheawardofthecontractstobeconcludedunderthissystem.

Allthetendererssatisfyingthequalitativeselectioncriteriaandhavingsubmittedanindicative tenderwhich complieswith the specificationandanypossibleadditional

42 Directive 2004/18/EC, article 32, and see Appendix VII.43 Directive, 2004/18/EC, article 33, and see Appendix X.



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documentsareadmittedtothesystem;indicativetendersmaybeimprovedatanytimeprovidedthattheycontinuetocomplywiththespecification.

Contractingauthoritiesinvitealltenderersadmittedtothesystemtosubmitatenderforeachspecificcontracttobeawarded.Thecontractisawardedtothetendererwhichsubmittedthebesttenderonthebasisoftheawardcriteriasetoutinthecontractnoticefortheestablishmentofthedynamicpurchasingsystem.

Adynamicpurchasingsystemmaynotlastformorethanfouryears44,exceptindulyjustifiedexceptionalcases.

13. Time-limits for Replies45

Directive2004/18defines thetime limits for receiptof requests toparticipateandforreceiptoftenders.Minimumtime-limitsaresetdownforthedifferentstagesoftheparticular contractawardprocedurechosen. Inall cases, thetimesspecified indaysrelatetocalendardays.Whenfixingthetimescaleforsubmittingexpressionsofinterest/requeststoparticipateortenders,contractingauthoritiesshouldtakeaccountofthecomplexityofthecontractandallowsufficienttimeforsubmittingthenecessaryinformationandpreparingtenders.

Themainminimumtime-limits,whicharereckonedfromthedateofdispatchingthenoticetotheOJEU,areasfollows.

OpenProcedure

• forreceiptoftenders:52days

• ifaPriorInformationNotice(PIN)hasbeenpublished:asageneralruletheminimumtimemaybereducedto36daysbutinnocircumstanceslessthan22days.

44 Directive 2004/18/EC, article 33, paragraph 7.45 Directive 2004/18/EC, article 38, and see Appendix V.



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Restricted,NegotiatedandCompetitiveDialogueProcedures

• forreceiptofexpressionsofinterest/requeststoparticipate:37days;

• for receiptof tendersunder restrictedprocedures:40days fromdateof issueofinvitationtotender;

• ifaPINhasbeenpublished:asageneralruletheminimumtimeforreceiptoftendersundertherestrictedproceduremaybereducedto36daysbutinnocircumstanceslessthan22days(noreductionintimesforreceiptofexpressionsofinterest).

• Underanegotiatedprocedureorincompetitivedialoguethetimeallowedforreceiptoftendersmaybeagreedbetweenthepartiesinvolved.

Wheregenuineurgencyrendersthesetimelimitsimpracticable,shortertime-limitsmaybeappliedasfollows

• forreceiptofexpressionsofinterest,notlessthan15daysfromthedateofdispatch-ingthenoticeand

• forreceiptoftenders,notlessthan10daysfromthedateofissueofinvitationtotender.

Theuseoftheurgentproceduresmustbejustifiedandhavebeencausedbyunforeseeableeventsoutsidethecontrolofthecontractingauthority.TheEuropeanCommissionandtheEuropeanCourtofJusticeinterpret‘urgency’verystrictly.46Delayorinactiononthepartofthecontractingauthorityisnotsufficientreasonforapplyingexceptionalprocedures.

Electronic/online transmission:minimumtimes for responsesmaybe reducedwherecontractnoticesaretransmittedelectronicallytotheOJEUandalltenderdocumentationismadeavailableelectronicallyinaccordancewiththeprovisionsoftheDirectives.The

46 Illustrative case law of the Court of Justice: Case 194/88 R, Commission v. Italy (Solid urban waste in La Spezia); Case C-24/91, Commission v. Spain (Universidad Complutense of Madrid); Case C-107/92, Commission v. Italy (Avalanche barrier in Colle Isarco/Brennero); Case C-328/92, Commission v. Spain (Pharmaceutical products and specialities); Case C-318/94, Commission v. Germany (Dredging of the lower Ems); Case C-385/02, Commission v. Italy (Overflow basin in Parma); Case C-394/02, Commission v. Greece (Thermal-electricity generation plant at Megalopolis).



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reductioncanbeuptoacumulative12days,reflectingthepotentialfortimesavingifup-to-datetechnologicalmethodsofcommunicationandtransmissionareusedatthevariousstagesoftheprocess.ConditionsforavailingofthesepotentialtimereductionsaresetoutinArticle38(5)and(6)ofthepublicsectorDirective.

14. Issue of Documents47

Responsestorequestsforinformation,requestsfortenderdocumentsandothersup-portingdocumentation(ifnotmadeavailableelectronically)mustbeissuedwithoutde-layandinanyeventwithinamaximumofsixdaysoftherequest.Additionalinformation,requestedingoodtime,mustbeissuedatleastsixdaysbeforethelatestdateforreceiptoftenders.Inordertoavoidgivingunfairadvantage,additionalinformationsuppliedtoonepartyinresponsetoarequestshouldbesuppliedtoallinterestedpartiesifitcouldbesignificantinthecontextofpreparingatender.

15. Receipt and Opening of Tenders

Contractingauthoritiesshouldensurethatproperproceduresareinplaceforopeningtenderstopreventabuseorimproprietyatthisstage.Alltendersshouldbeopenedtogetherassoonaspossibleafterthedesignatedlatesttimeanddatesetforreceiptoftenders.Internalproceduresshouldrequirethatopeningoftenderstakesplaceinthepresenceofatleasttwoofficialsofthecontractingauthority.Theprocedureadoptedshouldensurethat,inthecaseofanydispute,thereisaclearandformalindependentlyvouchedreportof thetendersreceived.Tenders receivedaftertheclosingtimeforreceiptoftendersshouldnotbeaccepted.

47 Directive 2004/18/EC, articles 39 and 40.



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16. Clarification of Tenders

Contractingauthoritiesmayseekadditionalinformationinclarifyingsubmittedtenders.However,alterationstobidsafterthedeadlineforsubmissionhaspassedarenotper-missibleundertheopenorrestrictedprocedures.Inparticular,anyadjustmenttopricewhichcouldimprovethecompetitivepositionofabidisnotpermitted48 49.

17. Evaluation of Tenderers and Tenders and Award of Con-tract50

Concerningtheverificationofthesuitabilityandchoiceofparticipantsthearticles44to52ofdirective2004/18giveclearinstructionsregardingthequalitativecriteriawhichcanbeaskedtobefulfilledbytenderers(personal,technical,economicandfinancial).

Evaluationoftenderersandtendersshouldbecarriedoutbyasuitablycompetentteamwhichmayincludeindependentrepresentation.Theevaluationandawardprocessmustbedemonstrablyobjectiveandtransparentandbasedsolelyonthepublishedcriteria.Thisisbestachievedbytheuseofascoringsystembasedonalltherelevantandweightedcriteria,indicatingacomparativeassessmentoftendersundereachcriterion.Tenderswhichdonotcomplywiththerequirementsspecifiedinthecontractnoticeorthetenderdocumentationshouldberejected.

(i) Wherepriceisthesolecriterion,thecontractwillbeawardedtothelowestpricedbidcomplyingwiththespecifiedrequirements.

48 In regard to the open and restricted procedures, the EU Council and Commission have stated that “all negotiations with candidates or tenderers on fundamental aspects of contracts, variations in which are likely to distort competition, in particular on prices, shall be ruled out”.

49 See the relevant case-law mentioned in Appendix XII and in particular case C-87/94.50 Directive 2004/18/EC, articles 44 to 52 (qualification and evaluation of tenderers) and 53 to 55 (evaluation of tenders).



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(ii)Where‘mosteconomicallyadvantageoustender’isthebasis,thecontractmustbeawardedtothetenderwhichbestmeetstherelevantcriteria.Inadditiontopricetheywillincludeothercriteriarelevanttothesubjectofthecontract.Forexample,theymayincluderunningcosts,servicingcosts,levelofaftersalesservice,techni-calassistance,technicalmerit,environmentalcharacteristics.Thecriteria,withtherelevantweighting,willhavebeenpre-establishedandmadeknowntothetenderers,inthecontractnoticeand/orthetenderdocumentation(RFT).

Theevaluationoftendersisanareawheresubjectivejudgementisusedandthereforecareanddiligenceshouldbeexercisedduringtheauditofthisstageoftheprocess.

Tendersmustbeevaluatedobjectivelyandtransparentlyagainstthepublishedweightedcriteria.Objectivityandtransparencyisbestachievedbytheuseofascoringsystemormarkingsheetbasedontheweightedcriteria,indicatingacomparativeassessmentoftendersundereachcriterion.

Thecriteriamaybesubdividedforthepurposeofscoringifitassistsintheevaluationbutthismustnotinvolveadeparturefromthepre-establishedcriteriaandweighting.

Undertherestrictedprocedure,careshouldbetakentoensurethatthepre-qualificationcriteriaarenotusedinthetenderevaluationprocess.Tendererswillbedeemedtohavemettheminimumrequirementsinregardtotheircapacitytoperformthecontract.Tendersshouldbeassessedsolelyonthebasisofhowtheymeettheawardcriteriarelatedtotheactualproject.

Inopenorrestrictedprocedures,themostcompetitiveoradvantageoustenderersarefrequentlyaskedtomakeapresentationontheirproposalsfortechnicalorconsultancyprojects.Thesepresentationsareusedasanaidtounderstandingandforpurposesofelaborationandclarification.Anydialoguewith tenderers thatcouldbeconstruedas“posttendernegotiation”onprice,orresultinsignificantchangestocriteriaortender



48

specifications,istobeavoided.Suchnegotiations,outsidetheexceptionalandclearlydefinedcircumstanceswhereEUrulespermit,couldcontravenetheEUprocurementDirectives.

18. Abnormally Low Tenders51

Atenderwhichmightberegardedasabnormallylowmaynotberejectedwithoutinvesti-gationandconsiderationoftherelevantelementsthatgaverisetoaparticularlylowbid.Suchelementsmightincludeaninnovativetechnicalsolutionorexceptionallyfavourableconditionsavailabletothetenderer.Thetenderershouldbegiventheopportunitytoexplainthebasisofthetender.

19. Disclosure of information: Notifying Tenderers52 and Con-tract award notice53

Unsuccessfulcandidatesandtenderersforanypubliccontractshouldbeinformedoftheresultsoftheircandidatureoratenderingprocesswithoutdelayandmusthavetheop-portunitytohaveacontractawarddecisionrescindediftheirrightshavebeeninfringedoranawarddecisionisdeemedunlawful54.Thereviewprocedureisorganizedbydirective89/665/EEC,whichisnotanalyzedinthisguideline.

ThisrequiresthatunsuccessfultenderersforcontractscoveredbytheEUDirectivesbenoti-fiedpromptlyoftheoutcomeofatenderingprocedureandthatacontractisnotformallyawardedbeforeaninterval,duringwhichanunsuccessfultenderercanseekareviewofthedecisionifs/hefeelsthattheprocesshasbeenunfairorunlawful,haselapsed.Thisimpliesthatanynotificationtothetendererdeemedsuccessfulduringthisintervalmust

51 Directive 2004/18/EC, article 55.52 Directive 2004/18/EC, article 41.53 Directive 2004/18/EC, article 35, § 4.54 Case C-81/98, Alcatel.



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beprovisionalandnotconstituteacontractualarrangement.Tenderdocumentationshouldincludeastatementindicatingtheneedforanappropriateintervalaftertheawarddecisionisnotifiedandbeforeaformalcontractisputinplace.

Proposalsinatenderingprocessarenormallysubmittedonaconventionalbasis.Inordertopreservetheintegrityoftheprocessandtorespectthecommercialandcom-petitivepositionsoftenderers,detailsoftendersmustbekeptconfidentialatleastuntiltheevaluationprocessisconcluded.Aftertheawardofacontractcertaininformationmustbedisclosed.UnderthepublicprocurementDirectives,contractingauthoritiesarerequiredtoprovidecertaininformationoncontractsabovetheEUthresholds.

TwoparticularprovisionsondisclosureofinformationintheprocurementDirectivesrequirethat:

• anyeliminatedcandidateortendererwhorequestsitmustbeinformedpromptly(within15days)ofthereasonsforrejectionandofthecharacteristicsandrelativeadvantagesofthesuccessfultendereraswellasthenameofthesuccessfultenderer.

• contractingauthoritiespublishcertaininformationoncontractsawarded(orframe-workagreementsconcluded)within48daysoftheawardintheOJEU.Particulars,includingthetypeofcontract,theprocedureandawardcriteriaused,thenumberoftendersreceived,thenameofthesuccessfultenderer,thevalueofthecontractortherangeoftenderprices,justificationforthenegotiatedprocedure,ifused,arepublished.ThenecessaryinformationcanbesubmittedonlinetotheOJEUonthestandard‘ContractAwardNotice’.

However,informationmaybewithheldfrompublicationifrelease:

• wouldimpedelawenforcementorwouldotherwisebecontrarytothepublicinterest,

• wouldprejudicethelegitimatecommercialinterestsofparticularundertakingsor

• mightprejudicefaircompetition.



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Thecontractingauthoritiesarerequiredtoprepareawrittenreportcontainingfunda-mentalinformation,asoutlinedinArticle43ofthepublicsectorprocurementDirective2004/18/EC,ontheawardprocedureadopted.Thisreport,orthemainfeaturesofit,mayberequestedbytheEUCommissionatanytime.



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INDEX

Note: the numbers refer to the sections of the Guideline

AAbnormally low tenders • 18Advertisements in the national media • 5Advertising in the OJEU • 5Award Criteria • 4;17Award of contract • 17

BBasic principles • 1;9Bodies governed by public law • 2Buyer Profiles • 7

CCommon Procurement Vocabulary • 6Competitive dialogue • 12Contract award criteria • 4;17Contract award notice • 19Contracting authorities • 2Contracts below the thresholds • 9Contracts excluded from Directive 2004/18/EC • 9

DDirective 2004/18/EC (obligations imposed by -) • 3Directive 2004/18/EC (contracts excluded from -) • 9Disclosure of information • 19Dynamic purchasing system • 12

EEqual treatment • 9Estimation of contract values • 10EU public procurement website • 5;6;8Evaluation of tenders • 17

FFinancial thresholds • 2;8;9Framework agreements • 12Free movement • 9

IInformation (requests for -) • 14

LLowest priced tender • 4;17

MMinimum time for tendering • 13Most economically advantageous tender • 4;17

NNegotiated procedure • 12Non-discrimination (principle of -) • 9Non-priority services • 11Notification of tenderers • 19

OOJEU Notices • 5Open tendering procedure • 12Opening tenders • 15

PPIN • 7Price as sole criterion • 17Principles governing tendering of public contracts •1; 9Prior Information Notices (PIN) • 7Priority and non-priority services • 11Procurement procedures •12Public sector bodies • 2

QQualification of tenderers • 17

RReceipt of tenders • 15Requests for supporting documentation • 14Requests for tender documents • 14Restricted tendering procedures • 12



52

SSegmentation of contracts • 8Selection of tenderers • 17Services • 11Services (priority and non-priority -) • 11

TTendering procedures • 12Tenders (opening of -) • 15Tenders (receipt of -) • 15Thresholds • 2;8 Contracts under the thresholds • 9Time limits • 13 Electronic transmission • 13 Prior Information Notice • 13 Receipt of expressions of interest • 13 Receipt of requests to participate • 13 Receipt of tenders • 15Transparency • 9Treaty principles • 9

WWeighting of contract award criteria • 4;17



53

APPENDICES


AppendixII: Mainthresholds(exclusiveofVAT)abovewhichadvertisingofcontractsintheOfficialJournaloftheEUisobligatory,applicablefrom1January2010to31December2011

Appendix III: Overview of priority and non-priority services

AppendixIV: Guidanceforauditorsoncontractsbelowthreshold,andcontractsforserviceslistedin annex IIb

Appendix V: Public Sector Timescales

AppendixVI: StepsinconductingaCompetitiveProcessforcontractsaboveEUThresholds(Diagram)

AppendixVII: FrameworkAgreementsandFrameworkcalloffstage(Diagram)

AppendixVIII:CompetitiveDialogueProcedure(Diagram)

AppendixIX: ElectronicAuctions(Diagram)

AppendixX: DynamicPurchasingSystems(Diagram)


AppendixXII:Case lawof theEuropeanCourtof Justice concerningpublicprocurement (1982- -2009)

Appendix XIII: Tender documents. An auditor’s view

AppendixXIV:Priceandqualitycoefficientsintheevaluationoftenders

AppendixXV:Directive2009/81/ECof13July2009ontheawardofworkscontracts,supplycon-tractsandservicecontractsinthefieldsofdefenceandsecurity



54


Award Criteria:criteria,setoutintenderdocumentation,onwhichtenderswillbeevaluatedandtheawardofthecontractwillbebased, i.e.relatingtohowatendereraddressesandproposestoperformordelivertheobjectofthecontractandatwhatcost.

Buyer Profile:adedicatedonlineareacontainingprocurementrelatedinformation.ThepurposeofaBuyerProfileistoprovidedetailsaboutacontractingauthority’sprocurementpracticesandintentions,sothatpotentialsupplierswillbebetterinformedaboutthepurchaser,andbet-terabletojudgewhethertheywanttobidforaparticulartenderopportunity.ABuyerProfileincludescopiesofallnoticesrequiredbytheDirective,tenderspecificationsandadditionaldocuments, futureprocurement requirements, thepurchaser’sprocurementprocess andcontactdetails.TheBuyerProfilemayalsoincludescheduledpurchases,contractsconcluded,procedurescancelledandanyotherusefulgeneralinformation.

Contracting Authority:aGovernmentdepartmentoroffice; localorregionalauthority;anypublicbody,commercialornoncommercial;asubsidiaryorbodyestablishedbyapublicbody;anyinstitutionorentityfundedlargelyfrompublicfunds.

Public Contract:acontract for theprovisionofworks,suppliesorservicestoacontractingauthority.Itincludesallprocurements,notjustthosewhichareundertakenonthebasisofafulltenderingprocessandformalsigningofacontract.

Qualification Criteria:exhaustivecriteria(setoutinArticles45to48ofDirective2004/18/EC)tobeusedinpre-qualifying/pre-selectingcandidateswhoareinvitedtosubmittenders.Thecriteria relate toacandidate’sprofessionalconductandstanding,professionalor technicalexpertise,financialoreconomicstanding,generalcapacityandcompetency,i.e.criteriawhichrelatetoacandidate’scharacterandcapabilitytoperformaparticularcontract.Proposalsinrelationtoaparticularprojectarenotsoughtandarenotaconsiderationatthisstage.

Restricted Procedure:aprocedureunderEUprocurementDirectiveswherebyexpressionsofinterestareinvitedthroughanoticeintheOJEU(andotherappropriatemedia)andonlythose



55

whomeetcertainqualificationcriteriaareissuedwiththefulltenderdocumentationandinvitedtosubmittenders.

RFT (Request for Tenders):allthedocumentationrelatedtothetenderingprocess.Itnor-mallyincludesageneraloverviewofthetenderrequirements,adetailedspecificationofrequirements,theformatandstructureforsubmissionoftenders,howtenderswillbeexaminedandthecriteriaonwhichtheywillbeevaluated,andsomegeneralconditionsoftendering.TheRFTshouldnormallyincludeasetofconditionsforacontractwhichwillbeconcludedwiththesuccessfultenderer.

Segmentation:processbywhichtheglobalvalueofapubliccontractissubdividedtopre-ventitscomingwithinthescopeoftheDirective.



56

Appendix II: Main thresholds (exclusive of VAT) above which advertising of contracts in the Official Journal of the EU is obligatory, applicable from 1 January 2010 to 31 December 201155

Works

€ 4,845,000 Threshold applies to Government departments and offices, local and regional authorities and other public bodies.

Supplies and Services

€ 193,000

€ 125,000

Threshold applies to local and regional authorities and public bodies outside the utilities sector.

Threshold applies to Government departments and offices

Appendix III: Overview of priority and non-priority services56

Appendix IV: Guidance for auditors on contracts below threshold for application of the Public Procure-ment Directives, and on Contracts for Services listed in Annex IIB to Directive 2004/18/EC57

55 ThresholdsarerevisedeverytwoyearsandpublishedintheOJEU56 ThefulltextofthisAppendixisintheattachedCD.57 Idem



57

Appendix V: Public Sector Timescales58

Appendix VI: Steps in conducting a Competitive Pro-cess for contracts above EU Thresholds (open, restricted and negotiated procedures) (Diagram)59

Appendix VII: Framework Agreements and Framework call off stage (Diagram)60

Appendix VIII: Competitive Dialogue Procedure (Diagram)61

Appendix IX: Electronic Auctions (Diagram)62

Appendix X: Dynamic Purchasing Systems (Diagram)63

58 Idem59 Idem60 Idem61 Idem62 Idem63 Idem



58


Guidelines and Directives

EUDirective2004/18/ECcoverstheprocurementofpublicsectorbodies.Directive2004/17/ECcoverstheprocurementofentitiesoperatingintheutilitiessector.TheseDirectiveswerepublishedinOJNoL134of30April2004andareavailableon:

http://eur-lex.europa.eu/en/index.htm

Generalinformationaboutpublicprocurementcanbefoundatthefollowingwebsite:

http://ec.europa.eu/internal_market/publicprocurement/index_en.htm

Official Journal of the EU

Onlinepublicationofnoticesisavailableon:

http:/simap.eu.int

Other relevant websites•EUPublicProcurementwebsite:

http://simap.europa.eu

•GeneralEUwebsite:

http://europa.eu

•WTOsiteonthe1994GovernmentProcurementAgreement(GPA): http://www.wto.org/english/tratop_e/gproc_e/gp_gpa_e.htm

•CourtofJusticewebsite:

http://www.curia.europa.eu



59

Appendix XII: Case law of the European Court of Justice concerning public procurement (1982-2005)64

Introduction

TheCourtofJusticehasanimportantroleintheEuropeanUnion.AccordingtotheTreaty,it“shallensurethatintheinterpretationandapplicationofthisTreatythelawisobserved”(Article19TEU).TherelevantjudgmentscollectedinthisAppendixarethusanofficialinter-pretationoftheEUprocurementdirective.

TheanalysisofthecaselawoftheCourtofJusticehasbeenestablished–asfaraspossible–fromtheofficialSummariesoftheJudgmentspublishedintheEuropeanCourtReports.SomerelevantparagraphsofJudgmentscanalsobefoundinthetext.TheSummariesandJudgmentsareavailableonthewebsiteoftheCourtofJustice(http://curia.europa.eu/en/content/juris/index.htm) orontheportal“Eur-Lex”toEuropeanUnionlaw(http://eur-lex.europa.eu/en/index.htm).

Referencetothefactualcontextofeachcasehasalsobementionedforamore“concrete”and“realistic”understandingoftherulesprovidedbytheEUprocurementdirectiveandtheirinterpretationbytheCourtofJustice.65

1. Judgment of 10 February 1982, case 76/81, Transporoute

Criteriaforqualitativeselection–Principleofnon-discriminatorytreatment–Abnormallylowtender

2. Judgment of 28 March 1985, case 274/83, Commission/Italy

Themosteconomicallyadvantageoustender

64 The full text of this Appendix is in the attached CD. There you can find a more comprehensive description of the mentioned ECJ cases.

65 This introduction relates to the full text of the Appendix, which can be found in the attached CD. In this paper only the key issues of the cases are mentioned.



60

3. Judgment of 10 March 1987, case 199/85, Commission/Italy

Contractawardprocedures–Exceptionalcircumstances

4. Judgment of 09 July 1987, joined cases 27-29/86, CEI and Bellini

Criteriaforqualitativeselection–Economicandfinancialstandingoftenderer

5. Judgment of 20 September 1988, case 31/87, Beentjes

Contractingauthorities–Technicalabilityandknowledgeoftenderers–Publicityrequire-ments–Mosteconomicallyadvantageoustender–Conditionsforperformanceofcontracts–Principleofnon-discriminatorytreatment

6. Judgment of 22 September 1988, case 45/87, Commission/Ireland

Technicalspecifications–Freemovementofgoods

7. Judgment of 22 June 1989, case 103/88, Fratelli Costanzo

Awardofcontracts–Abnormallylowtenders

8. Judgment of 5 December 1989, case 3/88, Commission/Italy

Principleofnon-discriminatorytreatment–Activitiesconnectedwiththeexerciseofof-ficialauthority–Contractsdeclaredtobesecret–Derogationstothecommonmarketfundamentalfreedoms–Applicationofnegotiatedprocedurewithoutjustification

9. Judgment of 20 March 1990, case C-21/88, Du Pont de Nemours

Principleofnon-discriminatorytreatment–Principleoffreedomofmovementofgoods



61

10. Judgment of 18 March 1992, case C-24/91, Commission/Spain

Contractawardprocedures–Reasonsofextremeurgency

11. Judgment of 3 June 1992, case C-360/89, Commission/Italy

Principleofnon-discriminatorytreatment–Freedomtoprovideservices–Awardofpublicworkscontracts–Criteriaforqualitativeselection

12. Judgment of 22 June 1993, case C-243/89, Commission/Denmark

Principleofnon-discriminatory treatment–Commonmarket fundamental freedoms -Contractawardprocedures

13. Judgment of 2 August 1993, case C-107/92, Commission/Italy

Contractawardprocedures–(No)reasonsofextremeurgency

14. Judgment of 14 April 1994, case C-389/92, Ballast Nedam Groep I

Criteriaforqualitativeselection–Registrationofcontractors

15. Judgment of 19 April 1994, case C-331/92, Gestión Hotelera Internacional

ScopeoftheEUprocurementdirective–Mixedcontractrelatingbothtotheperformanceofworksandtotheassignmentofproperty

16. Judgment of 26 April 1994, case C-272/91, Commission/Italy

Contractawardprocedures–Commonmarketfundamentalfreedoms–

17. Judgment of 3 May 1994, case C-328/92, Commission/Spain

Contractawardprocedures–Pharmaceuticalproductsandspecialities–(No)reasonsofextremeurgency–Derogationsfromcommonrules–Strictinterpretation–Existenceofexceptionalcircumstances



62

18. Judgment of 24 January 1995, case C-359/93, Commission /Netherlands

Contractawardprocedures–Tendernotices

19. Judgment of 28 March 1996, case C-318/94, Commission/Germany

Contractawardprocedures–Applicationofnegotiatedprocedurewithoutjustification–(No)reasonsofextremeurgency

20. Judgment of 25 April 1996, case C-87/94, Commission/Belgium

Contractawardcriteria–Principleofequaltreatment–Principleoftransparency

21. Judgment of 18 December 1997, case C-5/97, Ballast Nedam Groep II

Criteriaforqualitativeselection–Suitabilitytopursuetheprofessionalactivity–Economicandfinancialstanding–Technicaland/orprofessionalability–Registrationofcontractors–Relevantentity

22. Judgment of 15 January 1998, case C-44/96, Mannesmann

Contractingauthorities-Bodygovernedbypubliclaw

23. Judgment of 17 September 1998, case C-323/96, Commission/Belgium

Contractingauthorities-State

24. Judgment of 10 November 1998, case C-360/96, Arnhem and Rheden/BFI

Contractingauthorities–Bodygovernedbypubliclaw–Needsinthegeneralinterest,nothavinganindustrialorcommercialcharacter

25. Judgment of 17 December 1998, case C-353/96, Commission/Ireland

Contractingauthorities–Bodygovernedbypubliclaw



63

26. Judgment of 16 September 1999, case C-27/98, Fracasso and Leitschutz

Awardofcontracts–Whetheritiscompulsorytoawardthecontracttothesoletendererconsideredsuitable

27. Judgment of 18 November 1999, case C-107/98, Teckal

Scopeofthedirective–Contractingauthorities–“In-house”-serviceorpublicprocure-mentcontract?

28. Judgment of 18 November 1999, case C-275/98, Unitron Scandinavia

Contractawardprocedures–Contractingauthorities

29. Judgment of 2 December 1999, case C-176/98, Holst Italia

Criteriaforqualitativeselection–Suitabilitytopursuetheprofessionalactivity–Economicandfinancialstanding–Technicaland/orprofessionalability

30. Judgment of 26 September 2000, case C-225/98, Commission/France

Contractawardprocedures–Commonrulesonadvertising–Contractawardcriteria–Cri-teriaforqualitativeselection

31. Judgment of 3 October 2000, case C-380/98, University of Cambridge

Contractingauthorities–Bodiesgovernedbypubliclaw–Percentageofpublicfinancing

32. Judgment of 5 October 2000, case C-16/98, Commission/France

Publicworkscontract–Artificialsplittingofasinglework–Principleofnon-discriminationbetweentenderers



64

33. Judgment of 7 December 2000, case C-94/99, ARGE Gewässerschutz

Principleofequaltreatment–Participationoftenderersreceivingsubsidiesfromcontractingauthoritiesenablingthemtosubmittendersatpriceslowerthanthoseoftheircompetitors

34. Judgment of 7 December 2000, case C-324/98, Telaustria Verlag

ScopeoftheEUprocurementdirective–Publicserviceconcession–Obligationoftranspar-encyofthecontractingauthority

35. Judgment of 1st February 2001, case C-237/99, Commission/France

Contractingauthorities–Bodiesgovernedbypubliclaw

36. Judgment of 10 May 2001, joined cases C-223 and 260/99, Agora and Excelsor


37. Judgment of 12 July 2001, case C-399/98, Ordine degli Architetti

Contractawardprocedures–Commonmarketfundamentalfreedoms–ScopeoftheEUprocurementdirective

38. Judgment of 18 October 2001, case C-19/00, SIAC Construction

Awardofcontracts–Principleofequaltreatment–Mosteconomicallyadvantageoustender

39. Judgment of 27 November 2001, joined cases C-285 and 286/99, Lombardini and Mantovani

Awardofcontracts–Abnormallylowtenders



65

40.Judgment of 17 September 2002, case C-513/99, Concordia Bus Finland

Mosteconomicallyadvantageoustender–Protectionoftheenvironment–Principleofnon-discriminatorytreatment

41. Judgment of 14 November 2002, case C-411/00, Felix Swoboda

Contractawardprocedures–Publicservicecontracts–Qualificationofservices–ServicesfallingpartlywithinAnnexIIAandpartlywithinAnnexIIB–Determinationoftheap-plicableregime–Mainpurposeofthecontract–Comparisonofthevalueoftheservices

42. Judgment of 12 December 2002, case C-470/99, Universale-Bau

Contractingauthorities–Bodygovernedbypubliclaw–Criteriaforqualitativeselection

43. Judgment of 23 January 2003, case C-57/01, Makedoniko Metro and Michaniki

Contractawardprocedures–Groupoftenderers–Nationalrulesprohibitingachangeinthecompositionofthegroupaftersubmissionoftenders

44. Judgment of 27 February 2003, case C-373/00, Adolf Truley

Contractingauthorities–Bodygovernedbypubliclaw–Needsinthegeneralinterest-Criterionofmanagementsupervisionbypublicauthorities

45. Judgment of 10 April 2003, joined cases C-20 and 28/01, Commission/Germany

Negotiatedprocedurewithoutpriorpublicationofacontractnotice–Technicalofartisticreasons,orreasonsconnectedwiththeprotectionofexclusiverights–Environmentalprotection



66

46. Judgment of 15 May 2003, case C-214/00, Commission/Spain

Contractingauthorities–Bodygovernedbypubliclaw

47. Judgment of 22 May 2003, case C-18/01, Korhonen and others


48. Judgment of 19 June 2003, case C-315/01, GAT

Contractawardcriteria

49. Judgment of 16 October 2003, case C-421/01, Traunfellner

Awardofcontracts

50. Judgment of 16 October 2003, case C-283/00, Commission/Spain

Contractingauthorities–Bodygovernedbypubliclaw–Needsinthegeneralinterest,nothavinganindustrialorcommercialcharacter–Statecommercialcompanygovernedbyprivatelaw

51. Judgment of 16 October 2003, case C-252/01, Commission/Belgium

ScopeoftheEUprocurementdirective–Executionofservicesaccompaniedbyspecialsecuritymeasures

52. Judgment of 4 December 2003, case C-448/01, EVN and Wienstrom

Mosteconomicallyadvantageoustender–“Green”awardcriteriongivingpreferencetoelectricityproducedfromrenewableenergysources



67

53. Judgment of 14 September 2004, case C-385/02, Commission/Italy

Contractawardprocedure–Derogationsfromthecommonrules–Strictinterpreta-tion–Existenceofexceptionalcircumstances–Burdenofproof

54. Judgment of 7 October 2004, case C-247/02, Sintesi

Rightofthecontractingauthoritytochoosebetweenthecriterionofthelowerpriceandthatofthemoreeconomicallyadvantageoustender

55 Judgment of 14 October 2004, case C-340/02, Commission/France

Principleofequaltreatment–Principleoftransparency–Applicationofnegotiatedprocedurewithoutjustification–Contractinseveralphases

56. Judgment of 18 November 2004, case C-126/03, Commission/Germany

ScopeoftheEUprocurementdirective–Contractconcludedbyacontractingauthor-ityinrelationtoaneconomicactivitysubjecttocompetition–Contractconcludedbyacontractingauthorityinordertobeabletosubmitanofferinatenderprocedure

57. Judgment of 11 January 2005, case C-26/03, Stadt Halle and RPL Lochau

Scopeofthedirective–Contractingauthorities–“In-house”-services–Contractingauthorityhavingaholdinginthecapitalofacompanylegallydistinctfromit

58. Judgment of 13 January 2005, case C-84/03, Commission/Spain

Contractingauthorities–Bodygovernedbypubliclaw–Publiccontract–Derogationsfromthecommonrules–Strictinterpretation–Useofthenegotiatedprocedureincasesnotprovidedforbythedirective

59. Judgment of 3 March 2005, joined cases C-21 and 34/03, Fabricom

Principleofnon-discriminationbetweentenderers



68

60. Judgment of 21 July 2005, case C-231/03, Coname

Commonmarketfundamentalfreedoms–Directawardofaconcessionforthemanage-mentofapublicgas-distributionservice–Principleoftransparency

61. Judgment of 13 October 2005, case C-458/03, Parking Brixen

Scopeof theEUprocurementdirective -Publicserviceconcession–Principleofequaltreatmentandnon-discrimination–Commonmarket fundamental freedoms–Publicserviceconcessioncontracts

62. Judgment of 20 October 2005, case C-264/03, Commission/France

Commonmarketfundamental freedoms–PubliccontractsexcludedfromthescopeoftheEUprocurementdirective–ObligationtorespectthefundamentalrulesoftheTreaty–Contractawardprocedures

63. Judgment of 10 November 2005, case C-29/04, Commission/Austria

Scopeofthedirective–Contractingauthorities–“In-house”-services–Contractingauthor-ityhavingaholdinginthecapitalofacompanylegallydistinctfromit

64. Judgment of 24 November 2005, case C-331/04, ATI EAC and others

Theeconomicallymostadvantageoustender–Principlesofequaltreatmentoftenderersand transparency

65. Judgment of 9 February 2006, joined cases C-226/04 and C-228/04, La Cascina and Zilch

Publicservicecontracts–Qualitativeselection–Paymentofsocialsecuritycontributionsandtaxes



69

66. Judgment of 6 April 2006, Case C-410/04, Associazione Nazionale Autotras-porto Viaggiatori (ANAV)

Freedomtoprovideservices–Localpublictransportservice–Awardwithnocallforten-ders–Awardbyapublicauthoritytoanundertakingofwhichitownsthesharecapital–Inhouse?

67. Judgment of 11 May 2006, Case C-340/04, Carbotermo and Consorzio Alisei

Publicsupplycontracts–Awardofcontractwithoutacallfortenders–Awardofthecon-tracttoanundertakinginwhichthecontractingauthorityhasashareholding–Inhouse?

68. Judgment of 18 January 2007, Case C-220/05, Jean Auroux and Others

Publicprocurement–Definitionof“publicworkscontract’and“work’–Methodofcal-culationofthevalueofthecontract–Awardwithoutcallfortenders

69. Judgment of 19 April 2007, Case C-295/05, Asociación Nacional de Empresas Forestales (Asemfo)

National legislationenablingapublicundertakingtoperformoperationsonthedirectinstructionsofthepublicauthoritieswithoutbeingsubjecttothegeneralrulesfortheawardofpublicprocurementcontracts–Inhouse

70.Judgment of 14 June 2007, Case C-6/05, Medipac-Kazantzidis

Freemovementofgoods–Principleofequaltreatmentandobligationoftransparency–HospitalpurchaseofmedicaldevicesbearingtheCEmarking–Protectivemeasures–Publicsupplycontract



70

71.Judgment of 18 July 2007, Case C-382/05, European Commission/Italy

PublicservicecontractssubjecttotheEUprocurementDirectiveandnotserviceconces-sionsoutsidethescopeofthatdirective

72.Judgment of 13 September 2007, Case C-260/04, European Commission/Italy

Freedomofestablishmentandfreedomtoprovideservices–Publicserviceconcessions–Requirementsofpublicationandtransparency–Discriminationongroundsofnationality.

73.Judgment of 13 November 2007, Case C-507/03, European Commission/Ireland

Awardofpubliccontracts–Commonmarketfundamentalfreedoms

74.Judgment of 13 December 2007, Case C-337/06, Bayerischer Rundfunk

Publicservicecontracts–Contractingauthorities–Bodiesgovernedbypubliclaw–Condi-tionthattheactivityoftheinstitutionbe‘financed,forthemostpart,bytheState’

75.Judgment of 18 December 2007, Case C-532/03, European Commission/Ireland

Publicprocurement–Commonmarketfundamentalfreedoms–Emergencyambulanceservices

76.Judgment of 18 December 2007, Case C-357/06, Frigerio Luigi

Economicoperators

77.Judgment of 24 January 2008, Case C-532/06, Lianakis

Criteriawhichmaybeacceptedas‘criteriaforqualitativeselection’or‘awardcriteria’-Principleofequaltreatmentofeconomicoperatorsandobligationoftransparency–Eco-nomicallymostadvantageoustender



71

78.Judgment of 21 February 2008, case C-412/04, European Commission/Italy

Publicworks,supplyandservicecontracts–Transparency–Equaltreatment–Contractsexcludedfromthescopeofthosedirectivesonaccountoftheirvalue

79.Judgment of 3 April 2008, case C-346/06, Dirk Rüffert

Freedomtoprovideservices–Socialprotectionofworkers.

80.Judgment of 8 April 2008, case C-337/05, European Commission/Italy

Publicsupplycontracts–Awardofpubliccontractswithoutpriorpublicationofanotice–Absenceofcompetitivetendering–Helicopters

81.Judgment of 10 April 2008, case C-393/06, Ing. Aigner

Bodygovernedbypubliclaw–Contractingauthority–Contractingentitypursuingactivi-tiesfallinginpartwithinthefieldofapplicationofDirective2004/17/ECandinpartwithinthatofDirective2004/18/EC

82.Judgment of 15 May 2008, joined cases C-147/06 and C-148/06, SECAP and Santorso

Communitylaw–Principles–Equaltreatment–ContractswithavaluebelowthethresholdsetbytheEUProcurementDirective,whichareofcertaincross-borderinterest

83.Judgment of 19 June 2008, C-454/06, pressetext Nachrichtenagentur

Proceduresfortheawardofpublicservicecontracts–Amendmentstotheprovisionsofapubliccontractduringthecurrencyofthecontract



72

84.Judgment of 17 July 2008, C-347/06, ASM Brescia

Commonmarketfundamentalfreedoms–Concessionforapublicgas-distributionservice–Publicserviceconcessiongrantedwithoutacompetitivetenderingprocedure–Principlesoftheprotectionoflegitimateexpectationsandlegalcertainty

85.Judgment of 2 October 2008, case C-157/06, European Commission/Italy

Proceduresfortheawardofpublicsupplycontracts–Lighthelicoptersforthepoliceandthenationalfireservice–Awardofpubliccontractswithoutpriorpublicationofanotice–Derogationsfromcommonrules–Restrictiveinterpretation–ProtectionoftheessentialinterestsofaMemberState’ssecurity

86.Judgment of 13 November 2008, case C-324/07, Coditel Brabant

Publicprocurement–Tenderingprocedures–Publicserviceconcessions–Concessionfortheoperationofamunicipalcabletelevisionnetwork–Awardedbyamunicipalitytoaninter-municipalcooperativesociety–Obligationoftransparency–Whetherthecontrolexercisedbytheconcession-grantingauthorityovertheconcessionaireissimilartothatexercisedoveritsowndepartments.

87.Judgment of 16 December 2008, case C-213/07, Michaniki

Publicworkscontracts–Groundsforexcludingparticipationinacontract

88.Judgment of 19 May 2009, case C-538/07, Assitur

Publicservicecontracts–Nationallegislationnotallowingcompanieslinkedbyarelation-shipofcontrolorsignificantinfluencetoparticipate,ascompetingtenderers,inthesameprocedurefortheawardofapubliccontract

89.Judgment of 9 June 2009, case C-480/06, European Commission/Germany

Contractingauthorities–NoformalEuropeantenderingprocedurefortheawardofwastetreatmentservices–Cooperationbetweenlocalauthorities



73

90. Judgment of 11 June 2009, case C-300/07, Hans & Christophorus Oymanns

Publicsupplycontractsandpublicservicecontracts–Bodiesgovernedbypubliclaw–Contractingauthorities–Invitationtotender

91. Judgment of 10 September 2009, case C-573/07, Sea

Publicprocurement–Awardprocedures–Contractrelatingtoaserviceforthecollection,transportanddisposalofurbanwaste–Awardedwithoutanycallfortenders–Awardedtoacompanylimitedbyshareswhosecapitaliswhollyownedbypublicbodiesbutunderwhosestatutesaprivatecapitalholdingispossible

92. Judgment of 10 September 2009, case C-206/08, Eurawasser

Procurementproceduresofentitiesoperatinginthewater,energy,transportandpostalservicessectors–Serviceconcession–Publicserviceforthedistributionofdrinkingwaterandthetreatmentofsewage

93. Judgment of 15 October 2009, case C-196/08, Acoset

Awardofpubliccontracts–Awardofwaterservicetoasemi-privatecompany–Competi-tiveprocedure–Appointmentoftheprivatepartnerresponsibleforoperatingtheservice

94. Judgment of 15 October 2009, case C-138/08, Hochtief and Linde

Negotiatedprocedureswithpublicationofacontractnotice–Obligationtoensuregenu-inecompetition

95. Judgment of 12 November 2009, case C-199/07, Commission/Greece

Contractnotice–Qualitativeselectionandawardcriteria



74

96. Judgment of 10 December 2009, case C-299/08, Commission/France

Proceduresfortheawardofpubliccontracts

97.Judgment of 23 December 2009, case C-305/08, CoNISMa

Publicservicecontracts–Conceptsof‘contractor’,‘supplier’and‘serviceprovider’–Con-ceptof‘economicoperator’–Universitiesandresearchinstitutes–Group(‘consorzio’)ofuniversitiesandpublicauthorities–Wheretheprimaryobjectunderthestatutesisnon-profit-making–Admissiontoaprocedurefortheawardofapubliccontract.

98.Judgment of 23 December 2009, case C-376/08, Serrantoni and Consorzio stabile edili

Publicworkscontracts–Principleofequaltreatment–Groupsofundertakings–Prohibi-tiononcompetingparticipationinthesametenderingprocedurebya‘consorziostabile’(‘permanentconsortium’)andoneofitsmembercompanies.

Appendix XIII: Tender documents. An auditor’s view66

Appendix XIV: Price and quality coefficients in the evaluation of tenders67

66 The full text of this Appendix is in the attached CD.67 Idem



75

Appendix XV: Directive 2009/81/EC, of 13 July 2009, on the award of works contracts, supply contracts and service contracts in the fields of defence and security

ThenewDirective2009/81/ECondefenceandsecurityprocuremententeredintoforceon21August2009.TheDirectiveistobecomethecornerstoneofatrulyEuropeanDefenceMarketsupportingthedevelopmentoftheEuropeandefence-relatedsupplierbase.

Upuntilnow,thevastmajorityofdefenceandsensitivesecurityprocurementcontractshavebeenexemptedfromtheInternalMarketrules.OneofthereasonsforthisisthattheexistingEUprocurementrulesareconsideredtobeill-suitedformostdefenceandsecurity-relatedpurchases.

ThenewDirectiveshouldgreatlyimprovethissituationbyprovidingtailor-madeprocurementrulesfordefenceandsecuritycontracts.

MemberStatesnowhaveattheirdisposalCommunityrulestheycanapplytocomplexandsensitivetransactionswithoutputtingatrisktheirlegitimatesecurityinterests.

More transparency and competition for Europe’s defence and security markets

BeforeDirective2009/81/EC,mostdefenceandsensitivesecurityequipmenthadtobepro-curedonthebasisofuncoordinatednationalrules,whichdiffergreatlyintermsofpublication,tenderingprocedures,selectionandawardcriteria,etc.ThisregulatorypatchworkwasamajorobstacleonthewaytowardsacommonEuropeandefenceequipmentmarketandopenedthedoortonon-compliancewiththeInternalMarketprinciples.

Directive2009/81/ECwillopenuptheInternalMarketfordefenceandsecurityproductsbyintroducingtransparentandcompetitiveprocurementrulesspecificallyadaptedtotheneedsofthesehighlysensitivesectors.



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A tailor-made procurement regime for sensitive contracts

Thenewrulesapply totheprocurementofarms,munitionsandwarmaterialandalsotosensitivenon-militarycontractsinareassuchasprotectionagainstterrorismwhichoftenhavesimilarfeaturestodefencecontracts.

TheDirectivecontainsanumberofinnovationstailoredtothespecificneedsofprocurementindefenceandsecuritymarkets:

• Awardingauthoritiesmayusethenegotiatedprocedurewithpriorpublicationasastandardprocedure,whichgivesthemflexibilitytofine-tunealldetailsofthecontract.

• Candidatesmayberequiredtosubmitspecificguaranteesensuringsecurityofinforma-tion(safeguardingofclassifiedinformation)andsecurityofsupply(timelyandreliablecontractexecution,especiallyincrisissituations).

• Specificrulesonresearchanddevelopmentcontractsstrikeabalancebetweentheneedtosupportinnovationandthenecessaryopennessofproductionmarkets.

• Awardingauthoritiesmayobligecontractorstoawardsubcontractsinacompetitivemanner,opening-upsupplychainsandcreatingbusinessopportunitiesforSME’sinthedefenceandsecuritysector.

• Asetofnationalreviewprocedureswillprovideeffectiveremediesprotectingtherightsofbusinessestakingpartintheawardprocedure.

Limiting exemptions from the Internal Market rules to the strict minimum

MemberStatesstillhavethepossibilitytouseArticle296ECTreatytoexemptdefenceandsecurityprocurementcontractswhicharesosensitivethateventhenewrulescannotsatisfytheirsecurityneeds.



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Inmostcases,however,MemberStatesshouldbeabletousethenewDirectivewithoutanyriskfortheirsecurity.

Transposition

MemberStateshavetimeuntil21August2011totransposeDirective2009/81/ECintotheirnationallegislation.

For more information, see:

http://ec.europa.eu/internal_market/publicprocurement/dpp_en.htm


Procurement Performance Model


The Procurement Performance Model develops key

questions as reference pointers for auditors evaluating

the performance of the procurement function in public

sector bodies.


Meta level – assessment of the governments overall procurement strategy

1 Dogovernmentpoliciespromoteand/orsafeguardfaircompetition?

2 Doesgovernmenthaveanoverallprocurementstrategyand/orpolicy?

3Areprocurementpolicies andpractices in linewith (international) goodpractice standards?

4Istheperformanceoftheprocurementfunction/unitbenchmarkedwithotherprocure-mentfunctions/unitsinthedifferentstagesoftheprocurementprocess?

5Areobtainedprices/qualitiescompetitivetoprices/qualitiesobtainedbyotherprocure-mentfunctions/units,comparingobtainedorimprovedvalueformoney?

Macro level – assessment of the department’s procurement function/unit:

6AreoutsourcingandPublicPrivatePartnershipsconsideredasalternativestoin-housework?

7 Doesthedepartmenthaveaprocurementstrategyandisitimplemented?

8 Isthedepartment’sprocurementfunction/unitwellorganized?

9 Istheprocurementprocesswellorganized?

10Dotheemployeeshavethenecessaryskillsandexperiencetocarryoutprocurementsefficiently?

11Arethereappropriatecontrolsinplacetoensurethatprocurementcomplieswiththerelevantlegislation?

12Are theremechanisms inplace toevaluate theperformanceof thedepartment’s suppliers?

13Arerisksmanagedtoprovidereasonableassuranceregardingdepartmentprocurement-objectives?

14Are there regular reviews and analysis of the performance of the procurement function/unit?

Micro level – assessment of a single procurement project

15Doestheprocurementprojecthaveacleargoalanddoesthegoalmeetthespecifiedneedsoftheusers?

16 Istheprocurementprojectefficientlymanaged?

17 Arethereappropriatecontrolsinplacetoensurethattheprocurementprojectcomplieswithrelevantlegislation?

PROCUREMENTPERFORMANCEMODEL


Procurement performance model

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1. Do government policies promote and/or safeguard fair competition?METALEVEL-ASSESSMENTOFTHEGOVERNMENTSOVERALLPROCUREMENTSTRATEGY

Why important?Publicprocurementcanonlybesuccessfulinacompetitivebusinessenvironment.Therearebusi-nesssectorsinwhichsoundcompetitionhastobepromotedorneedsgovernmentattention.Typicalgovernmentpolicieswithinthiscontextmayincludelawandregulationstopromotefreetradeaswellasanticorruptionpolicies.

Questions•Isfreeandfair(international)competitionpromotedbygovernmentpoliciesandlegislation,inlinewithEU,tradeorganisationsandotherpolicies?

•Areregulationsontaxes,fees,duties,excises,tariffsetc.notimpeding(international)competition?•Dogovernmentagenciesoverseethatrulesofcompetitionareadheredto?•Doesgovernmentimposesanctionsoncompaniesundulylimitingcompetition?•Areregulationsandprotectivemeasuresinplacetoavoidcorruption?

•Isgovernmenttransparentaboutwinningbidsandprices?

Guidance•Directive92/50/EEC;GuidetotheCommunityrulesonpublicprocurementofservices (http://europa.eu.int/comm/internal_market/publicprocurement/index_en.htm)•OfficeofFairTrading(OFT)–UK:Guidelinestocompetitionassessment;February2002 (http://www.oft.gov.uk/Business/regulations/default.htm)•AustralianChamberofCommerceand Industry:NationalCompetitionPolicy;April 2001,N.º74(http://www.aph.gov.au/library/intguide/econ/ncp_ebrief.htm)

•CouncilofEurope:Resolution(97)24:Onthetwentyguidingprinciplesforthefightagainstcorruption (http://www.coe.int/T/E/Legal_affairs/Legal_cooperation/Combating_economic_crime)•UnitedNations(UN):Conventionagainstcorruption2003 (http://www.unodc.org/unodc/en/corruption.html)•TransparencyInternational (http://www.transparency.org)

Public Procurement Audit86


METALEVEL-ASSESSMENTOFTHEGOVERNMENTSOVERALLPROCUREMENTSTRATEGY2. Does government have an overall procurement strategy and/or policy?

Why important?

Consideringthe(financial)importanceofprocurementsforgovernment,itmaybewisetodevelopanoverallgovernmentstrategyand/orpolicyonpublicprocurement.Thiswouldfacilitateamoreunifiedapproachbyvariousgovernment institutionsandpublicentities.Thisgovernmentpolicycouldincludeperformancetargetsforthevariousprocuringunitsandethicalguidelinesrelatedtopublicprocurements(forexampleonchildlabour,theenvironmentetc.).

Questions

•Doesgovernmenthaveanoverallstrategyand/orpolicyonpublicprocurement,providingguidanceforprocuringentities?

•Doesthegovernmentpolicyinclude:o Performancetargetsonvalueformoneyobtainedandcostsavings?o Ethicalguidelinesforpublicprocurement?o Provisionsforobtainingoverallmanagementinformationonpublicprocurement?

Guidance

•Gettingvalueformoneyfromprocurement/Howauditorscanhelp?–NationalAuditOffice/OfficeofGovernmentCommerce(England)

•Government-wide reviewofprocurement;ParliamentarySecretary’sTaskForce;Canada2005(http://www.pwgsc.gc.ca/prtf/text/presentations/21-23oct04-e.html)



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METALEVEL-ASSESSMENTOFTHEGOVERNMENTSOVERALLPROCUREMENTSTRATEGY3.Areprocurementpoliciesandpractisesinlinewith(international)goodpractisestandards?

Why important?

MultinationalandSupranationalorganisations(forexampleEU,UN,WorldBanketc.)haveestablishedstandardsandgoodpracticeguidelinesforpublicprocurement.Thesestandardsaredesignedtopromoteeffectiveprocurement,valueformoney,faircompetition,harmonisationandtransparency.Itisthereforeimportantthatgovernmentisincompliancewithinternationalstandardsandadoptsgoodpracticeguidelines.

Questions•Isgovernmentawareandinformedaboutinternationalprocurementstandardsandgoodpractice?

•Areprocurementpolicies,proceduresandorganisationevaluatedagainstthesestandards?

•Doesgovernmentlearnfrombenchmarkingitsownpracticeswithinternationalstandards?

Guidance• Directive 92/50/EEC; Guide to the Community rules on public procurement of services (http://europa.eu.int/comm/internal_market/publicprocurement/ index_en.htm)

• United Nations Commission on International Trade Law (UNCITRAL): Model law on procurement of goods, construction and services to enactment

(http://www.uncitral.org/uncitral/en/index.html)

• World Bank: Office Memorandum May 23, 2002 – 38874: Revised CPAR (Country Procurement Assessment Reports) procedures

(http://web.worldbank.org/WBSITE/EXTERNAL/PROJECTS/PROCUREMENT/0,,page PK: 84271~theSitePK:84266,00.html)

• SIGMA – paper N.º 30 – December 2000 (114): Public Procurement Review Procedures (http://unpan1.un.org/intradoc/groups/public/documents/NISPAcee/UNPAN006807.pdf)

• Council of Europe: Resolution (97)24: On the twenty guiding principles for the fight against corruption (http://www.coe.int/T/E/Legal_affairs/Legal_cooperation/ Combating_economic_crime)• United Nations (UN): Convention against corruption 2003 (http://www.unodc.org/unodc/en/corruption.html)



METALEVEL-ASSESSMENTOFTHEGOVERNMENTSOVERALLPROCUREMENTSTRATEGY4. Is the performance of the procurement function/unit benchmarked with other procurement

functions/units in the different stages of the procurement process?

Why important?Departmentalagenciesandnon-departmentalpublicbodiesareresponsiblefordeterminingthegoodsandservicestheyneedandforthewaytheyacquirethem.Theprocurementfunction/unitcoverseveryaspectoftheprocessofdeterminingtheneedofgoodsandservices(includingworks),andbuying,deliveringandstoringthem.Benchmarkingwithotherprocurementfunc-tions/unitsmayhighlightoptionsforfurtherimprovements.

Questions• Istheprocurementfunction/unitcomparedwithotherprocurementfunctions/unitsandwhataretheresultsofacomparativeanalysesincludingthevariousstagesincompetitiveprocure-ment,forexample:

o Assessingtheneedforthegoodsandservices;

o Specificationofrequirement;

o Agreeinglistofpotentialsuppliers;

o Invitationtotender;

o Evaluationofbids;

o Selectionofsupplier;

o Agreeingformofcontract;

o Formalawardingofcontract;

o Evaluationofcontractperformance?

Guidance•Gettingvalueformoneyfromprocurement/Howauditorscanhelp?–NationalAuditOffice/OfficeofGovernmentCommerce(England)



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METALEVEL-ASSESSMENTOFTHEGOVERNMENTSOVERALLPROCUREMENTSTRATEGY5. Are obtained prices/qualities competitive to prices/qualities obtained by other procurement functions/units,comparingobtainedorimprovedvalueformoney?

Why important?

Procurementsshouldbebasedonvalueformoney(definedastheoptimumcombinationofwholelifecostsandfulfilmentofcustomer’srequirements)ratherthaninitialpurchaseprice.Benchmarkingwithotherprocurementfunctions/unitsmayhighlightoptions for further im-provements.

Questions

•Howdoprocurementfunctions/unitscompareregarding:

o Valueformoneyobtained,comparingthequalityofserviceandcosts.

o Improvingvalueformoneybyforexample:(a)reducingthecostofpurchasingand

thetimeittakes;(b)negotiation;(c)improvingproject-,contract-,asset-and/orrisk

management.

•Howdotheprocurementfunctions/unitsmanagetheprocurementrisks(forexample:theriskifthesupplierdoesnotdeliverontime,tobudgetandofappropriatequality;theriskofindiscretion,fraudandwaste)?

•Which formsofcontractstrategiesaregenerallyusedbytheprocurement functions/unitsandisthechoicetousethisspecificcontractstrategyinspiredbytheneedtodelivervalueformoney(mostlikelycomparedtootherstrategies)?

•Dotheprocurementfunctions/unitswork incompliancewithproperprojectmanagementprocedures;sothatprojectsaredeliveredontime,withincostlimits,meetingqualitystandardsandwithminimumdisruptionofservices?

Guidance

•Gettingvalueformoneyfromprocurement/Howauditorscanhelp–NationalAuditOffice/OfficeofGovernmentCommerce(England)



Why important?TheuseofcompetitionandPublicPrivatePartnershipmayensurethatthepublicwayofhan-dlingtasksareorganizedappropriatelyandefficiently,includingthatthereisadivisionoflabour betweenthepublicandprivatesector.Therefore,itisimportanttoconsiderindetailsexactlywhatisproducedin-houseandwhatadvantageouslymaybeproducedexternally.

Questions•Aredecisionstooutsourceandbeingpartofpublicprivatepartnershipscloselylinkedtothedeliveryofdepartment’scoreservicesandfunctions?

•Areadvantagesanddisadvantagesofin-houseproduction,outsourcingandPublicPrivatePart-nershipsconsidered?

•Isittestedperiodically,whetherthepublic’swayofhandlingtasksiscompetitiveinrelationtopriceandquality?

•Isitonaregularbasisexaminedwhetheritispossibletoenterintopublicprivatepartnershipswithprivatesuppliers?

•Areservices/taskscombinedinsuchawaythatthemarketisusedwhererelevant?•Isitassessedwhetherwell-functioningmarketsexistforthedepartments’services/tasks?•Isitconsideredwhetherservices/tasksareofasufficientvolumetomakeitattractivetooutsourcetheseservices/tasks?

•DoesthedepartmentfocusonprocedurecostsinconnectionwithtenderingorenteringintoPublicPrivatePartnerships?

Guidance•http://www.ppp.gov.ie/splash.php(Ireland)• http://ncppp.org/(USA)

• http://www.centipedia.com/articles/Outsource(England)

MACROLEVEL-ASSESSMENTOFTHEDEPARTMENT’SPROCUREMENTFUNCTION/UNIT6. Are outsourcing and Public Private Partnerships considered as alternatives to in-house

work?



91

Why important?

Astrategicapproachtoprocurementisimportantbecauseitcanassistadepartmentinmeetingitspolicyobjectivesandtoobtainvalueformoneyinprocurement.Aprocurementstrategycanamongotherthingshelp:

•Buildacommonideaofwhatismoreimportantwhenprocurementdecisionsaremade.(forexampletherelationshipbetweenprice,qualityandservice)

•Optimizeprocurementintheorganizationasawhole,byusingthecollectivebuyingpowerandreducinginternaladministrativecost

•Assuringtherightcompetencesamongprocurementstaffandtherighttoolstosupportanefficientadministration,forexamplee-procurement

•Supporttheachievementofdepartmentalpolicyandbusinessobjectivebymakingalinktotheprocurementgoals

Questions

•Istherelationshipbetweenin-houseandexternalworkconsideredinthestrategy?

•Doesthestrategyensurethatneedsaremet,butnotexceeded?

•Doesthestrategyensurethattheconceptsofstandardisationandcoordinationofprocurementareusedtotakeadvantageofthedepartment’scollectivebuyingpower?

•Doesthestrategydiscusthebestmannerofpurchase,consideringthetypesofgoodsandser-vicesneeded?

•Doesthestrategyensurethatthebestsupplierischosenconsidering:price,quality,service,dependableoperation,internaloperationcosts,lifetimeoperationcostsandcodesofethic?

•Doesthestrategyincludeapolicyforidentifyingandtrainingsuitableprocurementstaff?

MACROLEVEL-ASSESSMENTOFTHEDEPARTMENT’SPROCUREMENTFUNCTION/UNIT

7. Does the department have a procurement strategy and is it implemented?



•Doesthestrategyensurethatappropriatecontrolsareinplaceto:

o Ensureproprietyandregularityindelivery?

o Addressriskoffraudandcorruption?

o Monitorbehaviourofprocurementstaff?

•Doesthestrategycontainincentivestoevaluatetheperformanceoftheprocurementfunc-tion/unit?

•Isthestrategyimplementedacrosstheentireorganization?

Guidance

•ImprovingProcurement,NationalAuditOffice(England)2004

•ModernizingProcurement,NationalAuditOffice(England)1999

•ContractManagement–AgenciesCanAchieveSignificantSavingsonPurchaseCardBuys,UnitedStatesGovernmentAccountabilityOffice(USA)2004


•ProcurementExcellence–aguidetousingtheEFQMmodelinprocurement,OfficeofGo-vernmentCommerce(England)1999



93

Why important?Havingprocurementorganizedeffectivelyisaverycentralareaofeffort,astheinternalwayoforganisingprocurementmaybeameanforadepartmenttoimproveeffectivenessofprocure-ment.Bythismeanadepartmentmayreduceitscostsofhandlingprocurementandinvoicingsignificantly.

Questions•Isthereanoverallmissionfortheprocurementfunction/unitandisitdeterminedwhichtaskstheprocurementfunction/unitshouldcarryout?

•Hasguidelinesbeensetupforhowtheprocurementfunction/unitshouldcarryoutitsprocu-rements?

•Hasitbeendeterminedwhichareasofprocurementthefunction/unitshouldcover?

•Hasitbeendeterminedwhichsharedservicestheprocurementfunction/unitshouldbepartof?

•Hasitbeendeterminedhowlargeaportionoftheprocurementportfoliothatshouldbemanagedbytheprocurementfunction/unitandhowlargeaportionthatshouldbemanagedlocally?

•Istheprocurementfunction/unitorganisedthemostappropriatewaytakingintoconsiderationtheactualtaskswhichthedepartmenthastocarryout?

•Istheperformanceoftheprocurementfunction/unitregularlyevaluated?

Guidance•ModernizingProcurement,NationalAuditOffice(England)1999



8. Is the department’s procurement function/unit well organized?



Why important?Havingtheprocurementprocessorganizedeffectivelyisanimportantareaofeffort,asthepro-curementprocessmaybeameanforadepartmenttoreducetransactioncostsassociatedwithprocurement.Thedifferentstepsintheprocurementprocessaresetoutinfigure1.

The procurement process

Placing orders

Order confir-mation

Taking delivery

Invoice proces-

sing

Book-keeping

Settle-ment

Byhavingtheprocurementprocessorganizedeffectivelyadepartmentmayreduceitscostsofplacingorders,orderconfirmation, takingdeliveryofgoods, invoiceprocessing,bookkeepingandsettlements.

Questions

•Hasthedepartmentidentifiedanddescribedthedifferentelementsintheprocurementprocess?

•Hasguidelinesbeensetupforhowtheprocurementprocessshouldbeconducted?

•Istheprocurementprocessorganisedthemostappropriatewaytakingintoconsiderationthe

amountofprocurement?

•Istheprocurementprocessfullydigitalized?

•Iselectronicprocurementappliedtoreducetransactioncosts?

•Doestheprocurementprocesscompilebasicprocurementinformationsuchashowmuchis

boughtandspendwithindividualsuppliers?

•Istheefficiencyoftheprocurementprocessregularlyevaluated?


9. Is the procurement process well organized?



95

Guidance


•Gettingvalueformoneyfromprocurement/Howauditorscanhelp–NationalAuditOffice/

/OfficeofGovernmentCommerce(England)

•ModernizingProcurement,NationalAuditOffice(England)1999

•PurchasingProfessionalServices,NationalAuditOffice(England)2001



Why important?Procurementrequiresamixofskillsrangingfromtheabilitytonegotiateprices, interpretingmarketintelligenceandanabilitytonegotiatetermsandconditions,tocompetenciesinelec-tronicprocurementandcontractmanagement.Itisthereforeimportantthattheprocurementfunction/unithasprofessionalskillsandexperiencetocarryouttheprocurementsefficiently.

Questions•Doesprocurementstaffhaverecognisedprofessionalprocurementqualificationsorsufficienttraining?

•Doesprocurementstaffhaveskillstoprocurecomplexorspecialitems(i.e.IT)?

•Doestheprocurementfunction/unitunderstandcostumerneeds,supplymarketsandsuppliers?

•Doestheprocurementfunction/unithavetheabilitytonegotiatewithcostumersandsuppliers?

•Doestheprocurementfunction/unithavetheabilitytoapplypublicprocurementprinciplesandtopreparetenderandcontractdocuments?

•Doestheprocurementfunction/unithavetheabilitytoapplyelectronicprocurement?

•Doestheprocurementfunction/unithavetheabilitytosecurebestperformancefromcontrac-tors?

Guidance


•ImprovingITprocurement,NationalAuditOffice(England)2004

MACROLEVEL-ASSESSMENTOFTHEDEPARTMENT’SPROCUREMENTFUNCTION/UNIT10. Do the employees have the necessary skills and experience to carry out procurements efficiently?



97

Why important?Itisimportantthatappropriatecontrolsareinplacetoensurethatprocurementcomplieswithrelevantlegislationandotherrules.Failuretocomplyhastheeffectthatoptimumprocurementisnotachievedandthatthedepartmentrunstheriskoflegalproceedings.

Questions•Arethereinternalcontrolsystemsinplacetosecurethatlawsandregulationsareobserved?

•Aretheinternalcontrolsystemsoperational?

•Dotheinternalcontrolsystemsfunctionappropriate?

•Hasmanagementtakenthenecessarystepstoensurethatrelevantcontrolsystemsarealwaysuptodate?

Guidance• http://www.coso.org/

•Procurement,astatementofgoodpractice,NationalAuditOffice(NewZealand)2001

MACROLEVEL-ASSESSMENTOFTHEDEPARTMENT’SPROCUREMENTFUNCTION/UNIT11. Are there appropriate controls in place to ensure that procurement complies with the

relevant legislation?



Why important?Theperformanceofadepartment’ssuppliersisvitaltoanefficientprocurementsystemandtheattainmentofdepartmentpolicyobjectives.Itisthereforeimportantthattherearemechanismsforevaluatingtheperformanceofsuppliers.Failuretoevaluatetheperformanceofsuppliersin-cludesariskofnotidentifyingproblemsatanearlystageandoffailingtofollowuponaservicelevelwhichisunsatisfactory.

Questions•Aretheremechanismsforevaluatingthedepartment’ssuppliers’performanceinrelationtoprices,quality,deliveryandinnovation?

•Docontractscontainregularreviews,targetsandqualitystandardsinordertoassesssuppliers’performance?

•Isthereaforumwherethedepartment’ssuppliers’performanceisregularlydiscussedwiththesuppliers?

Guidance•Government-widereviewofprocurement,ParliamentarySecretary’sTaskForce(Canada)2005




12. Are there mechanisms in place to evaluate the performance of the department’s suppliers?



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MACROLEVEL-ASSESSMENTOFTHEDEPARTMENT’SPROCUREMENTFUNCTION/UNIT13. Are risks managed to provide reasonable assurance regarding department procurement-

objectives?

Why important?Thesystematicapplicationofmanagementpolicies,procedures,andpracticestothetasksofanalyzing,evaluatingandcontrollingriskintheprocurementareaisimportanttoproviderea-sonableassuranceregardingentityprocurementobjectives.Failuretoapplyriskmanagementintheprocurementareamayresultinpricesthatarenotcompetitive,reducedstandardsofreceivedgoodsandservicesanddissatisfiedstakeholders.

Questions•Areinformationgatheredtoproduceknowledgeaboutprocuredgoodsandservices,pricespaidandsupplierperformance?

•Arerisksintheinternalenvironmentidentified,forexample:o Inadequateorganisationoftheprocurementfunction/unit?o Dysfunctionalculture?o Inferiorcompetenciesamongprocurementstaff?o Ineffectiveinternalcommunicationintheprocurementfunction/unit?

•Arerisksintheexternalenvironmentidentified,forexample:o Budgetaryconstraints?o Competitiononprocurementstaff?o Threatstosupplierrelations?o Stakeholder-dissatisfaction?

•Arerequiredqualityandservicestandardsset?

•Arebehaviourmodificationappliedtochangeprocurementofgoodsandservicesifprocure-mentisnotfunctioningproperly?

•Isthereaneffectiveriskmanagementsystemcontinuouslymonitoringprocurementrisk?

Guidance•EnterpriseRiskManagement–Integratedframework,COSO,2004

•http://www.bettermanagement.com/library/library.



Why important?Regularreviewoftheperformanceoftheprocurementfunction/unitisanimportantareaofeffortasitenablesthedepartmenttoidentifyopportunitiestoincreasevalueformoneyandtoidentifymalpracticeandprocurement fraud. Failure to regularly review theperformancewill result inincreasedriskiftheprocurementfunction/unitismalfunctioning.

Questions•Doesthedepartmenthaveasystemforcapturingperformancedataoftheprocurementfunction/unit,anddoestheinformationincludeinformationon:

o Whatisbought?

o Thepricespaid?

o Whoarethekeysuppliers?

o Waysofachievinggoodsandservices?

o Processcostoftheprocurementfunction?

•Doesthedepartmentevaluateandbenchmarktheperformanceoftheprocurementfunction/unitagainstothercomparableprocurementfunctions/units?

•Aretheresystemsforrecordingandmonitoringinordertodiscovermalpracticeandfraudintheprocurementfunction/unit?

Guidance•Gettingvalueformoneyfromprocurement/Howauditorscanhelp–NationalAuditOffice/OfficeofGovernmentCommerce(England)

•Government-widereviewofprocurement,ParliamentarySecretary’sTaskForce(Canada)2005


MACROLEVEL-ASSESSMENTOFTHEDEPARTMENT’SPROCUREMENTFUNCTION/UNIT14. Are there regular reviews and analysis of the performance of the procurement function/

unit?



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Why important?Havingacleargoalmayimprovevalueformoneyandmayensurealinkbetweenthepurchaseononehandandtheachievementofdepartmentalpolicyandbusinessobjectivesontheotherhand.Carefullypreparedprocurementgoalscanhelpachieve:

•Thatusersneedsaremet,butnotexceeded.•Thebestmannerofpurchaseischosen,consideringthetypeofgoodsorserviceneeded.•Theprocurementprojectcanbeevaluated.

Questions•Isthereaneedfortheprocurementprojectatall?•Aretheuser’sneedsclearlyandinvariablydefinedandhastheexpectedoutcomeormissionbeenclearlyidentifiedandcommunicatedinmeasurableterms?

•Hasalternativesbeenconsideredforthespecifiedprocurementproject?•Hasanupperlimitofcostbeenfixed?•Hastheexpectedbenefitsfromrealisationoftheprocurementprojectbeencalculated?

Guidance•Auditingofefficiency–OfficeoftheAuditorGeneralofCanada,1995•Contractmanagement-Commentsonproposedservicesacquisitionreformact,UnitedStatesGovernmentAccountabilityOffice,2003

•Federalacquisition–Progress in implementingtheservicesacquisitionreformactof2003,UnitedStatesGovernmentAccountabilityOffice,2005


•Improvingprocurement,NationalAuditOffice(England),2004•Improvingprocurement,part2,NationalAuditOffice(England),2004•Modernisingconstruction,NationalAuditOffice(England),2001•Modernisingprocurement,NationalAuditOffice(England),1999•Procurement-AStatementofgoodpractice,OfficeoftheControllerandAuditor-General(NewZealand),2001

•Purchasingprofessionalservices,NationalAuditOffice(England),2001

MICROLEVEL-ASSESSMENTOFASINGLEPROCUREMENTPROJECT;15.Doestheprocurementprojecthaveacleargoalanddoesthegoalmeetthespecified

needs of the users?



Why important?Thedifferentstepsofthesupplyprocesshavetobeexecutedwiththesufficientcare.Thefollowingprocesscycleintendstoshowthedifferentstagestobeconsidered.3maincategories(plan,imple-mentandmanage)canbedefinedwithintheprocesscycle.

Determining the need for the procurement

Preparing the procurement plan

Specification of requirement

Choosing the procurement method

Tender?

Establishing and publishing the tender

Evaluating tenders received

Post-tender negotiations (if applicable)

Agreeing and approving the preferred tender

Awarding the contract

Managing the contract

Completing or renewing the contract

Evaluating contract performance

No

Yes

Pla

n

Imp

lem

ent

Man

age

Process cycle

Selection of supplier

MICROLEVEL-ASSESSMENTOFASINGLEPROCUREMENTPROJECT:

16.Istheprocurementprojectefficientlymanaged?



103

Questions•Aretherightskills,experiencesandcompetenciespresentintheacquisitionworkgroupandarethenecessaryoutsidespecialistsinvolvedinpartoftheprocess?

•Doestheprocurementunithavesoundcommercialawarenessandknowledgeofsuppliersandthemarket?

•Doprocurementstaff,supplierandendusercommunicateproperly?

•Isconfidentialityguaranteedduringthewholeprocess?

Process cycle:Plan:•Isitcalculatedwhetheraggregatedprocurementcanbemorecost-efficient?•Isanappropriateddegreeofstandardizationofgoodsandservicesrespected?•Istheforeseenbudgetcomparedwithsimilarprojectsorprocurementsyetrealised(historicalstandards)?

•Isacost/benefitanalysis,acost/effectivenessorafinancialanalysisconsideringlife-cyclecostsperformedandisthefundingoftheprocurementguaranteed?

•Isariskevaluationperformed?•Istheappropriateprocurementapproachbeeingchosen(consideringforexamplethepossibi-lityofcontractingoutworkorprocuringlowvalueitemsthroughaspecificlowcostprocuringsystem)?

•Areincentivestodeliverontimeandinquantityproperlyspecified?

Implement:

•Aretherewrittenrulesonrequirementsforthespecificquoteandtenderusedinthetransactionandaretheyapplied?

•Aretherecomplementaryrulestobeusedandaretheyapplied?(e.g.emergency)•Istheopportunityproperlypublished?•Istheretimewasteduringtendering?•Areinformationtechnologyresources(e-procurement)usedtoreducecosts?•Isthetenderclearlyandproperlyspecified,includingevaluationcriteriaandknowingaboutthemarketandthereforenotover-prescriptiveandreceptivetoinnovation?

•Areprequalificationcriteriaofsuppliers(sizeofcompany,trackrecordandexperienceofthecompanywithgovernmentbodies,capacityforsupplierstotakeonriskfromthecontractingbody,price,environmentalcriteria)properlydefinedandapplied?



•Aretenderswhodonotcomplywiththerequirementsspecifiedintherequestfortendersrejec-ted?

•Isevaluationoftendersobjectiveandtransparentandbasedsolelyonthepublishedcriteria?•Isthecontractawardedtothetenderwhobestmeetstherelevantcriteria?

Manage:

•Isthechosensupplierpartofthedepartment’sdatabase?Isitevenakeysupplier?•Doesthecontractmeetcriteriaofcompletenessandconsistency?•Areunsuccessfulcompaniesinformedwhytheirtenderfailed?•Doesthecontractincludeperformance-basedclauses?•Incaseoftimeandmaterialandlabourhourcontracts,dothesurveillancegiveanadequateandreasonableassurancethatthecontractorisusingefficientmethodsandeffectivecostcontrols?

•Arereviewmeetingsorganisedduringcontractexecutionanddotheymeetdemand?•Arecontractchangesafterawardingproperlyjustifiedandexecuted?•Areinternalcontrolmechanismsperformedbeforepayments?•Aretheestablishedbudgetandtimetable(milestones)respected?•Haslatepaymentintereststoberewardedandcouldtheyhavebeenavoided?•Arethereanycomplaintsofthesuppliersand/orend-users?

Guidance•Auditingofefficiency–OfficeoftheAuditorGeneralofCanada,1995•Contractmanagement–Commentsonproposedservicesacquisitionreformact,UnitedStatesGovernmentAccountabilityOffice,2003

•Federalacquisition–Progressinimplementingtheservicesacquisitionreformactof2003,UnitedStatesGovernmentAccountabilityOffice,2005



•Purchasingprofessionalservices, NationalAuditOffice(England),2001



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Why important?Publicprocurementlegislationcontainsrulesconcerningtheprocessofacquiringgoods,worksandservicesbypublicsectorentities.Theprimarypurposeofsuchlegislationisoftentoencour-ageeconomyandefficiencyintheuseofpublicfunds-togivevalueformoney.Theessenceofpublicprocurementlegislationistodefineandimplementtheproceduresthataremostlikelytoproduceaneconomicandefficientresult,whilerespectingthepublicnatureoftheprocess,freecompetitionandthedutyoffairnesstothesuppliers.

Questions•Istherealegalauthorityfortheprocurementproject?•Areexistingsuppliersthathaveaspecialrighttobeconsultedbeingcontacted?•DoestheprocurementprojectcomplywithEuropeanCommunities’regulationsandrules?•Doappropriatecontrolsensurethatprocurementdecisionsarenotbiasedbyconflictsofinterestorcorruption?

Guidance•Auditingofefficiency–OfficeoftheAuditorGeneralofCanada,1995•Contractmanagement-Commentsonproposedservicesacquisitionreformact,UnitedStatesGovernmentAccountabilityOffice,2003

•Federalacquisition–Progressinimplementingtheservicesacquisitionreformactof2003,UnitedStatesGovernmentAccountabilityOffice,2005



•Purchasingprofessionalservices,NationalAuditOffice(England),2001

MICROLEVEL-ASSESSMENTOFASINGLEPROCUREMENTPROJECT:

17. Are there appropriate controls in place to ensure that the procurement project complies with relevant legislation?


Checklists for Financial andCompliance Audit of Public

Procurement


Thescopeofpublicprocurementisbroadandincorporatesawiderangeofactivities,includingacquiringgoodsandservicesatanappropriatequalityandquantity,bundlingsupplyneedswithotherdepartments,outsourcingservicesandestablishingpartner-shipswithsuppliers.Inallcasesthepublicbodyhastochooseasupplierandpayforthegoodsdeliveredorserviceprovided.InmostoftheEUMembersStates,procurementrepresentsbetween25%to30%ofpublicspending.

SupremeAuditInstitutions(SAIs)audittheuseofpublicresourcesand,dependingonmandates,mayalsopromotesoundmanagementprinciplesandtheattainmentofvalue.TheauditmandatesandactivitiesofSAIsvary,asdonationalbudgetingsystemsandpublicprocurementregulations.Draftingacommonchecklisttobeusedwhenauditingpublicprocurementprocesseswasadifficulttask,notleastbecausewehadtoproduceadocumentwhichwasrelevantandapplicabletoauditorsoperatingwithindifferentframeworks,objectives,requirementsandprocedures.

Anauditormayexaminetheprocurementfunctionaspartofanauditoftheaccountsofaspecificpublicauthority.Alternativelyhe/shemaybeinterestedinexaminingspecificareasorproceduresandinconsideringefficiency,competition,fraudandcorruption,regularity,fitnessforpurposeorvalueadded.SomeSAIsmaystrivetorecommendgoodpracticewhileothersmayconcentrateonmattersofcomplianceandtheactiontakeninresponsetoidentifiedirregularities.

Thechecklistswerepreparedonthebasisofcommonprinciplesandprocedureshavingregardto:

• AnanalysisofthecontributionsreceivedfromseveraloftheSAIs,whichledustoconcludethatallofthemfocusontherobustnessoftheprocurementfunction,meetingpublicneeds,competitionobjectivesandtransparentprocedures;

• EUMemberStatesareboundtothebasicpreceptsoftheEUTreatyandoftheDirective2004/18/EC1;

1 Although there are other EU regulations on public procurement, this checklist always refers to Directive 2004/18/EC ruling.

CHECKLISTS FOR FINANCIAL AND COMPLIANCE AUDIT OF PUBLIC PROCUREMENT


Checklistsforfinancialandcomplianceaudit

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• Nomatterwhichnationalorlocalregulationisfollowed,Stateauthoritiesmustrespecttherequirementsofacompetitiveprocessandmakeitsdecisionsinatransparentwaywhich respectsallparticipantsequally. Inparticular itmustnotdiscriminateon thegroundsofnationality;

• Procurementisariskareaforfraudandcorruptionandtheyusuallyresultinthemisuseofpublicresources.

WhilethechecklistscloselyfollowtherequirementsoftheEUDirective,theyaregeneralinnatureandareapplicabletopurchasesfallingbelowtheEUthresholdlimits.Theyalsoad-dresssomerelevantquestionsnotincludedintheEUDirective,e.g.organisationalissues.Inaddition,wehaveplacedemphasisonaspectswhichweknowfromexperiencearepronetofailureandirregularinfluence.

Whenusingthesechecklists,theauditorshouldkeepinmindthat:

• Theevaluationofpublicprocurementprocessesmaybeonlyapartoftheaudit(asinthecaseofafinancialaudit),and,thus,theproposedquestionsmayhavetobeintegratedwithinthebroadmethodologyofthataudit;

• Dependingonassessedrisks,notallquestionswillbeapplicabletoeachaudit;

• Accordingtoauditmandatesandnationalsystems,someitemsmayhavetobemodifiedorquestionsadded.Forinstance,financingthroughnational,stateorlocalbudgetswillputtheprocuringentityundertheobligationoffollowingtherelevantnational,stateorlocalfinancialandprocurementregulations;

• Whereanauditisplannedtoincludevalueformoneyquestions,itemsfromtheseche-cklistsshouldbeconsideredalongwiththoseincludedintheProcurementPerformanceModel.

Thechecklistsbeginwithananalysisoftheprocurementfunction,andthereafterisorganisedaccordingtothemainstagesoftheprocurementprocesssuchaspretenderstage,choiceof



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procurementprocedure,publicityandnotificationsused,identificationofpotentialbidders,evaluationoftendersandawardprocedure.Aspecificattentionisgiventoadditionalworksandsuppliesasafrequentformofdirectcontracting.

Eachchapterhasanumberofmainquestions,whicharethenpresentedinthefollowingformat:

• Background,explainingtheimportanceandgivingsomerelevantinformation;

• Questions,detailingtheareasanddirectionsinwhichthatitemshouldbeinvestigated;

• Guidance, identifyingdocumentsthattheauditorshouldconsiderinrelationtotheitemunderanalysis:

‒ TherelevantpartsoftheDirective2004/18/EC;

‒ TherelatedsectionsoftheGuidelineforAuditors;

‒ QuestionsincludedintheProcurementPerformanceModel;

‒ ImportantjudgementsoftheEuropeanCourtofJustice(ECJCase-Law);

‒ AuditreportsandstudiesproducedbySAIs2.

Sincepublicprocurementisoneoftheactivitiescreatingmoreopportunitiesforcorruption,whichoriginatedamagesestimatedbetween10%to50%ofthecontractvalue,wehaveincludedafraudandcorruptionperspectiveinthischecklists.Wheretheauditemphasisisonfraudandcorruptpractices,thentheauditorshouldtakespecialnoteofthosequestionshighlightedwiththefollowingredflag: .Iftheanswertothosequestionsis“No”increasedrisksoffraudandcorruptionareprobableandfurtheranalysisisneeded3.

2 Summaries, details and links to these reports are included in “Supreme Audit Institutions Summaries of Procure-ment Studies” or can be obtained by contact with the concerned SAI.

3 See AFROSAI-E guideline “Detecting fraud while auditing” for a global approach, for fraud checklist and for audit procedures, risks and suggested controls for selected audit areas, including procurement (on request to AFROSAI- E).

For types of fraud and corruption in contracts and warming signs of possible fraud and corruption in contracts see “ASOSAI Guidelines for Dealing with Fraud and Corruption” in http:/ /www.asosai.org/guidelines/guidelines1.html. See also Fighting Corruption and Promoting Integrity in Public Procurement, OECD, 2005

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1. AUDITING THE MANAGEMENT OF THE PROCUREMENT FUNCTION1.1 Areprocurementprocesseswellorganisedanddocumented?

1.2 Areproperfinancingarrangementstaken?

1.3 Areinternalcontrolsystemsinplace?

1.4 Isprocurementexecutiondulymonitoredanddocumented?2. AUDITING THE PREPARATION OF THE PROCUREMENT2.1 AreEUprocurementregulationsapplicable?

2.2 Didthepublicauthoritycalculatethecontractvalueaccurately?

2.3 Wastheperformancedescriptionadequatetoneedsandlegalrequirements?

2.4 Werethetenderdocumentscomprehensive,transparentandfreefromrestrictionsorconditionswhichwoulddiscriminateagainstcertainsuppliers?

2.5 Wasthesubmissionofvarianttendersacceptedanddulyruled?

2.6 Hasthepublicauthorityproceduresinplacetomonitortheinputofexpertsemployedtoassisttheprocurementfunction?

3. AUDITING THE PROCEDURE CHOSEN TO PROCURE

3.1 Didthepublicauthoritydecideuponanadequateandadmissibleprocurementpro-cedure?

3.2 Didthechosenprocedureensurefaircompetitionandtransparency? 4. AUDITING THE PUBLICITY AND NOTIFICATIONS USED

4.1 DidthepublicauthorityreportprocurementprocessesandresultsincompliancewiththeDirectives?

4.2 Wastimelyandequalaccesstocontractdocumentsandinformationprovidedtoallcandidates?

4.3 Wasconfidentialityensuredwhennecessary?

5. AUDITING THE AWARD PROCEDURES

5.1 Wastheformalreviewofrequeststoparticipateorevaluationofbidscorrectlyun-dertaken?

5.2 Wassuitabilityofcandidatesaccuratelyassessed?

5.3 Wereexclusioncausesdulyconsideredbeforetheactualevaluationoftenders?

5.4 Werebidsproperlyevaluated?

5.5 Wasthedecisionontheawardprocessaccurateandadequatelycommunicated?

6. AUDITING ADDITIONAL WORKS OR DELIVERIES

6.1. Wereanyadditionalworksordeliveriesadmissible,withoutrecoursetoanewprocure-mentprocedure?



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1.1. Are procurement processes well organised and documented?1.AUDITINGTHEMANAGEMENTOFTHEPROCUREMENTFUNCTION

BackgroundTheorganisationandassignmentofresponsibilitieswithintheprocurementprocessiscriticaltotheeffectiveandefficientfunctioningofthatprocess.Thepublicauthoritymustdocumentallmeasuresanddecisions taken inaprocurementprocess,inordertobeabletofollowprogress,toreviewitwhennecessaryandtosupportmanagementdecisions.Thisorganisationanddocumentationmeasuresalsoformthebasisforfinancialandcompli-ancecontrolsappliedintheprocurementprocess.

Questions

•Are the functions and responsibilities of those involved in the procurement function clearly established and documented?

•Have guidelines incorporating the principles and objectives of a robust procurement practice been established?

•Are procurement processes organised and documented and include: needs to be addressed, contract performance description, documentation, notifications, award procedure and decision, draft and concluded contract, physical execution and pay-ments made?

•Are procedures conducted by electronic means sufficiently recorded and documented, making the audit trail easy to follow?

•Do staff involved in the various stages of the process have the appropriate skills and training to perform their duties effectively?

• Are procurement proposals initiated, processed and approved by authorized officers, with no cases of overstepping?

• Are there no cases of documents missing, altered, back-dated or modified or after-the-fact justifications?



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Guidance

•Directive4:Forrecordsofe-proceduresseearticle43.

•PPWGProcurementPerformanceModel(PPM):Forprocurementstrategyseenº7ofPPM.Fororganizationoftheprocurementfunctionseenº8ofPPM.Fororganizationoftheprocurementprocessseenº9ofPPM.Forstaff’sskills,experiencesandcompetenciesseenos10and16ofPPM.Forrisksrelatingtointernalandexternalenvironmentsseenº13ofPPM.Forcapturingandusingperformancedataseenº14ofPPM.

•Auditreportsandstudies:For clear identification of functions:

4 ItalwaysreferstoDirective2004/18/EC

For the need of guidelines:

Report SAIManagementofpublicprocurementattheMinistryofInterioranditsgoverningarea Estonia

ManagementofprocurementattheMinistryofEnvironment Estonia

Report SAIContractmarketingandpromotionexpenditure BelgiumFlemishBroadcastingCorporation(VTR)’scooperationwithexternalservicesfortele-visionprogrammes “

Procurementofmaintenanceservices Estonia

StatisticsFinland’sserviceprocurements Finland

TheDefenceadministration’sprocurementactivities–supplyprocurement “AuditontheoperationoftheHungarianDefenceForcespublicprocurementsystemsprojects Hungary



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Report SAIContractmarketingandpromotionexpenditure BelgiumRoads,motorwaysandwaterwaysmaintenanceleases Belgium

For compency issues:

For the organization, documentation and filing of procurement processes:

Report SAIFlemishBroadcastingCorporation(VTR)’scooperationwithexternalservicesfortelevisionprogrammes Belgium

Consultancycontractsawardedbyministerialcabinets »ManagementofpublicprocurementattheMinistryofInterioranditsgoverningarea EstoniaStatisticsFinland’sserviceprocurements FinlandUniversities’procurementactivities »ProcurementsofsystemworkandADPconsultingservicesbythetaxadministration »Annualreportonfederalfinancingmanagement,PartII GermanyContractsofassistance, consultancyand servicesawardedby theFoundation for FurtherEducation,financialyears1996to1998 Spain

For qualification of procurement staff:

Report SAIImprovingpublicservicesthroughbetterconstruction UKImprovingITprocurement:theimpactoftheOfficeofGovernmentCommerce’siniciativesondepartmentsandsuppliersinthedeliveryofMajorIT-enabledprojects UK



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BackgroundThefinancingofprocurementcontractsisparticulartothebudgetaryframeworkapplicabletothepublicbodyandinoperationintheMemberState.Inexaminingprocurementduringthefinancialauditprocess,manyauditapproachesexaminethefinancingarrangementsaspartoftheirtestingofcompliancewithnationallegislation,financialrulesandauthorities.

Questions

• Has the procurement under review and the related funding been approved at the appropriate level (e.g. government, ministry, board, head of body)?

• Is this funding legal or otherwise in compliance with relevant national laws or proce-dures governing the financing of this type of contract?

• Have the funding arrangements been agreed where payments take place over several financial periods?

• Does the approved level of funding correspond to the estimated value of the contract calculated for the purpose of the procurement process?

• Is funding made available for payments under the contract at the appropriate time and in accordance with the relevant national/public financial procedures?

• Where funding is being arranged by borrowings, do these have the necessary approval and legal authority?

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Guidance

•Checknationalfinancialregulations

•PPWGProcurementPerformanceModel(PPM):Forriskofexternalenvironment/budgetaryconstraintsseenº13ofPPM

•Auditreportsandstudies:

For budgetary funding issues:

Report SAIContractmarketingandpromotingexpenditure BelgiumManagementofpublicprocurementattheMinistryofInterioranditsgoverningarea EstoniaManagementofprocurementattheMinistryofEnvironment »TheFinnishstate’spaymenttrafficprocurement FinlandAcquisitionsofmedicationsandpharmaceuticalproductsinasampleofpublichospitalsoftheNationalHealthSystem-1999and2000 Spain



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BackgroundTheprocurementprocessinteractswiththeotherfinancialcontrolsthathavebeenestablishedinordertosafeguardassetsandpreventfraudorfinancialerror.Insomefinancialauditap-proachestheprocurementprocessisexaminedasanintegralpartofthesystemofinternalcontrol.

Questions

• Is there a system in place which controls requisitions, records contract performance and payments made and which sets out:

o Those responsible for the various procedures including assessment of needs and autho-risation levels

o Data to be recorded o Specific procedures to be adopted in ordering goods and services under agreed contract(s) o Procedures for verifying that goods/services have been properly delivered/performed

and are in accordance with the contract terms o Procedures for approving payments, including reconciling claims made under the contract

to delivery/performance records and checking the arithmetical accuracy of the payment requests

o Management monitoring of transactions and balances?o Enforcement of compliance in case contractors fail to meet contract termso Regular accounting reconciliations of contract payments, transactions and inventory?

•Is there appropriate segregation of duties between those procuring services, requi-sitioning goods/services, verifying the performance of the contract and approving payments?

•Have mechanisms to avoid conflicts of interests in the procurement processes been established?

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1.AUDITINGTHEMANAGEMENTOFTHEPROCUREMENTFUNCTION1.3 Are internal control systems in place?



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•Are there no indications or evidences of conflicts of interest by officers authorizing transactions or by members of committees involved in the procurement processes?

•Are there no indications or evidences of repeated, unusual or unnecessary contacts by officers authorizing transactions or by members of committees involved in the procurement processes with contractors?

•Does an appropriate official review the procurement process on an ongoing basis to ensure that it is in compliance with applicable rules?

•Do controls exist for e-procedures and records, covering in particular:

o Access to data, including standing data, and the identification of restriction levels and authorised personnel?

o Proper and complete records of transactions and events are maintained?o Transactions are properly verified after input or modification?o Is data securely stored?

• Are there no materials provided to contractors who, according to the contracts, are supposed to provide them (such as office space, furniture, IT equipment) and no cases of employees from the contracting authority performing parts of contracted work?

• Are cases of double payment duly prevented and corrected?

Guidance

•Directive:Forrecordsofe-proceduresseearticle43.

•PPWGProcurementPerformanceModel(PPM):Fortheorganizationoftheprocurementfunctionseenº8ofPPM.

Forpublicprocurementfunctioncontrolsseenº11ofPPM.

Forriskmanagementseenº13ofPPM.

Formalpracticeandfraudintheprocurementfunctionseenº14ofPPM.

Forconflictsofinterestsandcorruptionseenº17ofPPM.

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Report SAI

Contractmarketingandpromotionexpenditure BelgiumExecutionofeconomiccompensationsassociatedwiththepurchaseofspecificmilitaryequipment “FlemishBroadcastingCorporation(VTR)’scooperationwithexternalservicesfortelevisionprogrammes “ManagementofpublicprocurementattheMinistryofInterioranditsgoverningarea EstoniaFile,storage,safekeepingormanagementofmedicalhistoriesandpastprocurementorinforcein1999and2000onthisactivityforasampleofpublichospitalsoftheNationalHealthSystem Spain

Modernisingprocurementintheprisonservice UKImprovingITprocurement:theimpactoftheOfficeofGovernmentCommerces’initiavesondepart-mentsandsuppliersinthedeliveryofmajorIT-enabledprojects “

Report SAIContractmarketingandpromotionexpenditure BelgiumPublicinvestmentprojectsbytheNationalLaboratoryforCivilEngineering Portugal

For the need of clear segregation of duties:

Report SAIFlemishBroadcastingCorporation(VTR)’scooperationwithexternalservicesfortelevisionpro-grammes Belgium

Procurementofconsultancyservices Denmark

For preventing conflicts of interests:

For the need of an effective internal control system:



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BackgroundMonitoringof contractsand theprocurementprocessallowsmanagement toassessovertimetheeffectivenessofprocurementcontrols,contractperformanceandcompliancewithfinancialandotherlegalauthorities,reducingscopeformisuseofpublicresources.Itinvolvesassessingprocurementexecutionandrelatedcontrolsonatimelybasisandtakingnecessarycorrectiveactions.

Questions• Are the responsibilities for monitoring the execution and performance of contracts

clearly assigned?

• Are those responsibilities discharged by personso With the appropriate authority to take actions in the event of non-compliance?o With the appropriate skills, technical knowledge and/or ability to effectively ensure the

proper execution and performance of the contract?

• Are reports based on sound data available to those responsible for monitoring the performance of contracts?

• Are order quantities, deliveries and payment levels under the contract monitored by an appropriate official?

• Does an appropriately qualified official check the quality of performance against the contract terms?

• Are there systems for recording and managing stocks (where part of contract)?

• Are there established procedures for dealing with and documenting non-performance and return of goods?

• Is there an adequate and appropriate record for monitoring performance and any resulting or follow up actions?

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Guidance

•PPWGProcurementPerformanceModel(PPM):Forregularevaluationoftheprocurementfunctionseen.8ofPPM.

Forpublicprocurementfunctioncontrolsseenº11ofPPM.

Forevaluationofsuppliers’performanceseenº12ofPPM.

Formalpracticeandfraudintheprocurementfunctionseenº14ofPPM.


Report SAIIntroductionofdoubleentryaccountingattheMinistryoftheFlemishCommunity BelgiumAnnualReportconcerningthefinancialyear2000,OJEC15-12-2001,page318-328. ECATheDefenceAdministration’sprocurementactivities–supplyprocurement FinlandImprovingpublicservicesthroughbetterconstruction UK

Report SAIIntroductionofdoubleentryaccountingattheMinistryoftheFlemishCommunity BelgiumManagementofpublicprocurementattheMinistryofInterioranditsgoverningarea EstoniaManagementofprocurementattheMinistryofEnvironment “Acquisitionsofmedicationsandpharmaceuticalproducts ina sampleofpublichospitalsof theNationalHealthSystem-1999and2000 Spain

MinistryofDefence:therapidprocurementofcapabilitytosupportoperations UK

For the need of clear description of responsibilities:

For control on contract performance:

For the need of specialized staff/expertise in procurement:

Report SAIIntroductionofdoubleentryaccountingattheMinistryoftheFlemishCommunity BelgiumExecutionofeconomiccompensationsassociatedwiththepurchaseofspecificmilitaryequipment “Frameworkcontracts:theFederalCentralBuyingOffice’soperationexaminedintermsofsoundmanagementandlegality “

FlemishBroadcastingCorporation(VTR)’scooperationwithexternalservicesfortelevisionprogrammes “Theprocurementofpublictransportservices FinlandProcurementawardedbytheProvincialDelegations, financialyear2002,regardingtheservicesofHomeAssistance SpainAnnualauditreportoftheautonomous(regional)andlocalpublicsectors,financialyear1996.Itemconcer-ning“Publicprocurement” “Acquisitionsofmedicationsandpharmaceuticalproducts ina sampleofpublichospitalsof theNationalHealthSystem-1999and2000 “



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2.1.AreEUprocurementregulationsapplicable?

Background

Thereare twomainEUDirectives settingupdetailed rules for theawardofpublicworks,suppliesandservicecontractsintheEUMemberStates:Directive2004/18/ECand2004/17/EC.Thefirstonegenerallyappliestomostofthecontractsandthesecondonecoordinatesspecificallytheprocurementproceduresofentitiesoperatinginthewater,energy,transportandpostalservicesectors.

Basically,publicauthoritiesareobligedtoobservetherulesoftheDirectivesprovidedthecontractexceedsacertainthreshold.Inaddition,therulesmayalsobeapplicablewherepublicauthoritiessubsidisedcontractsbymorethan50%,orwhereanentityisgrantedspecialorexclusiverightstocarryoutapublicserviceactivity.ContractsbelowEUthresholdsvaluesandsomeothercontractsexplicitlyexcludedfromthescopeofapplicationarenotcoveredbythoseDirectives.So,onemustgothroughthecomplexrulesandexemptionsfromtheapplicationofEUrulestodeterminewhenacontractissubjecttothespecificrequirements.

ApplyingEUprocurementregulationsmeansthatthepublicauthoritymustfollowcertainpro-cedures,recogniseitsobligationsundertheprincipleoffaircompetition,includingadvertisingandtransparencyrequirements,measuresanddecisionswhichallowallparticipantstooperateonanequalbasis,andavoidinganykindofdiscrimination,includingforreasonsofnationality.

Onefurtherpointofinterest—theEuropeanCourtofJustice(ECJ)hasconfirmedthattheInternalMarketrulesoftheECTreatyapplyalsotocontractsoutsidethescopeofthePublicProcurementDirectives.AccordingtoECJ’scaselaw,anobligationoftransparencyexistsforallcontractssufficienttoenablethemarkettobeopeneduptocompetitionthroughadvertisingcontractdetailsandbytheapplicationoffairandimpartialprocedures.

2.AUDITINGTHEPREPARATIONOFTHEPROCUREMENT



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Report SAIIntroductionofdoubleentryaccountingattheMinistryoftheFlemishCommunity BelgiumExecutionofeconomiccompensationsassociatedwiththepurchaseofspecificmilitaryequipment “Frameworkcontracts:theFederalCentralBuyingOffice’soperationexaminedintermsofsoundmanagementandlegality “

FlemishBroadcastingCorporation(VTR)’scooperationwithexternalservicesfortelevisionprogrammes “Theprocurementofpublictransportservices FinlandProcurementawardedbytheProvincialDelegations,financialyear2002,regardingtheservicesofHomeAssistance SpainAnnualauditreportoftheautonomous(regional)andlocalpublicsectors,financialyear1996.Itemconcer-ning“Publicprocurement” “Acquisitionsofmedicationsandpharmaceuticalproducts inasampleofpublichospitalsof theNationalHealthSystem-1999and2000 “

Qustions

• Is a contract being awarded for works, supply of products or provision of services?

• Is the contractor a “contracting authority”, as defined in the Directive, is it a public works concessionaire or is the specific contract subsidised by more than 50% by a “contracting authority”?

• Has the public authority estimated that the value of the contract will exceed the thresholds of the Directive?

• Are contracts which have several component parts qualified according to the component of greatest value and were the correct thresholds used?

• Where the public authority cites exemptions pursuant to articles 12-18 of the Directive, have the special requirements for those exemptions been proved?

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Guidance

•Directives:Fordefinitionsof“publiccontract”and“contractingauthority”seearticles1(2)and(9)andAnnexIII.Seealsoarticles1(3),3and63forothersituations.

Forexemptionsseearticles12to18,57and68.

Forthresholdsseearticles7and8,asamendedbyCommissionRegulation(EC)1177/2009,of30November2009,publishedintheOJEUL314,of1December2009,andbeawarethatthresholdsaresetfortheverytwoyearsbytheEuropeanCommission.

Seearticles7andAnnexesII,IVandVforspecificrulesforproductsinthefieldsofdefenceandservicesinthefieldofresearchanddevelopment,telecommunicationsandothers.

Forcontractsinthewater,energy,transportandpostalservicesectorsseeDirective2004/17/EC.

Forqualificationofcontractsseearticles1,10,12-14,16and20-22.

ForcontractsinthefieldofdefenceandsecurityseeDirective2009/81/EC.

•SeealsoCommission Interpretative Communication 2006/C179/02ontheCommunitylawappli-

cabletocontractawardsnotornotfullysubjecttotheprovisionsofthePublicProcurementDirec-

tives,includingreferencestotherelevantECJcase-law.



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•PPWGGuidelineforAuditors:Seen.os2(ScopeofDirective2004/18/EC)and8(Thresholds)andAppendixII.

•PPWGProcurementPerformanceModel(PPM):ForcompliancewithEUlawseen.17ofPPM.

•ECJCase-Law:Case Judgement Issue

C-31/87,Beentjes 1988.09.20 ContractingauthoritiesC-44/96,Mannesmann 1998.01.15 “C-323/96Commission/Belgium 1998.09.17 “C-360/96,ArnhemandRheden/BFI 1998.11.10 “C-353/96,Commission/Ireland 1998.12.17 “C-275/98,UnitronScandinavia 1999.11.18 “C-380/98,UniversityofCambridge 2000.10.03 Contractingauthorities/DefinitionofpublicfinancingC-237/99,Commission/France 2001.02.01 ContractingauthoritiesC-223and260/99,AgoraandExcelsor 2001.05.10 “C-470/99,Universale-Bau 2002.12.12 “C-373/00,AdolfTruley 2003.02.27 “C-214/00,Commission/Spain 2003.05.15 “C-18/01,Korhonenandothers 2003.05.22 “C-283/00,Commission/Spain 2003.10.16 “C-84/03,Commission/Spain 2005.01.13 “C-107/98,Teckal 1999.11.18 Contractingauthorities/In-housecontractingC-26/03,StadtHalleandRPLLochau 2005.01.11 Contractingauthorities/In-housecontractingC-295/05,Asemfo/Tragsa 2007.04.19 “C-324/07,Coditel 2008.11.13 “C-573/07,SeaSrl/ComunediPonteNossa 2009.09.10 “C-29/04,Commission/Austria 2005.11.10 “

C-480/06,Commission/Germany 2009.06.09 Administrativecooperationintheperformanceofpublictasks

C-331/92,GestiónHoteleraInternacional 1994.04.19 MixedcontractsC-16/98,Commission/France 2000.10.05 Definitionofpublicworkscontract

C-411/00,FelixSwoboda 2002.11.14 Qualificationofservices–AnnexIIAorIIB/Contractawardprocedures

C-126/03,Commission/Germany 2004.11.18 Applicabilityofpublicprocurementprocedures

C-458/03,ParkingBrixen 2005.10.13 Publicserviceconcession

C-264/03,Commission/France 2005.10.20ObligationtorespectthefundamentalrulesoftheTreatyforpubliccontractsexcludedfromthescopeofpublicprocurementDirectives



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Report SAIFlemishBroadcastingCorporation(VTR)’scooperationwithexternalservicesfortelevisionprogram-mes Belgium

For the need of complying with the basic standards of the EC Treaty:



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2.AUDITINGTHEPREPARATIONOFTHEPROCUREMENT2.2. Did the public authority calculate the contract value accurately?

Background

ApublicauthoritymustnotsplitacontractinordertoremainbelowthresholdsinordertoavoidthescopeoftheDirectiveorofthenationallaw.Inthiscontextthecalculationofval-uesshallbecomprehensiveandtakeaccountofanyformofoption(i.e.possibleadditionalsuppliesorservices)andrenewals.

Questions• Did the public authority identify the full contract value and include options and pro-

visions for renewals?

• Was the estimation of contract value in accordance with the criteria fixed in the Di-rective?

• Is there no evidence that the works or supply required was subdivided in order to remain below levels of authorisation or procedure?

• Was the estimated contract value based on realistic and updated prices?

• Was the estimated contract value in line with the final cost of the contract awarded?

Guidance

•Directive:Formethodsforcalculatingthecontractvalueseearticles9and67(2)

•PPWGGuidelineforAuditors:Seen.os8(Thresholds)and9(EstimationofValues)

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•ECJCase-Law:


Case Judgement IssueC-16/98,Commission/France 2000.10.05 Artificialsplittingofasinglework

Report SAIControlofpubliccontractscoveringtheroadtransportinfrastructureinBrussels BelgiumConstructionofthe“Deurganckdock”(AntwerpContainerTerminalComplex) “Buslineservices:costpriceandcontractawardtooperators “AuditoveraRailTransportInstitute Portugal

Report SAIConsultancycontractsawardedbyministerialcabinets BelgiumPublicinvestmentprojectsbypublicrailtransportenterprise PortugalIntegratedprojectoftheNorthernRailroad “Procurementawardedduringthefinancialyear2002bythestatepublicsector SpainAutonomous(regional)andlocalpublicsectors.Financialyear2000.Itemconcerning“PublicPro-curement” “

ProcurementbytheStatepublicsectorduringthefinancialyears1999,2000and2001 “

For estimation of contract value:

For splitting of contracts to remain below levels of authorisation or procedure:



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2.AUDITINGTHEPREPARATIONOFTHEPROCUREMENT2.3.Wastheperformancedescriptionadequatetoneedsandlegalrequirements?

Background

Theperformancedescriptionistheheartoftheprocurementprocedureasitisherethatthepublicauthoritydefinesitsneedsandtherequirementsthetendersmustmeet.Unjustifiedorinaccurateneedsassessmentmayleadtopurchaseunnecessarygoodsorservices.

Performanceshouldbedescribedunambiguouslyandcomprehensively,sothatallbiddershaveaclearunderstandingofwhatisrequired,soastoensurethatthedetailinthetenderdocu-mentsreceivedarecomparableandinordertoavoidthatsuppliersdeliverlessthanexpected.

Inparticular,theperformancedescriptionmustcomplywiththeprinciplesofequaltreatmentandtransparencyandmaynotdiscriminateinfavourofanyproductorservice.Thismeansthatthepublicauthorityisnotentitledtorequirespecifiedproductsunlessjustifiedbythesubjectmatterofthecontract.Theissueoftechnicalspecificationsisparticularlysensitivebecause,bymeansofunjustifiedtechnicalrequirements,obstaclestocompetitionandfavouritismtowardscertainsuppliersmaytakeplacewithinanapparentopencompetition.

Inaddition,fromthetimenoticesarepublishedperformanceunderthecontracthastoremainunchangedduringtheprocedureandshallformthecentreoftheresultingcontract.Insomeprocedures,likethenegotiatedones,itisadmissiblethatsomeitemsofthetendersmaybeadapted,providedthecharacteroftheperformanceremainsunalteredandrequirementsandspecificationsarerespected.

Inthecaseofparticularlycomplexcontractsadialoguewithtenderersmaybeusedtoiden-tifyanddefinethemeansbestsuitedtosatisfytherequirements.Forthiscaseacompetitivedialogueproceduremaybeadopted,throughwhichthecontractingauthorityidentifiesthesolution(s)capableofmeetingitsneeds,followingproceduresthatshallensureequalityoftreatmentamongalltenderers.



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Questions

• Was there reasonable justification for the need of the purchase, namely when made towards the end of the financial year?

• Were the performance conditions under the contract comprehensive and unambiguous?

• Was the public authority specific about the nature and scope of the performance before launching the procurement process?

• Did the public authority consider and evaluate alternatives, like bundling needs with other departments or grouping supplies in separate lots with different characteristics?

• Was the performance described clearly, unambiguously and comprehensively, giving precise definition of the characteristics of what was to be supplied, so that all concerned had an equal understanding of requirements and that clarification or amendments are not necessary?

• Could the bidders assess the economic risks the successful bidder would be responsible for, thus limiting the inclusion of extra charges for risk?

• Were technical requirements set strict enough to guarantee the desired performance without being unnecessarily tight to exclude favourable bids that don’t comply with all requirements?

• Did technical specifications (required characteristics of a material, product, supply or service) afford equal access for tenderers, containing no feature that directly or indi-rectly discriminate in favour, or against, any bidder, product, process or source?

• Were technical specifications formulated by reference to performance or functional requirements admitted by the Directive?

• Did technical specifications exclude any reference to a specific make or source, to a particular process, to trade marks, patents, types or to a specific origin or production, thus preventing favouring or eliminating certain undertakings or products?

• When such references were made, was a precise description of the performance not otherwise possible and were those references accompanied by the words “or equiva-lent”?

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• Did the performance description remain unchanged once the notifications had been published?

• If the public authority has changed the performance description unilaterally:o Was the scope of change relevant and admissible? o Have the participants been informed in an equal manner?o Was it conceivable that, under the assumption that the amended performance descrip-

tion had been the basis for the original competition, more bidders might have applied or submitted an offer?

o In that case, was the competition reopened?

• If negotiations or fine-tunings of the tenders have taken place, were these such that they were in accordance with the type of procedure used and were there no substantial changes to the performance specifications described in procurement documents?

• When a competitive dialogue was used, did the contracting authority inform the par-ticipants when the dialogue was concluded and invite them to submit final tenders, describing the solution(s) and the elements required and necessary for the performance of the project?

Guidance

•Directive:Fordetailedinformationaboutadmissibilityoftechnicalspecificationsseearticle23andAnnexVI.

Therequirementsforproductneutralperformancedescriptionsarecodifiedinarticle23(8).

•PPWGProcurementPerformanceModel(PPM):Formatchingthegoaloftheprocurementprocesswiththeusers’needsseen.15ofPPM.

Fortheplanningofthepublicprocurementprocessseenº16ofPPM.

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•ECJCase-Law:


Case Judgement IssueC-45/87,Commission/Ireland 1988.09.22 Technicalspecificationsdefinedaccordingtonational

technicalstandardsC-3/88,Commission/Italy 1989.12.05 Formsofdiscriminationwhichleadtothesameresultas

discriminationbyreasonofnationalityC-243/89,Commission/Denmark 1993.06.22 Discriminationbasedontherequesttousethegreatest

possibleextentofnationalproductsandlabourC-359/93,Commission/Netherlands 1995.01.24 Technicalspecificationsdefinedbyreferencetoatrade

mark,withoutaddingthewords“orequivalent”

Report SAIControlofpubliccontractscoveringtheroadtransportinfrastructureinBrussels Belgium

For the lack of a clear definition of the main components of the contract (“stock contract technique):

Report SAIOutsourcingofthedataprocessingfunctionattheMinistryoftheFlemishCommunity BelgiumDamagecompensationsinpublicworks “

For contracts leaving many and important issues uncovered:

Report SAIFundsspentonacquiring-CzechStatisticalOfficeheadquarters CzechRepublic

For justification of purchases:

Report SAIPerformanceDescription Germany



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2.4.Werethetenderdocumentscomprehensive,transparentandnon-discriminating?2.AUDITINGTHEPREPARATIONOFTHEPROCUREMENT

Background

Inaddition to theperformancedescription the tenderdocumentsprovideall the relevantconditionsforthecompetition.

Theyinformthebiddersaboutcontentandformofthedocumentstheyhavetosubmit inordertoverifytheirprofessionalandfinancialabilityandallthenecessarydeclarationsthatthepublicauthorityrequires.Thepublicauthorityhassomediscretionconcerningtherequire-mentsandverificationitseeks,providedtheyarejustifiedbythesubjectmatterofthecontract.Furthermore,thepublicauthorityshouldbeawarethatunnecessarystrictrequirementslimitcompetitionandreducethescopeforvalueformoney.

Mostnotablythetenderdocumentsindicatetheawardcriteriaandthesub-criteriafortheevaluationofthemostadvantageousofferandtheirweighting.Clear,objectiveandadmis-siblecriteriaarecrucialforimpartialandtransparentawards,reducingscopeforarbitraryandcorruptdecisions.

Questions•Did the bidders have a clear understanding of which documents and declarations had to be presented with the tender?

•Could bidders learn all relevant information straight from the tender documents? Did the public authority make sources of information beyond the tender documents equally available for all the candidates?

•Did tender documents fix the requirements for the suitability of bidders, concerningo Minimum capacity levels of economical and financial standing o Minimum capacity levels of technical and/or professional ability o Required standards of quality assurance or environmental management?

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F/CF/C • Were standards, certifications and evidence required admissible under the Directive?

• Were the extent of information, the levels of ability and the standards required related and proportionate to the subject matter of the contract, avoiding unnecessary restric-tions and verifications?

• Did the public authority abstain from unnecessary verification in terms of the scope and deadline to prove the bidders capability?

• Where the public authority weighted selection criteria, did it publish the weightings in advance of the receipt of the tenders?

• Has the public authority defined clearly the award criteria?

• Where the award criteria was the most economically advantageous tender, were:

o Sub-criteria clearly indicated?o Relative weighting of each sub-criteria or a range with an appropriate maximum spread

specified?o The sub-criteria listed in descending order of importance where is was not possible to state

weighting values in advance?o The sub-criteria different from those defined in the qualification of bidders?

• Are those sub-criteria linked to the subject matter of the contract, reflecting the main focus and the importance of the elements of the performance?

• Is the weighting set coherent, convincing and leaving little scope for arbitrary and ran-dom evaluation and ranking?

• Are criteria and sub-criteria set suitable to identify the tender that offers best value for money? Has price been given a reasonable weighting?

• When the public authority set social or environmental conditions for the performance of the contract, were these compatible with EU law and was adequate information given to the candidates?

• Were there no inconsistencies between the several tender documents?

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Guidance

•Directive:Fordocumentrequirementsseearticles40,44and47to52.

Forrequirementsconcerningthesuitabilityoftenderersseearticles44to52.

Forawardcriteriaseearticles40and53.

Forperformanceconditionsseearticles26and27.

•SeealsoInterpretative Communications of the Commission COM (2001)566finalfrom15.10.2001,forintegratingsocialconsiderationsintopublicprocurementandCOM(2001)274finalfrom04.07.2001,aboutthepossibilitiesforintegratingenvironmentalconsiderations.

•PPWGGuidelineforAuditors:Seen.os4(Criteriaforawardingcontracts)and16.

•PPWGProcurementPerformanceModel(PPM):Seenº16ofthePPM,abouttheimplementationofthepublicprocurementprocessandnº17aboutthecompliancewithEUlaw.

•ECJCase-LawCase Judgement Issue

C-76/81,Transporoute 1982.02.10 CriteriaforqualitativeselectionC-27-29/86,CEIandBellini 1987.07.09 “

C-31/87,Beentjes 1988.09.20Criteriaforqualitativeselection/Requirementsofthemostadvantageous tendercriterion/Condition related to theemploymentoflong-termunemployedpersons

C-360/89,Commission/Italy 1992.06.03

Criteriaforqualitativeselection:prohibitionofdiscrimina-tionthatfavourscompanieswithofficesintheregionwheretheworksaretobecarriedoutorestablishesapreferencefor temporaryassociations includingundertakingswiththeirmainactivitiesinthatregion

C-3/88,Commission/Italy 1989.12.05Principleofnon-discriminatorytreatment:formsofdiscri-minationwhichleadtothesameresultasdiscriminationbyreasonofnationality



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Case Judgement Issue

C-21/88,DuPontdeNemours 1990.03.20

Principleofnon-discriminatory treatment:national rulescannot reserve toundertakingsestablished inparticularregionsof thenational territory aproportionof publicsupplycontracts

C-274/83,Commission/Italy 1985.03.28 Applicabilityofthemostadvantageoustendercriterion

C-272/91,Commission/Italy 1994.04.26

Restrictionofparticipation inapublicprocurementpro-ceduretobodiesthemajorityofwhosecapitalisheldbythepublicsector infringescommonmarket fundamentalfreedoms

C-225/98,Commission/France 2000.09.26Admissible criteria in themost advantageous tendercriterion/Criteria forqualitative selection: reference toclassificationofnationalprofessionalorganisations

C-16/98,Commission/France 2000.10.05 Principleofnon-discriminationbetweentenderers

C-94/99,ARGEGewässerschutz 2000.12.07

Principleof equal treatment:participationof tenderersreceivingsubsidies fromcontractingauthoritiesenablingthemtosubmittendersoflowerpricesthantheonesoftheircompetitors

C-19/00,SIACConstruction 2001.10.18 Admissiblecriteriafortheawardofapubliccontract

C-513/99,ConcordiaBusFinland 2002.09.17 Admissiblecriteriafortheawardofapubliccontract,de-pendingonthesubject-matterofthecontract

C-470/99,Universale-Bau 2002.12.12 Weightingofcriteriaforqualitativeselectionofthecandi-datesinvitedtotenderinarestrictedprocedure

C-315/01,GAT 2003.06.19 NonadmissiblecontractawardcriteriaC-448/01,EVNandWienstrom 2003.12.04 Admissible“green”contractawardcriteria

C-247/02,Sintesi 2004.10.07Nationalrulescannotprecludetherightofthecontractingauthoritytochoosebetweenthecriterionofthelowerpriceandthatofthemoreeconomicallyadvantageoustender

C-340/02,Commission/France 2004.10.14Principlesofequaltreatmentandtransparency:thesubject-matterofeachcontractandtheawardcriteriashouldbeclearlydefined


Report SAIRoads,Motorwaysandwaterwaysmaintenanceleases BelgiumAuditoveraRailTransportInstitute PortugalAutonomous(regional)andlocalpublicsectors,financialyear1999.Itemconcerning“PublicProcurement“ Spain

For absence of information in the procurement process:



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Report SAIBuslineservices:costpriceandcontractawardtooperators Belgium2000AnnualReport(§4.127.6),2001AnnualReport(§4.129.65),2002AnnualReport(§4.136.7(a) Cyprus

Finnishstate’spaymenttrafficprocurement FinlandAuditoveraRailTransportInstitute PortugalPublicPrivatePartnershipsinHealthSector “IntegratedProjectoftheNorthernRailroad “

For the need of clear definition and detailing of the awarding criteria and its weighting:

Report SAIPublicPrivatePartnershipsinHealthSector PortugalIntegratedProjectoftheNorthernRailroad “

For relevancy of the award criteria towards the subject matter of the contract:

Report SAIIntegratedProjectoftheNorthernRailroad Portugal

For possible award sub-criteria (excluding candidates’ suitability requisites):

Report SAIProcurementmanagementinthefieldofITsystems,softwareproductsandsoftwareservices(2004) Estonia

BuildingworksofthehighspeedlineMadrid-Barcelona-1999and2000 Spain

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2.5.Wasthesubmissionofvarianttendersacceptedanddulyruled?2.AUDITINGTHEPREPARATIONOFTHEPROCUREMENT

Background

Where thecriteria forawardare thatof themosteconomicallyadvantageous tender, thepublicauthoritymayallowthesubmissionofvariants.Thismightprovebeneficialincasetheauthorityisnotabsolutelycertainaboutthedetailedsolutionfortheperformance,especiallyiftheywanttobenefitfrominnovation.Inthiscasethetendermayvaryfromtheperformancedescriptionwithoutbeingexcludedonlyforthisreason.However,thepublicauthoritymayevaluateanysubmittedvariantonlyincaseswherecertainrequirementsaremet.

Questions• Did the public authority permit tenderers to submit variants, thus offering space for

creative solutions and added value?

• In that case, was the award criteria that of the most economically advantageous tender?

• Was the admissibility of variants displayed in the contract notice?

• Did the public authority state the minimum requirements to be met by the variants in the tender documents?

• Did it also specify the requirements for the presentation of variant tenders?

Guidance

•Directive:Fordetailedinformationaboutvariantsseearticle24



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•PPWGProcurementPerformanceModel(PPM):Seenº16ofPPM,aboutproceduresopentoinnovation.


C-421/01,Traunfellner 2003.10.16 Needofinformingtenderersabouttheminimumspeci-ficationsofvariants



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2.6.Whereapplicable,didthepublicauthorityadequatelymanageexpertsemployedtoassistin the procurement process?

2.AUDITINGTHEPREPARATIONOFTHEPROCUREMENT

Background

Inmanycaseswhereaspecificknowledgeorexpertiseisrequired,apublicauthoritywillengageexpertstopreparetechnicalspecificationsand/ortenderdocuments.ExpertsmayalsoneedtobeemployedtomeetparticularrequirementsoftheDirective.

Monitoringbythepublicauthorityisofparticularimportanceinthesecases.Caremustbetakentoensureuserrequirementsaredefinedandincorporatedintocontractperformance.Caremustalsobeexercisedtoensurethatthespecificationsdefineddonotgiveanyadvantagetoeconomicoperatorswhoareinapositiontoinfluencetheexpert.Furthermore,itmustbeensuredthatallthekeydocumentationisgiventothecontractingauthority,sothatiteffectivelyownstheprocessandisabletotreatallcandidatesinlikemannerincludingthedistributionofallrequestedinformation.

Theinvolvementofexpertsincompetitionsintroducesthedangerofviolatingthebasicprin-ciplesofequaltreatment/non-discriminationandtransparency.Expertsmaybegiventheop-portunitytodesignrequirementsintheirownfavouror,atleast,mayhaveaccesstoprivilegedknowledgeorotheradvantagescapableofdistortingthenormalconditionsofcompetition.Risksofcorruptionarealsoincreased.Manynationalrulesexcludeexpertsemployedonanypartoftheprocessfromsubsequentlyparticipatinginthecompetition.

TheEuropeanCourtofJusticehasrecentlyruledthataprovisiontoautomaticallyexcludeex-pertsfromsubmittingatenderinacompetitionwherehehadaninvolvementisprecludedbytheDirectives,statingthatthoseexpertsmustbegiventheopportunitytoprovethat,inthecircumstancesofthecase,theexperienceacquiredwasnotcapableofdistortingcompetition.Inanycase,ifthepublicauthorityacceptstheparticipationofanexpertithadengaged,itmustbeabletodemonstratethattheexpertgainednoadvantagefromtheengagement.



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Questions• Where the public authority engaged an expert, was the contract awarded in compliance

with procurement regulations?

• Were the specifications of the contract determined free from influence of particular interests of consultants, experts or other economic operators?

• Has the public authority examined in detail the definition of performance?

• Is there no evidence that the expert has influenced the decisions taken by the public authority in his/her interest or in the interest of a specific contractor?

• Was all the key documentation given to the contracting authority?

• Was the expert likely to gain privileged knowledge from his activity which could be advantageous for him in a subsequent competition? If so, was his participation in the contract specifically excluded?

• If the expert was allowed to submit a tender, was all the relevant information the expert had gained from his earlier involvement made available to the other bidders?

• Is there no evidence that the consultants participating in the project design released information to contractors competing for the prime contract?

Guidance

•ECJCase-Law

Case Judgement IssueC-21/03andC-34/03,“FabricomSA” 2005.03.03 Principleofnon-discriminationbetweentenderers/

privilegedknowledge

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3.1. Did the public authority decide for an appropriate and admissible procurement procedure?3AUDITINGTHEPROCEDURECHOSENTOPROCURE

Background

Theselectionoftheprocedurehasconsequencesforthescopeofcompetition.

Publicauthoritieshavetheoptiontofollowanopenorarestrictedprocedurebutmustnotconductanegotiatedprocedureunlessexceptionalconditionsexpresslydescribedprevail.ThissectionoftheDirectiveshouldbestrictlyinterpretedandassumedonlyunderexceptionalcircumstances(EuropeanCourtofJustice).

TheDirectivesintroducethepossibilityofusingnewtypesofprocedures,likecompetitivedialogue,frameworkagreementanddynamicpurchasingsystem,aimedatbringingsomeproceduralflexibilityandsavingspossibilitieswithoutcomprisingfaircompetitionandtrans-parency.Note:EUMemberStatesmayopttoallow,ornot,thesetypesofprocedureintheircountries.

Inpracticenegotiatedproceduresare frequentlyused, theconsequencesofwhicharearestrictedcompetitionandnegotiationsaboutperformanceandpriceswhichmakeitmoredifficultforthepublicauthoritytoadheretotheprinciplesofequaltreatmentandtranspar-ency.ItisamajorviolationofEUprocurementregulationsandinternationalstandardsforpublicauthoritiestoawardcontractswithoutfollowingtheapplicableprocedures.

Questions• Has the public authority taken a well-grounded decision about the procurement

procedure chosen and has it documented the process?

• Is it clear which procurement procedure the public authority has opted for?

• Where Directive is not applicable, are there regulations or policies stating the proce-dures to be adopted for the procurement and were they complied with?

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F/CF/C • Did the public authority opt for the procedure that offers fair and open competition under the given circumstances?

• If exceptional negotiated procedures were used, did the contracting authority give sufficient and reasonable reasons for its option, providing a detailed explanation as to why an open or restricted procedure was not possible?

• In this case, did it use one of the possible exemptions set in the Directive to justify the negotiated procedure and did it clearly and adequately set forth that the conditions of that exemption are met?

• Did those conditions actually occur?

• When competitive dialogue was used, did the contracting authority provide sufficient justification for the use of this procedure and was the contract actually “particularly complex”?

• Was the chosen procedure the most efficient and effective for the performance of the contract?

Guidance

•Directive:FormoredetailsconcerningprocurementproceduresseeArticles28to34,seedescriptionofcir-cumstancesthatallowtheuseofexceptionalnegotiatedproceduresinarticles30and31.

•Directive 2009/81/EC:Procurementrulesfordefenceandsecuritycontracts.

•PPWGGuidelineforAuditors:Seenº11(TenderingProcedures).

•PPWGProcurementPerformanceModel(PPM):Seenº16ofthePPM,aboutplanningthepublicprocurementprocess,andnº17aboutcompli-ancewithEUlaw.

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•ECJCase-LawInthecase-lawoftheEuropeanCourtofJusticethecodifiedexemptionsarerestrictivelyinterpretedandassumedonlyunderexceptionalcircumstances.Thisconcernsespeciallythosepremisesgivenunderarticle30(1,c)andarticle31(1,bandc).

•Auditreportsandstudies: For advantages of framework agreements:

Case Judgement IssueC-199/85,Commission/Italy 1987.03.10 Exceptionalcircumstancesthatenabledirectawardmust

beprovedC-3/88,Commission/Italy 1989.12.05 UseofrestrictedprocedurewithoutadequatejustificationC-157/06,Commission/Italy 2009.10.02 “

C-24/91,Commission/Spain 1992.03.18 Useofrestrictedprocedurewithoutadequatejustification:reasonsofextremeurgency

C-107/92,Commission/Italy 1993.08.02 “C-328/92,Commission/Spain 1994.05.03 “

C-318/94,Commission/Germany 1996.03.28 Useofrestrictedprocedurewithoutadequatejustification:reasonsofextremeurgencyandunforeseeableevent

C-231/03,Coname 2005.07.21 Directawardofa concession isnotpermissiblewithoutappropriatetransparency

C-458/03,ParkingBrixen 2005.10.13 DirectawardofapublicserviceconcessionisnotadmissibleC-107/98,Teckal 1999.11.18 In-houseprovidingexceptionC-26/03,StadtHalle 2005.01.11 “C-458/03,ParkingBrixen 2005.10.13 “C-295/05,Asemfo/Tragsa 2007.04.19 “C-324/07,Coditel 2008.11.13 “C-573/07,SeaSrl/ComunediPonteNossa 2009.09.10 “

C-196/08,AcosetSpA 2009.10.15

Possibilityofawardingapublicservicetoasemi-publiccompanyformedspecificallyforthepurposeofprovi-dingthatservice,whentheprivateparticipantinthatcompanyhasbeenselectedbymeansofapublicandopenprocedure.

C-480/06 2009.06.09 CooperationbetweenlocalauthoritiesC-299/08,Commission/France 2009.12.10 Singleprocedurefortheawardofthecontract

Report SAIFrameworkcontracts:theFederalCentralBuyingOffice’soperationexaminedintermsofsoundmana-gementandlegality Belgium

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For “stock contract technique”:

Report SAIIntroductionofdoubleentryaccountingattheMinistryoftheFlemishCommunity BelgiumContractmarketingandpromotionexpenditure “FlemishBroadcastingCorporation(VTR)’scooperationwithexternalservicesfortelevisionprogrammes “Consultancycontractsawardedbyministerialcabinets “Dredgingworks “StatisticsFinland’sserviceprocurements FinlandUniversities’procurementactivities “UseofexpertservicesbytheDefenceAdministration “AuditoveraRailTransportInstitute PortugalPublicinvestmentprojectsbypublicrailtransportenterprise “Parliament’s2005account “Highspeedrailwayproject “IntegratedprojectoftheNorthernRailroad “MafraMunicipalityanditsenterprises “SintraMunicipalenterpriseforparkingmanagement(includingselectionofprivatepartnertoaPPParrangement) “

Procurementawardedduringthefinancialyear2002bythestatepublicsector SpainAutonomous(regional)andlocalpublicsectors,financialyears1999and2000.Itensconcerning“Pu-blicProcurement” “

For the use of undue and less competitive procedures:

Report SAIProcurementawardedbythestatepublicsectorduringthefinancialyearsof1999,2000and2001 Spain

For non justification of used procedure:

Report SAIRestrictedprocedures(aboveandbelowthresholds) Germany

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3.2. Did the chosen procedure ensure competition and transparency?3AUDITINGTHEPROCEDURECHOSENTOPROCURE

Background

Besidestheattainmentofvalue,theprinciplesoffaircompetition,transparencyandequaltreatmentmustalsoberespected.Europeanregulationsestablishdifferentlevelsforsafe-guardingtheseprinciplesaccordingtotherelevantsizeofthecontractsandtheneedtobal-ancethefunctionandweightofformalitieswiththeassociatedcosts.Inanopenprocedure,allinterestedeconomicoperatorsaregiventheopportunitytosubmitatender,whichisnotnecessarily thecasewithotherprocedures.According to theprocedures chosen, certainminimumshaveyettobeconsidered.Companieswhodidnotapplymustnotbeseparatelyinvitedbythepublicauthorityforreasonsofequaltreatment.

Questions → When a restricted procedure was used:•Did the public authority publish a prior notification calling any interested candidate

to request participation?

•When the contracting authority decided to limit the number of candidates to invite to tender, did the contract notice indicate:

o The minimum and maximum number of candidates it intends to invite?o The objective and non-discriminatory selection criteria to be used to choose that number

of candidates?

•Did the number of candidates invited respect the minimum set (usually 5), ensuring a genuine competition?

• Is it certain that the public authority did not permit the inclusion of economic opera-tors who had not previously applied to participate?

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→ When a negotiated procedure with publication of a contract notice was used:

• Were all interested operators allowed the opportunity to participate in the tender stage?

• Where the contracting authority decided to limit the number of candidates to invite to tender, did the contract notice indicate:


of candidates?

• Did the number of candidates invited respect the minimum set (usually 3), ensuring a genuine competition?

• Is it certain that the public authority did not permit the inclusion of economic operators who had not previously applied to participate?

→ When a negotiated procedure without prior publication of a contract notice was used:• Was a sufficient competitive environment created?

→ When a competitive dialogue was used:

• Were all interested operators allowed the opportunity to participate?

• When the contracting authority decided to limit the number of candidates to invite to tender, did the contract notice indicate:


of candidates?

• Did the number of candidates invited respect the minimum set (usually 3), ensuring a genuine competition?

• Is it certain that the public authority did not permit the inclusion of economic operators who had not previously applied to participate?

• Was the award criterion only the most economical advantageous tender?

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→ When a framework agreement was used:• Has the agreement been awarded in compliance with the general procurement regu-

lations?

• Have the special requirements pursuant to Article 32 of Directive been met?

• Is the duration of the agreement less than the maximum term of four years?

• When awarding a single contract, were the public authority and the supplier the original parties to the framework agreement? When not, was the competition reopened?

→ When a dynamic purchasing system was used:

• Was the dynamic purchasing system set up following the rules of open procedure?

• In the set up of the system and in the award of contracts were only electronic means used?

• Were all economic operators given the opportunity of submitting indicative tenders and allowed admission throughout the entire period of the dynamic purchasing system?

• Have the special requirements pursuant to Article 33 of Directive been met?

• Was invitation to tender to each specific contract issued after the evaluation of the indicative tenders was completed?

• Were all admitted tenderers invited to submit a tender for each specific contract?

• Is the duration of the system less than four years?

• Were no charges billed to interested economic operators or the parties to the system?

Guidance•Directive:

Foropenprocedureseearticle1(11/a)Forrestrictedproceduresseearticles1(11/b),44(3)andAnnexVIIAFornegotiatedproceduresseearticle1(11/d),2,30,31and44Forcompetitivedialogueseearticles1(11/c),29and44Forframeworkagreementsseearticles1(5)and32Fordynamicpurchasingsystemseearticles1(6),33,35(3,4),42(2-5)andAnnexVIIA

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•PPWGGuidelineforAuditors:Seenº11andAppendixV,VIandVII

•PPWGProcurementPerformanceModel(PPM):Seenº16ofthePPM(implementingthepublicprocurementprocess)andnº17(compliancewithEUlaw).

•ECJCase-Law


Case Judgement IssueC-225/98,Commission/France 2000.09.26 Limitationtoamaximumoffivetendererswithinarestric-

tedprocedureisnotadmissible

C-20and28/01,Commission/Germany 2003.04.10 Possibilityofanegotiatedprocedurewithoutpriorpubli-cationofacontractnotice

C-385/02,Commission/Italy 2004.09.14 Strictinterpretationandneedofproofofderogationsregar-dingtheexistenceofexceptionalcircumstances

C-340/02,Commission/France 2004.10.14 Useofnegotiatedprocedurewithout justification/needofproofabouttheexistenceofexceptionalcircumstances

C-84/03,Commission/Spain 2005.01.13 Strict interpretationof derogations/Unjustifieduseofnegotiatedprocedure

C-138/08,HochtiefandLinde 2009.10.15 Negotiatedprocedures,obligationtoensuregenuinecom-petition,minimumnumberofsuitablecandidates

Report SAIFlemishBroadcastingCorporation(VTR)’scooperationwithexternalservicesfortelevisionprogrammes Belgium

For lack of transparency and competition:



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4.1. Did the public authority notify procurement processes and results in compliance with the Directive and EC Treaty?

4AUDITINGTHEPUBLICITYANDNOTIFICATIONSUSED

Background

Notifyingtheintentiontoawardacontractandpublishingtherulesthatgoverntheprocedureiscrucialforafairandopencompetition.

Directivescompriseaseriesofruleswhichcovertheformofnotificationandtimeframefortheprocedure.Althoughtheserulesmayseemmerelyformal,theyaregenerallybindingandensureconditionsforfaircompetition,adequatetimeforpreparationoftenders,equaltreatmentandtransparency.Also,theEuropeanCourtofJusticehasconsideredthattheirviolationhasseriousconsequencesforthelegitimacyoftheprocedure.

TheDirectivediscriminatesbetweenthreedifferentcommitmentstoplacenotifications–priorinformationnotice,callfortenderandpostawardnotification–ofwhichthecallfortenderisthemostcrucialaspect.

Questions• When the contracting authority shortened the time limits for the receipt of tenders,

had it published a prior information notice about the intended awards in the Official Journal of European Union (OJEU)?

• When under the scope of the Directive, was the call for tenders for contracts or fra-mework agreements published in the OJEU?

• Did this notice follow the necessary form, including disclosure of all the required information?

• Were national advertisements published after the day when the official notification was sent to OJEU?

• Did national advertisements confine details to those contained in the notification sent to OJEU?

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• Did time limits set to receive tenders and requests to participate comply with the mi-nimum requirements established for the chosen procedure?

• For contracts below the thresholds, was an advertisement to open the award to com-petition published?

• In this case, were the means and content of advertising adequate having regard to the relevance of the contract to the Internal Market?

• Was the time limit set for submission of bids sufficient to the potential bidders to pre-pare and submit their bids?

• Were results of the award procedures published?

Guidance

•Directive:Forpriorinformationnoticeobligationseearticles35,36,38andAnnexesVIIAandVIII.

Forformsandcontentofcontractnoticesseearticles35,36,AnnexesVIIAandVIII.SeealsoAnnexIItoCommissionDirective1564/2005,from7September2005.

Forminimumdeadlinestoreceivetendersorrequeststoparticipateandshorteningpossibilitiesseearticles36(2)and38.

Fornoticesonawardresultsseearticle35(4).

•FornotificationofprocurementincontractsnotcoveredbytheDirective,namelycontractsbelow

thethresholds,see Commission Interpretative Communication 2006/C 179/02.

•PPWGGuidelineforAuditors:Forpriorandcontractnoticesseen.os5and7.

Fortimelimitsseenº12.

Fornoticesonawardresultsseenº18.

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•PPWGProcurementPerformanceModel(PPM):Fortheneedforpropercommunicationbetweenprocurementstaffandsuppliersseenº16ofPPM.ForcompliancewithEUlawseenº17ofPPM.

•ECJCase-Law

Case Judgement IssueC-76/81,Transporoute 1982.02.10 Thepurposeofrulesregardingparticipationandadvertising

istoprotecttenderersagainstarbitrariness

C-225/98,Commission/France 2000.09.26 Situationswhere thepublicationof aprior informationnoticeiscompulsory

C-324/98,TeleaustriaVerlag 2000.12.07Principlesofnon-discriminationand transparency:needfor advertising in a public service concession awardingprocedure

C-399/98,OrdinedegliArchitetti 2001.07.12 Needforcontractnotices


Report SAIContractmarketingandpromotingexpenditure BelgiumStatisticsFinland’sserviceprocurements FinlandContractsofassistance,consultancyandservicesawardedbytheFoundationforFurtherEducation-fi-nancialyears1996to1998 Spain

ContractingawardedundertheestablishmentofnewwaysofmanagementoftheNationalHealthService-financialyears1999,2000and2001 “

For notices or information to the bidders:



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4.2.Wastimelyandequalaccesstocontractdocumentsandinformationprovidedtoallcandidates?

4AUDITINGTHEPUBLICITYANDNOTIFICATIONSUSED

Background

Theequalaccess to informationbycandidates is clearlyandextensivelyprotectedby theEuropeanpublicprocurementregulationsandisaprimarymechanismforguaranteeingfaircompetitionandtransparencyandforreducingthescopeoffavouritismbeinggiventospecificinterests.

Theuseof informationandcommunicationtechnologieshasbroughtwiderpossibilitiesofaccessingandspreadinginformation,fortakingadvantageoforganisedknowledgeandforacceleratingprocedures.Accessibilityandsecurityhavenewsignificanceinthiscontext.

Questions• Did the contracting authority offer unrestricted and full electronic access to the contract

documents and any supplementary documents (specifying the internet address in the notice)?

• When that type of access was not offered, were all specifications, documents and addi-tional information made available on a timely basis or issued in hard copy to economic operators?

• Were the documents describing the requirements and performance accessible to all bidders in the same way or were specific documents easier to obtain for domestic bidders?

• Was additional significant information supplied to all interested parties?

• Were the means of communication and information exchange used free from barriers and did they allow economic operators’ access to the tendering procedure?

• If an electronic auction or a dynamic purchasing system was used, did the tender documents specify details on access to information, electronic equipment used and connection specifications?

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Guidance

•Directive:Forelectronicandnon-electronicaccesstodocumentsseearticles38(6),38(7),39(1,2),40(1-4),42andAnnexX.

Forelectronicauctionsseearticle54(3).

Fordynamicpurchasingsystemsseearticle33.

•PPWGGuidelineforAuditors:Seenº13.

•PPWGProcurementPerformanceModel(PPM):Seenº16(implementingthepublicprocurementprocess)andnº17(compliancewithEUlaw).


C-359/93,Commission/Netherlands 1995.01.24 Informationtobeincludedintendernotices


Report SAITheprocurementandcommercialuseofmultipurposeicebreakers Finland

For the need of providing all the bidders with complete information about the con-tract performance:



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4.3.Wasconfidentialityensuredwhennecessary?4AUDITINGTHEPUBLICITYANDNOTIFICATIONSUSED

Background

Transparencyshouldnotunderminetheimportanceofnotgivinganyadvantagetobidderswhenmakingtheiroffers.Confidentialityincriticalmomentsisessentialtoensurethatthepublicinterestisprotectedandtopreservebusinessconfidence.Preventingaccesstoprivi-legedinformationisalsoacornerstonetodetercorruptopportunities.

Questions• Did communication, exchange and storage of information ensure confidentiality of

tenders and requests to participate?

• Was the content of tenders and requests to participate only known after expiration of the time limit set for submitting them?

• During an electronic auction, did the identity of tenderers remain undisclosed at all times?

• In a competitive dialogue, were solutions proposed or confidential information given by a candidate not revealed to others without his/her express agreement?


Forconfidentialityrequirementsseearticles29(3),42(3)and54(6).


C-538/07,Assitur 2009.05.19 Companieslinkedbyarelationshipofcontrolorsignificantinfluenceascompetingtenderers

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5AUDITINGTHEAWARDPROCEDURES

Background

Theawardingproceduresaretypicallyconductedinfiveseparatesteps:

• Formalreviewofbids• Assessmentofthesuitabilityofbidders• Confirmationofexclusioncausesfortenders• Evaluationoftendersandawarddecision• Conclusionofthecontract

Insomeprocedures,likerestrictedprocedure,negotiatedprocedurewithadvertising,com-petitivedialogueanddynamicpurchasingsystem,completelyautonomousstagesaredevotedtotheselectionoftheeconomicoperatorsallowedtosubmitatender.Thosewho,havingrequestedthatpossibility,arenotselectedassuitablebiddersare,fromthatmoment,outsideofthecompetitionandarenotrequiredtoprepareatender.

Forotherprocedures,suchas theopenone, thesuitabilityofcandidates isassessedaftertheyhavesubmittedtheirtenders.However,thequalitativeassessmentofcandidatesmustbeundertakenseparatelyandperformedpriortotheevaluationoftenders,apracticethatissometimesoverlookedbycontractingauthorities.

Itfollowsthatevaluationstepsmustbedoneinaccordancewiththeframeworkofeachspe-cificprocedure.



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5.AUDITINGTHEAWARDPROCEDURES5.1.Wasaformalreviewoftendersreceivedundertaken?

Background

Beforetheassessmentofbidderstakesplacethereshouldbeaformalverificationaboutthecompliancewithbasicrequirements,suchasadherencetodeadlinesandenclosureoftheinformationrequested.

Questions• Is there a record maintained of the procedures followed in the opening of tenders

together with the reasons for the acceptance or rejection of tenders received?

• Were at least 2 officials employed to work together in the opening of the tender documents?

• Did the contracting authority verify compliance with the basic requirements of the competition?

• Were tenders rejected for due cause such as: o Were not received within the prescribed time limit?o Were not submitted in a closed envelope?o Did not meet the formal requirements?o Did not include the required certifications and information?

• Were no tenders presented after the time limit accepted?


Forformalreviewoftendersseearticles26and41(2).

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•PPWGGuidelineforAuditors:Fortenderopeningandformalreviewseen.º14.

•PPWGProcurementPerformanceModel(PPM):Seenº16ofPPM(implementingthepublicprocurementprocess).



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5.2.Wasthesuitabilityofcandidatesaccuratelyassessed?

Background

Thecontractingauthority shouldadmitonly thosebidderswhichdemonstrateeligibility,includingminimumcapacitylevelssetintheprocurementdocuments.Aswehaveseenin2.4,thepublicauthorityhassomediscretionconcerningtherequirementsandverificationitseeks,providedtheyarejustifiedbythesubject-matterofthecontractanddon’tunneces-sarilylimitcompetition.

Inaddition,apublicauthorityshouldensurethatcontractsarenotawardedtooperatorswhohavecommittedcertainoffencesorparticipatedincriminalorganisations.

Whenassessingthesuitabilityofbidders,theprinciplesofequaltreatmentandtransparencymustalsobeobserved.

Thecontractingauthoritymustdocumenttheprocessfollowedintheselectionofcandidates,statingthereasonsforselectionandrejection.

Questions• Was the qualitative assessment of submissions received undertaken independent of

and prior to the evaluation of tenders?

• Are the processes followed documented, including the reasons for selection and rejection?

• Did the contracting authority assess suitability of bidders exclusively on the basis of the requirements previously announced and in a non- discriminatory manner?

• Did candidates prove their suitability to pursue the professional activity as admissibly required?

• Did candidates give evidence of their technical and/or professional ability in accor-dance with the references specified in either the notice or invitation to tender?

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•Did candidates give evidence of their economic and financial standing in accordance with the references specified in either the notice or invitation to tender or other appropriate documents?

• Where the economic operator intends to rely on the capacities of other entities, did it prove their ability to access the necessary resources?

• Where required, did candidates give evidence of complying with quality assurance standards?

• Where required, did candidates give evidence of complying with required environ-mental management standards?

• Where required, were candidates registered as approved contractors, suppliers or service providers or certified by relevant bodies?

• Did the contracting authority request and verify evidence that candidates:

o (and/or their representatives) were not convicted of participation in a criminal orga-nisation, corruption, fraud or money laundering?

o Were not bankrupt or in an analogous situation? o Were not guilty of offences of professional conduct? o Have fulfilled obligations related to the payment of social security contributions and

taxes?

• Is there no evidence of false certifications?

• Were candidates from States covered by AGP Agreement included and evaluated in like manner to all other submissions received?

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Guidance

•Directive:Forsuitabilitytopursuetheprofessionalactivityseearticle46.

Foradmissiblemeansofprovingtechnicaland/orprofessionalabilityseearticle48(1-6)

Foradmissiblemeansofprovingeconomicandfinancialstandingseearticle47(1-5)

Fortheuseofcapacitiesofotherentitiesseearticles47(2,3),48(3,4)and52(1)

Foradmissiblequalityassuranceassessmentseearticle49

Foradmissibleenvironmentalmanagementassessmentseearticle50

Fornon-discriminatoryprovisionsaboutlistsorcertificationsseearticle52

Forexclusioncausesseearticle45

ForAGPAgreementseearticle5

Fordocumentationandcommunicationproceduresseearticles41and43

•Directive2009/81/EC:Indefenceandsecurityprocurementscandidatesmayberequiredtosubmitspecificguaranteesensuringsecurityofinformationandsecurityofsupply.

•PPWGGuidelineforAuditors:Seenº18

•PPWGProcurementPerformanceModel(PPM):Seenº16ofPPM(implementingthepublicprocurementprocess)andnº17(compliancewithEUlaw).



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•ECJCase-Law

•Auditreportsandstudies


C-389/92,BallastNedamGroepI 1994.04.14Considering the resourcesof companiesbelonging toaholding inassessing suitabilityofdominant legalpersonofthegroup

C-5/97,BallastNedamGroepI 1997.12.18 “

C-176/98,HolstItalia 1999.12.02 Serviceproviderrelyingonthestandingofanothercompanyasproofofitsownstanding

C-305/08,CoNISMa/RegioneMarche 2009.12.23

Entitieswhich are primarily non-profit-making and donothave theorganisational structureof anundertakingoraregularpresenceonthemarket(suchasuniversitiesandresearchinstitutes)areallowedtotakepartinpublictenderingproceduresfortheawardofservicecontracts

C-199/07,Commission/Greece 2009.11.12 Qualitativeselection,criteriaforautomaticexclusion

C-376/08,SerrantoniandConsorciostabileedili 2009.12.23 Apermanentconsortiumandoneofitsmembercompaniesascompetingtenderers

Report SAIAuditoveraRailTransportInstitute Portugal

For illegal admission of bidders:



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5.AUDITINGTHEAWARDPROCEDURES5.3.Werethedocumentsreceivedscrutinisedforcompletionandadherencetostatedcondi-

tions before the tenders were evaluated?

Background

Oncesuitabilityhasbeenestablished,thenextstepistoevaluatethetendersreceived.Thepublicauthoritymayfirstexcludetendersthatcannotbeacceptedforreasonssuchasnotmeetingperformanceconditionsorquotingtoolowatendersumtoenablethecontracttobeproperlyperformed.

Averylowpricedtendercannotberejectedunlessthebidderisfirstgiventheopportunitytoexplainthebasisofhiscostestimates.

Questions• When performance conditions were detailed in the tender documentation, did the

contracting authority verify if the tenders received met those requirements?

• Did variants taken into consideration meet the requirements for their presentation?

• Is there no evidence of a quotation priced too low?

• In that case, did the contracting authority write to the bidder seeking disclosure of the basis of his cost estimate?

• Did the bidder comply with this request within the deadline set?

• Were the reasons for the estimation verified and was it possible to clear doubts?

• In open and restricted procedures, did the contracting authority make sure that there is no substantive change to the bid due to this clearing process?

• When a tender was considered abnormally low because of state aid, is there no veri-fiable clue/indication that the aid was granted illegally?

• When tenders were actually rejected because they were abnormally low, were reasons for this decision given and were they sufficiently grounded?

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Guidance

•Directive:Forperformanceconditionsseearticles26and27

Forsubcontractingseearticle25

Forabnormallylowtendersseearticle55

Forvariantsseearticle24.



•ECJCase-Law

Case Judgement IssueC-76/81,Transporoute 1982.02.10 Obligationsofthecontractingauthorityregardinganab-

normallylowtender

C-103/88,FratelliCostanzo 1989.06.22 ObligationsofMemberStateswhendefiningrulesregardingabnormallylowtenders

C-243/89,Commission/Denmark 1993.06.22Principleofequaltreatment:prohibitionofnegotiatingwithatendereronthebasisofatendernotcomplyingwiththetenderconditions

C-285and286/99,LombardiniandMantovani 2001.11.27 ObligationsofMemberStatesandcontractingauthoritiesregardingabnormallylowtenders



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5.AUDITINGTHEAWARDPROCEDURES5.4.Werebidsproperlyevaluated?

Background

Thefinalevaluationandawardprocessmustbedemonstrablyobjectiveandtransparentandbasedsolelyonthepublishedcriteria.Thepublicauthorityhastoconsiderallthepublishedcriteria,pursuanttotheindicatedweighting.Admissiblevariantswhichmeettherequire-mentsmustbeevaluatedinthesamewayastheotherbids.

Theawarddecisionwillbebasedontheresultoftheevaluationoftenders.

Inopenandrestrictedprocedures,anydialoguewithcandidatesthatcouldbeconstruedas“posttendernegotiation”onpriceorothertenderelementsisnotpermissible.However,forotherprocedures,suchasnegotiatedorcompetitivedialogue,negotiationsarepermissiblewithincertainrulesandmayresultinchangesinthetenders.Thesenegotiationsmayeventakeplacethroughanelectronicauction.

Questions• Is the evaluation process documented in a transparent, plausible and convincing

manner?

• Did the contracting authority evaluate only those tenders that qualified in the former 3 steps?

• When open and restricted procedures were used, no negotiations or alterations to tenders were permitted, namely on price?

• When negotiations or fine-tunings of the tenders did take place, were these permitted within the procedure followed?

• In those cases, was equality of treatment and distribution of information provided to all tenderers during the dialogue or the negotiations?

• When negotiation took place in successive stages, was this practice stated in the pro-curement documents and was it done in accordance with the award criteria stated?

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• Where an electronic auction was used to bid, were all required specifications given equally to tenderers?

• In this case, did the contracting authority make a full initial evaluation of the tenders according to the award criteria and the weighting set, did it invite all bidders simul-taneously to submit new prices and/or new values and did it provide the necessary information to them to enable them to continue bidding?

• Did the contracting authority evaluate and rank bids against all and only those criteria, and relative weighting, which it had published in the procurement documents?

• When awarding contracts under a framework agreement, did the contracting authority comply with the terms laid down in that agreement?

• Was there a sound basis for the scorings applied to the criteria and was the scoring well balanced?

• Were calculations used in evaluation adequate and correct?• Is there no evidence of collusion between bidders? 61

• Is there no evidence of unauthorized release of information or seemingly unnecessary contacts with bidders’ personnel during the evaluation and negotiation processes?

• Is there no evidence of favouritism towards a particular contractor during the evaluation and negotiation processes?

• Is there no evidence of any individual on the evaluation panel being biased?• Is there no evidence of any external or superior pressure to reach a specific result?• Did the contracting authority draw up a report in writing of the outcome of the evalu-

ation in accordance with article 43 of the Directive?

51 Collusive bidding involves agreements or informal arrangements among competitors, limiting competition and usually concerning price fixing.

Situations and practices that may evidence collusion include: withdrawal of bids with no evident reason, fewer competitors than normal submitting bids, certain competitors always or never bidding against each other, bidders appearing as subcontractors to other bidders, patterns of low bids suggesting rotation among bidders, differences in prices proposed by a company in different bids with no logical cost differences, large number of identical bid amounts on line items among bidders, mainly when they are service-related, identical handwritings, company pa-per, telephone numbers or calculation or spelling errors in two or more competitive bids, submission by one firm of bids for other firms, reference to any type of price agreements, statements by contractors about any kind of market divisions or turns to receive jobs.

Collusive practices are usually very secret and, although indicators such as those mentioned are usually not sufficient to prove the anti-competitive activity, they are enough to alert appropriate authorities for investigation.

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Guidance

•Directive:Article53isthecentralprovisionfortheevaluationoftenders

Forelectronicauctionsseearticle54

•PPWGGuidelineforAuditors:Seeno.16andAppendixtoSection4

ForelectronicauctionsseeAppendixVIII


•ECJCase-Law



C-87/94,Commission/Belgium 1996.04.25

Takingintoaccountamendmentssubmittedaftertheope-ningof tenders,awardingacontractnotcomplyingwiththecontractdocumentsor consider cost-saving featuresnotreferredinthecontractdocumentsoffendprinciplesofequaltreatmentandtransparency

C-19/00,SIACConstruction 2001.10.18 Equaltreatmentoftenderersduringthecontractingpro-cedure

C-331/04,ATIEACandothers 2005.11.24 Conditionsallowingajurytoattachaspecificweighttothesubheadingsofanawardcriterion

Report SAITheNorthWastewaterTreatmentPlantinBrussels.Awardandfundingoftheconcessioncontract Belgium

For formalization of consolidated tenders in negotiated procedures:



176

Report SAIStatisticsFinland’sserviceprocurements Finland

AuditoveraRailTransportInstitute Portugal

For the need of a document comparing the bids and stating the grounds of the award:

Report SAIBuslineservices:costpriceandcontractawardtooperators Belgium2000AnnualReport(§4.127.6),2001AnnualReport(§4.129.65)and2002AnnualReport(§4.136.7(a)) CyprusEx-anteauditandalsoontherequestofthePublicAccountsCommitteeoftheHouseofRepresentati-ves “

StateBudgetfundsprovidedforinvestmenttotheindustrialzones CzechRepublic

AnnualReport2004onfederalfinancialmanagement,PartII,items3,17,18and42 GermanyAutonomous(regional)andlocalpublicsectors,financialyear1997.Itemconcerning“Publicprocure-ment”. Spain

For a fair and transparent evaluation of bids, according to the award criteria:

Report SAIPublicinvestmentprojectsbyapublicrailtransportenterprise Portugal

PublicinvestmentprojectsbytheNationalLaboratoryforCivilEngineering “

For awarding a contract not complying with the contract documents:

Report SAIRentalofaircraftstofightforestfires Portugal

For collusion among bidders:



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5.AUDITINGTHEAWARDPROCEDURES5.5.Wastheoutcomeoftheawardprocessproperlyreachedandcommunicated?

Background

Havingconcludedtheprocurementprocessandawarddecision,thecontractingauthorityhasobligationsofreportingandnotification.Theseobligationsreflectpublicaccountability,transparency,controlandtherightsofcandidates.

Questions

• Was the award decision based on the result of the evaluation of tenders?• Has the award included no items different from those contained in bid specifications?• Did the chosen bid meet user needs?• Did the contracting authority draw up a comprehensive written report about progress

and outcome of the procurement process?• Was that report communicated to the European Commission, when requested? • Were tenderers notified in writing and on a timely basis of decisions concerning the

rejection of tenders or applications, the conclusion of the procurement procedure, the name of tenderer(s) selected and characteristics and relative advantages of the chosen tender(s)?

• In case of decisions not to conclude a procurement or award a contract, were tenderers informed in writing and on a timely basis of those decisions and their grounds?

• If information was withheld, was there reasonable justification for this decision?• Was there a reasonable interval between dates of award and contract to allow un-

successful tenderers to seek a review of award decision?• Did the conditions of contract comply with the detail provided in the procurement

documents and with the outcome of the procurement procedure followed?• Did the conditions included in the contract protect the risk of non-performance by

the supplier and were there no conflicting provisions?• Were there no material changes in the contract shortly after award?

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Guidance

•Directive:Article43outlinesthecontentofthereportonthetenderingandevaluationprocess.

Forinformationtotenderersandreasonstowithholditseearticle41.



•ECJCase-Law


C-87/94,Commission/Belgium 1996.04.25

Takingintoaccountamendmentssubmittedaftertheope-ningof tenders,awardingacontractnotcomplyingwiththecontractdocumentsor consider cost-saving featuresnotreferredinthecontractdocumentsoffendprinciplesofequaltreatmentandtransparency

C-27/98,FracassoandLeitschutz 1999.09.16 Contractingauthoritiesarenotobligedtoawardthecon-tracttothesoletendererconsideredassuitable

C-455/08,Commission/Ireland 2009.12.23

Guaranteeofeffectivereview.Minimumperiodtobeensu-redbetweennotificationtotheunsuccessfultenderersofthedecisiontoawardacontractandthesignatureofthecontractconcerned.

C-337/98,Commission/France 2000.10.05 AsubstantialchangeinthescopeofthecontractorinthescopeofthecompetitionbehinditistobeconsideredasanewawardandanewcontractforthepurposeofDirectives

C-496/99,Commission/CASSuchidiFrutta 2004.04.29

C-454/06,Pressetext 2008.06.19



179



IntroductionofdoubleentryaccountingattheMinistryoftheFlemishCommunity “

BuildingworksofthehighspeedlineMadrid-Barcelona-1999and2000 Spain

Reportsmentionedin6.1

For post awarding changes in the contract:

Report SAIWastewatertreatmentplantinnorthernBrussels-Awardandfundingoftheconcessioncontract Belgium

For the need of formal consolidate tenders after negotiations:

Report SAIContractsofassistance,consultancyandservicesawardedbytheFoundationforFurtherEducation,financialyears1996to1998 Spain

For the need of written contracts:



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6.AUDITINGADDITIONALWORKSORDELIVERIES6.1.Wereanyadditionalworksordeliveriesadmissiblewithouttheneedforanewprocure-

ment procedure?

Background

Publicauthoritiesoftenchoosetocomplementtheworksordeliveriesprocuredandcontracted,duringtheirexecutionandwithoutanewprocurementprocedure.

Thesechangesinthecontentoftheawardedperformancemayresultfromseveralcircum-stances:

• Unexpectedtechnicalreasons,asgeologicalsurprisesornewlegalrequirements

• Suggestionsforreplacementoftechnicalsolutionsormaterials

• Changedideasaboutthedefinedneedsandpossibleimprovements,aschangingabasementintoaparkingarea

• Addingneedstotheonesdescribed,asincludingagardentoabuilding,makingaroadlongerthanplannedorbuyingmorecomputersthanthequantitytenderedfor.

Flexibilitytochangeperformancewithouttheneedtodisruptandgoingthroughanewprocure-mentproceduremightbenecessarytofulfilneedsandachievesavings.Ontheotherhanditmightalsobeameansofdisrespectingtherules,favouringorrewardingasupplier,avoidinganopenprocurementorovercomingbudgetaryconstraints.

Additionstocontractshouldonlybeadmissibleinexceptionalcases.



182

Questions

• Did the additional works introduce minor or non-substantial changes to performance, as described in the contract documents?

• Were additional works brought about by a cause which had not previously existed?

• Were additional works strictly necessary for the completion of performance under the contract?

• Is it that additional works could not be technically or economically separated from the original contract without major inconvenience?

• Did additional works amount to no more than 50% of the initial contract?

• Were additional works charged at the unit prices agreed in the initial contract?

• Were additional deliveries a partial replacement for normal supplies or installations or an extension of existing supplies or installations?

• Would a change of supplier oblige the contracting authority to acquire material ha-ving different technical characteristics resulting in incompatibility or disproportionate technical difficulties in operation and maintenance?

• Was the length of original and recurrent contracts less than 3 years?

Guidance

•Directive:

ForadditionalworksseeArticle31(4/A)andforadditionaldeliveriesseeArticle31(2/b)rocess.

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•ECJCase-Law


Case Judgement IssueC-337/98,Commission/France 2000.10.05 Asubstantialchangeinthescopeofthecontractorinthe

scopeofthecompetitionbehinditistobeconsideredasanewawardandanewcontractforthepurposeofDirectives

C-496/99,Commission/CASSuchidiFrutta 2004.04.29

C-454/06,Pressetext 2008.06.19

Report SAIFinalpaymentonsomelarge-scalepublicworkscontracts Belgium

For jeopardizing competition through delivering additional works:

Report SAISpecialReportNo8/2003concerningtheexecutionofinfrastructureworkfinancedbytheEDF(OJEU,C181,31Jul2003) ECA

Expo98 Portugal

Euro2004 “

Largepublicworksfinancialslippage “

Additionalpublicworkscontractsfrom2006to2008 “

For reasons leading to the delivery of additional works:

Report SAIDredgingworks Belgium

PortMaritimeInstitute Portugal

RailTransportInstitute “

Additionalpublicworkscontractsfrom2006to2008 “Autonomous(regional)andlocalpublicsectors,financialyears1999and2000.Itensconcerning“Pu-blicProcurement” Spain

For undue delivery of additional works:

Report SAIConstructionofthe“Deurganckdock”(AntwerpContainerTerminalComplex) Belgium

RailTransportInstitute Portugal

Public-ownedcompany “

Largepublicworksfinancialslippage “

Additionalpublicworkscontractsfrom2006to2008 “

MinistryofDefence:majorProjectsreport2004 UK

For deviations to the price of the initial contract:



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Report SAIContractsawardedin1999and2000ontheactivitiesandservicessusceptibleofgeneratingrevenuesinasampleofpublichospitalsoftheNationalHealthSystem,withspecialreferencetothecontractsthathavetherealizationofclinicaltestsasanobject

Spain

Buildingworksofthehigh-speedlineMadrid-Barcelona-years1999and2000 “

For extension of contracts’ time limits:


Summaries of SAIs Audit Reports


Summary of the audit reports

187

168

Court of Audit, Belgium

Report Main issues

1. Bus line services: costpriceandcon-tractawardtooperators

Subcontractingprocess– Competition ru-les–CriteriaWeighting–Amalgamationofmarketplayers–Costprice

2. Contractmarketing and promotionexpenditure

Legality–Europeanpublicationofanotice–Advertisingcampaigns–Internalcontrol

3. Frameworkcontracts:TheFederalCen-tralBuyingOffice’soperation(abbrevia-tedinFOR/CMS)examinedintermsofsoundmanagementandlegality

Legality-Frameworkcontracts

4. Executionofeconomiccompensationsassociatedwiththepurchaseofspecificmilitaryequipment

Economic compensations –Military pro-gramme contracts – Legality – InternalControl

5. Control of Public Contracts coveringtheRoad Transport Infrastructure inBrussels

The“stock”contracttechnique–Implemen-tationofthecontracts

6. Constructionofthe«Deurganckdock»(Antwerpcontainerterminalcomplex)

Publicworks – Cost increase –Damageclaims

7. Damagecompensationschargedonthebudgetof the Flemish infrastructurefund

Damageclaims–Damagecompensations

8. IntroductionofdoubleentryaccountingattheMinistryoftheFlemishCommu-nity

Unclearprojectrequirements–Negotiationprocedure–Tightbudget–Tighttimeplan-ning–Systemflaws

168 The full text of this Appendix is in the attached CD. There you can find a more comprehensive description of the mentioned SAI reports.



9. TheOutsourcingoftheDataprocessingfunctionattheMinistryoftheFlemishCommunity

Legality–Outsourcing contract–Vaguelytermed contract

10. TheNorthWastewaterTreatmentPlantinBrussels.Awardandfundingoftheconcessioncontract

Contractaward–Contractfunding

11. Roads,motorways andwaterwaysmaintenanceleases

Generaltermsofprocurement–Implemen-tationofleases–Renewalofleases

12. Final payment on some large-scalepublicworkscontracts

Changestotheinitialproject

13. The“IlotEcluse”buildingconstructionworks(publicworkscontract)

Legality–Qualitativeselection–Publicationrules

14. Complyingwith public procurementregulation

Legality–Executionofpublicworks–Qua-litativeselection–Servicecontracts–Re-newalcontracts

15. Publicservicecontractsprovidingmain-lyintellectualservices

Intellectualservicesprocurements

Audit Office, Republic of Cyprus

Report Main issues16. ProvisionofConsultancyServices for

theSewerageConveyanceandTreat-mentoftheGreaterNicosiaArea

Ex-anteauditandlater–ConsultancyServi-ces–Technicalevaluationcriteria–Methodoftenderpricing

17. ProvisionofServices Ex-anteaudit–ProvisionofServices-Selec-tionofadvertisingfirm–Awardoftender

18. ITprocurement Valueformoney-ITprocurement



189

Supreme Audit Office, Czech RepublicReport Main issues

19. FundsspentonacquiringoftheCzechStatisticalOfficeheadquarters

Regularity–Performance–Specialcategoryof purchase – Preparatory phase of theinvestmentproject–Urgentneed–Formofpublictender–PriceandFunding–Thebuildingphase

20. StateBudgetfundsprovidedforinvest-menttotheindustrialzones

Performance–Assessmentofthedeclaredbenefitsoftheprogramme–Implementa-tionoftheprogramme

21. StateBudget fundsand themanage-ment of the state property under the authorityoftheMinistryofTransport

Performance–Regularity-Managementofthestateproperty–Selectedexpenditures

National Audit Office, Denmark

Report Main issues22. Untitled ValueforMoney–Consultancyservice

State Audit Office, EstoniaReport Main issues

23.Organisation of public procurementrelatedtoroadrepair(2004)

Performance–Procurementofroadrepairworks

24.ManagementofpublicprocurementattheMinistryof Interioranditsgover-ningarea(2002)

Legality–Managementofpublicprocure-ment



25.Managementof procurement at theMinistryoftheEnvironment(2002)

Procurementofenvironmental services–Riskmanagement

26. Procurementofmaintenanceservices(2005)

Legality – Procurement ofmaintenanceservices

27. Procurementmanagementinthefieldof IT systems, softwareproductsandsoftwareservices(2004)

Legality-Managementofprocurements

European Court of Auditors

Report Main issues

28. SpecialReportNo8/2003–executionofinfrastructureworkfinancedbytheEDF(OJEC–C181–Volume4631July2003)

Infrastructurework–EuropeanDevelop-mentFund–Performanceofinfrastructurework–Compliance

29. AnnualReportconcerningthefinancialyear2000(OJECpage318-328,15-12- -2001)

Internalcontrol–Procurementprocedures–Compliance

State Audit Office, FinlandReport Main issues

30. Statistics Finland’s service procure-ments

Performance–Compliance–Transparency–Non-discrimination

31. TheDefenceadministration’sprocure-mentactivities–Supplyprocurement

Performance–Defence



191

32. TheFinnishstate’spaymenttrafficpro-curement

Performance–Compliance–Principleofequalityandnon-discrimination–Principleof transparency

33. Theprocurementandcommercialuseofmultipurposeicebreakers

Performance–Preparationoftheprocure-ment-Principleofequality

34. Theprocurementofpublic transportservices

Performance–Managementoftheprocu-rement–Preparationoftheprocurement

35. Universitiesprocurementactivities Performance–Compliance–PreparationoftheProcurement

36. Useofexpertservicesbythedefenceadministration

Performance–Preparationoftheprocure-ment–Implementationoftheprocurement

37. ProcurementsofsystemworkandADPconsultingservicesbythetaxadminis-tration

Performance–Compliance-Preparationofthe procurement

Bundesrechnungshof, GermanyReport Main issues

38. AnnualReport2004onfederalfinancialmanagement

Performanceand regularity -Cross-boun-dary examinations – Preparation of theprocurement–Awardprocedures

State Audit Office, HungaryReport Main issues

39.Operationof theHungarianDefenseForces Public Procurement Systemprojects

Performance–Publicprocurementmana-gement

40. Summariesofthereportsontheactivi-tyoftheStateAuditOfficein2002-2004

Annualreports



Office of the Comptroller and Auditor General, IrelandReport Main issues

41. DevelopmentofanICTHumanResour-ceManagementSystem

Value forMoney –Management of theprocurement

42. PrimaryRoutesImprovementProgram-me

ValueforMoney–Implementationoftheprocurement–Costincrease

43.WasteManagementinHospitals ValueforMoney-Environmentalstandards44. PurchasingofTyresbyAnGardaSiocha-

na(PoliceForce)ValueforMoney–Managementofthepro-curement–Preparationoftheprocurement–Procurementprocedures

45. InterviewRecordingSystems ValueforMoney–Preparationoftheprocu-rement–Procurementprocedures–Awardprocedures

Tribunal de Contas, PortugalReport Main issues

46. Executionofaconstructionjobtoim-provealocalroad

Compliance– Implementationof thepro-curement

47. Port-MaritimeInstitute Compliance–Awardprocedures48. RailTransportInstitute Compliance–Awardprocedures49. Euro2004,1ststage Performance–Preparationoftheprocure-

ment–Implementationoftheprocurement50. EXPO’98 Performance–Managementoftheprocure-

ment–Implementationoftheprocurement51. CentralisedPublicTendersintheHealth

sectorPerformance – Centralisation of publicpurchases

52. Public-ownedcompany Performance–Activitiesofapublic-ownedcompany–Preparationoftheprocurement– Implementationof theprocurement –Additionalworks



193

Audit Office, Slovak Republic

Report Main issues53. Report on the results of the check

of compliancewith theactonpublicprocurementbySlovenskápošta,š.p.BanskáBystrica

Compliance–Principlesofcompetitionandeconomy–Procedureschosentoprocure

Tribunal de Cuentas, Spain

Report Main issues54. Autonomous(Regional)andLocalpu-

blicsectors,financialyear1996Compliance– Implementationof thepro-curement

55. Contracts of assistance, consultancyandservicesawardedbytheFounda-tion for Further Education, financialyears1996to1998

Compliance–Effectiveness–Privatenon-profitfoundation

56. Contractingawardedby foundations,onestablishmentofnewwaysofmana-gementoftheNationalHealthService.Financialyears1999,2000and2001

Regularityandperformance–Managementof theprocurement–Preparationof theprocurement–Principlesofpublicity,con-currence,objectivityandtransparency

57. AuditReportoftheprocurementawar-dedbyfoundationsoftheStatepublicsector.Financialyears1999,2000,2001and2002

Regularity and compliance– Efficiency–Managementoftheprocurement–Awardprocedures

58. Autonomous(Regional)andLocalpu-blicsectors,financialyear1997

Preparationof theprocurement– Imple-mentationoftheprocurement

59. Acquisitionsofmedicationsandphar-maceuticalproducts-1999and2000

Compliance–Efficiencyandeconomy–Ma-nagementoftheprocurement–Preparationoftheprocurement–Procedurechosendoprocure



60. Contractsawardedin1999and2000byhospitalsoftheNationalHealthSystem,withspecialreferencetocontractsre-ferringtotherealizationofclinicaltests

Regularity–Regimeofeconomiccompen-sations–Preparationoftheprocurement

61. Procurementawardedduring2002byentitiesoftheStatepublicsector

Compliance – Efficiency and economy –Procedure chosen to procure – Awardprocedures

62. Autonomous(Regional)andLocalpu-blicsectors,financialyear1998

Compliance–AnnualReport–Preparationoftheprocurement–Awardprocedures–Implementationoftheprocurement

63. Autonomous(regional)andLocalpublicsectors,financialyear1999

Preparationof theprocurement–Awardprocedures– Implementationof thepro-curement

64. Procurement subscribedby theStatepublicsectorduringthefinancialyears1999,2000and2001

“

65. ProcurementawardedbytheProvincialDelegations,financialyear2002,servi-cesofHomeAssistance

“

66. Highspeed lineMadrid-Barcelona –1999and2000 “

67. File, storage, safekeepingormanage-mentofmedicalhistoriesinhospitals:procurementonthisactivity

Managementoftheprocurement–Prepa-rationoftheprocurement–Implementationof the procurement

68. Autonomous(regional)andlocalpublicsectors.Financialyear2000 “



195

National Audit Office, United Kingdom

Report Main issues

69. Non-CompetitiveProcurement in theMinistryofDefence

Valueformoney-Defenceequipmentpro-curement-Non-competitiveprocurements

70. Improving ITProcurement–ProgressbytheOfficeofGovernmentCommerceinimprovingdepartments’capabilitytoprocurecost-effectively

Value formoney -Department’sProcure-ment-Managementoftheprocurement

71.Ministry ofDefence:Major ProjectsReport2004

Valueformoney-Defenceequipmentpro-curement–Projectperformance

72. ImprovingPublicServicesthroughbet-terconstruction

Valueformoney-Constructionprojects

73. Purchasing andManaging Softwarelicences

Valueformoney-Managementofthepro-curement

74. ProcurementofVaccinesbytheDepart-mentofHealth


75.ModernisingProcurementinthePrisonService


76.MinistryofDefence:TheRapidProcu-rementofCapabilitytoSupportOpera-tions

Valueformoney-Defenceprocurement-Managementoftheprocurement

77. Improving IT Procurement: the im-pact of the Office of GovernmentCommerce’sinitiativesondepartmentsandsuppliersinthedeliveryofMajorIT-enabledprojects


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