Purchasing Supplies at CERN Legal aspects Contract execution and follow-up (who does what) Florence...
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Transcript of Purchasing Supplies at CERN Legal aspects Contract execution and follow-up (who does what) Florence...
Purchasing Supplies at CERN
Legal aspectsContract execution and follow-up (who does what)
Florence Jacobs DG-LSCristina Lara Arnaud FP-PI
2
OutlineLegal aspects
1. CERN contracts
2. General Conditions of CERN Contracts (GCC)
Contract follow up
3. When? Why? How? Who?
4. Case study no. 3
1 CERN contracts
Legal aspects: CERN contracts
Purchasing process
Selection of contractor
Formalization of commercial
arrangement
Legal aspects: CERN contractsSpecific clauses
General term
s
ContractbetweenCERN
and contract
or
“Tailor-made”
contract
Legal aspects: CERN contracts
Specific clauses
purchase order (≤ 200k CHF) or
standard contract (> 200k
CHF)
General termsGeneral
Conditions of CERN Contracts
(GCC)
2 General Conditions of CERN Contracts (GCC)
Why GCC?
CERN’s own rules
Procurement: tendering
process and GCC
Labour: Staff Rules and
Regulations
Safety:CERN Safety rules
Utility of the GCC
Application of the GCC
Documents comprising the contract
Purchasing Supplies — Legal Aspects & Contract Follow-up 13
Priority between documents
terms of the contract
service level agreement
delivery schedule
technical specification
other annexes of the contract, excl. invitation to tender and GCC
invitation to tender, excl. GCC
GCC
contractor’s bid
Confidential information
Intellectual property: GCC
Intellectual Property: reasonable modifications possible
CERN contractor
Owns generated IP
Provides no warranty
Disclosure of IP
Owns generated IP
Provides warranty
No disclosure of IP
Delivery
DATEPLACE
• As set out in contract• Responsibility of contractor • Good shape• Modification by CERN
compensation• Receipt ≠ acceptance
Delivery: when it goes wrong…
Late delivery
Foreseen: refusal and termination of contract if it has lost purpose (wedding cake clause)
Penalties / termination if maximum penalties reached
Notify FP
After delivery:acceptance procedure
Written notification
of acceptance
within 3 months
CERN recognizes that delivery
is correct
via:
Payment in
full
What to do within 3 months of delivery?
Carry out detailed inspection
Notify non-conformity in writing; => remedial measures by contractor
No payment of non-conforming deliveries
Penalties
Termination of contract if loss of purpose of goods/services due to delay for remedial measures
Warranty: Duration
GCC: 2 years after acceptance
Modifications possible
GCC exception: longer legal warranty
Warranty: purpose
Remedy of existing non-conformities by contractor
Remedy to supplies likely to suffer same non-conformity
No remedy measures by CERN or 3p at contractor’s expense
Extension or renewal of warranty
Termination:when it goes really wrong…
Gross negligence or willful
misconduct
By CERN
or contra
ctor
Bankruptcy
insolvency
Termination:what to do?
Notify FP before taking any termination measure!
Avoid serious financial and legal consequences
3 Contract follow-up Who does what
Contract follow-up
Procurement
process
Selection of
contractor
Formalization of
commercial
arrangement
Contract follow-up
When?Technical aspects are discussed during “clarification” phase
• Planning established
• Equipment to be used defined
• Raw material to be purchased
• Etc.
Purchasing Supplies — Legal Aspects & Contract Follow-up 27
Purchasing Supplies — Legal Aspects & Contract Follow-up 28
Why? Power in the Purchasing Process
How?Follow-up meetings with contractor
Periodicity
Participants
To be defined
Establish minutes of meetings
draft by CERN technical responsible
review by procurement officer
approval by contractor
If no comments within 8 days minutes are approved
Purchasing Supplies — Legal Aspects & Contract Follow-up 29
How?
Use contractual tools in case of problems with contract execution
Purchasing Supplies — Legal Aspects & Contract Follow-up 30
Purchasing Supplies — Legal Aspects & Contract Follow-up 31
• Late delivery, failure to deliver
• Non-conforming supplies
• Failure to deliver or late delivery (weeding cake clause) Other breaches (delivery of docs, non compliance with laws.. )
• Problems with warranty
Penalties No acceptance
Execution by third party
Termination, bank guarantee
How ?
The technical officer shall:
Communicate in writing with the contractor
Involve the procurement officer asap in case of problems
Keep track of any relevant correspondence or communication with contractor
(minutes, e-mails, technical reports, etc.)
NEVER commit CERN without the approval of the procurement
officer.
Purchasing Supplies — Legal Aspects & Contract Follow-up 32
How?The procurement officer will:
Draft correspondence with contractual consequences, i.e.: application of penalties, notice + request for remedial measures, non acceptance of supplies, drawing on bank guarantees, termination of contract
Interact with the Legal Service and other services (invoice office), if necessary
Purchasing Supplies — Legal Aspects & Contract Follow-up 33
Joker Case Study No. 3
“ Contract follow-up for the Supplyof 15 Tons of Magic Powder ”
Case study 3Your task• Case analysis (30 minutes):
• Make three groups: two CERN technical officers and two CERN commercial officers
• Read the background• Answer to the questions
• Group presentation and case synthesis (30 minutes):• Each group makes its presentation
Contract Procurement Management Training Supplies– 20 September 2011 35