OPERATIONAL GUIDELINES

for PUBLIC PROCUREMENT

JANUARY, 2012

Table of Contents

1.Scope of the Operational Guideline4

2.Objective of the guideline4

3.General conduct of procurement procedures5

4.Procurement forecast6

5.Indicative notice8

6.Confidential business information and access to documentation9

7.Statement of needs and determination of availability of funds9

8.Functions of the Chief Administrative Officer11

9.Functions of the Requesting Unit (User Department)11

10.Functions of the Procurement Department/Unit11

11.Types of procurement procedures13

12.Estimating the value and classifying the contract13

13.Determination of Procedure16

14.Types of contracts17

15.Procurement number19

16.Summary procurement record19

17.Tender dossier20

18.Technical Specifications27

19.Time limits29

20.Publication30

21.Issue of Tender/Prequalification documents33

22.Provision of additional or clarifying information and Time Extensions33

23.Selection Criteria35

24.Group of Economic Operators45

25.Contract Award criteria45

26.Tender Security47

27.Performance Security48

28.Tender validity49

29.Tender form and submission50

30.Receipt of tenders50

31.Opening of Tenders51

32.Tender samples52

33.Clarification of tenders53

34.Establishment of the Tender Evaluation Committees53

35.Examination, Evaluation and Comparison of Tenders55

36.Abnormally Low Tenders57

37.Notifying Tenderers/Candidates58

38.Termination of a procurement procedure59

39.Standard Forms60

40.Conduct of the procedures60

41.Open Procedure60

42.One-envelope and Two-Envelope Tendering Procedure71

43.RESTRICTED procedure73

44.Emergency Procurement81

45.Negotiated procedure after publication of a contract notice82

46.Negotiated procedure without publication of a contract notice90

47.Price quotation procedure91

48.Procedure for minimal value contracts95

49.Immoveable Property Contracts96

50.Framework Contracts97

51.Design contest104

52.Public Service Operators108

53.Consultancy Services113

54.Complaints117

55.Contract Management120

56.Separation of Duties123

Annex 1125

Annex 2127

1. Scope of the Operational Guideline

1.1 This Operational Guideline is designed to assist the procurement staff in the management of procurement activities and design contests. It gives details of the procedures governing the procurement of goods, services, works and design contests.

1.2 This Guideline complements and clarifies the provisions of the Public Procurement Law, Law No. 04/L-042, (PPL) and shall be read in compliance with the provisions of the PPL. This Guideline gives an overview of the main procedures to be used in public procurement, and it gives an idea of the process, you will have to go through, when you procure and use public funds.

1.3 All persons, economic operators (EOs), undertakings, and Contracting Authorities (CAs) including the Public Service Operators as these legal and natural persons are defined in the PPL involved in procurement activities will be bound by the policies, procedures and practices appearing in this guideline.

1.4 According to the PPL the following list of the CAs is simplified and mentions the groups in broad terms:

Contracting Authorities:

1. Public Authorities

a. Central and local authorities (ministries, municipalities etc);

b. Bodies governed by Public Law as defined in the Law, meaning bodies under dominant public influence;

c. Associations of the above.

2. Public Service Operators

a. Public authorities or public undertakings engaged in public service activity;

b. Other entities granted exclusive rights to perform public service activity (neither public authorities nor public undertaking).

3. Public undertaking

a. Any undertaking under dominant public influence.

4. Any person, committee or private company operating on basis of a special or exclusive right.

5. Anybody carrying out procurement activities on behalf of the above.

2. Objective of the guideline

2.1 The objectives of the Guideline are:

a) To describe procedures to be followed and the documentation to be used while conducting procurement activities;

b) To guide the staff in the management of the procurement activities in order to create uniformity and consistency using best practices in order to achieve value for money.

2.2 It is very important that the public procurement process is discharged honestly, fairly, and in a manner that secures best value for public money. CAs must be cost effective and efficient in the use of resources while upholding the highest standards of probity and integrity.

2.3 The Law imposes obligations on CAs to:

a) publish their requirements at the PPRCs website;

b) use procurement procedures that provide open and transparent competition;

c) apply clear and objective criteria in selecting tenderers and awarding contracts;

d) use non - discriminatory technical specifications;

e) allow sufficient time for submission of requests for prequalification or tenders.

3. General conduct of procurement procedures

3.1 CAs conducting procurement procedures are obliged to take reasonable and necessary measures to ensure equality of treatment and non-discrimination among interested EOs.

3.2 When conducting procurement procedures, a CA shall have the following obligations:

a) to play an active role in determining the terms of contracts, with special reference to prices, delivery deadlines, quantities, technical characteristics and guarantees;

b) to the greatest extent possible under the circumstances, to compare requests to participate and tenders effectively to ascertain their relative advantages and disadvantages; and

c) to ensure that the contracted price is not higher than the concerned market price.

3.3 CAs shall incur no liabilities towards any tenderer or candidate, or participant in a public procurement procedure, unless a decision is issued by the Procurement Review Body concerning compensation to a complainant.

3.4 All public procurement activities shall be conducted in accordance with the following basic principles:

Competition - among suppliers should be encouraged in the most efficient and effective way.

Efficiency & Effectiveness - should be sought in the procurement process to secure value for money for the CA.

Fairness/ Non Discrimination Act fairly during the whole procurement lifecycle without imposing unnecessary burdens or constraints on suppliers or potential suppliers. Avoid any favourably treatment to specific supplier or potential supplier.

Objectivity/Integrity/ Honesty Declare any conflict of interest that affects or appears to affect their judgment; Reject gifts, hospitality and benefits of any kind from supplier or a potential supplier, which might be reasonably seen to compromise their objectivity or integrity.

Transparency Ensure equal conditions and accessibility to all EOs, by informing them in an open and transparent way.

Accountability Be accountable for the responsibilities assigned to them, as well as for the decisions made by them, keep the appropriate records.

Professionalism Work to a high standard of professionalism by complying with the legislation in force and applying the best practices.

3.5 Each procurement process is conducted through the following 8 steps:

1st STEP

Procurement Planning

2nd STEP

Estimating the Value and Classifying the Contract

3rd STEP

Determining the Procurement Procedure

4th STEP

Preparing the Tender Dossier

5th STEP

Publication

6th STEP

Opening and evaluation of tenders

7th STEP

Award and signing of contract

8th STEP

Contract management

4. Procurement forecast

4.1 The procurement forecast is a written document which indicates:

a) the goods, works and services expected to be procured during the fiscal year;

b) the intended starting date; and

c) the estimated contract value.

4.2 This is the first step in the procurement process.

4.3 Procurement planning is a process undertaken by CAs to plan purchasing activities for a 12 months period of time. Production of the annual procurement plan:

a) Eliminates the necessity of emergency procurements or waivers;

b) Aggregates the requirements, wherever possible, to obtain value for money and reduce procurement costs;

c) Enables the identification of framework contracts to provide an efficient, cost effective and flexible means to procure works, services or supplies that are required continuously or repeatedly over a set period of time; and

d) Avoids splitting up of procurement requirements which are broadly similar or related.

4.4 Failure to undertake procurement planning is considered bad management and may:

a) have a detrimental impact on the entire CA and the attainment of its objectives;

b) result in emergency procurement or waivers, in which case punitive action shall be taken against such offenders; and

c) Result in splitting of procurement requirements which are broadly similar or related.

4.5 A preliminary procurement foreca