NEW EU DIRECTIVES CONCERNING PUBLIC PROCUREMENT TRANSPOSED INTO ROMANIAN LAW STARTING MAY JANUARY BUCHAREST
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1 NEW EU DIRECTIVES CONCERNING PUBLIC PROCUREMENT TRANSPOSED INTO ROMANIAN LAW STARTING MAY JANUARY BUCHAREST
2 Professor Sue Arrowsmith University of Nottingham
3 Frameworks Used for products/works/services where repeat need but exact quantities unknown e.g. stationery, vehicle repair, roads maintenance Eliminate the need for repeating procedures for each order (administrative convenience) - but maintain competition and transparency
4 Categories of framework Single-supplier frameworks E.g. to get price discount Multi-supplier frameworks E.g. because best supplier for each order is only known when the details of the order are known (e.g. consultancy projects which personnel available, project methodology etc) To distribute work more widely For security of supply
5 Categories of framework Single-user frameworks Public body lets for own use Multi-user frameworks e.g. awarded by purchasing consortium for all universities
6 Main types of framework Binds P to buy and S to supply Either to certain quantities or to any requirements if they arise (e.g. all stationery needed in the year) Binds S only E.g. where P thinks market may change Binds neither S nor P
7 When should frameworks be used and which type? EU law itself does not regulate which type may be used and when Depends on purchaser s objectives, and on the market Member States can restrict their use? (Less clear under Directive 2014/24) E.g. prohibit, restrict or require their use
8 Frameworks in the EU directives References in slides are to Directive 2014/24/EU unless otherwise stated See later slides for impact on utilities Most rules apply in the same way
9 Definition: Art.33(1) "framework agreement" means an agreement between one or more contracting authorities and one or more economic operators, the purpose of which is to establish the terms governing contracts to be awarded during a given period, in particular with regard to price and, where appropriate, the quantity envisaged Covers single-supplier frameworks and multi-supplier frameworks
10 Award procedures for frameworks Ordinary award procedures (usually open or restricted), adapted to rules on framework agreements
11 Single-supplier frameworks Call for competition (Selection/exclusion and reduction of numbers if not open procedure) Tenders Choose framework supplier, based on pre-disclosed award criteria Place orders
12 Multi-supplier frameworks Contract notice (Selection/exclusion and reduction of numbers if not open procedure) Tenders based on set terms and sample requirement Award Part 1: Choose framework suppliers, based on award criteria Part 2: Choose between framework suppliers for an order (call-off stage)
13 Contract notice/pin notice 2004 directive required contract notice for framework agreements 2014 directive allows sub-central entities to use contract notice or PIN
14 Contract notice/pin notice Must state in contract notice or PIN that procedure is for a framework Contract notice must include: Estimated total value, plus (as far as possible) the value and frequency of contracts Planned duration Reasons, if longer than four years
15 Contract notice/pin notice PIN in 2014 directive: does not refer to all information normally provided on frameworks in contract notice (and nor does the list relating to the invitation to confirm interest) The rules on PINs have overlooked framework agreements? New standard forms (in force Dec 3) make provision for stating reasons for duration beyond 4 yrs No reference to value and frequency of contracts (could go in other information or in invitation to confirm interest?)
16 Which authorities can use a multi-user agreement? Contract notice must identify the intended users Applied under 2004 directive Expressly confirmed in Art.33(2) of 2014 directive: framework may be applied only between CAs clearly identified for this purpose in the contract notice
17 Which authorities can use a multi-user agreement? When PIN used as call for competition, Art.33(2) requires clear identification of users in PIN or invitation to confirm interest Good practice - and possibly transparency obligation - require identification in the PIN itself?
18 Which authorities can use a multi-user agreement? Those outside the description cannot use the agreement E.g. universities cannot use a framework advertised as being for local authorities
19 Which authorities can use a multi-user agreement? But how precisely must the call for competition (or confirmation of interest) identify the users? Commission: potential user group must be explicitly identified by name or reference e.g. municipal bodies of province x, where list exists; but not contracting authorities Recital 60 to the 2014 directive on identifying in the framework itself confirms this approach?
20 Which authorities can use a multi-user agreement? Users do not need to be signed up at the time of the notice or even at the time the framework is concluded just identified in the framework agreement as per the notice?
21 Which authorities can use a multi-user agreement? Addition of new authorities is constrained by requirement to state estimated value of agreement Exceeding this by a material or considerable amount may require a new award procedure (Art.72)
22 Choosing framework suppliers (Selection: restricted procedures) Tenders based on set terms and sample requirement Choose framework suppliers, based on directive s usual award criteria i.e. most economically advantageous tender (price, cost or best pricequality ratio)
23 Choosing framework suppliers The directive envisages competition happening mainly at this stage, to choose a small number of suppliers Contrast the dynamic purchasing system with many suppliers and competition wholly at the call-off stage
24 Choosing framework suppliers 2004 directive required at least 3 framework suppliers for a multi-supplier framework Exception where there is not a sufficient number who meet the award criteria 2014 directive does not contain this rule
25 Choosing framework suppliers Q. Can new suppliers be added after the framework has been set up? A. No (2014 directive Art.33(2)) Alternatives where are new suppliers entering: - Short framework agreement (with limited burdens for existing suppliers to tender again) - Dynamic purchasing system (especially under 2014 directive)
26 Awarding contracts within the framework (calloffs) How should suppliers be chosen for each order (calloff) in a multi-supplier framework?
27 Awarding contracts within the framework (calloffs) Possibility 1: Call-off based on original tenders for the framework agreement Must award in accordance with objective conditions (Art.33(4)(a)) Which tender is most economically advantageous for the specific call-off Which tender is most economically advantageous overall Rotation/equitable division of work? Recital 61: objective conditions may include the needs or the choice of the natural persons concerned
28 Example: office supplies Suppliers are invited to submit prices for 300 standard items, together with delivery rates to different parts of the country 6 suppliers are selected based on prices and delivery charges, taking into account likely geographic spread of orders Call offs: supplier for each order is selected by e.g.: Lowest cost (price plus delivery charge) for the specific order; Lowest cost overall, based on the sample requirement for the framework agreement (In both cases if framework agreement allows this - use next best if best not available to supply) Rotation/division of work?
29 Awarding contracts within the framework (calloffs) Possibility 2: mini-competition at call-off stage Must award to the best tender on the basis of the directive s usual award criteria (Art.33(5)(d)) i.e. most economically advantageous tender (price, cost or best price-quality ratio)
30 Example of mini-competition: management consultancy Suppliers submit rates and details of expertise, based on several specimen briefs 3 suppliers are selected based on rates and expertise Call offs: A faxed brief is provided for each piece of work and firms indicate available consultants and proposals for addressing the project Supplier is then selected based on expertise of those available and quality of proposals, plus rates originally tendered (most economically advantageous for the call-off work)
31 The mini-competition Must invite all framework suppliers capable of performing the contract Must consider this when deciding how many to select For transparency should make it clear which firms are qualified for which type of requirement However, the directive permits later capability assessments, at least if needed? (e.g. because of the nature of the specific project)
32 The mini-competition Rules in Art.33(5) of 2014 directive: Must set time limit which is sufficiently long, taking into account factors such as the complexity of the contract and the time needed to send in tenders Tenders must be in writing Must not be opened until time for submission expires Must award to the tenderer that has submitted the best tender on the basis of the award criteria set out in the procurement documents for the framework agreement
33 The mini-competition Mini-competition can involve supplementing tenders to adapt them to the particular order e.g. Proposals for methodology for addressing a consultancy project Possible delivery time
34 Can call-offs with and without mini-competition be used under the same framework for the same products/works/services? 2004 directive was not specified 2014 directive provides expressly for this (Art.33(4)(b)) Possibility must be stipulated in the procurement documents for the framework agreement Choice between procedure 1 and 2 must be made using objective criteria which must be set out in those documents Recital 61: Such criteria could for instance relate to the quantity, value or characteristics of the works, supplies or services concerned, including the need for a higher degree of service or an increased security level, or to developments in price levels compared to a predetermined price index
35 Methods not permitted for call-offs By allowing continuous revisions to tenders, and choosing the best current offer without running a mini-tender under the regulations Not allowed under 2014 directive even when electronic catalogues are used By free exercise of discretion without regard to any pre-stated award criteria
36 Award criteria: disclosure obligations Must state criteria in notice or documents and (usually) give weightings e.g. price 80%, quality 20%
37 Award criteria: disclosure obligations Where use sub-criteria, must state these and any weightings in advance, where might have affected tenders (ECJ in Lianakis, ATC) How does this affect call-offs by mini-competition? Need to specify sub-criteria and any weightings in documents issued for mini-competition How does this affect call-offs without mini-competition? Must state sub-criteria and weightings in documents for the framework itself? Can use range of weightings to give flexibility e.g. for urgency
38 Award criteria Can criteria and/or weightings used for call-offs differ from those used to choose framework suppliers? Can criteria and/or weightings used differ for different call-offs? Presumption that the same? Scope for justified variation within pre-stated range? e.g. urgency; importance of quality Can use sub-criteria (and these could differ?) Remember to disclose (see previous slide for when)
39 Price in framework agreements Is it possible to have a framework agreement without a price (or pricing mechanism)? Definition indicates that framework must set the price But are there exceptions? Yes where not meaningful? e.g. fuel If price is very significant criterion for call-offs should all interested suppliers be included on the framework? Note: cannot generally use a framework as a supplier list i.e. set up large lists without competition to get on the list; competition must occur in setting up framework as far as possible
40 Changes to terms 2014 directive Art.33(2): when awarding contracts based on a framework agreement may not make substantial modifications to the terms Is simply a statement of the general principle that substantial changes are not allowed - confirmed by language of Art.33(2) ( modifications ), which is the same as Art.72 (which states rules on changes for both contracts and framework agreements)
41 Aggregation Value is the maximum value of all the contracts envisaged for the term of the framework Is it necessary to aggregate all call-offs placed under a single framework, even when awarded by different entities? Yes? Even if not, must use directive if orders of one user exceed the threshold (or that user will violate the directive by using the framework)
42 Length of framework agreements Framework agreement must not exceed 4 years, apart from exceptional cases which are duly justified E.g. to allow suppliers recoup initial investment; to achieve savings through aggregation of demand Reasons must be stated in contract notice Not clear what is legal position when PIN used to advertise under 2014 directive as this information not mentioned in list required in notice or invitation to confirm interest Advisable to state in PIN?
43 Length of call-offs Can extend beyond life of framework agreement itself (indicated by recital 62 to 2014 directive) Can be longer than 4 years or (see again recital 62) the length of the framework agreement
44 Award notices Award notice required when framework set up 2014 directive requires within 30 days, rather than 48 No award notice required for orders (call-offs) under framework 2014 directive provides for option for Member States to require group notices of call-offs, with grouped notices to be sent within 30 days of end of each quarter (Art.50(2)) Publication of aggregate information would be useful (including for collecting statistics)?
45 Frameworks in the utilities sectors Recital 71: introduces changes to enhance competition by improving the transparency of and access to procurement carried out by means of framework agreements, in particular to: Control call-offs Limit the duration of framework agreements Rules are in Art.51 of 2014 Utilities Directive
46 Frameworks in the utilities sectors Definition in Art.51(1) is the same as for the public sector
47 Frameworks in the utilities sectors Explicit control of call-offs: Must be based on objective rules and criteria (Art.51(2)) These must ensure equal treatment E.g. Best price or price/quality ratio using pre-stated criteria, equitable division of work, rotation, random selection? Rules and criteria must be set out in the procurement documents relating to the award of the framework agreement itself Is stated that may include re-opening of competition i.e. mini-competition (Art.51(2)) Must be sufficient time for tendering Must award to the tenderer submitting the best tender Award criteria for the mini-competitions must be set out in the framework agreement
48 Frameworks in the utilities sectors Are the rules on conclusion of framework agreements and making calloffs any different from those under the public sector rules? Requirements based on transparency and equal treatment will apply, notably to identify the parties to the framework and notify sub-criteria used? Definition is the same so rules on need to include price etc are the same Rules on modification apply explicitly to framework agreements as well as to contracts: Art.89 Most additional provisions in the public sector rules clarify rules already applicable (as with prohibition on modifications) or ensure flexibility, notably to use different call-off procedures in the same framework clearly that also applies to utilities More flexibility for negotiation in making call-offs by minicompetition? (Note explicit rules on mini-tenders do not all apply) Can further economic operators be added to a framework agreement once it is concluded? Not expressly prohibited but risky
49 Frameworks in the utilities sectors New provision that may not exceed 8 years, apart from exceptional cases duly justified, in particular by the subject of the framework agreement (2014 Utilities Directive Art.51(1)) Recital 72: this might for instance arise where economic operators need to dispose of equipment the amortisation period of which is longer than eight years and which must be available at any time over the entire duration of the framework agreement. In the particular context of utilities providing essential services to the public there may be a need in certain cases for both longer framework agreements and a longer duration of individual contracts; for instance in the case of framework agreements aimed at ensuring ordinary and extraordinary maintenance of networks which may require expensive equipment to be operated by personnel having received highly specialised ad-hoc training aimed at ensuring continuation of the services and minimisation of possible disruptions.
50 Frameworks in the utilities sectors Provision that shall not use framework agreements improperly or in such a way as to prevent, restrict or distort competition remains in the directive (Art.51(2))
51 Thank you!
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