1politica Achizitiilor Publice in Ue en

Workshop on Public Procurement
Bucharest, 8Bucharest,
March
, 2005
8 March, 2005
Economics of Procurement,
Project management tools,
Evaluation techniques and
Public Procurement policy in a
Member State
Bucharest, 8 March, 2005
Public Procurement Policy in the

Netherlands:
Very simple: WE HAVE NO PUBLIC

PROCUREMENT POLICY IN THE
NETHERLANDS!
We do not even have national public
procurement legislation!
Only exception: public works.
Here we have uniform procurement
guidelines
Procurement in the Netherlands
These are compulsory for Central

Government, but all other public
bodies are free to do what they like
For Central Government there is only
one other obligation: for every
contract exceeding 50.000 euro a
minimum of three potential
contractors must be asked to make
an offer
Procurement in the Netherlands
Means that participating in

procurement processes can be
extremely difficult and risky
Therefore contractors should
evaluate every invitation to tender
very carefully.
Participating without careful
evaluation/examination beforehand
may KILL your company
Threat or opportunity?
You may regard procurement as a

threat or as an opportunity:
Threat: you lose all efforts (and
money) made in account
management because of procedure
that is open to anyone
Opportunity: Markets that were
traditionally closed will be opened:
Threat or opportunity?
By knowing the rules AND the best

practices you may be able to help
potential new clients to assist them
in setting up proper procurement
procedures (non bureaucratic,
economically viable etc)
Incorporation in acquisition policy
Participation in the public procurement

process must be part of the contractors
acquisition policy because: it takes time, it
costs money, it requires knowledge of the
rules!
It has to be laid down in internal
administrative procedures
It should be communicated through all
levels of the organization
Ideally, one department should be

made responsible for organizing,
coordinating and facilitating
participation in procurement
procedures and for keeping up with
changes in the regulations
This department should also draw up
a timetable and have the (delegated)
authority to force people to deliver
the information that is needed
according to this timetable
Always remember and remind the

contracting authority:
Public procurement is a
COMMERCIAL process rather than a
legal process: Lawyers are necessary
to see that it is executed according
to the law but the COMMERCIAL
specialist should be leading!!
Strategic partnerships
Contractors should ask themselves

whether it is advisable to form
strategic partnerships in order to
become more successful:
By participating with strategic
partners ( maybe even in the form
of a European Economic
partnership) you will be able to
offer:
Partnerships
More turnover
More experience
Bigger workforce
More reference projects
Better quality control(?)
More innovation strength
Exclusion from participation
1.
2.
Contracting Authorities can exclude

potential contractors from participation
when the candidate is:
Bankrupt or being wound up, has not
paid his taxes or social security
contributions, has been convicted for
grave professional misconduct, has
deliberately given false information
They are allowed to ask for official proof
that no such circumstance is the case
Exclusion from participation

z
If they do so, ask them to issue a so

called own declaration in which you
declare that you are in no such
circumstances and that you will come up
will all official proof (official documents)
once they have selected you as their
preferred contractor
This saves time, money and
bureaucracy!
Criteria for qualitative selection
According to the directives certain

documents, declarations and other data
can be asked for in order to be certain
about the applicants abilities
These concern: Enrolment in the
professional or trade register, financial
and economic standing, technical capacity
etc.
This can be proved by all kinds of official
documents
BEWARE:
Criteria for qualitative selection are

about the contractors situation, not
about his offer.
To evaluate an offer one needs
awarding criteria.
These two are completely different,
so beware of contracting authorities
mixing them!
Criteria for qualitative selection
Your advice to contracting authorities:

In general: Be clear!
Dont ask: recent declaration but be
specific: not older than three months
from the day of sending the notification
Dont ask: last three years but be
specific: balance sheets of the year
2000, 2001, 2002 .
Be sure why you ask something and how
you are going to weigh/assess it; If you
are not: DONT ASK IT!
Compulsory notifications
- Notice of open, restricted or negotiated
procedures
- Notice of contract award. This notice must
include the name of the selected
contractor and the value of the contract
awarded.
For EU-tenders all notices must be in
conformity with the standard format as
published on the Internet
(www.simap.eu.int).
In the near future it will only be possible to
send the notices to the Bureau of Official
Publications in Luxemburg BY MAIL
Time limits
All time limits in EU-legislation are

governed by regulation 1182/71/EEC
All time limits are minimum limits
(more time may be granted and you
even have the right to demand more
time if the minimum time limit is not
sufficient
The directives say: 52 day from the
time of sending the notice.
Beware:
Regulation 1182/71 says: A time limit

starts only the day after a legal act has
been performed.
Sending the notification to Luxemburg is
the legal act.
This means that the time limit starts the
next day.
A time limit ends at 24.00 hours of the
last day, so opening of the offers can start
taking place only the day following the
expiration of the time limit.
Note: All days are calendar days.
Restricted Procedure
Free choice between open and

restricted procedure.
Restricted procedure means one can
limit the amount of candidates to be
invited to submit an offer to a
MINIMUM OF 5
Problem is that the directives do not
indicate how this limitation has to be
done
This is therefore at the discretion of
the contracting authority
Beware:
Contracting authorities are advised to

perform this selection very cautiously and
in a very transparent way.
This can be achieved either by a public
draw (not allowed in every EU country) or
by selecting on the basis of an objective
weighting instrument, where only the best
scoring candidates will be selected. In the
interest of transparency this instrument
should be made public.
Advantages/disadvantages of
various procedures
Open procedure:
Advantages: Unlimited amount of offers,
therefore unlimited competition. Relatively
quick
Disadvantages: Risk of huge piles of
paper, all to be examined by the
contracting authority. Besides coming up
with all papers to meet the selection
criteria, all candidates have to submit
offers in the mean time, which means an
lot of calculating. This increases the cost
of participating in the tender procedure
and eventually leads to higher prices
Advantages/disadvantages
Restricted procedure:
Advantages: Preliminary selection of
candidates based on qualitative criteria.
Candidates know beforehand how many
competitors there are so can calculate
their chances. By reducing the number of
candidates: less paperwork to examine by
the contracting authority
Disadvantages: Longer and sometimes
more complicated procedure, higher risk
of complaints if not properly executed.
Contact between Contracting

authorities and candidates
Contact is permitted but contracting

authorities must ensure that this
does not impair fair competition.
It is up to the contracting authority
to decide how he will deal with this.
If he includes a name of a contact
person and a telephone number or
personal e-mail address, he indicates
that he does not object to contact
Contact (continued)
He should in any case organize a question

and answer round ca. halfway procedure
(one in case of open procedure, two in
case of restricted procedure).
He should allow all candidates to submit
their questions till a certain date and hour,
then answer ALL questions and send them
(anonimized) together with answers, to all
candidates. This creates a level playing
field.
Submission of Tenders
Contracting authorities should be

clear about what they want to
receive
It is advisable to be rather rigid in
this, for instance Your balance
sheets over the years 2000, 2001
and 2002 must be included in annex
1, your proof of membership of the
Chamber of Commerce must be
included in annex 2 etc. Failure to
obey this will lead to rejection of
your offer
Also they must be clear regarding:

Final date of submission (date, time)
Note: Always make it very clear that this
is a fatal time limit: One minute too late
means rejection!
Whether the opening is public or not
Where to submit. Note: not only the place,
for instance municipality hall but very
specific: room 210 or secretariat of
the director general for public works or
even: Miss X (who is the administrative
secretary and does not know anything
about the tender procedure)
They must also be clear about:
- how many examples should be send
whether they want one example on CDrom
whether tenders should be send under
closed cover
- how to submit (personally against receipt,
by post etc)
NOTE: They should keep tender documents
closed till after the date and time of
closing of the submission period
Last but not least contracting authorities

should instruct personnel on key-posts,
that a closing date is imminent.
Many candidates wait till the last minute
to submit their tenders as they are afraid
that these might otherwise be opened
before the closing moment (and
information be leaked to competitors)
Therefore people in the mail-handling
department and behind the reception
should be well instructed.
Rules for Tenders
The European directives do not specify

anything as to how tenders should look
like
Contracting authorities can therefore
determine themselves what they want to
receive and how. Standard formats will
help evaluating the documentation
received
Main rule is to be utterly clear about what
one wants to receive
General Conditions applicable
Contracting authorities should draw up

their own general conditions (terms)
It is wise to have separate terms for
works, supplies and services
We always tell Contracting authorities to
insist that only the general terms of the
contracting authority are applicable, with
the exclusion of contractors conditions
(otherwise they will end up with offers
that are not comparable)
However, if they dont, see that your own
conditions are applicable!
Checklists
Make checklists to monitor the whole

process and its progress
Draw up a timetable and send this to
everybody involved in the
procurement process, making clear
that it is everybodys responsibility to
respect the timetable
Awarding of the Contract

The European directives state two
awarding criteria:
- Lowest price
- Economically most advantageous offer
Note: Lowest price IS lowest price and is
not, repeat not, negotiable
Choice between awarding criteria is free and
should be subject of thorough
considerations
Leading thought should be that total cost of
ownership is much more important than
price alone
Awarding of contract
Economic most advantageous offer can

include many aspects that are of
importance to the contracting authority.
These aspects may be:
Quality
Functionality
Service
Warranty
Aesthetic characteristics
Price
Environmental aspects etc.
All these are more or less subjective

criteria.
It is up to the contracting authority
to make sure that they are being
judged upon as objectively as
possible and that this judgment
process is transparent
The same applies to the judgment of
criteria for qualitative selection
One way of creating an objective system

is a system of musts and wants
(requirements and desires)
Meeting the musts is a conditio sine qua
non (Knock-out criterion)
Concerning the wants all candidates will
be compared in relation to the others in
order to determine who meets the wants
best, who ends up worst and what is the
position of the other candidates
Examples of must and wants:

Must: it is not allowed to offer a price
higher than 500.000
Want: the price should be as low as
possible
Must: A service engineer must be
available within two hours
Want: A service engineer is available
as soon as possible
In this system all wants will get their

own rating (for instance on a scale from 1
to 10)
The rating reflects the ranking of the
wants between each other
All candidates will be compared in relation
to the others to determine who responds
best to a want, who responds worst and
the position of the remaining candidates.
This is expressed in a mark (on a scale
from 1 to 10)
The best candidate scores 10 points, the
worst 1 point
Award
Explanation:
O = Offer
R= Rating in comparison with other
competitors
T= Total score on this Want
Price= in 100.000 Euro
Available= availability of engineer in hours
Warranty= warranty in years
User panel= evaluation figure on scale of
1-10 (1 is worst, 10 is best) by evaluation
team
award matrix
contractor
wants
price
rating
o r t
o r t o r t o r t
5,
8
12
30
1
0
60
available
10
80
1,
5
7,
5
60
40
warranty
12
1
0
10
30
12
user panel 5
10
50
20
35
Total
139
10
4
13
5
80
Alcatel period
Since EC court ruling in Alcatel case,

member states are forced to
announce intended award
Rejected bidders get possibility to
oppose award during restricted timelimit.
In some member states this limit is
only 14 days!
Greatly increases amount of legal
proceedings.
Checklists
Make several checklists for the monitoring

of your participation:
First one when first reading the invitation:
Who is the contracting authority, what are
they procuring, what procedure, do we
have enough time, financial means, know
how to offer them, what are the
specifications, have they been drawn up
with someone in mind, is there a
reference to certain suppliers or products
Checklists
Second one:
Who is responsible for what
What do we need to submit
What did the contracting authority
forget (this is where we start earning
money!!!)
What is the cost of investment
against the possible net profit (roi)
or its marketing value
Checklists
Do we need to form some kind of

strategic alliance in order to create
more critical mass
Who else might be competing and
what is our added value over them
and /or local contractors
Other things to check
You name it, I will answer it!!

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Workshop on Public Procurement

Bucharest, 8 March, 2005

Public Procurement Policy in the

Very simple: WE HAVE NO PUBLIC

Procurement in the Netherlands

These are compulsory for Central

Procurement in the Netherlands

Means that participating in

You may regard procurement as a

By knowing the rules AND the best

Bucharest, 8 March, 2005

Incorporation in acquisition policy

Participation in the public procurement

Ideally, one department should be

Bucharest, 8 March, 2005

Always remember and remind the

Contractors should ask themselves

Bucharest, 8 March, 2005

Exclusion from participation

Contracting Authorities can exclude

Exclusion from participation

If they do so, ask them to issue a so

Criteria for qualitative selection

According to the directives certain

Criteria for qualitative selection are

Criteria for qualitative selection

Your advice to contracting authorities:

All time limits in EU-legislation are

Regulation 1182/71 says: A time limit

Free choice between open and

Contracting authorities are advised to

Contact between Contracting

Contact is permitted but contracting

He should in any case organize a question

Contracting authorities should be

Also they must be clear regarding:

Bucharest, 8 March, 2005

Last but not least contracting authorities

Rules for Tenders

The European directives do not specify

General Conditions applicable

Contracting authorities should draw up

Make checklists to monitor the whole

Bucharest, 8 March, 2005

Awarding of the Contract

Bucharest, 8 March, 2005

Economic most advantageous offer can

All these are more or less subjective

One way of creating an objective system

Examples of must and wants:

In this system all wants will get their

Since EC court ruling in Alcatel case,

Make several checklists for the monitoring

Do we need to form some kind of

Bucharest, 8 March, 2005

Other things to check

You name it, I will answer it!!

Bucharest, 8 March, 2005

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