manual for private sector on eu pre-accession assistance

8/13/2019 Manual for Private Sector on EU Pre-Accession Assistance

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GOVERNMENT OF THE REPUBLIC OF SERBIA

EU INTEGRATION OFFICE

MANUAL

FOR PRIVATE SECTORON EU PRE-ACCESSION

ASSISTANCE


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MANUAL

GOVERNMENT OF THE REPUBLIC OF SERBIA

EUROPEAN INTEGRATION OFFICE

FOR PRIVATE SECTORON EU PRE-ACCESSION

ASSISTANCE:PUBLIC PROCUREMENT

PROCEDURES


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Table of Contents

INTRODUCTION ..................................................................................................................... 5Purpose of the guide and target group ..................................................................................... 5

Structure of the guide ........................................................................................................................ 5

Recommendations for readers ........................................................................................................ 5

General remarks ..................................................................................................................................... 5

WHAT IS IPA FUNDING FOR? ................................................................................................ 6IPA legal framework ............................................................................................................................. 6IPA strategic framework ...................................................................................................................... 8

IPA financial framework ...................................................................................................................... 8

Management of IPA funds ................................................................................................................. 8

IPA institutional framework and main beneficiaries ............................................................ 9

How the private sector can use allocated EU/IPA funds ...................................................... 12

HOW TO APPLY ................................................................................................................... 13Type of contracts relevant to private sector ....................................................................... 13

Where to look for funding opportunities ................................................................................ 16

Selection and award criteria .......................................................................................................... 17

Who evaluates tenders? .................................................................................................................... 18

Terms of Reference and Technical Specifications ................................................................. 19

SERVICE CONTRACTS ......................................................................................................... 19

Service contracts content of the Tender Dossier ................................................................. 20Service contracts the evaluation process .............................................................................. 22Service contracts Framework Contracts ............................................................................... 22

SUPPLY CONTRACTS ......................................................................................................... 23

Supply contracts content of the Tender Dossier ................................................................. 23Supply contracts the evaluation process ............................................................................ 24

WORKS CONTRACTS .......................................................................................................... 25

Works contracts content of the Tender Dossier ................................................................. 25Works contracts the evaluation process .............................................................................. 27

GRANTS ................................................................................................................................. 27

Grants the main steps and key documents .................................................................... 29Grants the evaluation process .............................................................................................. 30Opportunities in secondary procurement ............................................................................. 31Ethics issues for all types of contracts .................................................................................... 32

CONCLUSION ....................................................................................................................... 32

Long-term benefits of mastering the process .......................................................................... 32

MANUAL FOR PRIVATE SECTOR ON EU PRE-ACCESSION ASSISTANCE:

PUBLIC PROCUREMENT PROCEDURES

Publisher:Republic of Serbia

Government

European Integration Office

For publisher:Milica Delevic, PhD

Author:European Integration Office

No. of copies:300

Design and prepress:GSM Advertising d.o.o., Belgrade

Printing:Global Print

Belgrade, 2011

ISBN 978-86-914485-3-0

CIP - Katalogizacija nedostaje


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INTRODUCTION

Purpose of the guide and target group

The purpose of this guide is to provide essential and useful i nformation regarding

the Instrument for Pre-Accession Assistance (IPA)financing for the private sector in

Serbia.

The three main objectives of this guide are to:

1. Disseminate relevant information regarding the IPA programme in Serbia2. Explain the role and responsibility of the EU and Serbian institutions in

relation to the IPA3. Highlight points relevant for the private sector regarding the IPA programme

in Serbia and, in particular, explain how to participate in IPA (EU) tenders

The guide is primarily aimed at the private sector in Serbia, which may benefit from the

available opportunities, but also at all readers interested in learning more about howbusiness is done with IPA funds.

Structure of the guide

The first part of this guide, What is IPA funding for? offers general information about

the IPAs legal, strategic, financial and institutional framework. The second main part,How to apply, explains the procurement procedures related to different types ofcontracts (service, supply, works and grants). The Glossary (at the end of the guide)

provides short explanations of relevant terms and concepts.

Recommendations for readers

This guide takes a generalist approach. It outlines the wide range of information about

IPA financing and highlights key points. However, only those entities that are wellprepared and informed will be able to avail of IPA (and other opportunities) for project

financing. Users should thus obtain more detailed information about the IPA that is

relevant to their business. Gathering information about possibilities for financing is a

continuous process, so the earlier that business entities learn about the IPA, the better

their chances of benefiting from opportunities.

General remarks

The accession of Serbia to the European Union (EU) is the process of Serbia joining the

EU. Serbia officially applied for EU membership on 22 December 2009. The IPA offers

assistance to countries engaged in the accession process over the period 20072013.

The aim of the IPA is to enhance the efficiency and coherence of this assistance by

means of a single framework that supports the stabilisation and association process of

candidate and potential candidate countries, while respecting their specific features

ANNEXES .............................................................................................................................. 33

Key documents .................................................................................................................................... 33

Key links .................................................................................................................................................. 33IPA budget ............................................................................................................................................. 34

GLOSSARY ............................................................................................................................ 37

List of Tables

Table 1. 1: IPA struct ures and authorities in Serbia, with reference to current stateof affairs ................................................................................................................................................... 10

Table 1.2: The PRAG eligibility rules ........................................................................................... 14

Table 1.3: PRAG procurement procedures for services, supply and wor .................... 15

Table 1.4: Rules for applying standard procurement procedures ................................. 15

Table 1.5: EU procurement principles and practice ........................................................... 16

Table 1.6: Content of a Service Tender Dossier .................................................................. 21

Table 1.7: Content of a Supply Tender Dossier ................................................................... 24Table 1.8: Content of a Works Tender Dossier ..................................................................... 26

Table 1.9: The grant evaluation process .................................................................................. 31


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and the processes in which they are engaged. Through the implementation of IPA

funding, the country creates a better economic context for the development of the

private sector.

Serbia has been a beneficiary of various EU assistance programmes and of the IPA

programme since 2007. The possibility of accessing IPA funds has opened numerous

opportunities to the public, private and voluntary sectors of the Serbian economy. To

make best use of those opportunities, potential beneficiaries need to be familiar with

the EU and Serbian institutions involved in the process and to assimilate concepts andknow-how regarding the procedures for best use of IPA funds.

WHAT IS IPA FUNDING FOR?

IPA legal framework

The European Commission serves as the executive arm of the European Union. It

administers the EU budget and supervises the implementation of EU common policies.To carry out its tasks, the Commission supports with available financial instruments a

wide range of projects in different countries.

IPA replaces the CARDS, PHARE, ISPA and SAPARD programmes. Under the IPA, the EU

finances projects that lead to full harmonisation of national legislation with the acquis

communautaire (or EU acquis: the accumulated legislation, legal acts and court decisionsthat constitute the body of EU law), the full application of harmonised legislation, andpreparation for implementation of EU cohesion and agricultural policies.

The financial value of the IPA programme for 20072013 totals nearly11.5bn,of which

1.4bnhas been allocated to Serbia.

Figure 1.1: IPA Budget 2007-13

The IPA beneficiary countries are divided into two categories, depending on their

status under the accession process:

Potential candidate countries Albania, Bosnia-Herzegovina, and Serbia Candidate countries Croatia, M acedonia, Iceland, Montenegro and Turkey

The IPA is intended as a flexible instrument, providing assistance that depends on the

needs of the beneficiary countries a nd on the progress they make. The IPA programme

is made up of the following five components:

IPA Component I: Transition Assistance and Institution Building includesmeasures for institutional capacity-building and related investments, with thegoal of fulfilling political, economic and other EU accession criteria and theresponsibilities involved in EU membership. Assistance can come in the formof technical assistance (TA), twinning projects (entailing the secondment of EUexperts), procurement of equipment (supply), works and grants.

IPA Component II: Cross-Border Cooperation provides support for cross-bordercooperation with bordering countries. Cross-Border Cooperation programmesalso have an important role for the regional development of the country.The priorities of IPA II are: promoting cross-border cooperation, sustainabledevelopment of the environment, market development, economic development,improving cohabitation on the EU external borders, improving living standardsin border regions, and strengthening the capacities of local/regional/nationalinstitutions to implement EU programmes.

IPA Component III: Regional Development, and IPA Component IV: HumanResources Development. Through IPA III and IV, the necessary preparationsare made for managing the financial instruments that will be available after EUaccession (Structural Funds and the Cohesion Fund). The potential beneficiariesare state administration bodies, public institutions, social partners and non-government organisations. The allocation of funds is based on multi-annualprogramming documents Operational Programmes.

IPA Component III supports projects in the environmental and transportsectors, and programmes which promote regional competitiveness anddevelopment while serving as a predecessor to the European RegionalDevelopment Fund (ERDF) and the Cohesion Fund.

IPA Component IV supports projects aimed at promoting employment,education/training and social inclusion, while serving as a predecessor to theEuropean Social Fund (ESF).

IPA Component V: Rural Development: emulates post-accession RuralDevelopment programmes by financing rural development-type measures,similar in nature to these programmes, but smaller in scale.

Potential candidate countries can receive assistance through Components I and

II, while Components III, IV and V are open to EU candidate countries. Nevertheless,

assistance under Component I may also be provided through measures and actions

of a similar nature as those foreseen under the regional, human resources and rural

development Components, including investment-type operations.

The IPA was presented by the Commission to the European Parliament and the EU Council. The IPA Council Regulation (EC) No.1085/2006 was adopted on 17 July 2006. The Commission Regulation (EU) No. 80/2010 amending regulation (EC) No. 718/2007Implementing Council regulation (EC) No. 1085/2006 has been adopted. See Annex IPA Budget and footnote 9 of this Manual.


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IPA strategic framework

Assistance under the IPA has to be provided in accordance with the general EU policyframework for pre-accession defined by the European and Accession Partnerships,

and taking due account of the Reports and the Strategy Paper included in the annual

enlargement package of the Commission. The Multi-Annual Planning Document

(MIPD)is the strategic document for the IPA. It applies for a multi-year rolling period,

with annual reviews.

The IPA Strategic Coherence Framework (SCF) is the umbrella strategy documentregulating priorities in the framework of IPA Components III and IV in the area

of infrastructure investments in environmental protection and transport, and

subsequently in developing the economy and competitiveness and in employment

and education.

Particular country priorities are elaborated in detail at the level of sector-specific

implementation documents, Operational Programs (OPs), written by nationaloperating structures as multi-year programming sectoral documents, produced in

close cooperation with EU Commission services and relevant stakeholders. Individual

state administration bodies were given responsibility for their preparation in

accordance with their sec tor-specific competences.

Those documents set out a hierarchy of objectives, indicators and guidelines on howto progress from strategy to operations (projects) and how to provide outputs andachieve the projects required impacts.

IPA financial framework

The strategic planning also entails multi-annual indicative planning documents.

These are established for each beneficiary country in accordance with the broad

political guidelines set out in the Commissions enlargement package, which includesa Multi-annual Indicative Financial Framework (MIFF).

The MIFF presents the Commissions intentions for the allocation of funds for the

coming years, broken down by beneficiary and by Component, on the basis of

the needs and the administrative and management capacity of each country and

compliance with the accession criteria.

Management of IPA funds

As regards action on the ground, the European Commission adopts annual or multi-

annual programsbased on the indicative planning documents. These programs are

implemented following four management methods: centralised, decentralised, joint

or shared.

In general, with centralised management, the Commission is the contracting authority

and takes decisions for the beneficiary country; with decentralised management,

the beneficiary country acts as the contracting authority and takes decisions on theprocurement and award of contracts, and refers them to the Commission for approval.

The IPA Implementing Regulation envisages that decentralised management of EU

funds by the beneficiary country will apply to the implementation of IPA assistance.

In the case of potential candidate countries, centralised management is permitted for

Components I and II only.

As a potential candidate country, Serbia is striving to achieve conferral of management

based on accreditation of the Decentralised Implementation System (DIS) as a

prerequisite for signing the Financing Agreements for IPA Components III, IV and V,

covering at least tendering, contracting a nd payments.

IPA institutional framework and main beneficiaries

A Directorate-General (DG)is a branch of EU administration dedicated to a specific

field of expertise and headed by a European Commissioner. The Directorates-General

are divided into four groups: Policy DGs, External Relations DGs, General Service DGs

and Internal Service DGs. The following DGs are relevant to the IPA:

Directorate-General for Enlargement one of the external-relations DGs, it isresponsible for the EU enlargement process.

Directorate-General for Regional Policy (DG REGIO) one of the policy DGs, it isresponsible for EU measures to assist in the economic and social development ofthe less-favoured regions of the European Union. IPA Component III (RegionalDevelopment) is under the responsibility of DG Regio (IPA/ISPA unit).

Directorate-General for Employment, Social Affairs and Equal Opportunities(DG EMPEL) also one of the policy DGs, it has the task of contributing to thedevelopment of a modern, innovative and sustainable European social model,with more and better jobs in an inclusive society based on equal opportunities.IPA Component IV (Human Resources Development) is under its responsibility.

Directorate-General for Development and Cooperation EuropeAid (DGDEVCVO) this combines (since January 2010, two former DGS, DG Developmentand DG EuropeAid, in order to provide a single contact point for stakeholdersboth inside and outside the EU. It plays a leading role in the international debateon development involving donors, international institutions, developing andemerging countries and non-state actors. EuropeAid website:http://ec.europa.eu/europeaid/who/index_en.htm

In Serbia, the main structures and authorities involved in managing and implementing

IPA funding under the DIS are:

National IPA Coordinator (NIPAC) Strategic Coordinator for Components III and IV (SCO) Competent Accrediting Officer (CAO) National Authorising Officer (NAO)


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National Fund (NF) Operating Structure (OS) Audit Authority (AA)

Table 1.1: IPA structures and authorities in Serbia, with reference to current

state of affairs

Body/authority Description Situation in Serbia

National IPA

C o o r d i n a t o r(NIPAC)

High-ranking official in

the government or stateadministration of thebeneficiary country, whoensures the overall co-ordination of assistanceunder the IPA Regulation

The Government of Serbia appointed Deputy

Prime Minister for EU Integration, Boidareli, to be the National IPA Coordinator(NIPAC).

NIPACs operating activities are carried out byNIPACs technical secretariat or the EuropeanIntegration Office.

Strategic

Coordinator

Entity within the stateadministration of thebeneficiary country, placedunder the responsibilityof the NIPAC, and with nodirect involvement in theimplementation of therelevant IPA Components.

The function of the Strategic Coordinatoris performed by the European IntegrationOffice.

Ognjen Miri, Deputy Director of the EuropeanIntegration Office and Coordinator for EUFunds, was designated as the responsibleperson for carrying out the activities of theStrategic Coordinator.

C o m p e t e n tA c c r e d i t i n g

Officer (CAO)

High-ranking official inthe government or state

administration of thebeneficiary country

In accordance with Government Conclusion19-3192/2008 of 21 August 2008, the function

of the CAO was performed by the formerMinister for Finance, Diana Dragutinovi.The new CAO will be appointed by t he newGovernment of Serbia. The CAO is responsiblefor issuance, monitoring and suspension orwithdrawal of accreditation for the NationalAuthorising Officer and the National Fund.

N a t i o n a lA u t h o r i s i n gOfficer (NAO)

High-ranking official inthe government or stateadministration of thebeneficiary country

The Government of Serbia appointed StateSecretary in the Ministry of Finance, VukDjokovi, to be the NAO.

National Fund(NF)

Body located in a state-levelministry of the beneficiarycountry, with centralbudgetary competence

The National Fund (both as a Treasury functionand as the NAO Services) was establisheddirectly under the NAO as a new Departmentin the Ministry of Finance.

O p e r a t i n gStructures (OS)

Body or a collection of bodieswithin the administration ofthe Operational Programmes(OPs)

The operating struc ture is set up for each IPAComponent separately:

The Implementing Agency for IPA ComponentsI, II, III, IV is the Department for Contracting andFinancing of EU Funded Projects) within theMinistry of Finance under the overall supervisionof the NAO. The Assistant Minister, ArletaManojlovi, in charge of the ImplementingAgency for IPA Components I, II, III, IV, wasappointed as Programme Authorising Officer.

Within the line ministries, relevant internalunits for programming and implementation(PIU) have been established, headed by theSenior Programme Officer (SPO).

IPA I and IPA II

The Sector for Cross-Border and TransnationalCooperation Programmes in SEIO wasdesignated as the OS within the transitionalsystem of managing cross-border cooperationprogrammes. SEIO is the national authorityfor managing and implementing cross-bordercooperation programmes within the systemof shared responsibilities. The Departmentfor Contracting and Financing of EU FundedProjects carriees out the activities of first-degreecontrol. Ognjen Miri, Deputy Director andCoordinator for EU Funds, was appointed asresponsible person for performing the activities

of the Operating Structure and the NationalAuthority.

IPA III and IPA IV

The Department for Contracting andFinancing of EU Funded Projects wasdesignated as the authority responsible for theOP of IPA Component III. The Department forEmployment within the Ministry of Economyand Regional Development was designatedas the Authority Responsible for the OP ofComponent IV.

In addition to the Ministry of Finance, theOS for IPA Component III consists of theauthorities responsible for infrastructure,energy, environment, mining, spatial planning,agriculture, forestry, water management,economy, regional development, science andtechnological development.

Besides the Ministry of Economy and RegionalDevelopment and the Ministry of Finance,the OS for IPA Component IV consists of theauthorities responsible for education, labourand social policy.

Audit Authority Functionally independentbody from all actors in themanagement and controlsystem, designated by thebeneficiary country

New amendments to the systematisation ofthe Ministry of Finance (under preparation)will also include the formal appointmentof the Audit Authority. Consultations areongoing on the positions, staffing andtraining, to comply with the requirements ofthe IPA Implementing Regulation.


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In addition to the main bodies, the IPA Implementing Regulation stipulates two levels

of Monitoring Committee, in order to provide coherence and coordination in the

implementation of IPA and engage all relevant actors:

IPA Monitoring Committee (IPA MC) Sectoral Monitoring Committees (SMCs)

How the private sector can use allocated EU/IPA funds

With a GDP for 2008 and 2009 estimated at 33,418m and 29,967m respectively,andGDP per capita of 4,546 and 4,093 respectively, Serbia i s a middle-income economy.

The GDP growth rate rose in 20052007 but declined to 0.0% in 20082009. However,

in 20102012, GDP growth is expected to be between 1.5% and 2% according to EU,

World Bank and International Monetary Fund (IMF) estimations.

The economy has a high unemployment rate 16.1% in 2009, up to 19.2% in October

2010 and an unfavourable trade deficit.

IPA and other EU funds offer a variety of opportunities for the growing Serbian

economy and for Serbian private companies to participate in business opportunities

in the region. Different types of companies in various fields of activities can benefit

from IPA funds: consulting, service providers, equipment suppliers, engineering

companies, research and development companies, etc. Participation in the award ofIPA procurement (service, supply and works tenders) or grant contracts is open to allnatural and legal persons and international organisations. As such, natural persons

must be nationals of, or legal persons established in:

a member state of the EU or the European Economic Area (EEA) a country that is a beneficiary of the IPA, or a country that is a beneficiary of the European Neighbourhood and Partnership

Instrument (ENPI)

Participation is also open to natural and legal persons from countries other than

those mentioned above where these countries enjoy reciprocal access to EU external

assistance.

Important:

In practice, the IPA brings new business opportunities to Serbia, but Serbian companiescan participate in IPA-financed projects abroad, in other IPA beneficiary countries.

HOW TO APPLY

The IPA funds are disbursed through programmes and projects that contribute to therealisation of national strategic priorities and EU policies. Private companies can apply

for participation in different kinds of projects in which the required tasks cover a wide

variety of subjects. If a company is a suitable candidate and successful in its bid, it will

be invited to sign a contract with the contracting authorities.

Type of contracts relevant to private sector

The types of contract that may offer opportunities to private companies are:

Services(technical assistance, studies, provision of know-how and training) Supplies(equipment and materials) Works(infrastructure and other engineering works). Secondary procurement(projects implemented through grant schemes)

The calls for tenders are announced by the EU Delegation and relevant Serbiangovernment institutions. Participation in the tenders is open on equal terms to all

qualified natural and legal persons.

Tender procedures for all ki nd of contracts established by the European Commission

for procurement under the IPA programme are consolidated in the Practical Guide

to Contract procedures for EU external actions (PRAG). It is essential that privateentities that want to participate in announced tenders become familiar with PRAG:

http://ec.europa.eu/europeaid/work/procedures/implementation/practical_guide/index_en.htm

PRAG is the sole working tool which explains the contracting procedures applying

to all EU external aid contracts financed from the EU budget. Therefore, PRAG must

be followed in IPA contracting procedures. There are strict rules governing the way inwhich contracts are awarded. These help to ensure that suitably qualified contractors

are chosen without bias and that the best value for money is obtained, with the full

transparency appropriate to the use of public funds.

Important:

PRAG rules define the eligibility criteria for the bidders.These rules are: the rule onnationality, the rule on origin of goods, and the rules describing grounds for exclusion.

According to the Statistical Office of the Republic of Serbia: hhttp://webrzs.stat.gov.rs/axd/en/ Idem At present, the contracting parties to the EEA Agreement are the EU and its 27 members plus Iceland, Liechtenstein and Norway.While Switzerland is not in the EEA, Swiss nationals have the same rights as EEA nationals. The beneficiary countries are divided into two categories, depending on their status as either candidate countries under theaccession process or potential candidates under the Stabilisation and Association process, namely: candidate countries(AnnexI to the Regulation): the former Yugoslav Republic of Macedonia, Croatia, Iceland, Montenegro, Turkey, andpotential candidatecountriesas defined at the Santa Maria da Feira European Council of 20 June 2000 (Annex II to the Regulation): Albania, Bosnia-Herzegovina, and Serbia including Kosovo as defined by the United Nations Security Council Resolution 1244/1999. This instrument has a budget of approximately 12bn; it covers European Community aid to Algeria, Armenia, Azerbaijan,Belarus, Egypt, Georgia, Israel, Jordan, Lebanon, Libya, Moldova, Morocco, the Palestinian Authority, Russia, Syria, Tunisia, andUkraine for the period 20072013.


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Table 1.2: The PRAG eligibility rules

Rule Details

The rule onnationality

This rule stipulates that participation in the procurement and grantprocedures is open on equal terms to all natural and legal personsfrom:

a) a member state of the European Union

b) a member state of the European Economic Area

c) an official candidate country / potential candidate country that is abeneficiary of the IPA

d) a country that is a direct beneficiary of the aid allocated through thecorresponding basic act

e) in the case of procurement and grants financed under a thematicprogramme, a developing country as specified by the OECDDevelopment Assistance Committee

f) as the case may be, another third country

g) those countries that are beneficiaries of a decision establishingreciprocal access to external aid

h) international organizations

The rule on originof goods

All goods (supplies and materials) purchased under a contract financedunder an EU instrument must originate from the EU or an eligible country

Grounds forexclusion

Candidates / tenderers / applicants may be excluded from participation inprocurement procedures in a number of situations defined in PRAG. Forall contracts and at all stages of procurement procedure, the contractingauthority may require evidence that the tenderer/applicant respects locallegislation on a number of points. They must produce proof that they arenot bankrupt or being wound up, that the management has not beenconvicted of any offence or professional misconduct, that they fulfil theirobligations under local employment law or in regard to payment of tax,that they have not been investigated for fraud, etc.

For EU services, supply and works in IPA countries, PRAG lays down different

procurement procedures,each allowing for a different degree of competition.

Table 1.3: PRAG procurement procedures for ser vices, supply and works

Single tender The contracting authority may award contracts to a value of 10,000 or lesson the basis of a single tender.

Frameworkcontracts (FCs)

FCs are applicable to services under 200,000, which implies a relativelysmall amount / duration of expert ise to be provided. The expertise solicitedunder this procedure may be delivered to the beneficiaries relativelyquickly.

Competitivenegotiatedtenderprocedure

In negotiated procedure, the contracting authority directly inviteseconomic operators to submit offers. If it considers that the offers can beimproved, negotiations can be carried out, on equal terms for all tenderers.

At the end of the procedure, the contracting authority selects the technic allycompliant tender which offers t he best value for money.

(Local orinternational)Open tenderprocedure

Open procedure is by far the most commonly used and representsmore than half of the contracts signed. Terms of reference / technicalspecifications are immediately accessible to all potential candidates. Anynatural or legal person wishing to tender may apply.

(International)Restricted tenderprocedure

All economic operators may ask to take part (by submitting an Expressionof Interest), but only shortlisted candidates evaluated according to theexclusion and selection criteria will receive the terms of reference and maysubmit a tender.

The rules for applying standard procurement procedures are summarised in Table 1.4.

The financial thresholds given a re based on the maximum budget for the contract

in question (including any co-financing). Where contracts are subdivided in lots, the

value of each lot shall be taken into account when calculating the overall threshold.

Table 1.4: Rules for applying standard procurement procedures

Type ofcontracting

PRAG Thresholds () and Relevant Procurement Procedure

SER VI CE S 2 00 ,0 00

Internationalrestricted tenderprocedure

< 200,000 but > 10,000

Framework contracts or competitivenegotiated procedure

10,000

Competitivenegotiatedprocedure orsingle tenderSUP PL IE S 1 50 ,0 00

International opentender procedure

< 150,000 but 60,000

Local open tender

procedure

< 60,000 but >10,000

Competitivenegotiated

procedureWORKS 5,000,000

International opentender procedure or

internationalrestricted tenderprocedure

< 5,000,000 but 300,000

Local open tender

procedure

< 300,000 but >10,000

Competitivenegotiatedprocedure

PRAG procurement thresholds and procurement procedures are not applicable to grants, which have a separate definition forprocedures. See section Grants of this guide.


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In addition, a number of governing principles apply to all EU funding under the EU

public procurement legislationenabling contracts to be awarded through competitivetendering. Regardless of procedure, the contracting authority must ensure that operationsare transparent and guarantee that the desired quality of procurement is obtained at the

best possible price. The principles are listed in Table 1.5.

Table 1.5: EU procurement principles and practice

EU procurementprinciple Principle as implemented in practice

Fair competition No bidder must be given preferential treatment during theprocurement procedure.

Transparency The tendering procedure must be publicised widely and in an easilyaccessible way.

Standard documents All tendering documents must use the same template and format.

Equal treatment The contract award must be completely impartial and involve nopreference for any candidate.

Non-discrimination Legitimate tenderers who offer guarantees equivalent tointernationally accepted standards and ensure compliance with theprovisions of sound financial management cannot be discriminatedagainst based on any criteria.

Best value for money Where the quality of technical offers is the same, the contract mustbe awarded to the cheapest compliant one in a case of supply andworks tenders and to the economically most advantageous tender inthe case of services tenders.

No retroactive awards Contracts are considered to take effect from the date of signature ofthe last signatory. No disbursements can be effected and no goodsand services provided before the contract is signed.

Where to look for funding opportunities

All EU (IPA) tenders are public. Contractors should look regularly at the Official Journalof the European Union and the EuropeAid website where Contract Forecasts for

Services, Supply and Works contracts are published, together with full instructions on

how to apply and participate in the announced tenders:

EuropeAid Calls for proposals & procurement notices:

https://webgate.ec.europa.eu/europeaid/online-services/index.cfm?do=publi.welcome

A Contract Forecastis a public document setting out the specific characteristics ofthe particular tender. It must be published at least 30 days before the publicationof the full tender dossier. The contract forecast gives a brief indication of thesubject, content and value of the contracts concerned. Since they are forecasts,the document does not bind the contracting authority to finance the contractsproposed so the companies are not expected to submit application forms at thisstage.

Important: Preparation of Proposals

When preparing a proposal (bid), particular attention should be paid to:

respecting the deadlines

preparing and submitting a complete set of documentation

using the correct templates

ensuring that documents are well translated

Selection and award criteria

Regardless of the type of procedure used, the following criteria are always applied:

Selection criteria Award criteria

Selection criteria: The contracting authorities will draw up clear and non-discriminatory selection criteria in every procurement procedure. The purpose is toassess that the tenderer has sufficient financial, economic, technical and professional

capacity to implement the tasks of the contract. The chosen selection criteria may not

go beyond the scope of the contract and must take account of the legitimate interests

of the tenderer, relating in particular to protecting the firms technical and business

secrets.

In practice, the tenderer will be asked to submit information about their economic,financial, professional and technical capacity according to the selection criteria

specified in the tender documents. Companies must also fulfil all the reference

criteria, providing references to prove their professional and technical status. For

example, the following may be requested:

Details of annual turnover, in order to establish the economic and financialcapacity of the tenderer;

Number of staff, and number of previous projects, in order to establish technicalcapacity; Information about, for example, the main services provided and suppliesdelivered in the past three years, and information about works carried out in thelast five years, as evidence of technical experience

A company must fulfil all the selection criteria or it may be excluded from the

evaluation procedure. Note that companies often do not apply alone but may group

in a consortium.

See http://ec.europa.eu/internal_market/publicprocurement/legislation_en.htm


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A consortium is a grouping of eligible natural and legal persons (companies) from

different or one country which submits a tender or application to a tender procedure.

It may be a permanent, legally established grouping or a grouping constitutedinformally for a specific tender procedure. If contracted, all members of a consortium

(i.e. the leader and all other partners) are jointly liable to the contracting authority.

In procurement procedures for service and supply contracts, the selection criteria are

applied to the consortium as a whole. This is applicable also to works tenders unless

otherwise stipulated.

Important:

A consortium is usually established at an early stage of the tender procedure. Thelead company of the consortium is usually in charge of implementing the project.From the point of view of good business practice, a written agreement betweenthe members of the consortium (a Consortium Agreement) should be signedbefore submitting any proposal.

Award criteria: Contracts are awarded on the basis of the award criteria established for

the call for tender in one of the following two ways:

under the automatic procurement procedure, in which case the contract isawarded to the tender that, being in order and satisfying the conditions laiddown, quotes the lowest price

under the best-value-for-money procedure (i.e. the most economicallyadvantageous tender)

Important:

Companies that want to participate in EU tenders should start to build their businessreferences and the know-how that will make them sufficiently competitive (eitheralone or in a consortium) not only to be shortlisted after submitting expressionsof interests, but also to win an increasing number of tenders.

Who evaluates tenders?

Tenders are opened and evaluated by an Evaluation Committeeappointed formally

by the contracting authority (EU Delegation in Serbia or Contracting Authority in

charge), comprising a non-voting chairperson, a non-voting secretary and an unevennumber of voting members (minimum of three for all procedures except for works

tenders above 5 million, where a minimum of five are required).

Every member must have a reasonable command of the language in which the

tenders are submitted and possess the technical and administrative capacities

necessary to give an informed opinion on the tenders. The identity of the evaluators

should be kept confidential.

Terms of Reference and Technical Specifications

For all tenders, the contracting authority prepares the Terms of Reference(for servicecontracts) and Technical Specifications(for supply and works contracts). Their purpose

is to give instructions and guidance to contractors at the tendering stage about the

nature of the tender they will need to submit, and also to serve as the contractors

mandate during project implementation. They are part of the Tender Dossier and

become an annex of the eventually awarded contract.

The Terms of Reference and the Technical Specifications must afford equal access forcandidates and should not create unjustified obstacles to competitive tendering. They

should be clear and non-discriminatory and be in proportion to the project and the

allocated budget.

The Technical Specifications must not refer to particular brands or be too specific, thus

encouraging competition.

While there is equal access for all candidates, it is up to the company to decide if it

can comply with all the administrative and technical criteria of the tender and if the

proposed budget is sufficient to cover the scope of work required.

The Terms of Reference and the Technical Specifications are integral parts of a contract,constituting a legal obligation of the contractor once the tender is awarded.

Important: Preparation of offers and common mistakes

Several common mistakes made by tenderers can jeopardise their proposals andeventually exclude them from the tender procedure.

According to PRAG, infringement of rules may lead to the rejection of the tender.The tender must be submitted in accordance with the instructions to tenderers.

When preparing offers, particular attention should be paid to avoiding relativelysimple mistakes such as: not respecting deadlines, poor use of templates, omissionof signatures, lack of information on necessary guarantees, etc.

It is essential to read carefully the Terms or Reference / Technical Specificationswhen preparing offers. Candidates should prepare their offers so that they reflectas closely as possible the needs of the contracting authority. All the criteriafor evaluation are public, and provided in Tender Documentation; therefore,candidates should seek to optimise their evaluation by fulfilling these criteria asfully as possible.

SERVICE CONTRACTS

Technical and economic support in the course of EU cooperation policy involves

recourse to outside know-how on the basis of service contracts,most of them forstudies or technical assistance.

Study contracts include studies for the identification and preparation of projects,feasibility studies, economic and market studies, technical studies, evaluations and

Types of service contracts: Global price, Fee-based


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audits. They generally specify an outcome, i.e., the contractor must provide a parti cular

product; the technical and operational means by which it achieves the specified

outcome are irrelevant. These contracts are often lump-sum (global-price)contractsand the contractor will be paid only if the specified outcome is achieved.

Technical assistance contracts(fee-based) are used where a service provider is called

on to play an advisory role, to manage or supervise a project, or to provide the experts

specified in the contract.

For a fee-based service contract, the Terms of Reference (ToR) include the allocatedbudget headings.The services are provided on the basis of a fixed daily fee rate forthe days the experts work under the contract. The budget consists of a fixed provision

for incidental expenditure which covers all actual expenses incurred by the consultant

which are not included in the fees. The section for incidental expenditure should specify

the type of expenditure which could be included in the expenditure verification of

the contract. The ToR also specify a provision for expenditure verification. The budgets

for incidental expenditures and expenditure verification are fixed by the contractingauthority and must correspond to the requirements of the ToR and be carefully

estimated.

Experts For service contracts, experts are the key element for good implementation

of projects. There are different types of experts: short-term, long-term, junior, senior.

An expert can also be qualified as a key expert/team leader or as a non-key expert. (Aprevious distinction between local and international experts has been abolished.) Keyexpert CVs are submitted with the technical offer for the selection procedures. The

scoring of the key expert CVs is crucial for winning a project.

Procurement notice:All service contracts of 200,000 or more must be the subject

of a restricted procedure. The European Commission is responsible for publishing the

notice in the Official Journal of the European Union and on the EuropeAid website.

Companies that want to participate in the tender should submit an Expression ofInterest (EoI). The minimum deadline for submitting EoIs is 30 days from the date of

publication of the procurement notice.

Service contracts content of the Tender Dossier

In general terms, a Service Tender Dossier includes the following content:

Table 1.6: Content of a Ser vice Tender Dossier

Instructionsfor Tenderers

The document defines the rules for tender participation and providesadministrative information, including a list of the administrative and financialreferences required, which are part of the s election and award criteria.

All the provisions and information that tenderers need to present theirtenders are included: procedures to follow, documents to provide, casesof non-compliance, award criteria and their weightings, stipulations onsubcontracting, etc.

Draft Contract

Agreementand SpecialConditions ofContract, withannexes

The contract is a legally enforceable agreement between two or more parties,

where the mutual obligations of the contracting authority and future serviceprovider are defined.

The Draft Contract Agreement and Special Conditions contain informationrelated to provision of services. The contract stipulates:

The Consultant will carry out the services on the terms and conditions setout in this contract, which comprises, in order of precedence, these specialconditions (Special Conditions) and the following annexes:

Annex I: General Conditions for service contracts financed by the EU Annex II: Terms of Reference [including clarifications before the deadline

for submission of tenders and minutes from the information meeting/site visit]

Annex III: Organisation and methodology [including clarifications fromthe tenderer provided during tender evaluation]

Annex IV: Key experts Annex V: Budget [breakdown for fee-based contracts only] Annex VI: Forms and other relevant documents Annex VII: Report of factual findings and ToR for expenditure verification

Terms ofReference(ToR)

The ToR is the most important document for Service Contracts as it defines thecontractors tasks and duties and objectives to achieve. The purpose of ToR isto give instructions and guidance to consultants at the tendering stage aboutthe nature of the tender they will need to submit. It also:

serves as the consultants mandate during project implementation becomes an annex of the eventual contract awarded as a result of the

tender

Otherinformation

Shortlist notice, administrative compliance grid, evaluation grid, tendersubmission form, etc

See: http://ec.europa.eu/europeaid/work/procedures/implementation/services/index_en.htm

Important: Envelope System

When preparing an offer, the bidder should:

Prepare and send the technical offer in Envelope A and the financial offer in

(separate) Envelope B both envelopes should be sealed and labelled properly

Understand fully the scoring system

Fulfil all administrative criteria ( e.g. relevant documents have been signed)

Provide sufficient information on the guarantee (if required) this can take time to

obtain

For fee-based contracts, the envelope B (financial offer) contain 3 lines: fee, incidentals and verification expenditure.


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Service contracts the evaluation process

Establishment of shortlists: From the companies that have provided expressions ofinterest, the Evaluation Committee will draw up a shortlist of candidates that consists

of a maximum of eight consortia / individual companies. Shortlisted candidates will

receive a letter of invitation to tender and the tender dossier. At the same time, the

final shortlist must be published on the EuropeAid website.

Evaluation procedure for service contracts: The Evaluation Committee will usethe administrative compliance grid included in the Tender Dossier to record theadministrative compliance of each of the tenders. (Companies submitting bids should

pay attention to the provided grids to ensure they clearly fulfil the criteria.)

In service contracts, best value for money is interpreted as the economically most

advantageous proposal.The criteria cover both the technical quality and price of the

tender. According to PRAG, while the Committee examines the technical offers, the

financial offers remain sealed.

Best value for money is established by weighing technical quality against price,

normally on an 80/20 basis. This is done by multiplying the scores awarded to the

technical offers by 0.80 and the scores awarded to the financial offers by 0.20. Full

details are provided in the tender dossier.

The shortlisted company must send two separate envelopes. According to PRAG,tenders must be submitted in accordance with the double envelope system, i.e., in

an outer parcel or envelope containingtwo separate, sealed envelopes,one bearing

the wordsEnvelope A technical offerand the other Envelope B financial offer.

Envelope A contains a technical offer with a methodology and key expert CVs (all parts

of the tender other than the financial offer must be submitted in Envelope A).

Service contracts Framework Contracts

Services with a value of more than 10,000 but less than 200,000 must be contracted

using the Framework Beneficiaries 2009 (FWC BENEF 2009) which runs until 15

September 2011 and may be extended until 15 September 2013.

Important: Framework Contracts

These are of particular interest as the bidding process (while restricted to a numberof Lots) is simple and fast. The contracts are short (less than one year) and small(less than 200,000). Framework contracts are divided into different thematic lots.Detailed information about one example, FWC BENEF 2009, can be found on theEuropeAid FWC website.

For sectors not covered by the Framework Contract or where such a procedure has

been unsuccessful or impossible, the competitive negotiated procedure must be used.

As it is a Multiple Framework Contract, the specific contract award is based on a

competition. A request must be sent to three Framework contractors of the same

lot. This request can only be issued during the period of validity of the FrameworkContract. The competition between the three framework contractors must respect the

principles of transparency, proportionality, equal treatment, non-discrimination and

sound competition.

SUPPLY CONTRACTS

Supply contracts cover the purchase, leasing, rental or hire purchase, with or withoutoption to buy, of products. A contract for the supply of products and for siting and

installation is considered to be a supply contract. During the delivery of the equipment,

installation and maintenance of the product could be required.

Supply contracts content of the Tender Dossier

Publication of procurement notice: In addition to forecasts, all supply contracts ofEUR 150,000 or more must also be the subject of a procurement notice. The European

Commission (acting on behalf of the contracting authority) is responsible for publishing

the notice in the Official Journal of the European Union and on the EuropeAid website.

If the procurement notice is published locally, the contracting authority must arrange

local publication directly.

The procurement notice must provide would-be suppliers with the information theyneed to determine their capacity to fulfil the contract in question.

In general terms, the Supply Tender Dossier has the following content:


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Table 1.7: Content of a Supply Tender Dossier

Instructions toTenderers

The document defines the rules for tender participation and providesadministrative information, including a list of the administrative and financialreferences required, which are part of the selection and award criteria. Itspecifies the type of supply contract (for all kind of equipment, includingcomputers, technical equipment, etc).

The instructions contain information related to:

1 Supplies to be provided; 2 Timetable; 3 Deadline for submission of tenders;4 Participation; 5 Origin; 6 Type of contract; 7 Currency; 8 Lots; 9 Period of

validity; 10 Language of offers; 11 Submission of tenders; 12 Content oftenders; 13 Pricing; 14 Additional information before deadline for submissionof tenders; 15 Clarification about meeting/site visit; 16 Alteration or withdrawalof tenders; 17 Costs of preparing tenders; 18 Ownership of tenders; 19 Jointventure or consortium; 20 Opening of tenders; 21 Evaluation of tenders; 22Signature of contract and performance guarantee; 23 Tender guarantee; 24Ethics clauses; 25 Cancellation of tender procedure; 26 Appeals

Draft ContractAgreementand SpecialConditions ofContract, withannexes

The contract is a legally enforceable agreement between two or more parties,where the mutual obligations of the contracting authority and future serviceprovider are defined.

These conditions amplify and supplement, if necessary, the General Conditionsgoverning the contract. Unless the Special Conditions provide otherwise, theGeneral Conditions remain fully applicable. The numbering of the articlesof the Special Conditions is not consecutive but follows the numbering ofthe articles of the General Conditions. In exceptional cases, and with theauthorisation of the competent Commission departments, other clauses maybe introduced to cover specific situations

TechnicalSpecifications

The Technical Specifications are the key elements of the tender package. Thedetailed description and technical characteristics of the goods are given,together with conditions for delivery (installation of equipment), warranty, andmaintenance conditions and training, if needed. The technical specificationsdescribe:

a) the quality levelsb) environmental performance (e.g. t he specifications, where possible,

should take into consideration the latest developments in the area)c) design requirements (including accessibility for people with disabilities

and environmental aspects, in line with the latest developments in thearea)

d) the levels and procedures of conformity assessment, includingenvironmental aspects

e) fitness for usef) technical details including, for supplies, the sales name and user

instructions, and, for all contracts, terminology, symbols, testing and testmethods, packaging, marking and labelling (including environmental

labelling, e.g. on energy consumption), production procedures andmethods

Additionalinformation

Administrative compliance grid, evaluation grid, tender application form, etc

Supply contracts the evaluation process

The opening of the supply offers is public. The Evaluation Committee opens received

tenders, announces the companies that gave the offer and the offer of each company,

and verifies the receipt of guarantees.

Technical offer:This consists of a detailed description of s upply in accordance with the

technical specifications.

Financial offer:This includes the costs for supply and installation of the equipment,

a description of the training for using the equipment, the contract for warranty and

maintenance.

The technical evaluation consists of two phases:

1. Checking that the administrative requirements prescribed by the tender havebeen met

2. Checking that the technical offer satisfies the required specifications

Important: Supply Tender Compliance

The winning offer must:

Fulfil the formal requirements prescribed by the tender

Fulfil the minimum technical characteristics of the required goods

Be the cheapest compliant offer (and within the budget limit)

WORKS CONTRACTS

Works contracts cover either the execution or both the execution and design, bywhatever means, of a work corresponding to the requirements specified by the

contracting authority. A work means the outcome of building or civil engineering

works that is sufficient of itself to fulfil an economic or technical function.

Works contracts content of the Tender Dossier

Publication of procurement notice: As well as contract forecasts, all works contractsof 5 million or more must be the subject of an officially published procurement

notice. The European Commission (acting on behalf of the contracting authority) is

responsible for publishing the notice in the Official Journal of the European Union

and on the EuropeAid website. If the procurement notice is published locally, the

contracting authority must arrange local publication directly.

In general terms, the Works Tender Dossier has the following content:


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Table 1.8: Content of a Works Tender Dossier

Volume 1: Instructions to Tendererand Tender Forms

The document defines the rules for tender par ticipationand provides administrative information, including a list ofthe administrative and financial references required, whichare part of the selection and award criteria. It specifiesthe type of work contract (for all kind of works, includingbuildings, roads, bridges, infrastructure, etc).

The instructions contain information related to: GeneralInstructions (financing, participation), Tender documents,

Tender preparation, Submission of tenders, Opening andevaluation of tenders, Contract Award (Award criteria,Notification of award), Contract clarifications, Ethicsclauses, Appeals, etc.

Volume 2: Draft Contract andConditions

The contract is a legally enforceable agreement betweentwo or more parties, where the mutual obligations ofthe contracting authority and future service provider aredefined.

The conditions of contracts for works may vary dependingon their technical nature and on the financial andmanagerial objectives of the contracting authority.

The usual draft contrac t contains information related to:Preliminary provisions, Obligations of the contractingauthority, Obligation of the contractor, Commencementand delays, Materials and workmanship, Payments,Acceptance and defects liability, Breach of contract andtermination, Settlement of disputes, Final provisions.

Volume 3: Technical Specifications(TS) The TS indicate, where applicable, lot by lot, the exactnature and performance characteristics of the works. It isessential that the performance characteristics correspondwith the intended purpose. The purpose of the TS is todefine the required works precisely. The minimum qualitystandards, defined by the TS, will enable the EvaluationCommittee to determine which tenders are technicallycompliant. Unless warranted by the nature of the contract,the TS must not mention or describe products of a givenbrand or origin, thus favouring or excluding certainproducts.

Volume 4: Model Financial Bid(MFB)

The MFB defines the mode of payments to be establishedbetween the contracting authority and a contractorduring execution of the works.

Volume 5: Design Documents andDrawings

A list of drawings and all design documents (technicaldrawings)

The tender documents must clearly state whether a firm, non-revisable price mustbe quoted. A price revision clause might be justified; works contracts are commonlysubject to price revision. If that is the case, it is recommended that a price revision

formula, following the models established in the Special Conditions, be included.

Works contracts the evaluation process

The selection criteria concern the tenderers capacity to execute similar contracts, withparticular reference to works executed in recent years.

The selection procedure involves:

4. Eliminating tenderers who are ineligible5. Checking that the tenderers financial situation (financial and economic

capacity) is sound, as backed up: for example, by balance sheets and turnoverfor the previous three years, if specifically required in the tender dossier

6. Verifying the tenderers technical and professional capacities; for example,by looking at their average annual staffing levels, the size and professionalexperience of their management, main services performed, supplies deliveredand works carried out in the field in question in recent years

The criteria should be precise, non-discriminatory and not prejudicial to fair

competition. No criteria specified in the tender dossier can be modified during the

procedure. The technical evaluation will be based on the evaluation grid publishedin the tender dossier, which must not be modified in any way during the evaluation

process. Given the wide variety of works and their technical nature, the grid must be

individually developed for each tender in a yes/noformat to allow clear assessment of

whether or not the offer responds to the technical requirements of the tender dossier.

Important: Price

The sole award criterion applied to administratively and technically complianttenders is price or, in exceptional cases and after derogation by the relevantservices of the European Commission, the best value for money.

GRANTS

The Commission awards money in the form of grants in order to implement projects or

activities in relation to EU policies. These grants may be awarded within fields as diverse

as research, education, health, consumer protection, protection of the environment,

humanitarian aid, etc.

The grant beneficiaries are mainly private or public organisations, and exceptionallyindividuals, chosen by the European Commission for their capacity to implement theprojects concerned.

Since grants cover a diverse range of fields, the specific conditions that need to be

fulfilled vary from one field to another. It is therefore important to consult carefully the

rules of each grant programme. However, some basic principles a pply in every case:

Grants are a form of complementary financing. The EU does not finance projectsup to 100%; only projects taking place outside the EU may be financed in full.

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Grants enable a given operation to break even financially and should not lead toa profit for their beneficiaries

Grants cannot be awarded retroactively for actions already completed.

In addition, only one grant may be awarded for the same action per beneficiary.

Grants are not awarded on a case-by-case basis. Instead, they are subject to annual

programming. Before 31 March each year, the Commission departments that manage

grant programmes publish their annual work programme. The work programme fixesthe broad outlines of the grants envisaged over the year (area of activity, objectives,timetable, available budget, award conditions, etc). By consulting these work

programmes, you may identify the fields that interest you.

Subsequently, the Commission departments publish calls for proposals on their

internet sites; these invite candidates to present, within a given deadline, a proposal for

action that corresponds to the objectives pursued and fulfils the required conditions.

These calls for proposals can also be published in the Official Journal of the EuropeanUnion C series.

All applications are examined and evaluated on the basis of criteria that have clearly

been announced in the calls for proposals, while ensuring equal treatment; candidates

are individually informed of the final decision concerning their proposal.

In exceptional cases, grants are awarded directly to certain beneficiaries without acall for proposals. This may be due to their specific competences or characteristics

whereby they are the sole beneficiaries for certain actions (situations of monopoly)

or to the emergency nature of the action (humanitarian ai d in particular).

As grants are made with public money, the European Commission applies the principle

of transparency. Thus, by 30 June of each year, the Commission departments publish

on their internet sites the list of grants they awarded during the previous year, with theexception of those awarded in the form of scholarships to individuals.

The grant is expressed in terms of a percentage and a maximum amount of the eligible

costs of the action actually incurred by the beneficiary. The contribution may further

be limited by a percentage of the total accepted costs of the action.

There are strict rules governing the way in which grants are awarded. The award ofgrants is subject to the principles of programming, transparency and equal treatment.

An action eligible to receive grant funding must be clearly identified. No action may be

split for the purpose of evading compliance with the rules laid down in PRAG.

Important rules include those that define the eligibility criteria for the applicants.

As with procurement contracts, these are: the rule on nationality, the rule on origin of

goods, and the rule that describes grounds for exclusion.

Grants must be programmed by the contracting authority with clearly defined

objectives. The annual work programme must be published, by budget heading or

programme, on the internet site of the contracting authority (or a ny other appropriatemedia) and on the EuropeAid website as appropriate, following the PRAG template.

The availability of grants must be publicised widely and in a transparent and

easily accessible way. The work programme will be implemented through the

publication of calls for proposals. All grants awarded in the course of a financial year

are published annually, with due observance of the requirements of confidentialityand security.

The grant award process must be completelyimpartial(equal treatment). This means,

notably, that the proposals must be evaluated by an Evaluation Committee, with the

advice of assessors where appropriate, using the published eligibility and evaluation

(selection and award) criteria.

Grants the main steps and key documents

The Guidelines for Applicants(which include the application form and other annexes)

explain the purpose of theCall for Proposals,the rules on the eligibility of applicants

and partners, the types of action and costs which are eligible for financing, and the

evaluation (selection and award) criteria. The guidelines also contain instructions on

how to fill in the a pplication form, what to annex to it, and what procedures to follow forapplying. They outline the evaluation process that will follow (including an indicativetimetable) and the contractual conditions which will a pply to successful applicants.

The guidelines should set out clearly and in detail the objectives and priorities of the

call for proposals, and give particular attention to the eligibility criteria. The guidelines

as well as any modifications to them must be published. The information published

will become binding on the Evaluation Committee once the date for submission has

elapsed.

The application form to be completed by applicants comprises:

a concept note information about the action proposed, including its budget information about the applicant information about any partners

Call for proposals:Grants must be awarded following the publication of a call for

proposals, which is always published on the EuropeAid website. A call for proposals

must also be published locally where it is not organised by a service of the European

Commission headquarters.

Except in exceptional cases, calls for proposals must by default be restricted that is,

all applicants may ask to take part but only the applicants shortlisted (on the basis of

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a Concept Notein response to the published Guidelines for Applicants) will be invited

to submit a full proposal. Calls for proposals may be open only in exceptional cases.

Important: Publicity

To ensure the widest possible participation and the requisite transparency,Guidelines for Applicants are included with every Call for Proposals. This documentshould be read carefully; failure to comply with the basic conditions will normallyresult in disqualification or rejection, and a waste of effort by the bidding entities.

Grants the evaluation process

Eligibility criteria:The eligibility criteria determine the conditions for participating in

a call for proposals. These criteria are established with due regard for the objectives

of the action and comply with the principles of transparency and non-discrimination.

Evaluation criteria: selection and award

The evaluation criteria consist of selection and award criteria, all of which are defined

in the evaluation grids.

The selection criteria are used to assess the applicants financial and operationalcapacity to complete the proposed action. The applicant must have stable and

sufficient sources of funding to maintain activity throughout the period duringwhich the action is being carried out, and to participate, where appropriate, in itsfunding. Applicants and their partners must also have the necessary professionalcompetencies and qualifications to complete the proposed action.

The award criteria are used to assess the quality of proposals against the setobjectives and priorities, so that grants are awarded to the actions that maximisethe overall effectiveness of the call for proposals.

All eligibility and evaluation criteria specified in the call for proposals cannot be

changed in the course of the procedure. The criteria should be precise and non-discriminatory.

The minimum period between the date of publication of the Guidelines for

Applicants and the deadline for submission of proposals is 90 days.However, when

the maximum size of each grant to be awarded within the programme is less than

or equal to 100,000, the minimum period is 60 days. In exceptional cases, a shorterdeadline may be allowed as a derogation.

Evaluation process: The evaluation process starts with the receipt of the concept

notes/proposals by the contracting authority, and ends with the decision to award

grants to the selected applicants. The procedure includes the steps s et out in Table 1.9.

Table 1.9: The grant evaluation process

Receipt and registrationof proposals

Opening session andadministrative check

All proposals should be opened in an opening session at which theregistration details are checked and completed and the proposalsnumbered. The proposals that have met the deadline are t hen subjectto an administrative check as to whether they have responded yesto all the criteria mentioned in the checklist. Incomplete dossiersmay be disqualified from the evaluation process.

Evaluation of theconcept notes

The concept notes submitted by the deadline and that have passedthe administrative check will undergo an evaluation of the relevanceand design of the action on the basis of an evaluation grid.

Evaluation of theapplication form

The quality of the application forms must be assessed on the basisof the evaluation grid containing the selection and award criteria.Comments are made for each heading on the basis of the questionsand criteria used for that heading.

Verification of eligibility This assessment must be carried out using the declaration by theapplicant, the required supporting documents, and the criteria setout in the Guidelines for Applicants. Under no circumstances mayassessors or members of the Evaluation Committee change thisdeclaration. The committee must check:

Is the declaration by the applicant in conformity with thesupporting documents requested?

Are the applicant, the partners and the action eligible?

Conclusions of theEvaluation Committee

The Evaluation Committee wil l draw up its recommendations afterthe assessors have examined all t he proposals.

The report of the award decision covers the subject of the decision, the overall amountof the grant awarded, the approved evaluation report and, if appropriate, the grounds

for a decision by the contracting authority to depart from the recommendations made

by the Evaluation Committee in respect of a particular proposal.

Subject to the contracting authoritys legislation on access to documents, the entire

procedure, from the drawing-up of the call for proposals to the selection of successful

applicants, is confidential. The Evaluation Committees decisions are collective and itsdeliberations must remain secret. The committee members are bound to secrecy.

Opportunities in secondary procurement

Contracts related to procurements to be carried out by the grant beneficiaries are

called secondary procurement contracts.They should be implemented in accordancewith the PRAG principles of transparency, confidentiality, fair competition and equaltreatment, and should follow the instructions in the manuals prepared for the

particular grant programme.

Important:

By following existing grant schemes, private companies can find numerousopportunities for secondary procurement under supply and works contractsbeing implemented by grant beneficiaries using PRAG procedures.

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Ethics issues for all types of contracts

Companies are expected to respect a number of ethics standards, including:

Any attempt by a tenderer to obtain confidential information, enter into unlawfulagreements with competitors or influence the Evaluation Committee or thecontracting authority during the process of examining, clarifying, evaluating andcomparing tenders will lead to the rejection of its candidacy or tender.

A potential candidate or tenderer must declare that it is not subject to current

or potential conflict of interest, and that it has no disqualifying links withother tenderers or parties involved in the project. Should either situation ariseduring performance of a contract, the contractor must immediately inform thecontracting authority.

Civil servants or other officials of the public administration of the beneficiarycountry, regardless of their administrative situation, must not be engaged asexperts by tenderers unless the prior approval of the contracting authority hasbeen obtained.

The contractor must at all times act impartially and as a faithful adviser inaccordance with the code of conduct of its profession. It must retain frommaking public statements about the project or services without the contractingauthoritys prior approval. It may not commit the contracting authority in any waywithout its prior written consent.

For the duration of the contract, the contractor and its staff must respect humanrights and undertake not to offend the political, cultural and religious mores ofthe beneficiary state.

The contractor may accept no payment connected with the contract other than thatprovided for therein. The contractor and its staff must not exercise any activity orreceive any advantage inconsistent with their obligations to the contracting authority.

The contractor and its staff are bound to maintain professional secrecy for theentire duration of the contract and after its completion. All reports and documentsdrawn up or received by the contractor during the performance of the contractare confidential.

The contract governs the contracting parties use of all reports and documentsdrawn up, received or presented by them during the performance of the contract.

The contractor must refrain from any relationship likely to compromise itsindependence or that of its staff. If the contractor ceases to be independent, thecontracting authority may, regardless of injury, terminate the contract withoutfurther notice and without the contractor having any claim to compensation.

CONCLUSION

Long-term benefits of mastering the process

The process of EU accession presents Serbia with big challenges, considering the need to

adjust to the acquiscommunautaire(the total body of EU legislation), but it also opens upthe opportunity to benefit from the financial resources of the European Union budget.

By joining the EU as a candidate country and eventually as a full member, Serbia will

have access to substantial financial resources to support developmental goals and

speed up the growth and development of the Serbian economy and society as a

whole. To use these opportunities in the best way, it is important to understand the

workings of the IPA and other available EU funds.

It is important to note that the principles and methods behind the procedures set out

in PRAG all based on EU legislation greatly resemble the principles and methods

of standard procurement that are applied within the EU in general and in its member

states. Thus, in the perspective of Serbia being a member of the EU in the near

future, the individual and institutional effort put into mastering the procurement

procedures is a long-term investment. All the skills acquired today will be valuablein years to come.

ANNEXES

Key documents

IPA Council Regulation (EC) No 1085/2006

Commission Regulation (EU) No. 80/2010 amending regulation (EC) No. 718/2007Implementing Council regulation (EC) No. 1085/2006

The Multi-Annual Indicative Financial Framework (MIFF) for the IPA

Multi-Annual Planning Document

Key links

Getaway to the European Union http://europa.eu/

European Commission http://ec.europa.eu/

European CommissionEnlargement

http://ec.europa.eu/enlargement

European Commission ExternalCooperation Programmes

http://ec.europa.eu/europeaid

E ur op ea n Pa rl ia me nt h tt p: // ww w. eu ro pa rl. eu ro pa .e u/

Council of Europe http://www.coe.int/

Delegation of the EuropeanUnion to the Republic of Serbia

http://www.europa.org.rs/

Serbian Government http://www.srbija.gov.rs/

EuropeAid tenders https://webgate.ec.europa.eu/europeaid/online-services/

index.cfm?do=publi.welcomePRAG http://ec.europa.eu/europeaid/work/procedures/

implementation/practical_guide/index_en.htm

SEIO http://www.seio.gov.rs/

Serbian Chamber of Commerce https://www.pks.rs

ISDACON http://www.evropa.gov.rs

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IPA budget

Multi-Annual Indicative Financial Framework (MIFF), Breakdown of the IPA AssistanceEnvelope for 20072013 into allocations by beneficiary and Component ()

Component 2007 2008 2009 2010 2011 2012 2013

SERBIA

Transition

Assistanceand InstitutionBuilding

181,496 179,441 182,552 186,207 189,957 193,802 203,101

Cross-borderCo-operation

8,204 11,459 12,248 11,752 11,923 12,097 11,631

TOTAL 189,700 190,900 194,800 197,958 201,880 205,899 214,732

CROATIA

TransitionAssistanceand InstitutionBuilding

49,612 45,374 45,601 39,483 39,959 40,872 38,514


9,688 14,726 15,899 15,601 15,869 16,143 16,698

RegionalDevelopment

45,050 47,600 49,700 56,800 58,200 59,348 62,000

HumanResourcesDevelopment

11,377 12,700 14,200 15,700 16,000 16,040 18,000

RuralDevelopment

25,500 25,600 25,800 26,000 26,500 27,268 27,700

TOTAL 141,227 146,000 151,200 153,585 156,528 159,671 162,912

FORMER YUGOSLAV REPUBLIC of MACEDONIA


41,642 41,122 39,311 36,917 28,803 28,207 27,941


4,158 4,078 4,372 4,468 5,125 5,183 5,243

RegionalDevelopment

7,400 12,300 20,800 29,400 39,300 42,300 51,800


3,200 6,000 7,100 8,400 8,800 10,380 11,200

RuralDevelopment

2,100 6,700 10,200 12,500 16,000 19,000 21,028

TOTAL 58,500 70,200 81,782 91,685 98,028 105,071 117,212

ICELAND


0 0 0 0 10,000 12,000 6,000

TOTAL 0 0 0 0 10,000 12,000 6,000

TURKEY

TransitionAssistanceand Institution

Building

256,703 256,125 239,551 217,810 228,621 233,900 238,326


2,097 2,875 3,049 3,090 9,779 9,975 10,174

RegionalDevelopment

167,500 173,800 182,700 238,100 293,400 367,805 378,000


50,200 52,900 55,600 63,400 77,600 89,930 96,000

RuralDevelopment

20,700 53,000 85,500 131,300 172,500 197,890 213,000

TOTAL 497,200 538,700 566,400 653,700 781,900 899,500 935,500

ALBANIA

TransitionAssistanceand Institution

Building

54,319 65,238 71,360 84,200 84,302 85,988 87,446


6,681 8,582 9,823 9,973 10,127 10,283 10,666

TOTAL 61,000 73,820 81,183 94,173 94,428 96,271 98,112

BOSNIA-HERZEGOVINA


58,136 69,855 83,900 100,688 102,682 104,673 106,870


3,964 4,945 5,208 4,696 4,746 4,797 4,942

TOTAL 62,100 74,800 89,108 105,385 107,428 109,471 111,812

MONTENEGRO

Transition

Assistanceand InstitutionBuilding

27,491 28,113 29,832 29,839 29,844 30,446 30,996


3,909 4,487 4,668 3,683 4,310 4,339 4,419

TOTAL 31,400 32,600 34,500 33,522 34,154 34,785 35,415

From Communication from the Commission to the Council and the European Parliament and the Council, Instrument for Pre-Accession (IPA) Revised Multi-Annual Indicative Financial Framework for 2011-20013; Brussels, 10 November 2010

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Component 2007 2008 2009 2010 2011 2012 2013

KOSOVO


68,300 184,700 106,100 66,100 65,828 67,071 70,712


0 0 0 1,200 2,872 2,929 2,988

TOTAL 68,300 184,700 106,100 67,300 68,700 70,000 73,700

TOTAL COUNTRY PROGRAMMES 1,109,427 1,311,720 1,305,073 1,397,307 1,553,047 1,692,668 1,755,395

MULTI-BENEFICIARY PROGRAMMES


129,571 137,737 188,868 141,707 186,269 156,860 177,845


0 0 0 4,922 5,293 5,672 6,059

SUPPORT EXPENDITURE

44,793 51,950 47,648 47,393 52,184 80,500 84,500

GRAND TOTAL 1,283,791 1,501,407 1,541,588 1,591,328 1,796,793 1,935,700 2,023,800

GLOSSARY

The Glossary explains in detail terms that are used in the main text of this Guide. Seealso Table 1.1, which defines IPA structures and authorities in Serbia.

Term Abbrv. Description

Accreditation In its str ict sense, this term refers to the formal acknowledgementthat a body or bodies meet the requirements contained inthe IPA Implementing Regulation for the administration of IPA

Components or IPA-financed programmes under decentralisedmanagement.

It is issued to the body or bodies in question