APPENDIX I EU PROCUREMENT AN INTRODUCTION

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1 APPENDIX I EU PROCUREMENT AN INTRODUCTION

2 EU Procurement An Introduction In accordance with EU Regulations, Procurements which exceed certain values must be advertised in Europe and must follow certain guidelines which are set down by the European Union. The Thresholds The EU has determined that Procurements above a certain monetary value are subject to EU Regulations. These thresholds are amended on a bi-annual basis, but currently stand as follows:- Works: 3,834m Supplies: 153,376 Services: 153,376 What are Works, Services and Supplies Contracts? Works Contracts building and engineering work including the installation of fixtures and fittings Service Contracts see schedule for full description Supplies Contracts purchase, lease, rental and hire of goods including electricity, natural and artificial substances. The European Union understand that certain procurements combine one or more of the divisions (Works, Services, Suppliers) e.g. a contract to build and run a interchange building, would be a combination of both works and services contracts. The European Union therefore have ruled that such contracts should be advertised in accordance with the regulation which covers the majority of the procurement e.g. if 50% or more of the value of the contract was to provide works then the contract will follow the works regulations. How do I value my contract? The European Union require that the contract be valued in its entirety e.g. a service contract for three years valued at 60, per year would be valued at 180, by the EU and would therefore be subject to EU Procurement Regulations. The EU also operate what are known as aggregation rules. These basically operate by valuing an organisations total procurement for a particular good or service over a set period of time e.g. if every month the PTE purchases separate orders of paper, the EU would consider the annual value of those purchases be aggregated together to discover the real value of the procurement. Similarly, if a

3 PTE purchases a number of vehicles over a 12 month period, the total value of the buses should be aggregated together to discover whether or not a EU process is required. The European Union is very keen to ensure that organisations do not artificially break up a contract in order to avoid compliance with the regulations. The European Tender Process Procurements which fall in the European Union regulations, may be tendered in one or four ways, these are as follows:- Open Procedure Restricted Procedure Negotiated Procedure Accelerated Procedure Of the four procedures, the most commonly utilised by the Executive are open procedure and restricted procedure. Each procedure is subject to a different timetable which must be adhered to. Open Procedure Under open procedure, a tender advert is placed with OJEU (Official Journey European Union). Tenders then have 52 days to respond to the Executive and to return their completed tender. The 52 days, do not include either the date of placement of advert or a closing date. Interested parties may request tender document anytime during that 52 day period. Tender documents must be issued to all interested parties within 6 days of request. The Executive are not permitted to exclude any interested party from the procurement. Therefore effectively, anyone may apply for and must be given the tender documents. This could therefore potential led to a situation whereby the Executive receives back an extremely large number of tender responses. Restricted Procedure Under restricted procedure, a tender advertisement is placed within OJEU. Interested parties then have 37 clear days to register an interest in the procurement. Interested parties, are then sent a brief specification and a pretender questionnaire. The Executive expects that the pre-tender questionnaire should be completed by the interested party and returned to the Executive during that 37 day period.

4 The return pre-tender questionnaires must then be used to create a shortlist of interested parties to invite to tender. Included within this procurement guide is both a draft pre-tender questionnaire and guidance on shortlisting. Shortlisted companies are then sent the tender documentation. Regulations require that tenderers be given 40 days in which to return the tenders. How do I advertise an OJEC The legal department, can advise upon aspects of the European procurement process and will prepare OJEC adverts upon request. Adverts within OJEU must follow strict guidelines and must be in a set format. Pre-information notice (PIN Notice) The European tender process, is a lengthy one, The European Union have recognised this and attempted to assist the organised procurer. They have done this by devising what is known as the pre-information notice. Pre-information notices, are advertisements which are placed before the main procurement process gets underway. They are particularly useful for recurring procurements. The pre-information notice procedure, is basically a warning notice to interested supplies that a tender process is coming from an organisation and that they should be aware of this. The pre-information notice, must follow a very strict format which the legal department can provide. Open procedure if a pre-information notice has been sent to the EU a minimum period of 52 days before and the maximum period of 1 year before the procurement process, time limit for receipt of tenders may be reduced to 22 days. Restricted procedure if a pre-information notice has been placed not less than 52 days before and more than 1 year before the procurement, the time limit for return of tenders may be reduced from 40 days to 26 days. What is the cost of advertising in OJEU? There is no cost for advertisements in OJEU. Advertisements are placed through legal by .

5 Services Directive SCHEDULE TO APPENDIX I SERVICE REGULATIONS The Services Directive applies to virtually all services commissioned by public sector organisations. There are some exclusions, detailed at paragraph 6 of the Regulations, which include the acquisition or disposal of land and buildings, certain defence contracts, financial services closely connected to monetary policy, employment contracts and contracts where the contractor charges the public for the use of services. The Directive divides services into two categories Priority and Residual. All provisions of the Services Directive apply to those services that are indicated as being Priority services. Only the provisions concerning nondiscriminatory technical specifications and obligatory contract award notices apply to those specified as being Residual. Full details of the categories of services are provided at Schedule 1 of the Public Services Contracts Regulations The categories can be summarised as follows. Priority Services 1. Maintenance and repair of equipment 2. Land transport services (including armoured car and courier services except transport of mail) 3. Air transport services of passengers and freight (except transport of mail) 4. Transport of mail by land (except rail) and by air. 5. Telecommunications services 6. Financial services (insurance, banking and investment) 7. Computer and related services (including bespoke software standard software is generally thought to be covered by the Supplies Directive) 8. Research and development services paid for by the contracting authority and solely for its benefit 9. Accounting, auditing and book-keeping 10. Market research and public opinion polling 11. Management consultancy and related services 12. Architectural services (as defined) 13. Advertising 14. Building cleaning and property management 15. Publishing and printing

6 Residual Services 16. Sewage and refuse disposal; sanitation and similar services. 1. Hotel and restaurant services 2. Transport services by rail 3. Water transport 4. Supporting and auxiliary transport 5. Legal services 6. Placement and supply services of personnel 7. Security services 8. Education and vocational educational services 9. Health and social services 10. Recreational, cultural and sporting services 11. Other services. The categories are defined within the Public Services Regulations by reference to the United Nations Common Product Classification (CPC). The CPC is now subsumed into the CPA and the CPV (Common Procurement Vocabulary).