1Politica Achizitiilor Publice in Ue En

8/20/2019 1Politica Achizitiilor Publice in Ue En

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Bucharest, 8 March, 2005Bucharest, 8 March, 2005

Workshop on Public Procurement

Bucharest, 8 March , 2005


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Economics of Procurement,Economics of Procurement,

Project management tools,Project management tools,Evaluation techniques andEvaluation techniques and

Public Procurement policy in aPublic Procurement policy in aMember StateMember State


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Public Procurement Policy in thePublic Procurement Policy in the

Netherlands:Netherlands:Very simple: WE HAVE NO PUBLICVery simple: WE HAVE NO PUBLIC

PROCUREMENT POLICY IN THEPROCUREMENT POLICY IN THENETHERLANDS!NETHERLANDS!

We do not even have national publicWe do not even have national publicprocurement legislation!procurement legislation!Only exception: public works.Only exception: public works.Here we have “ uniform procurementHere we have “ uniform procurementguidelines” guidelines”


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Procurement in the NetherlandsProcurement in the Netherlands

These are compulsory for CentralThese are compulsory for Central

Government, but all other publicGovernment, but all other publicbodies are free to do what they likebodies are free to do what they likeFor Central Government there is onlyFor Central Government there is onlyone other obligation: for everyone other obligation: for everycontract exceeding 50.000 euro acontract exceeding 50.000 euro a

minimum of three potentialminimum of three potentialcontractors must be asked to makecontractors must be asked to makean offeran offer


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Procurement in the NetherlandsProcurement in the Netherlands

Means that participating inMeans that participating in

procurement processes can beprocurement processes can beextremely difficult and riskyextremely difficult and riskyTherefore contractors shouldTherefore contractors shouldevaluate every invitation to tenderevaluate every invitation to tendervery carefully.very carefully.

Participating without carefulParticipating without carefulevaluation/examination beforehandevaluation/examination beforehandmay KILL your companymay KILL your company


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Threat or opportunity?Threat or opportunity?

You may regard procurement as aYou may regard procurement as a

threat or as an opportunity:threat or as an opportunity:Threat: you lose all efforts (andThreat: you lose all efforts (and

money) made in accountmoney) made in accountmanagement because of proceduremanagement because of procedurethat is open to anyonethat is open to anyoneOpportunity: Markets that wereOpportunity: Markets that weretraditionally closed will be opened:traditionally closed will be opened:


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Threat or opportunity?Threat or opportunity?

By knowing the rules AND the bestBy knowing the rules AND the best

practices you may be able to helppractices you may be able to helppotential new clients to assist thempotential new clients to assist themin setting up proper procurementin setting up proper procurementprocedures (non bureaucratic,procedures (non bureaucratic,economically viable etc)economically viable etc)


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Incorporation in acquisition policyIncorporation in acquisition policy

Participation in the public procurementParticipation in the public procurement

process must be part of the contractorsprocess must be part of the contractorsacquisition policy because: it takes time, itacquisition policy because: it takes time, itcosts money, it requires knowledge of thecosts money, it requires knowledge of the

rules!rules!It has to be laid down in internalIt has to be laid down in internaladministrative proceduresadministrative proceduresIt should be communicated through allIt should be communicated through alllevels of the organizationlevels of the organization


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Ideally, one department should beIdeally, one department should bemade responsible for organizing,made responsible for organizing,coordinating and facilitatingcoordinating and facilitatingparticipation in procurementparticipation in procurementprocedures and for keeping up withprocedures and for keeping up withchanges in the regulationschanges in the regulationsThis department should also draw upThis department should also draw upa timetable and have the (delegated)a timetable and have the (delegated)authority to force people to deliverauthority to force people to deliverthe information that is neededthe information that is neededaccording to this timetableaccording to this timetable


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Always remember and remind the Always remember and remind thecontracting authority:contracting authority:

Public procurement is aPublic procurement is aCOMMERCIAL process rather than aCOMMERCIAL process rather than a

legal process: Lawyers are necessarylegal process: Lawyers are necessaryto see that it is executed accordingto see that it is executed accordingto the law but the COMMERCIALto the law but the COMMERCIALspecialist should be leading!!specialist should be leading!!


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Strategic partnershipsStrategic partnerships

Contractors should ask themselvesContractors should ask themselves

whether it is advisable to formwhether it is advisable to formstrategic partnerships in order tostrategic partnerships in order tobecome more successful:become more successful:By participating with strategicBy participating with strategicpartners ( maybe even in the formpartners ( maybe even in the formof a European Economicof a European Economicpartnership) you will be able topartnership) you will be able tooffer:offer:


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PartnershipsPartnerships

More turnoverMore turnover

More experienceMore experienceBigger workforceBigger workforce

More reference projectsMore reference projectsBetter quality control(?)Better quality control(?)

More innovation strengthMore innovation strength


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Exclusion from participationExclusion from participation

Contracting Authorities can excludeContracting Authorities can exclude

potential contractors from participationpotential contractors from participationwhen the candidate is:when the candidate is:1.1. Bankrupt or being wound up, has notBankrupt or being wound up, has not

paid his taxes or social securitypaid his taxes or social securitycontributions, has been convicted forcontributions, has been convicted forgrave professional misconduct, hasgrave professional misconduct, hasdeliberately given false informationdeliberately given false information

2.2. They are allowed to ask for official proofThey are allowed to ask for official proof

that no such circumstance is the casethat no such circumstance is the case


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Exclusion from participationExclusion from participation

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

called “ own declaration” in which youcalled “ own declaration” in which youdeclare that you are in no suchdeclare that you are in no suchcircumstances and that you will come upcircumstances and that you will come up

will all official proof (official documents)will all official proof (official documents)once they have selected you as theironce they have selected you as theirpreferred contractorpreferred contractorThis saves time, money andThis saves time, money andbureaucracy!bureaucracy!


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Criteria for qualitative selectionCriteria for qualitative selection

According to the directives certainAccording to the directives certaindocuments, declarations and other datadocuments, declarations and other datacan be asked for in order to be certaincan be asked for in order to be certainabout the applicants abilitiesabout the applicants abilities

These concern: Enrolment in theThese concern: Enrolment in theprofessional or trade register, financialprofessional or trade register, financialand economic standing, technical capacityand economic standing, technical capacityetc.etc.This can be proved by all kinds of officialThis can be proved by all kinds of officialdocumentsdocuments


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BEWARE:BEWARE:

Criteria for qualitative selection areCriteria for qualitative selection are

about the contractors situation, notabout the contractors situation, notabout his offer.about his offer.

To evaluate an offer one needsTo evaluate an offer one needsawarding criteria.awarding criteria.These two are completely different,These two are completely different,so beware of contracting authoritiesso beware of contracting authoritiesmixing them!mixing them!


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Criteria for qualitative selectionCriteria for qualitative selection

Your advice to contracting authorities:Your advice to contracting authorities:

In general: Be clear!In general: Be clear!Don’t ask: “recent declaration” but beDon’t ask: “recent declaration” but bespecific: “ not older than three monthsspecific: “ not older than three monthsfrom the day of sending the notification” from the day of sending the notification” Don’t ask: “last three years” but beDon’t ask: “last three years” but be

specific: “ balance sheets of the yearspecific: “ balance sheets of the year2000, 2001, 2002” .2000, 2001, 2002” .Be sure why you ask something and howBe sure why you ask something and how

you are going to weigh/assess it; If youyou are going to weigh/assess it; If youare not: DON’T ASK IT!are not: DON’T ASK IT!


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Compulsory notificationsCompulsory notifications-- Notice of open, restricted or negotiatedNotice of open, restricted or negotiated

proceduresprocedures-- Notice of contract award. This notice mustNotice of contract award. This notice mustinclude the name of the selectedinclude the name of the selected

contractor and the value of the contractcontractor and the value of the contractawarded.awarded.

For EUFor EU -- tenders all notices must be intenders all notices must be inconformity with the standard format asconformity with the standard format as

p ublished on the In ternetp ublished on the In ternet(( www.simap.eu.intwww.simap.eu.int ).).In the near future it will only be possible toIn the near future it will only be possible to

send the notices to the Bureau of Officialsend the notices to the Bureau of OfficialPublications in Luxemburg BY MAILPublications in Luxemburg BY MAIL

http://www.simap.eu.int/http://www.simap.eu.int/http://www.simap.eu.int/http://www.simap.eu.int/http://www.simap.eu.int/


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Time limitsTime limits

All time limits in EUAll time limits in EU -- legislation arelegislation are

governed by regulation 1182/71/EECgoverned by regulation 1182/71/EECAll time limits are minimum limitsAll time limits are minimum limits(more time may be granted and you(more time may be granted and youeven have the right to demand moreeven have the right to demand moretime if the minimum time limit is nottime if the minimum time limit is notsufficientsufficientThe directives say: 52 day from theThe directives say: 52 day from thetime of sending the notice.time of sending the notice.


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Beware:Beware:

Regulation 1182/71 says: A time limitRegulation 1182/71 says: A time limitstarts only the day after a legal act hasstarts only the day after a legal act hasbeen performed.been performed.Sending the notification to Luxemburg isSending the notification to Luxemburg isthe legal act.the legal act.

This means that the time limit starts theThis means that the time limit starts thenext day.next day.A time limit ends at 24.00 hours of theA time limit ends at 24.00 hours of the

last day, so opening of the offers can startlast day, so opening of the offers can starttaking place only the day following thetaking place only the day following theexpiration of the time limit.expiration of the time limit.

Note: All days are calendar days.Note: All days are calendar days.


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Restricted ProcedureRestricted Procedure

Free choice between open andFree choice between open andrestricted procedure.restricted procedure.Restricted procedure means one canRestricted procedure means one canlimit the amount of candidates to belimit the amount of candidates to be

invited to submit an offer to ainvited to submit an offer to aMINIMUM OF 5MINIMUM OF 5Problem is that the directives do notProblem is that the directives do not

indicate how this limitation has to beindicate how this limitation has to bedonedoneThis is therefore at the discretion ofThis is therefore at the discretion ofthe contracting authoritythe contracting authority


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Beware:Beware:

Contracting authorities are advised toContracting authorities are advised to

perform this selection very cautiously andperform this selection very cautiously andin a very transparent way.in a very transparent way.This can be achieved either by a publicThis can be achieved either by a public

draw (not allowed in every EU country) ordraw (not allowed in every EU country) orby selecting on the basis of an objectiveby selecting on the basis of an objectiveweighting instrument, where only the bestweighting instrument, where only the bestscoring candidates will be selected. In thescoring candidates will be selected. In theinterest of transparency this instrumentinterest of transparency this instrumentshould be made public.should be made public.


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Advantages/disadvantages of Advantages/disadvantages of

various proceduresvarious proceduresOpen procedure:Open procedure:Advantages: Unlimited amount of offers,Advantages: Unlimited amount of offers,therefore unlimited competition. Relativelytherefore unlimited competition. RelativelyquickquickDisadvantages: Risk of huge piles ofDisadvantages: Risk of huge piles ofpaper, all to be examined by thepaper, all to be examined by thecontracting authority. Besides coming upcontracting authority. Besides coming upwith all papers to meet the selectionwith all papers to meet the selection

criteria, all candidates have to submitcriteria, all candidates have to submitoffers in the mean time, which means anoffers in the mean time, which means anlot of calculating. This increases the costlot of calculating. This increases the costof participating in the tender procedureof participating in the tender procedureand eventually leads to higher pricesand eventually leads to higher prices


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Advantages/disadvantages Advantages/disadvantagesRestricted procedure:Restricted procedure:Advantages: Preliminary selection ofAdvantages: Preliminary selection of

candidates based on qualitative criteria.candidates based on qualitative criteria.Candidates know beforehand how manyCandidates know beforehand how manycompetitors there are so can calculatecompetitors there are so can calculatetheir chances. By reducing the number oftheir chances. By reducing the number ofcandidates: less paperwork to examine bycandidates: less paperwork to examine bythe contracting authoritythe contracting authorityDisadvantages: Longer and sometimesDisadvantages: Longer and sometimesmore complicated procedure, higher riskmore complicated procedure, higher risk

of complaints if not properly executed.of complaints if not properly executed.


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Contact between ContractingContact between Contracting

authorities and candidatesauthorities and candidatesContact is permitted but contractingContact is permitted but contracting

authorities must ensure that thisauthorities must ensure that thisdoes not impair fair competition.does not impair fair competition.It is up to the contracting authorityIt is up to the contracting authorityto decide how he will deal with this.to decide how he will deal with this.If he includes a name of a contactIf he includes a name of a contact

person and a telephone number orperson and a telephone number orpersonal epersonal e -- mail address, he indicatesmail address, he indicatesthat he does not object to contactthat he does not object to contact


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ContactContact (continued)(continued)

He should in any case organize a questionHe should in any case organize a question

and answer round ca. halfway procedureand answer round ca. halfway procedure(one in case of open procedure, two in(one in case of open procedure, two incase of restricted procedure).case of restricted procedure).

He should allow all candidates to submitHe should allow all candidates to submittheir questions till a certain date and hour,their questions till a certain date and hour,then answer ALL questions and send themthen answer ALL questions and send them(anonimized) together with answers, to all(anonimized) together with answers, to allcandidates. This creates a level playingcandidates. This creates a level playingfield.field.


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Submission of TendersSubmission of Tenders

Contracting authorities should beContracting authorities should beclear about what they want toclear about what they want toreceivereceiveIt is advisable to be rather rigid inIt is advisable to be rather rigid in

this, for instance” Your balancethis, for instance” Your balancesheets over the years 2000, 2001sheets over the years 2000, 2001and 2002 must be included in annexand 2002 must be included in annex

1, your proof of membership of the1, your proof of membership of theChamber of Commerce must beChamber of Commerce must beincluded in annex 2 etc. Failure toincluded in annex 2 etc. Failure toobey this will lead to rejection ofobey this will lead to rejection ofyour offer” your offer”


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Submission of TendersSubmission of TendersAlso they must be clear regarding:Also they must be clear regarding:Final date of submission (date, time)Final date of submission (date, time)Note: Always make it very clear that thisNote: Always make it very clear that thisis a fatal time limit: One minute too lateis a fatal time limit: One minute too latemeans rejection!means rejection!

Whether the opening is public or notWhether the opening is public or notWhere to submit. Note: not only the place,Where to submit. Note: not only the place,for instance “ municipality hall” but veryfor instance “ municipality hall” but very

specific: “ room 210” or “ secretariat ofspecific: “ room 210” or “ secretariat ofthe director general for public works” orthe director general for public works” oreven: “Miss X” (who is the administrativeeven: “Miss X” (who is the administrativesecretary and does not know anythingsecretary and does not know anythingabout the tender procedure…)about the tender procedure…)


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They must also be clear about:They must also be clear about:

-- how many examples should be sendhow many examples should be send-- whether they want one example on CDwhether they want one example on CD --

romrom-- whether tenders should be send underwhether tenders should be send under

closed coverclosed cover

-- how to submit (personally against receipt,how to submit (personally against receipt,by post etc)by post etc)NOTE: They should keep tender documentsNOTE: They should keep tender documents

closed till after the date and time ofclosed till after the date and time ofclosing of the submission periodclosing of the submission period


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Last but not least contracting authoritiesLast but not least contracting authoritiesshould instruct personnel on keyshould instruct personnel on key -- posts,posts,that a closing date is imminent.that a closing date is imminent.Many candidates wait till the last minuteMany candidates wait till the last minuteto submit their tenders as they are afraidto submit their tenders as they are afraid

that these might otherwise be openedthat these might otherwise be openedbefore the closing moment (andbefore the closing moment (andinformation be leaked to competitors)information be leaked to competitors)

Therefore people in the mailTherefore people in the mail -- handlinghandlingdepartment and behind the receptiondepartment and behind the receptionshould be well instructed.should be well instructed.


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Rules for TendersRules for Tenders

The European directives do not specifyThe European directives do not specify

anything as to how tenders should lookanything as to how tenders should looklikelikeContracting authorities can thereforeContracting authorities can therefore

determine themselves what they want todetermine themselves what they want toreceive and how. Standard formats willreceive and how. Standard formats willhelp evaluating the documentationhelp evaluating the documentationreceivedreceivedMain rule is to be utterly clear about whatMain rule is to be utterly clear about what

one wants to receiveone wants to receive


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General Conditions applicableGeneral Conditions applicable

Contracting authorities should draw upContracting authorities should draw uptheir own general conditions (terms)their own general conditions (terms)It is wise to have separate terms forIt is wise to have separate terms forworks, supplies and servicesworks, supplies and servicesWe always tell Contracting authorities toWe always tell Contracting authorities toinsist that only the general terms of theinsist that only the general terms of thecontracting authority are applicable, withcontracting authority are applicable, withthe exclusion of contractors conditionsthe exclusion of contractors conditions

(otherwise they will end up with offers(otherwise they will end up with offersthat are not comparable)that are not comparable)However, if they don’t, see that your ownHowever, if they don’t, see that your ownconditions are applicable!conditions are applicable!


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ChecklistsChecklists

Make checklists to monitor the wholeMake checklists to monitor the whole

process and its progressprocess and its progressDraw up a timetable and send this toDraw up a timetable and send this to

everybody involved in theeverybody involved in theprocurement process, making clearprocurement process, making clearthat it is everybody’s responsibility tothat it is everybody’s responsibility torespect the timetablerespect the timetable


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Awarding of the Contract Awarding of the ContractThe European directives state twoThe European directives state twoawarding criteria:awarding criteria:

-- Lowest priceLowest price-- Economically most advantageous offerEconomically most advantageous offerNote: Lowest price IS lowest price and isNote: Lowest price IS lowest price and is

not, repeat not, negotiablenot, repeat not, negotiableChoice between awarding criteria is free andChoice between awarding criteria is free andshould be subject of thoroughshould be subject of thoroughconsiderationsconsiderations

Leading thought should be that “total cost ofLeading thought should be that “total cost ofownership” is much more important thanownership” is much more important thanprice aloneprice alone


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Awarding of contract Awarding of contractEconomic most advantageous offer canEconomic most advantageous offer caninclude many aspects that are ofinclude many aspects that are of

importance to the contracting authority.importance to the contracting authority.These aspects may be:These aspects may be:-- QualityQuality--

FunctionalityFunctionality-- ServiceService-- WarrantyWarranty-- Aesthetic characteristicsAesthetic characteristics-- PricePrice-- Environmental aspects etc.Environmental aspects etc.


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Awarding of contract Awarding of contract

All these are more or less subjectiveAll these are more or less subjective

criteria.criteria.It is up to the contracting authorityIt is up to the contracting authorityto make sure that they are beingto make sure that they are being

judged upon as objectively as judged upon as objectively aspossible and that this judgmentpossible and that this judgment

process is transparentprocess is transparentThe same applies to the judgment ofThe same applies to the judgment of

criteria for qualitative selectioncriteria for qualitative selection


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One way of creating an objective systemOne way of creating an objective systemis a system of musts and wantsis a system of musts and wants(requirements and desires)(requirements and desires)Meeting the musts is a conditio sine quaMeeting the musts is a conditio sine qua

non (Knocknon (Knock -- out criterion)out criterion)Concerning the wants all candidates willConcerning the wants all candidates willbe compared in relation to the others inbe compared in relation to the others inorder to determine who meets the wantsorder to determine who meets the wantsbest, who ends up worst and what is thebest, who ends up worst and what is theposition of the other candidatesposition of the other candidates


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Examples of must and wants:Examples of must and wants:

Must: it is not allowed to offer a priceMust: it is not allowed to offer a pricehigher thanhigher than €€ 500.000500.000Want: the price should be as low asWant: the price should be as low as

possiblepossibleMust: A service engineer must beMust: A service engineer must beavailable within two hoursavailable within two hoursWant: A service engineer is availableWant: A service engineer is availableas soon as possibleas soon as possible


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In this system all “wants” will get theirIn this system all “wants” will get theirown rating (for instance on a scale from 1own rating (for instance on a scale from 1to 10)to 10)The rating reflects the ranking of theThe rating reflects the ranking of thewants between each otherwants between each other

All candidates will be compared in relationAll candidates will be compared in relationto the others to determine who respondsto the others to determine who respondsbest to a want, who responds worst andbest to a want, who responds worst andthe position of the remaining candidates.the position of the remaining candidates.This is expressed in a mark (on a scaleThis is expressed in a mark (on a scalefrom 1 to 10)from 1 to 10)The best candidate scores 10 points, theThe best candidate scores 10 points, theworst 1 pointworst 1 point


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Award Award

Explanation:Explanation:O = OfferO = OfferR= Rating in comparison with otherR= Rating in comparison with othercompetitorscompetitorsT= Total score on this “ Want” T= Total score on this “ Want” Price= in 100.000 EuroPrice= in 100.000 EuroAvailable= availability of engineer in hoursAvailable= availability of engineer in hoursWarranty= warranty in yearsWarranty= warranty in yearsUser panel= evaluation figure on scale ofUser panel= evaluation figure on scale of11 -- 10 (1 is worst, 10 is best) by evaluation10 (1 is worst, 10 is best) by evaluationteamteam


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award matrixaward matrixcontractorcontractor→→

AA BB CC DD

wantswants↓↓

ratingrating↓↓

oo rr tt oo rr tt oo rr tt oo rr tt

priceprice 66 66 11 66 5,5,88 22 1212 55 55 3030 44 1100 6060

availableavailable 88 11 1010 8080 1,1,

557,7,55

6060 22 55 4040 33 11 33

warrantywarranty 33 33 11 33 55 44 1212 1100 1010 3030 55 44 1212

user paneluser panel 55 88 1010 5050 66 44 2020 77 77 3535 55 11 55

TotalTotal139139 1010

44131355

8080


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Alcatel period Alcatel period

Since EC court ruling in Alcatel case,Since EC court ruling in Alcatel case,member states are forced tomember states are forced toannounce intended awardannounce intended awardRejected bidders get possibility toRejected bidders get possibility tooppose award during restricted timeoppose award during restricted time --limit.limit.In some member states this limit isIn some member states this limit is

only 14 days!only 14 days!Greatly increases amount of legalGreatly increases amount of legalproceedings.proceedings.


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Make several checklists for the monitoringMake several checklists for the monitoringof your participation:of your participation:First one when first reading the invitation:First one when first reading the invitation:Who is the contracting authority, what areWho is the contracting authority, what are

they procuring, what procedure, do wethey procuring, what procedure, do wehave enough time, financial means, knowhave enough time, financial means, knowhow to offer them, what are thehow to offer them, what are the

specifications, have they been drawn upspecifications, have they been drawn upwith someone in mind, is there awith someone in mind, is there areference to certain suppliers or productsreference to certain suppliers or products

h kl


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Second one:Second one:

Who is responsible for whatWho is responsible for whatWhat do we need to submitWhat do we need to submitWhat did the contracting authorityWhat did the contracting authorityforget (this is where we start earningforget (this is where we start earningmoney!!!)money!!!)

What is the cost of investmentWhat is the cost of investmentagainst the possible net profit (roi)against the possible net profit (roi)or its marketing valueor its marketing value

h klCh kli


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Do we need to form some kind ofDo we need to form some kind of

strategic alliance in order to createstrategic alliance in order to createmore critical massmore critical massWho else might be competing andWho else might be competing andwhat is our added value over themwhat is our added value over themand /or local contractorsand /or local contractors

O h hi h kO h hi h k


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Other things to checkOther things to check

You name it, I will answer it!!You name it, I will answer it!!

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