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3.1 procurement and prag rules
This document provides an overview of procurement rules and procedures according to the Practical Guide to Contract Procedures (PRAG) for projects financed by the European Union. It defines procurement as the process of tendering and contracting. PRAG is a 330-page guide that establishes the procedures for all EU external aid contracts. It became effective in June 2003 and was last updated in January 2012. The four main procurement procedures outlined in PRAG are open tender, restricted tender, competitive negotiated procedure, and simplified procedure. The document also discusses grant schemes and terms of reference.
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- 1. Sustainable Economic Developmentof the Sudurnes region, Iceland Procurement Overview and PRAG Rules JOSE MATEOS MORENO Ásbrú, January 2012
- 2. 2 Procurement: what isit? • Combination of tendering and contracting • Starting point: contract forecast (after signed implementing agreement) • End point: signing of the contract • Main responsibility: EC (under centralised management) or under decentralised management, Line Ministry and the Final Beneficiary. • Four main blocks defined: Tender Forecast, Tender Preparation, Tendering and Contracting
- 3. 3 PRAG: what isit? PRAG is a (152 pages + 178 annexes) document that explains the procedures for tendering and contracting applying to all EC external aid contracts
- 4. 4 PRAG: guiding principlefor procurement-1 • In full: Practical Guide to contract procedures financed from the General Budget of the EC in the context of external actions • Focus: procurement, i.e. tendering and contracting • PRAG became effective on 1st June 2003 (latest version January 2012)
- 5. 5 PRAG: guiding principlefor procurement-2 • The rules of EU Funds/IPA procurement are governed by PRAG. • After accession Iceland is not obliged to follow PRAG procedures, i.e. for future Structural Funds projects. However, the PRAG procedures are considered a good basis for the future implementation of Structural Funds projects. • The role of Central Finance and Contracting Units (CFCU)
- 6. 6 PRAG: guiding principlefor procurement-3 • Type of contract – services (technical assistance, research projects). – works (infrastructure projects) – supplies (equipment, material) – Grant schemes (contribution, by way of donation, from the EU budget to a Final Beneficiary) • Centralised and decentralised controls (Extent to which EC is involved in procurement process).
- 7. PRAG Procedures 7 Open TenderProcedure Restricted Tender Procedure Competitive Negotiated Procedure Simplified Procedure Single Tender
- 8. Which procedure? SERVICES ≥ €200,000 International restricted tender procedure 1. < € 200,000 but > € 10,000 Framework contracts 2.Competitive negotiated procedure ≤ € 10,000 Single tender SUPPLIES ≥ € 150,000 International open tender procedure < € 150,000 but ≥ € 60,000 Local open tender procedure < € 60,000 but > € 10,000 Competitive negotiated procedure WORKS 1. ≥ € 5,000,000 Internat ional open tender procedure 2. International restricted tender procedure < € 5,000,000 but ≥ € 300,000 Local open tender procedure < € 300,000 but> € 10,000 Competitive negotiated procedure 8
- 9. Procedures (exceptional) DynamicPurchasing System Competitive Dialogue Negotiated Procedure 9
- 10.
- 11. 11 Terms of Reference(Outline) 1. Basic Information 2. Objectives 3. Description 4. Institutional Framework 5. Detailed Budget 6. Implementation Arrangements 7. Implementation Schedule 8. Equal Opportunity 9. Environment 10. Rates of return 11. Investment criteria 12. Conditionality and sequencing
- 12. 12 PRAG and GrantSchemes PRAG Rules regulate as well Grant Scheme Management. A grant is a direct financial contribution, by way of donation, from the EU budget or the EDF, in order to finance: •either an action intended to help achieve an objective forming part of a European Union policy; •or the functioning of a body which pursues an aim of general European interest or has an objective forming part of a European Union policy. Under PRAG, Grant beneficiaries are generally non-profit- making.