1. Sustainable Economic Development of the Sudurnes
region, Iceland
Procurement Overview and PRAG Rules
JOSE MATEOS MORENO
Ásbrú, January 2012

2. 2
Procurement: what is it?
• 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 is it?
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 principle for
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 principle for
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 principle for
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 Tender Procedure
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)
 Dynamic Purchasing System
 Competitive Dialogue
 Negotiated Procedure
9

10. 10
PRAG: procurement procedures

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 Grant Schemes
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.