2.5.5 What are the procedures for contracts
below EU Thresholds?
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The open, restricted and negotiated procedure described in section 2.5.4 can be applied also for contracts with value below the EU thresholds. In addition and under certain circumstances, the simplified procedures described below can be applied for contracts below the EU thresholds.
The Simplified Procedure - Below EU Thresholds the European Commission has published guidance on how public authorities should award contracts of low monetary value fairly. The law on public procurement also includes specific articles for awarding of such public contracts. Although they are not covered by the EU Directives on public procurement, it is important that they nevertheless comply with the principles of transparency and non-discrimination. The Commission's guidance, which is in the form of an 'Interpretative Communication', contains suggestions on how public authorities should comply with these principles at:
http://ec.europa.eu/internal_market/publicprocurement/key-docs_en.htm. The Commission also issued guidance on how to award low-value contracts fairly in July 2006 (IP/06/1053)
A good example of the use of this procedure was the procurement by the Department of Information and Technology Services of 10 portable colour printers to a total contract value of 2.360,00 Euro. In total 13 suppliers requested tender documents with 3 bids submitted. The contract was awarded on lowest price.
The following outlines the procedures found in the national Law 12(I)/2006 that contracting authorities may use:
It is important to note that contracting authorities may still publicly advertise a contract notice even though it is below the EU thresholds if expenditure is in a critical business sector, for VFM and liability reasons. For example, software upgrades.
It is possible that not all the suppliers approached will respond, therefore it is good practice to invite at least 2 suppliers to provide 1 quotation and 6 suppliers to provide 3 quotations. Feedback should be requested from suppliers who failed to submit quotes to develop knowledge of the market place and the suppliers within it. This feedback can be either verbal or written, and should be logged on the file for the record.
There may be occasions when insufficient quotes are received even though every effort has been made to obtain them. In this case the contracting authority should widen the opportunities to source suppliers as outlined above. If no quotes are obtained, the procurement procedure and procurement decision must be reviewed and revised.
If the value of contract, net of VAT, exceeds 50.000,00 Euro but is lower than the EU threshold the contracting authority must follow a formal tendering procedure with advertising. If the value of contract, net of VAT, exceeds the EU threshold the contracting authority must follow a formal tendering procedure with advertising including the OJEU.
It is important to refer to the regulations coupling the Law regarding the responsibility of authorising the use of the “simplified procedure”. The fact that the value of procurement is below established thresholds does not mean that the simplified procedure must be used. In cases where the savings potential from genuine competitions is high, the open, restricted, or negotiated procedure should be used. Contracting authorities should ensure that for reoccurring requirements for goods, the total value over a 12 month period does not exceed the threshold.
Simplified methods are directly connected with low-value and one-off procurement. If the need to procure goods or services has a recurrent character, framework agreements/call-off arrangements might be a better solution. They are suitable to procure goods, services and (maybe) works of low value. They are efficient to operate and can ensure a consistency in supply.
The following flowchart outlines the steps contracting authorities should take when procuring contracts below EU thresholds.
Figure 2-3: Steps to be followed when procuring contracts below EU thresholds
It is important that the procurement route chosen is appropriate for the size and complexity of the project, compliance with EC rules, business benefit and risk. An overly and unnecessarily complicated process will discourage SMEs from bidding.
Table 2-10: The approach to the Simplified Procedure
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