2.9.3 What are the specific features

of the procurement of works?

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Works are defined as capital development projects such as building and engineering contracts.

EU Thresholds 

Contracting authorities are required to estimate the value of the whole works project even though it may be made up of a number of separate contracts for different activities. For example, if the construction of a new building requires site clearance, construction and fitting out, the threshold must be applied to all three phases (total value) even though the activities are different and may involve different contractors. Related services, for example architectural services may be purchased under separate contracts, in which case their value need not be counted against the whole works project value.

As before, no procurement may be split up with the intention of avoiding application of the threshold value. 

Complex Projects works contracts are generally complex in nature and occur over a longer timeframe. Large construction projects such as the building of a new motorway require expert project management and the input of a number of key stakeholders.

It is important that the contracting authority allocates sufficient personnel to the project and secures their input at the very early stages of the procurement process and certainly in the development of the specification. Details acquired during the procurement process can be invaluable during the management of the implementation of the project and therefore contracting authorities need to ensure that detailed monitoring information is properly maintained from the outset.

Detailed technical specifications In many works contracts, there is a requirement for a team of experts on the procurement team with a wide knowledge and specific expertise. The contracting authority may have this expertise in-house or may have to recruit one or more external advisors.

With large scale construction works it is advisable that contracting authorities play close attention to warranties and liabilities with contractors since it is common to have additional works and complications that arise in the course of the construction that wee not necessarily planned for from the outset.

As a rule, in traditional construction projects, a percentage of the contract (normally 20%) is withheld from the supplier until a final warranty is received which may be some time after the completion of the construction itself. However in design, build and operating contracts, payment will be directly linked to performance.

Evaluation of Tenders The evaluation of tenders for works contracts often show significant variations in quality and price between different bidders. The evaluation committees of contracting authorities may wish to use formal clarification meetings with bidders to establish these differences and therefore make direct comparisons more manageable. All clarification should be copied to all bidders in the competition.

Concession Contracts. These are public works contracts where the contracting authority includes in the tender documents the right for the supplier to exploit the works carried out under the contract. For example a contracting authority may grant a private company the right to exploit a motorway by charging tolls to offset the cost of construction.

Details relating to public works concession contracts are stated in the law N12, Chapter VII.

Sustainable Development. Works contracts, in particular, need to emphasise the overall approach of best value for money rather than the lowest price. It is important that contracting authorities give due consideration to four key objectives for sustainable development:

Effective protection of the environment
Prudent use of natural resources
Social progress which recognises the needs of everyone
Maintenance of high and stable levels of economic growth.

Works contracts can have a particularly negative impact on sustainable development, however the following hierarchy may be useful when considering ways to decrease negative environmental impacts.

The Law stipulates specific procedures in the organisation of design contests in the area of services. Please refer to Law N12, Chapter VIII.

For example contracting authorities have the opportunity on a works contract to recycle old road materials on site, rather then bringing new material from elsewhere which also enables costs to be reduced, benefiting the environment and saving time.

© 2007 Republic of Cyprus, Treasury of the Republic, Public Procurement Directorate
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