5.5 GENERAL REFERENCE TO THE NEGOTIATED PROCEDURE

FOR PUBLIC CONTRACTS IN THE WATER, ENERGY,

TRANSPORT AND POSTAL SERVICES SECTORS

(DIRECTIVE 2004/17/EC & LAW 11(Ι)2006)

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In the following paragraphs, a general reference is made (in the form of tables) to the negotiated procedure for public contracts awarded in the Water, Energy, Transport and Postal Services Sectors, pursuant to the provisions of Directive 2004/17/EC and Law 11(Ι)2006.

In the Water, Energy, Transport and Postal Services Sectors, Contracting Entities may award contracts:

Using the negotiated procedure with publication of a contract notice, at their absolute discretion,
Using the procedure without publication of a contract notice restrictively and in specific cases, according to their reasoned opinion.

"Negotiated procedure is the procedure whereby Contracting Entities consult the economic operators of their choice and negotiate the terms of the contract with one or more of these" (Community Directive 2004/17/EC and Law 11(Ι)/2006 of the Republic of Cyprus).

During the negotiated procedure the Contracting Entities negotiate with the tenderers the tenders submitted by them, in order to adapt them to the requirements which have been set out in the tender documents and to seek out the best tender, in exactly the same way as the one described in the previous Chapters Sections of this Chapter for the respective negotiated procedure under Law 12 (Ι) 2006.

Pursuant to the national legislation, there are eleven cases justifying the use of a procedure without publication of a contract notice.

These cases are summarised in the following table:

No.

CASES JUSTIFYING USE OF A PROCEDURE WITHOUT PUBLICATION OF A CONTRACT NOTICE IN THE WATER, ENERGY, TRANSPORT AND POSTAL SERVICES SECTORS

(DIRECTIVE 2004/17/EC & LAW 11(Ι)/2006, article 38, paragraph 3a)

FIELD OF APPLICATION

SUPPLIES

SERVICES

WORKS

a

When no tenders or suitable tenders or no applications have been submitted in response to a procedure with a prior tender procedure, provided that the initial terms of the contract are not substantially altered

P

P

P

b.

Where a contract is purely for the purpose of research, experiment, study or development, and not for the purpose of securing a profit or of recovering research and development costs, and insofar as the award of such contract does not prejudice the competitive award of subsequent contracts with do seek, in particular, those ends

P

P

P

c

When, for technical or artistic reasons, or for reasons connected with the protection of exclusive rights, the contract may be awarded only to a particular economic operator

P

P

P

d

In the case of "extreme urgency" brought by "unforeseeable events"

P

P

P

e

In the case of additional deliveries by the original supplier

P

 

 

f

In the case of additional works or services not included in the original contract

 

P

P

g

In the case of new works consisting in the repetition of similar works or services of the original contract

 

 

P

h

In the case of supplies quoted and purchased on a commodity market

P

 

 

i

In the case of contracts awarded on the basis of a framework agreement

P

P

P

j

In the case of “bargain purchases”, where it is possible to procure supplies by taking advantage of a particularly advantageous opportunity available for a very short time at a price considerably lower than normal market prices

P

 

 

k

In the case of contracts that follow a design contest

 

P

 

The above cases are codified in the following tables:

 

Law 11(Ι)/2006, Chapter V, Article 38, §3, (a)

When no tenders or suitable tenders or no applications have been submitted in response to a procedure with a prior tender procedure, provided that the initial terms of the contract are not substantially altered

Tenders are considered unsuitable when their contents are not in agreement with the contract scope as this is described in the tender documents, and thus do not meet the requirements of the Contracting Entity as laid down in these documents.

 

EXAMPLES OF UNSUITABLE TENDERS

Tenders that do not meet the qualitative selection criteria (e.g. failure to submit a certificate or document regarding the tenderers personal situation, thus making it impossible to obtain additional information or clarifications) or the requirements of the award criteria.

Tenders made with reservations or tenders containing intentional or systematic errors.

Tenders made conditionally or containing conditions for counter-offers.

Tenders whose prices are demonstrably the product of collusion between the tenderers and are sheltered from competitive forces, or if more generally there are serious indications of collusion between the tenderers with the purpose of circumventing genuine competition or if, in the opinion of the Contracting Entity, there was not sufficient competition during the tendering procedure.

Financial offers that exceed the estimated budget of the Contracting Entity (when this budget is set as the ceiling in the tender documents, i.e. when negative reductions are not acceptable).

Abnormally low tenders that cannot be justified in writing by the tenderers following a request by the Contracting Entity.

 

EXAMPLES OF LACK OF TENDERS

When no tender is submitted.

Tenders not submitted within the specified time limit.

Tenders which are irrelevant to the terms of the tender documents.

 

EXAMPLES OF LACK OF TENDERERS

When the requests for participation or negotiation of all interested parties are found, during their evaluation, not to meet the requirements of the qualitative criteria (e.g. failure to submit a certificate or document regarding the tenderers personal situation, thus making it impossible to obtain additional information or clarifications).

 

SUBSTANTIAL ALTERATION OF THE ORIGINAL TERMS OF THE CONTRACT

Every change that may violate a specific principle of community law, especially the principles of free and undistorted competition, of equality of treatment of the tenderers, and above all the principle of ensuring the effectiveness of the Community Directives.

Changes in the technical specifications.

Changes in the contract financing method or to the payment of the contractor.

Changes in the contract schedule.

Changes in the conditions for the acceptance of the deliverables under the contract.

Changes in the construction techniques of a project.

Changes in the price. For example, an increase of the pre-estimated value of the original contract, even if such increase does not exceed 10% (Judgment of 13.01.05 in Case C-84/03 Commission v Spain, not yet published, point 47 and ff.).

 

Law 11(Ι)/2006, Chapter V, Article 38, §3, (b)

Where a contract is purely for the purpose of research, experiment, study or development

 

CASES WHERE A CONTRACT IS AWARDED PURELY FOR THE PURPOSE OF RESEARCH - EXPERIMENT - STUDY or DEVELOPMENT or FOR RECOVERING RESEARCH and DEVELOPMENT COSTS

When a work, service or supply is performed for the first time purely for the purpose of research, experiment, study or development (R&D).

When a work, service or supply as above is performed for the purpose of securing a profit (e.g. a product manufactured solely for the purpose of research).

When a work, service or supply as above is not performed for the purpose of securing a profit or of recovering research and development costs, and insofar as the award of such contract does not prejudice the competitive award of subsequent contracts with do seek, in particular, those ends (e.g. manufacture of a product in quantities that do not secure its commercial viability or for the purpose of selling it in order to recover research and development costs or for meet the costs of purchasing capital equipment for experimental or research laboratories).

 

Law 11(Ι)/2006, Chapter V, Article 38, §3, (c)

The case when, for technical or artistic reasons, or for reasons connected with the protection of exclusive rights, the contract may be awarded only to a particular economic operator

 

Law 11(Ι)/2006, Chapter V, Article 38, §3, (d)

The case of “extreme urgency” brought about by “unforeseeable events”

 

CASES OF EXTREME URGENCY DUE TO UNFORESEEABLE EVENTS

When for reasons of extreme urgency brought about by events unforeseeable by the Contracting Entity, the time limits laid down for the open, restricted and negotiated procedures cannot be adhered to.

Unforeseeable events are considered to be events transcending the normal bounds of economic and social life (for example, earthquakes or flooding) and requiring immediate action for relief and assistance to those affected.

This case refers only to works, supplies or services which are necessary for meeting and alleviating the immediate needs which have resulted from the unforeseeable events.

 

Law 11(Ι)/2006, Chapter V, Article 38, §3, (e)

The case of additional deliveries by the original supplier

 

THE CASE OF ADDITIONAL DELIVERIES BY THE ORIGINAL SUPPLIER

This case refers to additional deliveries by the original supplier which are intended:

either as a partial replacement of normal supplies,
or installations in use,
or as the extension of existing supplies or installations,

where a change of supplier would oblige the Contracting Entity to acquire material having different technical characteristics which would result in incompatibility or disproportionate technical difficulties in operation and maintenance.

 

Law 11(Ι)/2006, Chapter V, Article 38, §3, (f)

The case of additional works or services not included in the original contract

 

CASES OF ADDITIONAL WORKS or SERVICES NOT INCLUDED IN THE ORIGINAL CONTRACT WHICH CAN NOT BE FORESEEN

Additional works or services that cannot be technically or economically separated from the original contract without great inconvenience to the Contracting Entity.

Additional works or services which, although separable from the performance of the original contract, are strictly necessary for its completion.

“Unforeseen circumstances” are considered to be those due to events or circumstances which could not be identified and included in the scope of the original contract, although the necessary investigations were conducted and the necessary designs were developed, and due care and diligence was applied in accordance with the rules of “workmanship and science", which include the official (approved) regulations and specifications for works and services in the Republic of Cyprus or in the European Union.

The Contracting Entity must provide actual and detailed justification of the above.

 

Law 11(Ι)/2006, Chapter V, Article 38, §3, (g)

The case of new works consisting in the repetition of similar works of the original contract

 

CASES OF NEW WORKS CONSISTING IN THE REPETITION OF SIMILAR WORKS OF THE ORIGINAL CONTRACT

This case refers to works or services consisting in the repetition of similar works or services awarded to the contractor to whom the same Contracting Entities awarded an earlier contract through a tender procedure, provided that:

such works are in conformity with the design for the original contract,
the tender documents for the original contract provide that the award of such works may be made to the original contractor on terms which are the same with those of the original contract,
and that the total budget of the works has been taken into consideration in putting out to tender the original contract in accordance with the provisions of the law (thresholds).

 

Law 11(Ι)/2006, Chapter V, Article 38, §3, (g)

The case of supplies quoted and purchased on a commodity market

 

THE CASE OF SUPPLIES QUOTED AND PURCHASED ON A COMMODITY MARKET

This case refers to supplies quoted and purchased on a commodity market (crude oil, coal etc.)

 

Law 11(Ι)/2006, Chapter V, Article 38, §3, (h)

Contracts awarded on the basis of a framework agreement

 

THE CASE OF CONTRACTS AWARDED ON THE BASIS OF A FRAMEWORK AGREEMENT

When Contracting Entities have already awarded a framework agreement, they may award further contracts on the basis of that framework agreement.

A "framework agreement" is an agreement between one or more Contracting Entities and one or more economic operators, the purpose of which is to establish the terms governing contracts to be awarded during a given period, in particular with regard to price and, where appropriate, the quantities envisaged.

 

Law 11(Ι)/2006, Chapter V, Article 38, §3, (k)

The case of “bargain purchases”

 

THE CASE OF “BARGAIN PURCHASES”

This case refers to “bargain purchases”, where it is possible to procure supplies by taking advantage of a particularly advantageous opportunity available for a very short time at a price considerably lower than normal market prices.

It concerns supplies purchased on particularly advantageous terms:

either from a supplier who is definitively winding up its business activities,
or from the receivers or liquidators of a bankruptcy, a court settlement, or a similar procedure under national laws or regulations.

 

Law 11(Ι)/2006, Chapter V, Article 38, §3, (l)

The case of a design contest

 

THE CASE OF CONTRACTS FOLLOWING A DESIGN CONTEST

This case refers to designs (services), when the contract concerned is part of the follow-up to a design contest organised in accordance with the provisions of the Law and must, in accordance with the applicable rules, be awarded to the winner or to one of the winners of that contest.

In the latter case, all the winners should be invited to participate in the negotiations. This provision should be included in the documents of the original design contest.

 

For all the above cases, the steps of the procedure for the award of the respective contracts are identical to the steps of the negotiated procedures with one or more economic operators, as described in the previous paragraphs.

During the procedure for the prequalification of economic operators, the Contracting Entities must apply, inter alia, the principles of the European Union Treaty.

 


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