Public Procurement Guidelines 2005

(1) NPPPU Guidelines

In accordance with Government Policy, the Board as a Semi-State Body, complies generally with the procedures for public procurement laid down in the Public Procurement Guidelines – Competitive Process prepared by the National Public Procurement Policy Unit (NPPPU) of the Department of Finance. These replaced the ‘Green Book’ – “Public Procurement”, 1995 Edition.

(2) Scope of the Guidelines

For ease of reference, this document sets down the main procedures to be followed in the Board in relation to: -

1. Tendering (including acquisition of information and communications technology (ICT) and office equipment and for the provision of services), and
2. Disposal of assets.

(3) EU and GPA Matters

a) The Board is legally obliged to adhere to EU Public Procurement Directives and Government Procurement Agreement (GPA) of the World Trade Organisation, where relevant. The thresholds (exclusive of VAT) are set out in Appendix 3.

b) Where EU and/or GPA thresholds apply, the procedures set down in Public Procurement Guidelines prepared by the NPPPU will apply – see paragraph 7 following.

c) If the cost of any proposal or series of related proposals is or are likely to exceed the threshold figures or if the proposal is funded by the EU in part or in full, then such proposal must adhere to the relevant EU Directives.

d) Any advertisement made in accordance with EU Directives which specifies a language or languages in which tenders must be drawn up should specify the Irish language as an option.

(1) Designated Officer

The Board is required to appoint a Designated Officer in matters relating to public procurement. The duty of this Officer is to ensure that all matters related to procurement of works, supplies and services and the disposal of property and equipment are in accordance with legal and administrative requirements. The Secretary is the Designated Officer for this purpose.

(2) Aggregate Costs

Where a series of related contracts are proposed in any period of 12 months,the aggregate costs of the contracts shall be reckoned in relation to thresholds referred to in these guidelines.

(3) Expertise and Probity

The Secretary should ensure that staff involved in purchasing or placing contracts are familiar with these Guidelines and with the EU and international rules that may apply and that they are aware of the legal and policy framework within which procurement must be conducted. To safeguard against improper or unethical practices, functions within the procurement cycle will be separated by ensuring that, for example, ordering and receiving goods and services are distinct from payment for goods and services.

(4) Casual Purchases

Purchasing profiles should be examined to minimise casual or “once-off” purchases. Sections with recurring or ongoing requirements should analyse their medium to long-term needs. Appropriate contracting arrangements should be put in place for efficient and cost effective delivery of recurring supplies and services.

(5) Pilot Projects

Where a procurement process involves a pilot stage, the pilot should be conducted in a manner that allows and encourages the identification of a range of acceptable solutions or options. Care must be taken to avoid the development of relationships with a particular party or parties which could hinder a fair and open process or limit competition.

(6) Sole Suppliers

Where it is necessary to deal with a sole supplier, service provider or contractor, arrangements which provide best value for money should be negotiated. Care should be taken when faced with a supplier, service provider or contractor with an exclusive right to provide a particular supply or service in a designated territory. Open-ended arrangements with these exclusive distributors should be avoided where possible. Irish and EU competition law does not prevent an exclusive supplier from providing supplies to customers outside of its designated territory where the exclusive supplier has been requested to do so by that customer.

Better value for money can be achieved by seeking tenders from other suppliers, service providers or contractors outside the region in which there is an excusive distributor. It may be appropriate to advertise in the Official Journal of the European Union (OJEU) or otherwise seek non-national suppliers in such cases.

If the Board is refused supplies on the basis that there is an exclusive supplier supplying goods in the contracting authority’s area, the matter should be brought to the attention of the Competition Authority: telephone (01) 804 5400.

(7) Conflicts of Interest

Staff should be aware of potential conflicts of interest in the tendering process and should take appropriate action to avoid them. Care should be taken to ensure that project specifications and criteria should be open and generic as possible in order to avoid favouring any one solution or any one party.

(8) Statutory Provisions

Before awarding a contract, the Board should ensure that tenderers have regard to statutory provisions relating to minimum pay, legally binding industrial or sectoral agreements and relevant health and safety issues. An appropriate reference to the need for compliance with such provisions should be included in tender documents.

(9) Collusive Tendering

Staff should watch for anti-competitive practices such as collusive tendering. Any evidence of suspected collusion in tendering should be brought to the attention of the Competition Authority: telephone (01) 804 5400.

(10) Criminal Convictions

In line with the revised procurement Directives, candidates or tenderers who have been convicted of involvement in organised crime, fraud, corruption or money laundering must be excluded from performing a public contract.

(11) Value-Added Tax (VAT)

Tenderers should be invited to express tender prices exclusive of VAT. VAT law provides for equal treatment in the supply of goods and services; therefore, no competitive advantage or disadvantage should arise from the correct application of VAT rules.

The Board is required to pay VAT on goods and services procured and, generally speaking, cannot recover VAT paid. In the case of goods and services invoiced from within Ireland, VAT is charged to the Board and remitted to the Revenue Commissioners by the supplier of the goods or services. However, where the Board is procuring or likely to procure, in a twelve-month period, goods above a certain value (€41,000 from 1 January 2002) from other EU Member States, it is required to register and pay VAT to the Revenue Commissioners (Collector General) in respect of those procurements.

VAT must be paid by the Board for all scheduled services (including the most commonly procured services) invoiced VAT free from abroad, i.e. there is no minimum threshold. If the Board is required to register for VAT because it receives scheduled services from abroad, all goods which it receives, irrespective of the level of such acquisitions, are liable to Irish VAT. VAT, calculated at the rate applying in Ireland, must be paid to the Revenue Commissioners by the Board where it receives such goods or services.

The foregoing is a brief summary of the VAT rules which apply when procuring supplies and services and the information is not exhaustive. Further information is available in “Value Added Tax Information Leaflet No 11/01” issued by the Revenue Commissioners, which is published on their website www.revenue.ie or can be obtained by contacting VAT Administration, Stamping Building, Dublin Castle, Dublin 2: telephone (01) 647 5000.

(12) Professional Services Withholding Tax

Professional Services Withholding Tax (PSWT) must be deducted at the standard rate from payments by the Board for professional services. Comprehensive information on PSWT is available in a booklet “A Revenue Guide to Professional Services Withholding Tax (PSWT) for Accountable Persons and Specified Persons” which is published on website www.revenue.ie or can be obtained from the Revenue Commissioners: telephone (01) 878 0100.

(13) Tax Clearance Certificates

Tax clearance of contractors as outlined in Department of Finance ‘Circular 22.95 Tax Clearance Procedures – Public Sector Contracts’ or any revised version which will be available on www.revenue.ie must be adhered to by the Board.

Tenderers should contact their local Revenue District or Larger Cases Division, as appropriate. Full contact details can be obtained, and for most cases an online application for Tax Clearance Certificates can currently be made, under ‘What’s New’ on www.revenue.ie

Non resident tenderers should contact the Collector General, Sarsfield House, Limerick: telephone (061) 310 310 or 1890 203 070

(1) Pre-tendering

• a) In all cases where public procurement is involved, the Secretary should be informed of the proposal. Details should include the need for and the scope and nature of the project, the “do nothing” scenario, the likely cost / aggregate cost and the proposed method of tendering. In the case of restricted tendering, the names of the firms proposed should be indicated. Where the value of work / equipment / services exceeds the restricted tendering threshold and it is not proposed to use the open tendering method, the reason for not proposing to use open tendering should be stated to enable the matter to be considered by the Board in accordance with paragraph 5(1)(b).
• b) In relation to costs, it should be borne in mind that in addition to the actual cost of the contract, other ancillary costs should be considered in relation to the Board’s overall estimate of expenditure. Such costs should include consultants costs, overtime costs for Board’s staff and VAT. Such costs should always be provided for in original estimates and should be detailed in the proposal.
• c) The proposal should include –
  • i. time factors involved e.g. in the case of works to be carried out:-
    • lead in time,
    • time for consultations, if any, to prepare documents,
    • proposed date for invitations of tenders,
    • last date for receipt of tenders,
    • date for the award of the contract,
    • date for the completion of the contract.
  • ii. the name of the person in the Board who will be responsible for the project / purchase.
  • iii. in cases where works are proposed to be carried out, a detailed brief of what is required. This is particularly important where the Board proposes to employ outside consultants (e.g. Architects, Engineers). The proposal / brief should be forwarded to the Chief Officer for approval before invitations to tender are issued.

d) Tender documents should specify the basis on which the tender will be evaluated e.g. Price, Lowest Suitable Tender (LST) or Most Economically Advantageous Tender (MEAT). Where MEAT is to be used, the weighting system must be set and recorded before the closing date for the receipt of tenders.

e) Where an invitation to tender includes the supply of different items e.g. computers and printers, the tender documents should normally state whether the tender will be evaluated as a single tender for all the items or as separate tenders for the individual items or groups of items.

f) The Secretary should be consulted regarding the wording of the proposed public advertisement or letter of invitation. Adequate time should be allowed for the preparation of tenders having regard to size, complexity etc. of the project. It should be stated in the tender advertisement / letter that a Tax Clearance Certificate or C2 document must be produced before a contract is awarded. See also paragraphs 2(8) and (10) above.

g) The advertisement / letter should inform tenderers that tenders may be the subject of a request for access under the Freedom of Information Act, 1997. The following wording, unless otherwise advised by the Secretary, should be used: -

“The Board undertakes to hold confidential any material provided in response to this tender subject to the Board’s obligations under the Freedom of Information Act, (FOI), 1997. Tenderers are asked to consider if any of the information supplied in response to this notice should not be disclosed because of its information content, to identify same and specify reasons for its sensitivity. The Board will consult with tenderers about sensitive information before making a decision on any freedom of information request received. If tenderers consider that none of the information supplied by them is sensitive, they should made a statement to that effect. Such information may be released in response to an FOI request.”

h) Tenders should be addressed to the Secretary, by name. Envelopes should be marked so as to identify them as tenders without having to open the envelopes.

i) All tender proposals will be assigned a tender number by the Secretary. All tender advertisements will be submitted for publication by the Secretary. Letters issued in relation to restricted tendering should only issue when the content/wording has been approved by the Secretary.

j) All open tendering advertisements should be advertised on the Board’s web site and the Public Sector Procurement Portal (www.etenders.gov.ie). Accordingly, any tender document prepared should be available to be downloaded from these sites.

(2) Receipt and Opening of Tenders

a) All tenders will be retained by the Secretary unopened until the expiry date / time for receipt of the tenders has expired. No tender will be opened in advance nor should any tender information that may have become available (by a casual remark from a supplier, for example) be passed on to others.

b) Tenders will be opened as soon as possible after the deadline by the Secretary in the presence of at least one other employee of SEO grade or above. In the case of tenders involving very large projects or very significant sums of money, the Chairperson may nominate a member of the Board to be present at the opening of the tenders. A report (Appendix 2) will be completed and signed by the two employees including the Secretary and the member, if present.

c) Tenders received after the closing time for the receipt of the tenders will not be opened unless this is necessary to obtain the name and address of the tenderers. All unopened tenders or any tender not being considered should be returned.

d) In the case of a tender involving Bills of Quantities, only the lowest Bill should be opened initially. Written consent must be obtained to open other Bills. Unopened Priced Bills of Quantities should be returned to the unsuccessful tenderers as soon as possible after the contract is awarded.

e) Tenders and all information relating to the processing of them should be treated as strictly confidential even after the contract has been awarded.

(3) Evaluation of Tenders

a) Award criteria should be clearly indicated in the advertisement or tender documents. Where price is not the sole criterion for the award of the contract, tenders should generally be evaluated according to the principle of obtaining best value for money using either the Lowest Suitable Tender (LST) or the Most Economically Advantageous Tender (MEAT) systems.

1. LST refers principally to price but may also have regard to such items as capacity, organisation, experience, performance on previous contracts, financial standing relative to the contract and compliance with any specifications or quality standards laid down for the contract. The method and criteria for selecting firms and awarding contracts should be documented and should be objective, transparent, proportionate and fair.
2. For contracts being awarded on the basis of MEAT, it should be the normal practice to have the evaluation of tenders carried out by a team with the requisite competency. This may include independent representation, i.e. a competent person from outside the area directly involved with placing the contract. Transparency and objectivity are best demonstrated by the use of scoring system or marking sheet based on the relevant weighted criteria, including price, indicating a comparative assessment of tenders under each criterion. (See Appendix 4 for sample score sheet).

b) A report on the evaluation of the tender should be completed by an officer not below the grade of SEO.

c) The lowest or any tender need not necessarily be accepted.

d) Tenders must be approved by an SAO, Chief Officer or the Board in accordance with the levels set out in Appendix 1B.

(4) Informing Tenderers

a) If the tender which the Board proposes to accept contains an error, the tenderer should be informed of the error and asked to formally confirm or withdraw his tender. If the tender is confirmed, a signed endorsement should be attached to the quotation.

b) Unsuccessful tenderers should be informed without undue delay. They may be informed in general why they were unsuccessful e.g. price grounds, but this should be done without revealing information about other tenders which could enable the price or other details of individual tenders to be revealed.

(5) Re-invitation to Tender.

In certain circumstances it may be necessary to re-advertise a contract e.g. where a contract has had to be postponed or there is insufficient initial competition. In such cases, the same procedures will normally apply to the re-invitation as applied to the original invitation.

(6) Repeat contracts.

Occasionally, at the time of an invitation to tender, it may be considered that further acquisition of the equipment or the provision of the service may be required at some time in the future. Repeat orders from an open or restricted tendering process may be permitted for a period up to twenty four months after the original advertisement was published provided that: -

1. the original invitations to tender stated that fact, and
2. the repeat order is made within the period stated in the original invitation.

Where it is proposed to make a repeat order which does not comply with the above provisions, the approval of the Chief Officer, in the case of a contract awarded following restricted tendering, or the Board, in the case of a contract awarded following an open competition, is required. Where the original and repeat order(s) would have the effect of bringing the aggregate value of the contract into a different threshold, the Chief Officer should be consulted. Where such aggregate value would be above the EU /GPA threshold, a repeat order will not be permitted.

(7) Contractual Arrangements.

Contract Documents should be signed in duplicate by the Secretary and person acting for the contractor. One original should be retained by the Board and the other given to the contractor. In other cases, a letter of acceptance will issue by the Board signed by the Secretary.

(8) Cost Overruns.

All projects should be carefully monitored to ensure that the works or services are carried out within specification, time and costs limits. In this regard, the Board will appoint a project officer, where appropriate, to oversee the project. There should be no question of client-inspired designs or other changes which would involve increased costs after the contract is signed/agreed. Where a cost overrun is foreseen or has occurred, the Chief Officer should be informed as soon as possible.

Appendix 1A - Tendering Limits ¹

Appendix 1B - Approval of Contracts¹ (Para. 10(3)(d))

Appendix 1C - Disposal Of Assets (Para 12)

1. The figures for tendering limits and approval of contracts are exclusive of VAT.
2. A threshold of €236,945 applies to supplies and services up to 31^st December 2005. Different thresholds apply in other situations. See Appendix 3 for full range of EU and Government Procurement Agreement of the World Trade Organisation (GPA) thresholds.
3. See EU Directive 2004/18/EC; the procedures are set out in paragraph 6 of Public Procurement Guidelines – Competitive Process published by NPPPU of the Department of Finance www.etenders.gov.ie under Procurement Guidelines or www.gov.ie/finance (under publications).