is the term used to describe
the purchase of both goods and services according to a precise set
of procedures established to obtain the best value for money.
All activities have to be carried out according to specific regulations
to guarantee best value for money but also the correct expenditure
of funds and to safeguard the interests of the Financing Institution
/Do-nor and the Beneficiary.
is carried out through a series of precise steps which are commonly
referred to as the Pro-curement Cycle and which require management
of far more than simple purchasing activities. The ma-jor steps
as envisaged for the project are shown here below:
1. Planning and identification
of requirements: ensure coherency of procurement procedures as
agreed by the Financing Institution /Donors and Beneficiaries.
Technical staff of the PMU may assist the Procurement department’s
2. Assurance of adherence to Financing Institution and donor regulations:
continuous controls need to be carried out to guarantee the correctness
of expenditure of funds and safeguarding of public interests as
well as the respect of international trade agreements, eligibility
3. Preparation and issue of tender
documents: in the light of the preliminary administrative as-sessments
and technical requirements, documents are drawn up according to
donor regulations to provide the clearest possible details to
potential suppliers, permitting the submission of effi-cient bids.
Errors during this phase may render useless the procurement activity
and delay im-plementation through the need for rebidding.
4. Analysis and evaluation of
Prequalification and Tenders: scrupulous attention is required
in the methodology and techniques of evaluations. Transparency
of procedure is vital at this stage. Recommendations must be made
according to the most suitable bid resulting from the objective
implementation of pre-established evaluation criteria.
5. Contract negotiation and placement:
instructions to the suppliers must be given in a clear man-ner
according to the terms and conditions of the funding agency, donors
and the specific re-quirements of the recipient.
6. Logistics arrangements and
supervision: assistance may be required by the suppliers and recipi-ents
for the correct receipt of goods and services..
7. Financial administration, and
reporting: the PMU’s Finance and Procurement department
must answer to the funding agency for budget control, financial
control and cash flow analysis, and be in a position at all times
to clearly demonstrate the correct disbursement of funds, detail
pro-ject implementation and bring to light any problems which
may occur, indicating also possible solutions.
Contracts must be awarded to the most economically advantageous
tender, (i.e. that which offers the best price-quality ratio),
in accordance with the principles of transparency and fair competition
for po-tential contractors and taking care to avoid any conflicts
Compliance with Rules
In the event of failure to comply with the rules expenditure on
the operations in question will not be eligible for EC financing.
Tendering and contracting are subject to ex-ante approval (endorsement)
by the Commission for each type of procurement and procedure followed
(e.g. tender dossier, evaluation procedure, evaluation re-port,
Contract Rules and Procedures
There are strict rules governing
the way in which contracts are awarded. These help to ensure that
suitably qualified contractors are chosen without bias and that
the best value for money is obtained, with the full transparency
appropriate to the use of public funds.
Procedures established by the
European Commission for procurement under the relevant EC external
aid programmes are consolidated the Practical Guide.
The EC website www.europa.int/comm/europeaid/tender/gestion/indexen.htm
must be visited regularly to check for updates.
Before initiating any tender procedure,
the service, supply or works to be contracted must have been approved
in a Financing Agreement
Supply of Vehicle for
Ref. : EuropeAid/128677/N/SUP/EG