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Efca forum 2005

Efficiency, effectiveness and integrity questions
relating to Service Contracts Procurement
for EC External Actions
Stanhope Hotel, Rue du Commerce 9, 1000 Brussels

Opening remarks


Panos Panagopoulos, EFCA President
Koos Richelle, EuropeAid Director General

Session 1 – Service procurement for EC external actions: policy and implementation


Agneta Lindqvist, EuropeAid/G7
Dino Sinigallia, Relex, Ethiopia
Session
Devesh C. Mishra, World Bank
Tony Gardner, Department for International Development (DFID), UK
Session
EFCA’s
Robert Couturier, Chair, EFCA European External Aid Committee
Session

Round-up
Jules Muis

Annex : List of Participants

The speakers’ presentations are available at:
Jules Muis, Moderator, welcomed all to the Round-Table.
The Round-Table aims at opening the door to a forthright debate and frank exchange
of views on directions for best practice procurement in the area of development
assistance.
Mr. Jules Muis is former Vice-President of the World Bank and served as Director
General of the Internal Audit Service of the European Commission from 2001 to 2004.

OPENING REMARKS
Panos Panagopoulos

Mr. Panos Panagopoulos is the President of the European Federation of Engineering
Consultancy Associations (EFCA).

Panos Panagopoulos welcomed all speakers, guests and participants.
He began by referring to the activities of the European engineering consultants in
development and partnership projects worldwide. He then turned to the role of EFCA
and in particular of the EFCA External Aid Committee, which is focused on improving
the effectiveness of the procurement processes in European external aid
In this context, the President welcomed the European Commission’s recent move to
harmonise Budget and EDF procedures. The removal of excessive requirements in
the procurement process that go beyond what is strictly necessary, would be a
further important step to optimising procurement procedures.
The devolution of the management and supervision of development projects to the
recipient countries and the increased funding through budget support rather than on
a project basis strongly impact the industry’s business conditions.
He referred to the findings of the EFCA survey, which are based on a representative
part of the European industry providing technical assistance, and identify the
weaknesses and challenges in the external aid procurement processes.
He then mentioned some examples of solvable issues and pointed out that about
80% of the responding firms consider that the present evaluation processes do not
give sufficient guarantees as regards fairness and prevention of corruption
opportunities.
Finally, the EFCA President appealed to the European Commission to consider
jointly formulating practical and immediately enforceable measures for improvement
of the procurement procedures in external aid, to the benefit of all stakeholders.
OPENING REMARKS
Service contracts – EC external actions
Koos Richelle

Mr. Koos Richelle is Director General of EuropeAid Cooperation Office. He is
responsible for overseeing the DG's mission, which consists in the
implementation of the Commission's external aid instruments financed by the
Community budget and the European Development Funds.

Mr. Richelle began by explaining his mission and role.
He said that his presentation would demonstrate that the EU’s development
approaches are working and increasingly progressing towards results.
Development aid is increasing and will increase further. This aid is to be directed to
development results.
EuropeAid manages a large development aid programme (about 8 billion euro), and
is active in about 160 countries.
Technical cooperation accounts for about 25% of total ODA. Both the European
Parliament and the Court of Auditors closely control its effectiveness.
The variety of cooperation instruments, the tapestry of development actors at
European and country level, and the devolution of responsibilities to the Delegations
and recipient countries mean that the Commission services operate in an
increasingly complex and high-risk environment, in which financial and development
risks are to be balanced.
The firm commitment to aid effectiveness started in 2000.
The EC aid management reform agenda and the focus on the development of the
beneficiaries’ capacities, articulated in the Paris Declaration, entailed a demand-led
approach and result-orientated focus for technical cooperation.
Secondly, the use of technical cooperation as an instrument for the beneficiaries’
capacity building was made conditional on the country-ownership principle, alignment
with other aid mechanisms and coordination with other donors.
From the reforms contained in Accra Agenda for Action, Mr Richelle returned to the
aid effectiveness actions in relation to technical cooperation and project
implementation units, addressed in the Backbone Strategy.
He referred to the inclusion of regional and local authorities in development
strategies, donor coordination and pooled funding for major projects, and policy
coherence (trade, international finance).
Mr Richelle reaffirmed his personal commitment to undertake these reforms to
improve aid effectiveness with respect to capacity development.
Turning to integrity, he mentioned the growing proportion of OLAF cases in the area of external aid. In 2007, 90.5% of the audited cases were cleared. A majority of these cases of irregularities concerned organisations, foundations and NGOs, and not private consultancies. Finally, he pointed to the increased transparency and the disclosure data about the recipients of EU funds for external assistance. Going into the subject of the EFCA proposals and ‘low-hanging fruits, Mr. Richelle said that the Commission’s willingness to bring about changes is restricted by law and regulations. However, referring to the progress in the introduction of accruals-based accounting he said that he, together with his staff, would look at what next practical and technical steps could be taken towards further modernisation. Thanking Mr. Richelle for making a series of issues of the management process debatable, Jules Muis asked details about the Commission’s strategy to ensure coherence between its quality assurance system with national donors’ evaluation and performance measurement systems. Mr Richelle reacted that he would not go into the member states’ monitoring and evaluation systems. With reference to the increasing shift to budget support, he said that the Commission is paying particular attention to the beneficiaries’ performance indicators and financial management systems. The Commission’s approach is built on the IMF macro-economic conditions and the aid inflow is controlled through the Delegations. Europe has taken on the political commitment to increase the use of budget support, and therefore needs to manage all risks that are related to this form of aid funding. Mr. Panagopoulos (EFCA) asked Mr. Richelle to what extent the country’s development needs may be ‘operationalised’ into the aims of development aid. He also requested a general assessment of the quality of technical cooperation services, provided by the European consultancy. With reference to Jan Tinbergen, who thought that development aid through the 0.7 envelope would help to narrow the North-South prosperity gap by 2000, Mr. Richelle said that the real debate on aid effectiveness within a new paradigm of the relation between donor and recipient only started at that moment. Moreover, whilst the adequate level of aid was never defined, assistance towards better performing developing and middle-income countries was increasingly questioned. In Mr. Richelle’s view, country-ownership and investment in the countries’ human resources and knowledge are key elements for the success and ‘finality’ of aid at global and country level. Aid to middle-income countries is to become more related to business investment and enterprise development than targeted at poverty reduction. In response to the second question, Mr. Richelle stated that in general engineering consultancies deliver quality services. In the few cases of failure, investigations are carried out and legal proceedings opened. He added that a debarment system is not compatible with the current European legal framework. Mr Richelle concluded that whilst the quality in general is very satisfying, there continues to be the question about the sustainability of project aid. Martin Güldner (GOPA) stated that the delivery of quality aid is related to the firms and their staff that are involved in the value chain. He remarked that EuropeAid’s selection of proposed project teams for technical assistance projects is mainly CV-based and insufficiently relates to the firm’s professional competence. Mr. Richelle commented that the firm’s technical/professional abilities are evaluated. He added that the practice did not prove encouraging as companies proposed to replace staff at too late moments. He was aware of the industry’s concerns about bureaucracy and cumbersome procedures. However, compared with other donors, EuropeAid is delivering well within the existing regulatory framework. He underlined that the European Commission (and not the Delegations) is always taking financial decisions, for which it is accountable. Consequently, the Commission has put in place procedures to avoid the risks of mismanagement. A general assessment of the procedures would be made in the context of Accra Agenda for Action, but Mr. Richelle doubted that major shifts in the rules would be decided by 2009. Jules Muis referred to the EC’s contributions to the optimisation of financial regularity audits, and concluded the general discussion on accountability principles and rules to protect against risks of litigation. Reinhard Honert, VBI, asked about possible improvements of the current redress and appeal system and EuropeAid’s attitude towards drawing lessons from such challenges. Mr. Richelle answered that clear and explicit formal procedures exist. The Ombudsman’s role is limited to the investigation of complaints about maladministration. Complaints about award decisions are few. In cases of appeal, award decisions are reviewed and corrected whenever the competitive process proved incorrect. However, the majority of complaints are insufficiently substantiated and not valid. In case of practical problems, Mr. Richelle suggested to the industry to address these at the next level in the hierarchy, i.e. the Head of Delegation and/or the concerned geographical Directorate. He affirmed that EuropeAid is taking into account the lessons from malpractices and occasional cases. The latter, however, prove too specific and incidental and are therefore not sufficiently relevant to justify a change of the procedures. Jules Muis said that the debate had entered into ‘low-hanging fruits’. Enrico Vink, FIDIC, questioned the effects of the continuing financial crisis on development aid funds and commitments, and its impact on the quality of development aid. Mr. Richelle said that the EU’s overall assistance (including EDF) would increase. However, some member states already reduced their national development aid pledges. He underlined the EU’s participation in the forthcoming ‘Financing for Development’ Conference and joint position on financing for development issues. Economic forecasts for 2009-2010 show a general slowdown. The impacts of the financial crisis on economic activities and growth in developing countries are not yet clear. The availablity of credits and commercial lending will decrease. Therefore, a strong coordination between development finance institutions and pooling of various forms of donorship for major projects is imperative. Mr Richelle said that the financial crisis could have implications on the implementation and time schedule of projects. However, it is too early to forecast all challenges created by the downturn in developed economies. On behalf of the audience, Jules Muis thanked Mr. Richelle for sharing his ideas and views. SESSION 1
SERVICE PROCUREMENT FOR EC EXTERNAL ACTIONS: POLICY AND IMPLEMENTATION

Ms Agneta Lindqvist works in EuropeAid/G7 (Financial and contractual
matters, and legal affairs).

Ms Lindqvist supplemented Mr. Richelle’s presentation on the political perspectives,
aims and boundaries of aid effectiveness and efficiency by outlining AIDCO’s
procurement procedures aimed at maximising the delivery of the best result in the
right way.
The Practical Guide to Contract procedures for EC external actions (PRAG) contains
all the requirements applicable to the contractual procedures, and facilitates the
reading and implementation of the rules.
The 2008 review of PRAG, to take into account the consolidation of the budgetary
arrangements for Budget and EDF funded programmes, is expected to be finalised at
the end of November-beginning December.
Remaining differences between Budget and EDF procedures concern the rules on
eligibility and preferences.
Benefits of the review for the industry are the harmonization of rules and annexes,
the introduction of flexibility in the EDF procedures, and simplified tender documents
for calls for tenders under a lower threshold.
The competitive dialogue can also be used for EDF, and the threshold for financial
guarantee requirements for pre-advance payments under EDF is increased.
Other plus-points are the automatic payment of interests (in centralised systems), the
acceptance of copies of documentary evidence (cf. exclusion criteria), extended
validity period for the proof documents for EDF and the removal of the requirement
for a sworn statement to state that the situation has not changed.
The July 2008 Backbone Strategy provides for increased ownership, which for
procurement of technical cooperation services, in centralised management, means
the beneficiaries’ involvement in the elaboration and approval of the tender dossier,
the evaluation committee, and the approval of the project report.
The revised PRAG provides for telephone interviews in the place of physical meetings. Annexes also incorporate an extensive glossary. Improvements of the annexes relate among others, to the global price contract form, the instructions on drafting requirements in the Terms of Reference (e.g. period of experience; local experience instead of local expert, key and not-key experts instead of long-term and short-term experts), the introduction of separate selection criteria for natural persons, and the consolidation of the Budget and EDF annexes. Ms Lindqvist then turned to aid effectiveness. She explained divergent aid instruments and modalities, and the Commission’s aid management modes procedures under co-financing (working with and through other aid partners). Going into the subject of integrity, she referred to the PRAG provisions to increase transparency (e.g. the definition of technical specifications) and the training of contracting authorities to ensure a coherent interpretation of the rules. Ms Lindqvist presented various items in the AIDCO website. Finally, she said that feedback from both contracting authorities and the industry were considered in the review of the PRAG, as well as the legal framework, recommendations of the Ombudsman and relevant case law.
Mr. Dino Sinigallia is Head of the Delegation of the European Commission to
Ethiopia.

Mr. Sinigallia explained the mission of the Head of Delegation in EC Delegation to
the African Union in Djibouti (Council representative) and the roles of the EC
Delegation in Addis Ababa.
He said that his presentation would focus on the industry’s role in the implementation
of the aid policies and objectives.
He explained the Delegations’ formal role in the project procurement process and
project implementation phase. These include the approval of publication of the
forecast notice, approval of the members of the evaluation committee and
participation as observer in the evaluation, approval of the tender dossier, and
signing of the contract. During the implementation phase, the Delegation’s role
involves site visits and discussions with both the beneficiary and firms, and finally the
approval of the written report and payment.
Additional functions may include support to the National Authorising Officer (in the
preparation of tender dossier and the project implementation).
He then turned to the role of consultants in the context of general and sectoral
budget support. Consultants can assist the Delegations in identifying and formulating
objectives and priorities, preparing and implementing programmes, assessing the
country’s eligibility for budget support against the PEFA (Public Expenditure and
Financial Accountability) criteria, performance monitoring and evaluating the impact of the aid. Moreover, firms can be involved in capacity building support actions. Mr Sinigallia remarked that for joint budget support and pool-funding, the European Commission or the bilateral donor from one member state or the multilateral donor can manage the funds. He underlined that the European Commission and consultants are in the same boat and that the European Commission could not implement its development aid without the assistance of consultants He presented the Delegations’ views on bottlenecks and possible solutions: v the experts’ lack of knowledge of the EC procedures, EC contracts, and the roles of the Delegations, NAOs and the EC; solution: training of staff v unclear and non-traceable lines of responsibility (the firms is serving two masters, i.e. the NAO and the Delegation); solution: the expert is to take the role of catalyst and intermediary, and needs to explain the lines of the project implementation in a joint meeting with the NAO and Delegation, v project output, in particular the commitment to the project and/or country; solution: backstopping guidance and support from the headquarters before the start-up of the project. Mr. Sinigallia remarked that the Ethiopian government is suspicious of technical cooperation experts, and he advised experts to demonstrate diplomacy (and to refrain from any pedantry), v lack of accuracy of key experts’ CVs and the firm’s capability references; solution: more interviews (possibly video conferencing), Delegations to check CVs and firms’ references, v replacement of experts proves a major problem. Mr Sinigallia expressed sympathy for the firm’s problems as regards ensuring the experts’s availability during extensive selection processes and added that the Delegation aimed at realistic time assignments to start projects. Mr. Sinigallia ended his presentation with the statement that to date, he had never been confronted with a claim and he advised firms to seek an amicable solution at the administrative echelon. Jules Muis thanked Mr. Sinigallia for the frank observations and his contribution to the ‘mutual learning curve’. COMMENTS, QUESTIONS AND ANSWERS


Chérigui Kader, TRANSTEC, suggested that AIDCO rely on the firms’ past
performance assessment forms to evaluate the firms’ capabilities. Pointing to the
definition of ‘expert’ in the PRAG glossary, he mentioned the firms’ problems with
regard to the availability of permanent in-house experts (versus the use of
independent freelance experts). Thirdly, he asked for a clarification of ‘sub-
contracting’ (cf. annex I – General conditions for service contract, article 4).
Mr. Sinigallia replied that no written evaluation forms existed. Ms. Lindqvist explained that non-official performance reports exist only for framework contracts and long-term projects. Referring to new firms and negative reports, she questioned the use of such past-performance based track records. Mr. Sinigallia underlined that firms need to provide the required backstopping services to their staff to ensure that CVs correspond to reality. In his view, the industry’s use of freelance experts was not problematic. Etienne Matton, IBM, underlined the need for a good relation between the firm, which is ultimately responsible, and the Delegation. Mr. Sinigallia endorsed this view, and called on the firms to meet with the Delegation and its experts. Ines Ferguson, TYPSA, asked whether the EC was checking whether fair competition rules were respected in co-financed projects, managed by national development agencies. Ms Lindqvist replied that the Commission is verifying whether the potential fund managing donor is complying with the requirements of the Financial Regulation. Mr. Panagopoulos, EFCA, requested whether the statement as regards administrative conformity would be requested from the winner only. Ms. Lindqvist explained that in accordance with the Financial Regulation, this statement is required from all participants in two-step procedures (selection phase). In the open procedures, only the winner needs to provide such statement. SESSION 2 – SETTING THE SCENE

Mr. Devesh C. Mishra is Procurement Manager (Europe and Central Asia) for
the World Bank at Washington DC. He has been with the World Bank for more
than 10 years and has a professional experience of more than 36 years in the
implementation of large infrastructure projects including 28 years in
procurement.
Peter Trepte, a UK Barrister has been working on a study of the Consultant
Selection Guidelines.

Mr. Mishra thanked EFCA for the opportunity to talk about potential changes in the
World Bank policies, ensuing from a survey to various stakeholders.
Before beginning his presentation, Mr Mishra said that based on his previous
experience as Bank’s Borrower in India the 80’s, India saw development
achievements without external consultants and there was reluctance on the part of
Borrowers to engage external consultants. He added that in his current experience in
the World Bank, borrowers are generally opposing the perceived intrusion of
consultancies.
In his capacity as regional procurement manager, he is aware of consultants’
concerns and he comes across complaints made by consultants. In his view, the
Bank’s complaint management system is active and also well-functioning.
Mr. Mishra explained that whilst in the EC ‘services’ include intellectual and a wide
variety of other service activities, the World Bank Consulting Services Green
Guidelines apply to services of intellectual and advisory nature. The non-consulting
services, which are measurable and quantifiable services, are covered by the Red
Guidelines.
The study on the implementation of the Guidelines, led by Gian Casartelli, is a
restricted World Bank document and a work-in-progress
Mr Mishra would comment on the study’s key findings and recommendations.
The Guidelines, issued in 1964, emphasised qualifications as the prime selection
criterion; price was not a factor. In that period, the Bank focused on infrastructure.
In 1981, in addition to quality, price was introduced as a criterion.
In 1997, methods (QCBS, LCS, single source selection etc.) and flexibility in the use
of these methods were brought in. The ‘educated’ borrower was expected to select
the most appropriate method.
Infrastructure is the Bank’s largest portfolio. Consultancy services amount to 1,3
billion $ (2004).
The Casartelli study demonstrated that an unexpected result of the introduction of
flexibility was that 92% of the selection methods chosen was QCBS-based (2003-
2004). The borrower did not analyse which selection method would be most
appropriate. Moreover, differently proposals were given quality scores in close range
without much of differentiation and as a result price became the determinant factor for the contract award in several cases. In conclusion, the clients needed more guidance in the correct application of the Guidelines. Another major drawback of the inappropriate use of QCBS is the loss of good consultants, and the firms’ withdrawal from countries in which they had bad experiences. But again it was the choice of the consultant whether to stay engaged in a particular country and of its own company strategy. Mr Mishra presented a series of observations: v The Terms of Reference need to identify their services clearly and without ambiguity. The short list requirement of 6 firms with not more than 2 firms of the same country should not be applied in a too mechanical way. There might be exception of more than two firms from the same country if there are no qualified consultants from other countries. v Selection criteria (CVs, years of experience etc.) need to be used in a realistic and v The costs (average is between 30,000 to 60,000 $ whilst the chance to win the contract is 1 in 5) and the length of the procedure needs to be reduced (average is 17 months). v The members of the Evaluation Committee need more training in the Bank Mr Mishra added that the Casartelli study examined in detail the borrowers’ use of the most appropriate method, the most frequently used method, the participation of the most capable firms, and efficiency and costs of the selection. The study aimed at assessing the need for modifying the guidelines and the capacity of the users to apply the guidelines correctly. However as a low hanging fruit solution (the theme of the round-table) we need to train the Borrower in applying the Guidelines appropriately. For example, in the experience of Mr. Mishra, it is feasible to reduce the length of the selection process for selection based on Consultant’s qualification to 2 months, by indicating in the Expression of Interest (EOI) selection criteria like assignment on experience (40%), CVs of key personnel (40%) and brief response to ToR (20%). Based on EOI (which might be used for a higher value assignment – current limit $200,000- which again is required to be discussed within the Bank management first), only one firm with the most appropriate qualification and experience and response to brief TOR shall be selected and invited to provide a full technical and financial proposal. He concluded with the statement that the Casartelli report is not released because of certain data in the report that are consultant specific and hence confidential. Finally, the World Bank is reviewing the Casartelli study. However, he invited feedback from all participants based on the presentation so that the Bank can adjust the guidelines in the future to reflect best industry practice. Mr. Tony Gardner is Head of Procurement Group, Finance and Corporate
Performance Division, Department for International Development (DFID), U.K.

Mr. Gardner began by presenting the four focal areas of the ongoing transformation
of government procurement, and a description of DFID’s procurement business.
He explained the rules and good practice of advertising, adjudication criteria,
minimum timescales, standstill period and feedback. As regards the feedback to
unsuccessful participants, he commented that the scores prove to have only a limited
value for the suppliers.
He then turned to what DFID should do to achieve the best result. Keywords include:
define what it is aimed at, risk management (DFID plans to require bank guarantees
when necessary), manage the relationship for mutual quality (‘constructive
confrontational’ relation), transparent evaluation.
From the firms DFID is seeking clarity, reliable CVs and availability of experts, and
their ability to ‘sell’ their unique expertise through proposals.
Technical quality is only a part of the delivery of high quality development assistance.
It encompasses a range of skills and competences, consistency, effective
communications, good quality reporting, flexibility, cost control and understanding the
culture.
DFID interviews include a presentation by the project manager and questions.
DFID is seen as a strong agency. However, suppliers have requested more clear
ToRs (expected output) and more indicative inputs, as well as more feedback.
The concept of risk relates to poor tenders, fake competition, lack of understanding,
not-realised benefits and wasted money.
The DFID procurement review aimed at assessing all procurement capabilities for all
funding instruments (grants, budget support etc.) and included a consultation with all
stakeholders. The review found that procurement systems and practices were good
and managed by a strong professional team. However, commercial management and
strategy were weak points (i.e. an assessment of the potential to obtain greater
value-for-money and development benefits from their procurement systems and
practices).
The ensuing Improvement Plan calls for fuller and earlier assessment of focal areas
(procurement management strategy) and effective sharing of information (corporate
procurement knowledge).
Mr. Gardner explained the values, underlying the integrity principle.
He concluded that further improvements of DFID’s performance are possible and
would be pursued.
COMMENTS, QUESTIONS AND ANSWERS
Doris Wirth, Bluewaters Environmental Consultants, commented that the high costs for preparing proposals are discouraging firms from responding to tenders and in particular a real barrier for SMEs. She asked whether such costs related to tendering could be reduced. Mr. Gardner said that in order to ensure broad participation and good quality tenders, DFID may exceptionally reimburse unavoidable extra bidding costs. Mr. Mishra referred to the Bank’s guidelines, which facilitate the participation of smaller firms, and the possibility for small projects to invite a single firm or simplified proposals. Rob Wijdemans, Haskoning, said that the industry was eagerly awaiting the Casartelli report. Referring to the Bank’s frank admission that ‘participation of acknowledged and good firms is decreasing’ and the possibility that this would be true for AIDCO, he questioned what the Bank would do to remedy this situation. Mr. Mishra said that the report is considered ‘work in progress’. As regards the loss of good consultants, he remarked that the Bank is not responsible for preparing the ToR and the evaluation. However, the Bank may question to a certain degree the evaluation report and in his view, should be critical when reviewing the evaluation. Reinhard Honert, VBI, asked whether DFID and the World Bank use ‘framework contracts’, and requested details about the recommendable practice of providing ‘feedback to consultants’. Mr. Gardner explained that DFID uses framework contracts. However, DFID would upgrade its forecast programming to ensure more accuracy. He explained that in practice the DFID complaints procedure is being replaced by a ‘supplier feedback system’. Mr. Mishra said that the Bank’s guidelines define ‘Indefinite Delivery Contracts’, and added that these are not frequently used (and prove often misused). Complaints are registered in a public database and are quickly followed up. In his view, the Bank’s feedback to firms (i.e. a general comment on the rejected proposal) needs further improvement. Peter Trepte added that ‘framework arrangements’ relate to other, specialised services (requested by the borrower and to be additionally funded), and that the borrower may use its own framework arrangements. He explained that problems relate to the ToR and the evaluation of these particular and specialised services. Ian Meers (M & I. Doradztwo Inwestycyjne Sp. z o.o.) commented that huge EU funds are transferred to Poland, whilst the administration has insufficient procurement capacities. Both Messrs Gardner and Mishra admitted that lack of administrative capacities is a recurring concern. SESSION 3 – RESULTS OF EFCA’S SURVEY


Mr. Robert Couturier is Chair of the EFCA External Aid Committee.

In his introduction, Mr. Couturier referred to three principles of EC service contract
procurement, namely open competition, transparency and ruling out conflicts of
interest. Significant benefits were attributed to the harmonisation efforts for the
external aid programmes.
The Paris Declaration, and the ensuing Backbone Strategy, presenting a vision of
future Technical Cooperation practice and Project Implementation Units (PIUs) and
setting out an action plan, will impact on procurement.
EFCA and the EFCA External Aid Committee share the EuropeAid objective of better
quality technical cooperation and recognise the devolution approach and process.
In its dialogue of many years’ standing, EuropeAid has, on occasion, questioned
EFCA’s representativity. EFCA launched a survey among its membership on the
EuropeAid procurement cycle, in which 91 firms, i.e. 30% of the EuropeAid service
providers, participated.
Mr. Couturier presented the survey’s findings.
Respondents considered the forecast very short and wished details on the technical
capacity criteria at an early stage to establish alliances with other firms. Technical
capacity requirements, defined in the procurement notice, were found too restrictive
and inconsistently interpreted (e.g. ‘3 years reference’ is too short and is even
sometimes limited to completed projects only). A majority indicated a preference for
the use of e-mail for submitting applications.
The budget in the tender dossier was usually considered inadequate, and the use of
the evaluation grid in practice raised concerns. Site visits and clarification meetings
were seen as useful and should be organised for tenders above € 1 million and for
complex projects. Respondent consider that, at the tender stages, official contacts
with EC representatives and local authorities should be recommended and do not
consider that this would increase corruption opportunities. A large majority indicated
that all information should be made available to all tenderers in order to ensure
transparency and equal treatment.
The majority said that the short list needs to be limited to 6 (instead of 8) firms.
Clarification requests were inadequately and not timely answered and contacts with
officials should be enhanced.
A major worry as regards the evaluation related to the ‘preferred tenderer’.
Members of the evaluation committee are appointed by the national authority. The
EC observer is not in a position to detect or challenge a manipulated/preferential
score.
The respondents formulated a series of corrective measures:
- participation of an independent and technically qualified evaluator in the
evaluation procedure (to keep tight control over the way in which taxpayers’ money is spent); - increase the minimum number of evaluators, and eliminate deviating notes; - foresee a review of proposals in case of a claim (standstill period of 10 days); - assess the CVs of the evaluators; - a majority of the respondents remarked that the selection of only one single technical compliant tenderer should be the exception. In such case; an independent evaluator should review all technical proposals; - publicise the scores of technically compliant tenderers prior to the evaluation of - organise random checks of evaluations by an independent evaluator; - control evaluations in countries with a high perception of corruption; - set up a EuropeAid unit of qualified evaluators. The responses related to contract award revealed the firms’ concerns about compliance with procedures, timely information about the outcome of the tender procedure and feedback about the number of technically compliant tenders. . Respondents considered the existing appeal procedures unfair and inefficient, and favoured the setup of an independent review body. Generally, the firms view that appeals addressed to the contracting authority or the European Commission have very little chance of leading to a reversal of a contested decision. Mr Couturier highlighted that the improvement of technical cooperation procurement is one out of the 5 working axes set out in the Action Plan that complements the Backbone Strategy. EFCA is endorsing the objective of speeding up the project start, and is committed to enhancing the dialogue on reforming technical cooperation with EuropeAid Jules Muis concluded that the round table initiative was a unique and successful effort. However, it requires a further constructive and productive dialogue with EuropeAid to arrive at practical conclusions. SESSION 4 – LOW HANGING FRUITS
Stephan Arens, European Court of Auditors, thanked EFCA for the invitation to the round table, which he regarded as particularly contributing to greater aid efficiency. He explained that the Court of Auditors is carrying out both financial and performance audits. The latter audits examine whether the financial management of the European Community has been sound and whether the activities have been performed in an economic, effective and efficient manner. Subjects also comprise procurement and devolution. In this context, the results of the EFCA survey are highly relevant to the institution. Ian Meers (M & I. Doradztwo Inwestycyjne Sp. z o.o.) commented that corruption was not a problem in Poland. The procurement issue is the lack of transparency. In practice, technically compliant tenders fall short of technical specifications and standards that were included in the Terms of Reference. Mr. Gardner remarked that the EFCA proposal to nominate technically qualified members to the evaluation committee would not exclude conflicts of interest. He therefore suggested providing for an independent technically qualified evaluator in procurement. Gert Bergen, GITEC Consult, asked Mr. Gardner to expound the DFID views on increased budget funding and the need for qualified administrative staff in beneficiary countries’ government institutions. Mr Gardner said that there is a gradual recognition that making expertise available is not sufficient for development. Gradual changes towards improved financial management, accounting and procurement systems are to be included in a budget support strategy. Capacity issues are important and present challenges that need to be addressed. Peter Trepte (World Bank) remarked that no regulation on appeals could remedy the decision of an incompetent evaluation committee. Jules Muis commented that the EU not only established a regulatory framework; it is also designed to redistribute wealth and prosperity. Businesses are a key element in growth and each sector would favour policy decisions and regulations that stimulate and defend its interests. Panos Panagopoulos reacted that the regulatory system is weighing on the business and locking the potential for growth. It therefore is time to ‘shake the fruit down from the tree’ and to join efforts to seek a balance, which helps the functioning of the European enterprises. Robert Couturier, EFCA, underlined that the presented proposals do not entail a change in the current regulations. He added that rules are to ensure a level playing field for all competitors. Jules Muis thanked the speakers for their contribution, EFCA for its invitation, and the audience for their participation. Mr. Panagopoulos thanked the moderator. ANNEX - LIST OF PARTICIPANTS

First name
Function
Representation
Permanent Representation of Denmark to the E.U. Permanent Representation of Spain to the E.U. Permanent Representation of France to the E.U. Permanent Representation of France to the E.U. European Commission/DG DEV/Internal audit Permanent Representation of Denmark to the E.U. European Commission/DG EuropeAid/Financial and Contractual Matters & Legal Affairs Department for International Development Permanent Representation of Finland to the E.U. Permanent Representation of France to the E.U. Permanent Representation of Spain to the E.U. European Commission/DG EuropeAid/Financial and Contractual Matters & Legal Affairs M & I. Doradztwo Inwestycyjne Sp. z o.o. European Commission/DG EuropeAid/Financial and Contractual Matters & Legal Affairs European Commission/Delegation of the European Commission to Ethiopia Permanent Representation of Austria to the E.U. Economic and Commercial Affairs Officer Permanent Representation of Sweden to the E.U. Entreprises Permanent Representation of France to the E.U. Permanent Representation of the Czech Republic to the E.U.

Source: http://www.efca.be/Portals/EFCA/EFCA%20files/PDF/18-11-08Report.pdf

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