WRITTEN QUESTION E-1294/96 by Roberto Mezzaroma (UPE) to the Commission (31 May 1996)

Subject: Administration of Community aid in Bosnia

A number of European companies, including 'Italtrend' of Bologna, have been given the task of delivering supplies of humanitarian aid to Bosnia.

1. What criteria were used for selecting these companies and what contractual terms were laid down in the call for tender?

2. What legal, financial and logistical guarantees did these companies have to provide to win the Community contract?

3. How will the Commission check that these companies effectively carry out their task?

Answer given by Mr Van den Broek on behalf of the Commission (5 July 1996)

The Commission has on the behalf of the authorities of the Republic of Bosnia and Herzegovina contracted two procurement agents - EuroP.A.P.A. and Italtrend s.r.l. in association with Gemco and Cato - with effect from 15 January 1996. The role of the procurement agents is to arrange for the final identification, procurement and delivery of goods as specified under the Phare Essential aid programme in favour of Bosnia and Herzegovina at a cost that is economically the most advantageous and in the shortest possible time permitted by the requirement to act in accordance with Phare regulations and the tendering and contracting provisions agreed beforehand.

1. A general invitation to tender for pre-qualification for procurement agents was published ((OJ C 161, 27.6.1995. )). Following the evaluation of this tender, 13 procurement firms and consortia were retained as pre-qualified. On this basis and in accordance with standard Phare procedures the Commission established a balanced short-list of nine procurement firms which were invited on 28 November 1995 to tender for the specific procurement task under the Essential aid programme. The tender dossier included a standard draft procurement contract and relevant annexes in accordance with Phare tendering procedure. A copy of the draft contract can be made available on request. An evaluation committee was established which decided on the detailed technical evaluation criteria within the three main headings specified in the tender invitation namely: 1) organisation, time schedule, methods and plan of work (weighting maximum 25%); 2) experience (weighting maximum 30%); 3) qualification, experience and skills of proposed staff (weighting maximum 45%). Applying a double envelope method (separate technical and financial offers) the financial offers were only opened for those tenders which were technically acceptable i.e. scoring at least 65%. For these the overall ranking was computed weighting the technical proposal 70% and the financial proposal 30%.

2. The procurement agents were requested to engage themselves through a standard procurement contract including terms of reference, organisation and methods, list of staff, breakdown of prices and the general conditions for service contracts financed from Phare and Tacis funds. An integral part is bank guarantees covering the advance payments foreseen under the contract which allow the contracting authority to recuperate advances in case of non-performance. Subsequent payments are made based on regular invoicing of work performed. Final payment is made only upon the Commission's approval of a final report at the end of the assignment from the procurement agents. The procurement agents were requested to establish a permanent presence in Sarajevo, adequately staffed to perform the contractual tasks for the duration of the assignment. They have also been requested to pay particular attention to the logistical problems presented by the infrastructure conditions of the country and to devise methods to overcome possible delays.

3. Several monitoring and control mechanisms are in use. At the inception phase the procurement agents were requested to present an action plan setting out the time frame of their tasks under the contract and the resource input necessary. This is updated on a monthly basis and presented to the Commission in monthly and quarterly progress reports which provide an overall status of programme implementation. Close monitoring is also being assured by the Commission's Essential aid programme office in Sarajevo which is in day-to-day contact with the procurement agents and furthermore provides for the Commission approvals during the procurement cycle (content, short-listing, tender evaluation, contracting with suppliers). Finally, an independent monitoring team has been contracted by the Commission following a restricted tender to verify the quantity, quality and use of the supplies procured. This team has established a permanent presence in Sarajevo and provides independent reporting directly to the Commission on a monthly basis.