ADMINISTRATIVE INSTRUCTION No 02/2014

ADMINISTRATIVE INSTRUCTION No 02/2014

Public Procurement Regulatory Commission in regard with article 87, paragraph 2, sub-paragraph 2.9 and article 91, paragraph 1 of Law No 04/L-042 for Public Procurement, takes this:

ADMINISTRATIVE INSTRUCTION No 02/2014

For Tender Security, Performance Security and Aplication of award criteria economic and financial.

Article 1

Scope

Scope of this Administrative Instruction is to offer clarifications for Contracting Authorities in the implementation of Article 57 (Tender Security) and 63 (Performance Security) of Public Procurement Law No 04/L-042. Moreover, to offer Contracting Authorities clarifications in application of award criteria, with special focus on article 68 (Economic and financial stamding) of Law No 04/L-042 for Public Procurement.

Article 2

Used terms

Terms used in this Administrative Instruction have the same meaning as mentioned in Article 4 (Definitions) of Law No 04/L-042 for Public Procurement.

Article 3

Standard form for Tender Security

  1. According to the common provisions in power of article 57, paragraph 5 of PPL, and article 26, paragraph 5 of Public Procurement Guidelines approved by PPRC, tender security can be offered from tenderers according to their judgement, exclusively in one of below forms:
  • in cash or equal valued, as bank transfer;
  • certified cheque from a bank with repuation;
  • card of credit un-conditioned open and confirmed from a bank with repuation;
  • performance bonds, applicable by request, issdued by an insurance company with repuation;
  • unconditioned Bank guarantee issued by a bank with repuation.
  1. For scope of above paragraph:

(i)a bank “with reputation” means a bank which has a long-term clasification at least “A” according to one or more evaluation agencies or in case of one bank in Kosovo (if the bank has not been evaluated in that form) a bank that has ben licensed by Central Bank Authority of Kosovo.

(ii)an insurance company “with reputation” means an insurance company which has a long-term clasification at least “A” according to one or more evaluation agencies or in case of one insurance company in Kosovo (if the insurance company has not been evaluated in that form) a bank that has ben licensed by Central Bank Authority of Kosovo.

  1. In accordance with paragraph 2, contracting authorities shall not restrict at the tendering documents discretion of tenderers to submit tender security in any form specified at paragraph 1 of this article. Any provision which restricts form in which such insurances are submitted can be delivered exept those referred at paragraph 1, are to be considered invalid.

Article 4

Standard form for Performance Security

  1. According to common provisions in poker of article 63, paragraph 5 of PPL and article 27, paragraph 5 of Guidelines for Public Procurement approved by PPRC, performance security can be issued by economic operator who has been awarded with contract, according to his only judgment, exclusively in one of belowed forms:
  • in cash or equal valued, as bank transfer;
  • certified cheque from a bank with repuation;
  • card of credit un-conditioned open and confirmed from a bank with repuation;
  • performance bonds, applicable by request, issdued by an insurance company with repuation;
  • unconditioned Bank guarantee issued by a bank with repuation.
  1. For scope of above paragraph a “bank with reputation” and an “insurance company with reputation” have the same meaning as explained in article 3, paragraph 2.
  1. In accordance with paragraph 2, contracting authorities shall not restrict at the tendering documents discretion of tenderers to submit tender security in any form specified at paragraph 1 of this article.Any provision which restricts form in which such insurances are submitted can be delivered exept those referred at paragraph 1, are to be considered invalid.

Article 5

Economic and Financial Standing

  1. According to article 68 of PPL, contracting authorities are free to require from tenderers to fulfill minimal requests for economic and financial standing as criteria for participation in a tender procedure. Scope of this criteria is to evaluate if tenderer has enough economic and financial standing to perform proposed contract.

Such minimal requirements are not referred obligatory to:

-global turnovers, including here a minimal eventual turnover in a specified field within the contract;

-actual annual accounts, including here information about assets and obligations;

-ready financial resources;

  1. Contracting authority shall restrict requests dealing only with those which are appropriate to ensure that the tenderer has needed economic and financial security to perform awarded contract. All requests are to be strictly related and proportional with the contract subject to ensure like this a fair and sincere competition.
  1. In the determination of minimal turnover, contracting authorities are not to pass the foreseen value of the contract, except in justified cases as for special risks related to the nature of works, services or offered supplies. Contracting authority shall specify such extraordinary conditions at the tender documents. Requests for turnovers have to be expressed in numbers and should be referred to the maximum of last three financial years from the date of publication of contract notice. Such financial years should be expressed at the Contact Notice or Invitation for Tender or Participation.
  1. Where, except minimal turnover, a specified minimal turnover in specified fields covered by the contract, such turnover shall not pass 1.50 times the foreseen value of the contract. All provisions referring paragraph 3 and 5 of this article are applicable also in this case.
  1. As for paragraph 3 and 4 of this article, contracting authorities shall express at the Contract Notice qualification condition, selecting one of the below criteria:

1) total turnover of the tenderer in the last three financial years should pass (or be equal) with the minimal turnover as shown on Contract Notice.

2) average turnover of tenderer in the last three financial years should pass (or be equal), for every financial year, minimal request as shown on the Contract Notice.

3) Only when the contract has an extension longer than one year, average turnover of tenderer in the last three financial years should pass (or be equal), for every financial year, minimal annual request can be determined according to the below formulas: Value of the contract / number of years x 2 or value of the contract / number of months x 12 x 2.

In case of submission of the tender by a group, above formulas for appropriance shall apply to the group as unit.

  1. Depended from paragraph 2 of this article, contracting authorities should specify in the Contracts Notice which of mentioned criteria in above paragraph shall apply. Selection will be chosen in the discretion of the contracting authorities in non-discriminating way, and in any case having in mind the scope of contract, risks related to the implementation of the contract and specific conditions of the market not to restrict the competition.
  1. When contract is divided in lots, actual article is to be implemented in every lot individually. However, contracting authorities can put minimal turnovers that tenderers must have referring to groups in lots in case if successful tenderer is given some lots to perform in the same time.
  1. When contracts based on framework contracts should be given according to procedure for reopening of competition, maximal requests for turnover are to be calculated on expected maximal value of specific contracts to be given, or, when this is not known, based on the foreseen value of framework contract.
  1. According article 68, paragraph 2 of PPL, contracting authorities are to specify minimal economic and financial requirements in the Contract Notice or in the Invitation for Tender or Participation. Moreover, contracting authorities shall specify clearly on the above mentioned documents, for every economic and financial request, appropriate request within those mentioned in article 68, paragraph 1, sub-paragraph 1.1, 1.2, 1.3 and 1.4 of PPL.
  1. Needed declarations according to article 68, paragraph 1, part 1.1 of PPL is to be issued by a first class bank.
  1. Policy of insurance, according to paragraph 68, paragraph 1, part 1.2 of PPL, is to be issued by a known licensed insurance company.
  1. For scope of previous paragraph a “bank of first class” and a “licensed insurance company” have the same meaning as given in article 3, paragraph 2.

Article 6

PPRC is preparing an Instruction to advise further with examples application of rules referring Article 4 of actual Administrative Instruction.

Article7

Entry into power

This Administrative Instruction is powerful from 08 January 2014.

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(Date of signature) Safet Hoxha- President of PPRC

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