(Kiev, 1 December 2011)

1. Seminar on public procurement and eProcurement policies eProcurement Policy in International Legal Documents (Kiev, 1 December 2011)

2. I. General Overview (1) • Reasons • improved value for money from access to more suppliers or more competitive techniques (such as auctions) • saving transaction costs • saving time (e.g. quicker communication) • improved compliance with rules (through better monitoring) • stimulating a more competitive local supply base (adoption of modern practices and promoting standardization) • enhancing transparency and thereby limiting corruption (reducing personal contacts) • e-procurement is used by contracting entities • for dealing with suppliers • in communicating with the public and other public bodies • in the government’s internal administrative process

3. I. General Overview (2) • Opportunity for procurement regulators • many national and international regimes on procurement have gradually updated or reviewed their provision to take account of electronic procurement • (EU Public Procurement Directives) • WTO Government Procurement Agreement • UNCITRAL Model Law on Public Procurement • Multilateral Development Banks e-GP

4. UNCITRAL Model Law II. WTO Government Procurement Agreement (1) • Revised GPA text 2010 • Incorporates complete revision of wording (streamlined, easier to understand and user-friendly) • Use of electronic procurement • Preamble to the revised text recognizes “the importance of using, and encouraging use of, electronic means for procurement covered by [the agreement]” • Electronic Communication • Public notices • Annex 1 entities: Mandatory access of procurement notices by electronic means • Annex 2 and 3 entities: electronic accessibility is “encouraged” • Possibility for reducing minimum timescales (- 5 days)

5. UNCITRAL Model Law II. WTO Government Procurement Agreement (2) • Excursus – why using electronic Auctions at all ? • Benefit from inducing tenderers to make more competitive offers •  providing tenderers with information on competitors’ tenders through auction process •  allowing them to adjust their own tenders accordingly • Benefits from limiting opportunities for corruption or discrimination • Procuring entity won’t pass information to favoured bidder since all bidders have the relevant information anyway • Removing face to face contact • Benefits from reduced administrative costs and procurement timescales

6. UNCITRAL Model Law II. WTO Government Procurement Agreement (3) • Electronic Auctions • “an iterative process that involves the use of electronic means for the presentation by suppliers of either new prices, or new values for quantifiable non-price elements of the tender related to the evaluation criteria, or both, resulting a ranking or re-ranking of tenders” •  online, real-time competition between a buyer and a number of suppliers • Automatic evaluation method (including the mathematical formula) must be disclosed •  not only the price can be changed during auction • E.g. delivery time, warranty period

7. UNCITRAL Model Law and e-Procurement III. UNCITRAL Model Law (1) • Revised text 2011 • Enables procuring entities to take advantage of modern technologies • “e-communication” • “e-tendering” (electronicreverse auctions) • Electronic Communication • no distinction between paper-based or electronic means • Electronic submission of tenders • Virtual meetings • Opening of tenders • Guide of enactment will address the virtual equivalent of public openings

8. UNCITRAL Model Law and e-Procurement III. UNCITRAL Model Law (2) • Electronic Reverse Auction (1) • Conditions for using • Feasible to formulate a detailed and precise description of the procurement’s subject matter • Effective competition must be ensured • Award criteria must be quantifiable and be expressed in monetary terms •  restriction to “standardized” goods/services •  restriction to “quantifiable” criteria • Only criteria that can be applied without any subjective input •  precludes non-price criteria (e.g. aesthetic merit, environmental impact) during auction ? •  only non-price which can be quantified on an auditable basis (e.g. maintenance costs) ?

9. UNCITRAL Model Law and e-Procurement III. UNCITRAL Model Law (3) • Electronic Reverse Auction (2) • Very detailed set of rules (chapter VI) • Procedure • Type 1: e-auctions as a stand-alone procurement method (Art 53) • Type 2: e-auction as a phase of normal procurement methods (Art 54) • Requirements during e-auction • Automatic evaluation of all bids • Instantaneously information of its bid vis-à-vis other bids • Requirements after e-auction • Rejection of unresponsive bids / unqualified suppliers in Type 2 e-auctions • Rejection of abnormally low bids in Type 1/2 e-auctions

10. IV. Multilateral Development Banks e-GP (1) • Website www.mdb-egp.org •  jointly sponsored by the Asian Development Bank (ADB), the Inter-American Development Bank (IADB), and the World Bank • e-GP as effective tool in the fight against corruption, the promotion of integration and the stimulation of greater productivity • e-GP group has achieved a high degree of harmonization in its approach to provide technical advice and support to member countries in developing national e-GP strategies and solutions • e-GP Tool Kit prepared by MDBs is the only updated international standard for e-tendering and e-auctions for the time being

11. IV. Multilateral Development Banks e-GP (2) • E-GP Tool Kit •  provides member countries with strategic guidelines on the planning, management, implementation and support of e-GP • E.g. e-GP Strategic Planning Guide, International Survey of e-Procurement Systems, e-GP Standards Framework

12. IV. Multilateral Development Banks e-GP (3) • Excursus: World Bank • See Guidelines Procurement Under IBRD Loan And IDA Credits, May 2004, Revised October 1, 2006 at 2.11 and 2.44 • Provided that Bank is satisfied with adequacy of system • Multilateral development banks have published information on criteria that e-tendering must meet •  www.mdb-egp.org

13. UNCITRAL Model Law V. Excursus – e-Procurement in Austria (1) • e-procurement already under PPA 2002 • PPA 2006 emphasizes greater extend on e-procurement • Shorter time scales when electronic means of communication are employed • e-auction • Dynamic purchasing system • Mandatory electronic publication of information • SIMAP; pep.online.at (below EU-thresholds) • Suppliers must announce electronic address (e-mail) • Tender documents, communication via this address • Tender documents must be available electronically • Submission of RTP/bids if safe signature • “Law on signature”

14. UNCITRAL Model Law V. Excursus – e-Procurement in Austria (2) • E-auctions • Only for “standardized” goods/services • E.g. not for intellectual services • Lowest bid or most economic advantageous bid • Example:

15. UNCITRAL Model Law V. Excursus – e-Procurement in Austria (3) • Use of e-procurement depends on individual contracting authority •  no Austrian-wide uniformed approach • Central Purchasing Entity (“Bundesbeschaffungs GmbH) • http://www.bbg.gv.at/ • ASFINAG / Austrian Railways joint e-procurement plattform • https://www.ava-online.at/

16. UNCITRAL Model Law and e-Procurement VI. Resumé • Similar provisions in international texts • e-procurement – useful new tool • transparency, efficiency, integrity (anti-corruption), fair and equal treatment • e-procurement = reform process •  Not just replacing letters with e-mails • Developed e-procurement system in Austria

17. Johannes S. SchnitzerSenior Associate, Vienna WOLF THEISS Rechtsanwälte GmbH Schubertring 6, 1010 Vienna, Austria T: +43 1 515 10 5355 F: +43 1 515 10 665355 E: johannes.schnitzer@wolftheiss.com Contact CONTACT