CooperationCooperation

andandconsortium buildingconsortium building

Luis Araque de JuanEuropean Commission

International Cooperation and Development DEVCO/EuropeAid Unit R.3 Legal Affairs

Warsaw 20 April 2015

DefinitionsDefinitionsConsortium:A grouping of eligible natural and legal persons or public entities which submits jointly a tender under a tender procedure.

It may be a permanent, legally-established grouping or a grouping which has been constituted informally for a specific call for tenders. All members of a consortium (i.e., the leader and all other partners) are jointly and severally liable to the Contracting Authority.

DefinitionsDefinitionsJoint tender:A joint tender is a tender submitted by several legal entities, regardless of the link they may have between them.

If awarded the contract, these legal entities will have an equal standing towards the contracting authority in executing the contract. The contract is signed by all legal entities, or by one of them which has been duly authorised by the others (a power of attorney is to be attached to the tender).

Requirements towards Requirements towards members of consortiummembers of consortium

•Call for tenders under EC external actions (using PRAG) always allow the possibility of submission of offers by consortia•It is customary to identify a leader of the consortium, who will be the single contact point for communication, administrative and financial management of the contract on behalf of other members•The internal agreement among the consortium members may be requested by the contracting authority, but it is not the rule

Requirements towards members of consortiumRequirements towards members of consortium

Exclusion criteriaExclusion criteria1. Exclusion

Purpose: to determine if the operator is allowed to participate. Operators will be excluded if:

•Bankruptcy, affairs administered by court, arrangement with creditors, suspension of business activities•Convicted of an offence concerning their professional conduct•Guilty of grave professional misconduct•Not in compliance with social security contributions or payment of taxes•Fraud, corruption, money laundering, involvement in a criminal organisation•Subject to an administrative penalty by the EU Financial regulation

Requirements towards members of consortiumRequirements towards members of consortium

Exclusion criteriaExclusion criteria1. Exclusion

The exclusion criteria will apply separately to each legal entity of the consortium.

Every member of the consortium shall provide a declaration of non-exclusion and will be requested to provide the supporting evidence in case of award.

Members of ConsortiumX Y Z

Exclusion criteria

1 √ √ √2 √ √ √3 √ √ √4 √ √ √

…. √ √ √

Members of ConsortiumX Y Z

Exclusion criteria

1 √ √ √2 √ √ √3 √ X √4 √ √ √

…. √ √ √

Requirements towards members of consortiumRequirements towards members of consortium

Eligibility criteria (nationality rule)Eligibility criteria (nationality rule)

Purpose: It determines the conditions of access to EU external assistance. For each financing instrument, specific eligibility provisions may apply.

The eligibility criteria laid down in the tender dossier have to be met by every legal entity of the consortium.

Members of ConsortiumX Y Z

Nationality Poland Spain China

√ √ X

Members of ConsortiumX Y Z

Nationality Poland Spain Uganda

√ √ √

Check carefully Check carefully the eligibilitythe eligibilityrules of the rules of the tender and the tender and the nationality of nationality of potential potential partners prior partners prior to setting theto setting theconsortium.consortium.

Check carefully Check carefully the eligibilitythe eligibilityrules of the rules of the tender and the tender and the nationality of nationality of potential potential partners prior partners prior to setting theto setting theconsortium.consortium.

Requirements towards members of consortiumRequirements towards members of consortium

Selection criteriaSelection criteria1. Exclusion

Purpose: Ensuring that the future contractor has the financial, economic, technical and professional capacity to perform the contract.

- Economic and financial capacity

Example: the tenderer's average annual turnover in the last three years must exceed the annualized maximum budget of the contract / financial proposal of the tender

- Professional capacity

Examples: number of permanent staff or in a concrete field / the tenderer has an ISO 9000 certificate

- Technical capacity

Example: "x" implemented projects in the last 3 years (5 for works) of at least a certain amount

Requirements towards members of consortiumRequirements towards members of consortium

Selection criteriaSelection criteria1. Exclusion

The selection criteria will apply to the tenderer (consortium) as a whole and not to each legal entity separately.

Exception: Ratio of current assets/ current liabilities in the last year. This concrete criterium has to be met individually by each member of the consortium.

Requirements towards members of consortiumRequirements towards members of consortium

Selection criteriaSelection criteria1. ExclusionMembers of Consortium Result as a

X Y Z whole

Selection criteriaEconomic and Financial

Annual turnover X X X √Current assets/liabilities √ √ √ √

Professional

Number of staff X X X √Certificate ISO X X √ √

Technical

Projects of same size √ X X √Projects in a concrete region X √ √ √

Companies X, Y and Z came up with a compliant consortium! They would not have been able to meet the selection criteria participating on their own.

Change in the composition Change in the composition

of the consortium of the consortium during the procurementduring the procurement

procedureprocedure

During the procedure, the tenderer may inform the contracting authority that a member of the consortium has dropped out of the process, and/or is being replaced by another entity. As a principle, this type of requests should not be accepted and should lead to the rejection of the tender. Cases that may be accepted:•Where there is a merger or takeover of one member of the consortium (universal succession)The proposed new member will have to meet the exclusion/eligibility criteria. Its inclusion should not entail any substantial change in the tender as originally submitted.

Change in the composition Change in the composition

of the consortium of the consortium after signature of contractafter signature of contract

Once the contract is signed by all members of the consortium, as a principle there should be no change.

Again, cases of universal succession (merger / takeover of one of the members of the consortium) may be accepted.

If a change happens for any another reason, the contracting authority must analyse the consequences of terminating the contract vs. accepting the change, and it must especially assess whether the change is substantial or not (i.e. requires to terminate the contract and launch a new procedure or not)

Resolution of conflicts among Resolution of conflicts among consortium members during consortium members during implementation of a contractimplementation of a contract

Exclusion criteria?

Eligibilitycriteria?

Selectioncriteria?

Do I want to bid alone?

Yes

Offer

No Consortium

Do I want to be the leader?

No Sub-contractor

Put together the offer

Offer

No

Yes

No