Purchasing Supplies at CERN Legal aspects Contract execution and follow-up (who does what) Florence...

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Purchasing Supplies at CERN Legal aspects Contract execution and follow-up (who does what) Florence Jacobs DG-LS Cristina Lara Arnaud FP-PI

Transcript of Purchasing Supplies at CERN Legal aspects Contract execution and follow-up (who does what) Florence...

Page 1: Purchasing Supplies at CERN Legal aspects Contract execution and follow-up (who does what) Florence Jacobs DG-LS Cristina Lara Arnaud FP-PI.

Purchasing Supplies at CERN

Legal aspectsContract execution and follow-up (who does what)

Florence Jacobs DG-LSCristina Lara Arnaud FP-PI

Page 2: Purchasing Supplies at CERN Legal aspects Contract execution and follow-up (who does what) Florence Jacobs DG-LS Cristina Lara Arnaud FP-PI.

2

OutlineLegal aspects

1. CERN contracts

2. General Conditions of CERN Contracts (GCC)

Contract follow up

3. When? Why? How? Who?

4. Case study no. 3

Page 3: Purchasing Supplies at CERN Legal aspects Contract execution and follow-up (who does what) Florence Jacobs DG-LS Cristina Lara Arnaud FP-PI.

1 CERN contracts

Page 4: Purchasing Supplies at CERN Legal aspects Contract execution and follow-up (who does what) Florence Jacobs DG-LS Cristina Lara Arnaud FP-PI.

Legal aspects: CERN contracts

Purchasing process

Selection of contractor

Formalization of commercial

arrangement

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Legal aspects: CERN contractsSpecific clauses

General term

s

ContractbetweenCERN

and contract

or

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“Tailor-made”

contract

Legal aspects: CERN contracts

Specific clauses

purchase order (≤ 200k CHF) or

standard contract (> 200k

CHF)

General termsGeneral

Conditions of CERN Contracts

(GCC)

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2 General Conditions of CERN Contracts (GCC)

Page 8: Purchasing Supplies at CERN Legal aspects Contract execution and follow-up (who does what) Florence Jacobs DG-LS Cristina Lara Arnaud FP-PI.

Why GCC?

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CERN’s own rules

Procurement: tendering

process and GCC

Labour: Staff Rules and

Regulations

Safety:CERN Safety rules

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Utility of the GCC

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Application of the GCC

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Documents comprising the contract

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Purchasing Supplies — Legal Aspects & Contract Follow-up 13

Priority between documents

terms of the contract

service level agreement

delivery schedule

technical specification

other annexes of the contract, excl. invitation to tender and GCC

invitation to tender, excl. GCC

GCC

contractor’s bid

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Confidential information

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Intellectual property: GCC

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Intellectual Property: reasonable modifications possible

CERN contractor

Owns generated IP

Provides no warranty

Disclosure of IP

Owns generated IP

Provides warranty

No disclosure of IP

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Delivery

DATEPLACE

• As set out in contract• Responsibility of contractor • Good shape• Modification by CERN

compensation• Receipt ≠ acceptance

Page 18: Purchasing Supplies at CERN Legal aspects Contract execution and follow-up (who does what) Florence Jacobs DG-LS Cristina Lara Arnaud FP-PI.

Delivery: when it goes wrong…

Late delivery

Foreseen: refusal and termination of contract if it has lost purpose (wedding cake clause)

Penalties / termination if maximum penalties reached

Notify FP

Page 19: Purchasing Supplies at CERN Legal aspects Contract execution and follow-up (who does what) Florence Jacobs DG-LS Cristina Lara Arnaud FP-PI.

After delivery:acceptance procedure

Written notification

of acceptance

within 3 months

CERN recognizes that delivery

is correct

via:

Payment in

full

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What to do within 3 months of delivery?

Carry out detailed inspection

Notify non-conformity in writing; => remedial measures by contractor

No payment of non-conforming deliveries

Penalties

Termination of contract if loss of purpose of goods/services due to delay for remedial measures

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Warranty: Duration

GCC: 2 years after acceptance

Modifications possible

GCC exception: longer legal warranty

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Warranty: purpose

Remedy of existing non-conformities by contractor

Remedy to supplies likely to suffer same non-conformity

No remedy measures by CERN or 3p at contractor’s expense

Extension or renewal of warranty

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Termination:when it goes really wrong…

Gross negligence or willful

misconduct

By CERN

or contra

ctor

Bankruptcy

insolvency

Page 24: Purchasing Supplies at CERN Legal aspects Contract execution and follow-up (who does what) Florence Jacobs DG-LS Cristina Lara Arnaud FP-PI.

Termination:what to do?

Notify FP before taking any termination measure!

Avoid serious financial and legal consequences

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3 Contract follow-up Who does what

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Contract follow-up

Procurement

process

Selection of

contractor

Formalization of

commercial

arrangement

Contract follow-up

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When?Technical aspects are discussed during “clarification” phase

• Planning established

• Equipment to be used defined

• Raw material to be purchased

• Etc.

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Purchasing Supplies — Legal Aspects & Contract Follow-up 28

Why? Power in the Purchasing Process

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How?Follow-up meetings with contractor

Periodicity

Participants

To be defined

Establish minutes of meetings

draft by CERN technical responsible

review by procurement officer

approval by contractor

If no comments within 8 days minutes are approved

Purchasing Supplies — Legal Aspects & Contract Follow-up 29

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How?

Use contractual tools in case of problems with contract execution

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• Late delivery, failure to deliver

• Non-conforming supplies

• Failure to deliver or late delivery (weeding cake clause) Other breaches (delivery of docs, non compliance with laws.. )

• Problems with warranty

Penalties No acceptance

Execution by third party

Termination, bank guarantee

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How ?

The technical officer shall:

Communicate in writing with the contractor

Involve the procurement officer asap in case of problems

Keep track of any relevant correspondence or communication with contractor

(minutes, e-mails, technical reports, etc.)

NEVER commit CERN without the approval of the procurement

officer.

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How?The procurement officer will:

Draft correspondence with contractual consequences, i.e.: application of penalties, notice + request for remedial measures, non acceptance of supplies, drawing on bank guarantees, termination of contract

Interact with the Legal Service and other services (invoice office), if necessary

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Joker Case Study No. 3

“ Contract follow-up for the Supplyof 15 Tons of Magic Powder ”

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Case study 3Your task• Case analysis (30 minutes):

• Make three groups: two CERN technical officers and two CERN commercial officers

• Read the background• Answer to the questions

• Group presentation and case synthesis (30 minutes):• Each group makes its presentation

Contract Procurement Management Training Supplies– 20 September 2011 35

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