Session “Best practice for the procurement of services”

Procurement of Intellectual Services

Manfred EssletzbichlerEBRD-Consultant, WOLF THEISS

Kiev, November 2012

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Agenda

General Definition Examples

(Non-)Descriptiveness Choice of procurement procedure Award criteria

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General (1) “Services […], insofar as the nature of the services to be provided is such that

contract specifications cannot be established with sufficient precision to permit the award of the contract by selection of the best tender according to the rules governing open or restricted procedures” (Art 30 (1) c EU-PPD)

Characteristics of “intellectual services” Services which do not (necessarily) result in the same outcome Main objective is the solution to an assignment by intellectual “work” Creative or innovative element in order to solve the problem/ the task to be

performed Conceptual activity Complete and exhaustive (prior) description is impossible (however,

outcome or assignment can be described) Clear and definite description of service would “anticipate” the solution

and therefore “torpedo” the purpose of the tender Bids are not comparable without negotiations

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General (2)

Examples for intellectual services (Construction) planning services Research services Development (R&D) services Advertisement services (campaigns, branding) Consultancy services Software-development (customized software) Scientific studies Reports, professional opinions (e.g. tax, legal, economic)

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General (3)

Consequences for procurement of intellectual services Negotiated procedure is obligatory (strict prohibition of negotiations in

open and restricted procedure) as the nature of the services to be provided is such that contract

specifications cannot be established with sufficient precision to permit the award of the contract by selection of the best tender according to the rules governing open or restricted procedures

Economically most advantageous bid (not lowest price !) sole price negotiations are not allowed

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General (4)

Boundary between intellectual and “standardized” services Case-by-case evaluation Decisive whether service can be (exhaustively) described Services include both kinds of services:

Main value test vs main object test

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Is main purpose of (all) services irrelevant?

Main purpose of all services is crucial

Is comparability of the different bids ensured?

Pecuniary value of (different) services is irrelevant

How is the comparability ensured?

Negotiated procedure for all services

(Non-)Descriptiveness (1)

Descriptiveness Description of subject of the service Indescribable if contract specifications cannot be established with

sufficient precision to allow the evaluation of the bids in an open or restricted procedure Objective assessment before launch of the tender ! (technical) expert opinion might be needed for assessment of

descriptiveness Austrian review authority

“Descriptiveness does not necessarily mean for the envisaged outcome/result to be describable, but descriptiveness of the process to achieve the result: every bidder must have the same and distinct conception of the envisaged or necessary scope of services”

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(Non-)Descriptiveness (2)

Indicators for “Non-descriptiveness” (1) Bidders determines the exact scope of services and quality through

their bids ! Various possible solutions ! Solution depends on bidder ! Unclear allocation of risks ! No “standardized” behavior or process for bidder High complexity of the scope of services High number of different interests Size (and complexity) of project Number of components and parts Number of parties involved Number of planning stages and coordination rounds

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(Non-)Descriptiveness (3) Examples from Austrian case law

Non-describable services (i.e. intellectual service) Design for works (i.e. construction planning services) Draft of tender documents and execution of tender procedure Monitoring accompanying / accompanying inspection for the

implementation of a sewage treatment plant Project management for construction of a hospital Advertising and marketing services for hospital PR campaign for environmental certificate

Describable services (i.e. „standardized“ services) Construction supervision and coordination ?

Personal view: no standardized approach possible intellectual service

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Choice of Procedure

Negotiated procedure is mandatory The nature of the services requires a “dialogue” (i.e. negotiations) Negotiations are necessary to establish comparable bids which only

then can be assessed according to award criteria Negotiated procedure with prior notice

1st stage: call for requests to participate (eligibility/qualification and selection criteria)

2nd stage: negotiations with (at least) 3 bidders regarding every aspect of the tender

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Award Criteria – Special case of reference projects

Eligibility and award criteria Usually strict division between eligibility & selection criteria and award

criteria Eligibility & selection criteria are company/contractor related Award criteria are contract related

Permissibility of the evaluation of reference projects in the award stage when procuring intellectual services ?

References are company relatedReferences may therefore, prima facie, not be an award criteria

Special situation in case of intellectual servicesQuality of service is linked to the quality of the person rendering

the services (e.g. an creative director for a marketing campaign, project manager, etc)

References regarding key personnel arguably permitted !11

Contact

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Mag. Manfred EssletzbichlerTel: + 43 / 1 / 51510 – 5350Fax: +43 / 1 / 51510 – 665350E-Mail: manfred.essletzbichler@wolftheiss.com

WOLF THEISS Attorneys-at-LawSchubertring 61010 ViennaAustria