Rules for the Implementation of Public-Private Partnership Law Substantially Amended

Government Decision no. 1000/2011 amending and supplementing Government Decision no. 1239/2010 approving the Rules for the Implementation of Public-Private Partnership Law no. 178/2010, and approving several measures concerning the reorganization of the Central Unit for the Coordination of Public-Private Partnership within the Ministry of Public Finance and amending and supplementing Government Decision no. 405/2007 concerning the activity of the General Secretariat of the Government was published in the Official Journal no. 833 issued on December 13^th 2010.

The amendments and supplements mainly concern:

• definitions;
• main duties of public partners;
• types of PPP contracts;
• content of the attached document;
• qualification and selection criteria;
• estimated value of PPP contracts;
• award criterion;
• tender guarantee;
• publication of the notice of selection in the Electronic Public Procurement System (hereinafter referred to as “S.E.A.P.”);
• competitive dialogue procedure;
• communication of the outcome of the procedure;
• form and content of the PPP contract;
• monitoring of the award of the PPP contract
• appendices

At the same time, the Decision took over mutatis mutandis the provisions concerning the opening of the tenders, the unacceptable and irregular tenders, the abnormally low tenders, the evaluation committee, the co-opted external experts, the requests for clarifications, cancellation of the selection procedure from the Public Procurement Law.

DEFINITIONS

The specification that the PPP project must be entirely funded by private financing was removed.

MAIN DUTIES OF PUBLIC PARTNERS

The area of responsibility of the ministry with responsibilities for the management of the scope of the PPP project was changed. Thus, the preparation of the documents subject to the decision of the board of directors concerning the PPP project was removed, the ministry also ensuring the framing of the project in the fiscal-budgetary strategy approved according to Budget Responsibility Law no. 69/2010.

TYPES OF PPP CONTRACTS

Chapter III on the types of PPP contracts was fully repealed.

CONTENT OF THE ATTACHED DOCUMENT

The attached document may include mentions concerning:

• The indication by the private investor in his tender of the share of the contract which he intends to subcontract to third parties and the proposed subcontractors; this clarification shall be without prejudice to the private investor’s liability;
• The body or bodies from which the private investors may obtain relevant information about the obligations related to taxes, environmental protection, employment protection provisions and working conditions in force in the district or region where the works are to be carried out or services are to be provided and which shall be applicable to the works performed on the site or to the services provided during the performance of the contract; in such a case, the public partner requires the private investors to mention that when drafting the tender/ letter of intent they have taken into account the obligations relating to employment protection provisions and working conditions in force in the place where the works are to be carried out or services are to be performed.

Technical specifications should be established so as to take into account accessibility criteria for people with disabilities and design for all users. These technical specifications must allow equal access for private investors and not have the effect of creating unjustified obstacles to competition in terms of launching the procedures for selection.

Without prejudice to mandatory national technical rules, technical specifications are formulated:

• Either by reference to technical specifications defined in Appendix no.4 to the Decision – Definitions of certain technical specifications – and, in order of preference, to national standards transposing European standards, European technical approvals, common technical specifications, international standards or other technical reference systems established by the European Standardization bodies or, if these do not exist, to national standards, national technical approvals or national technical specifications concerning the design, calculation and execution of works and use of products; each reference is accompanied by the words “or equivalent”; if technical specifications are thus formulated, public partners may not reject a tender on the grounds that the goods or services tendered for do not comply with the specifications to which they have  referred, if the investor proves in his tender, in compliance with the requirements of the public partner, by any appropriate means, that the solutions which he proposes satisfy in an equivalent manner the requirements defined by the technical specifications; an appropriate means might be constituted by a technical dossier issued by a manufacturer or a test report issued by a recognized body;
• Or in terms of performance or functional requirements; the latter may include environmental characteristics; however, technical specifications must be sufficiently precise to allow investors to determine the subject-matter of the contract and to allow public partners to award the contract; if performance or functional requirements are established, public partners may not reject a tender for works, goods or services which comply with a national standard transposing a European standard, with a European technical approval, a common technical specification, an international standard or a technical reference system established by a European standardization body, if these specifications address the performance or functional requirements imposed by public partners; in his tender, the private investor must prove, in compliance with  the requirements of the public partner and by any appropriate means, that the works, goods and services compliant with the standard meet the performance or functional requirements of the public partner;
• Or in terms of performance or functional requirements, with reference to the specifications mentioned under the first bullet as a means of presuming conformity with such performance or functional requirements;
• Or by reference to the specifications mentioned under the first bullet for certain characteristics, and performance criteria or functional requirements for other characteristics.

If public partners lay down environmental characteristics in terms of performance or functional requirements, they may use the detailed specifications or, if necessary, parts thereof, according to the European or (multi)national eco-labels or other eco-labels, provided that:

• Those specifications are appropriate to define the characteristics of the goods or services that are the object of the contract;
•  The label requirements are drawn up based on scientific information;
• The eco-labels are adopted using a procedure in which all stakeholders, such as government bodies, consumers, manufacturers, distributors and environmental organizations may participate;
• The specifications are accessible to all interested parties.

Furthermore, public partners may specify that the goods or services bearing the eco-label are presumed to comply with the technical specifications defined in the attached document. Public partners must accept any other appropriate means of proof such as a technical dossier issued by a manufacturer or a test report issued by a recognized body. Recognized bodies are test and calibration laboratories, certification and inspection bodies which comply with applicable European standards. Public partners accept certificates issued by recognized bodies from other Member States.

Last, but not least, the rule is that technical specifications shall not indicate a specific make, source or process, and shall not refer to a trademark, a patent, a type, a specific origin or production that would have the effect of favoring or eliminating certain undertakings or products.

QUALIFICATION AND SELECTION CRITERIA

The provisions concerning the qualification and selection criteria were similarly taken from public procurement law.

Thus, the newly introduced provisions govern, inter alia, issues such as:

• purpose of the qualification and selection criteria – the selection criteria are intended to demonstrate the technical, financial and executive potential of each private investor participating in the procedure, which should prove the actual capability to perform the contract and to solve any difficulties related to the performance of the contract, if that investor is the successful tenderer.
• categories of qualification and selection criteria – the public partner may apply qualification and selection criteria only related to: personal situation of the private investor, suitability to pursue the professional activity, economic and financial standing, technical and/or professional ability, quality assurance standards, environmental protection standards;
• specific certifications–  to demonstrate compliance with the selection criteria, private investors may submit certificates issued by a competent public authority, or by a public or private body conforming to the European standards for certification; the public partner may not require the private investors to produce a specific certificate, the investors being entitled to produce in order to demonstrate compliance with certain requirements any other documents equivalent of such certificates, or that prove conclusively that those requirements are met; the public partner may request, if considered necessary, clarifications or supplementations to the documents submitted;
• disproportionate qualification and selection criteria– the public partner may not restrict participation in the PPP contract by introducing minimum selection criteria that have no relevance to the nature and complexity of the future PPP contract, that are disproportionate in view of the nature and complexity of the contract; the minimum requirements for selection are considered to be disproportionate in view of the nature and complexity of the PPP contract to be concluded, if it is necessary to fulfill conditions such as: the total values/ quantities of goods supplied, services provided and works executed, included in the contract/ contracts submitted by the private investor as evidence of his previous experience, be higher than the value/quantity of products/services/works to be supplied/provided/executed under the future PPP contract ; the turnover of the private investor be higher than the estimated contract value, multiplied by 2;
• method of establishing the criteria: when the public partner sets out specific selection criteria, the notice of selection and the attached document must include the information that the private investor have to submit for this purpose and the specific documents confirming that information; for the selection of private investors the public partner may only use the selection and negotiation criteria mentioned in the notice of selection.
• subcontractors – the public partner may not require the potential subcontractors to fulfill certain selection criteria, but the human and material resources of subcontractors are taken into account for their share of the contract to be performed, if relevant documents are submitted in this respect;
• selection of the private investor: the public partner must use for the selection of the private investors only the selection and negotiation criteria published in the notice of selection; in the competitive dialogue procedure the selection stage is a separate process that aims only at limiting the number of private investors that will take part in the dialogue; each private investor is selected based on the allocated score which reflects that investor’s ability to perform the PPP contract to be concluded; it is mandatory for the public partner to specify in the notice of selection and the attached document the scoring methodology based on which the private investors are to be ranked when necessary.
• criteria regarding personal situation– the public partner must accept as sufficient and relevant evidence of meeting these criteria any document that is considered probative from this point of view, in the country of origin of in the country where the private investor is established, such as certificates, criminal records, or any other equivalent documents issued by the competent authorities in that country; if in the country of origin or of establishment no such documents are issued, or the documents do not cover all situations provided by Law no. 178/2010, the public partner must accept a statutory declaration, or, if in that country the statutory declaration is not legally regulated, the public partner must accept an authentic declaration made in front of a notary public, an administrative or judicial authority, or a competent professional association.
• criteria regarding the suitability to pursue the professional activity – the public partner is entitled to require any private investor to submit the documents proving the registration as a legal entity, and if the case, professional certification or membership according to the legal provisions of the country of establishment.
• economic and financial standing criteria –  the private investor’s economic and financial standing may be proved, as a general rule, by one or more of the following references: appropriate statements from banks, or, where appropriate, evidence of professional risk indemnity insurance; presentation of balance sheets or extracts from balance sheets, if the publication of balance sheets is required by the legislation of the country in which the private investor is established, a statement of overall turnover, and, where appropriate, of turnover in the field of activity covered by the contract for a maximum of the last 3 financial years, available depending on the date on which the private investor was set up or started trade, if the information on turnovers is available; in this latter case the public partner must also consider the date when the private investor was set up or started trade.
• technical capacity criteria – the private investor’s technical capacity may be proved, inter alia, by: presenting a list of the works carried out over the past five years, accompanied by certificates of good performance; providing a list of the principal deliveries or the main services provided in the past 3 years, indicating the sums, dates and public or private recipients; indication of the technicians or technical bodies, in particular those responsible for quality control and, in the case of PPP works contracts, those upon whom the contractor can call for the execution; description of the technical equipment assigned to the PPP project and of the means used by the supplier or service provider to ensure the quality and its study and research facilities, a check carried out by the public partner or on its behalf by a competent official body from the country where the supplier or service provider is established, subject to that body’s agreement, if the goods or services to be provided are complex, or which, exceptionally, are intended for a particular purpose; educational and professional qualifications of the private investor that provides the services or manages the works and of the managerial staff and especially those of the person or persons responsible for providing the services or managing the works; indication of the environmental management measures that the private investor will be able to apply during the performance of the contract – for PPP works and services contracts; a statement indicating the average annual manpower of the private investor who provides services and the number of managerial staff for the last 3 years; a statement indicating the plant, materials and technical equipment available to the private investor that provides services or executes works for the performance of the contract; indication of the proportion of the contract which the investor that provides the services intends to subcontract; with regard to the goods to be supplied, by the samples, descriptions, and photographs requested by the public partner and whose authenticity can be proven on the request of the public partner; as concerns the goods to be supplied by certificates issued by official institutions or agencies responsible for quality control and of recognized competence, attesting the conformity of products clearly identified by reference to specifications or standards.
• capacities of other entities and group of private investors – when proving economic, financial and technical capacities, a private investor may include and submit in his tender capacities of other entities, regardless of the legal nature of their relationship; in this case the private investor must prove to the public partner that it will have at its disposal the necessary resources, for instance, presenting the firm undertaking of those entities in this respect; under the same conditions, a group of private investors may mention the capacities of the group members or other entities;
• quality assurance standards: if the public partner requires submission of certificates issued by independent bodies, attesting that the private investor meets certain quality assurance standards, the public partner shall refer to quality assurance systems based on the relevant European standards series certified by bodies conforming to the European standards concerning certification; public partners shall recognize equivalent certificates from bodies established in other Member States; also, the public partners shall also accept other evidence of equivalent quality assurance measures provided by the private investors;
• environmental management standards – if the public partner requests  the submission  of certain certificates issued by independent bodies attesting that the private investor complies with certain environmental management standards, the public partner shall refer to the Community Eco-management and Audit Scheme or to environmental management standards based on the relevant European or international standards certified by bodies conforming to Community Law or to the relevant European and international standards concerning certification; public partners shall recognize equivalent certificates from bodies established in other Member States ; the public partners shall also accept other evidence of equivalent environmental management measures produced by the private investors, if such evidence complies with the relevant legislation.

ESTIMATED VALUE OF PPP CONTRACTS

The estimated value of PPP contracts must include the total amount of updated costs related to the design, financing, building/development or conversion, rehabilitation/ modernization, maintenance, operation, exploitation or management of works, equipment and intangible/ tangible values and service provision during the period of the contract.

In calculating the estimated value, the value of the project risks, namely transferrable risk and risk retained, is considered. Transferrable risk is the quantification of value of all project risks that are to be undertaken by the investor. Retained risk is the quantification of value of all project risks that are to be undertaken by the public partner. Such risks include: legislative changes, risks caused by omissions in the project specifications, the public partner’s share of the demand decrease risk, etc.

Award Criterion

The criterion used to award PPP contracts is “the most economically advantageous tender”, the successful tender being established by applying a system of evaluation factors for which relative weightings or a specific calculation algorithm are given.

The calculation algorithm and the tender evaluation factors must be presented clearly and in detail in the attached document to the notice of selection and must reflect the actual scoring methodology for the advantages that result from the technical and financial proposals submitted by the private investors.

The public partner is not entitled to use the selection criteria as evaluation criteria of tenders/letters of intent.

TENDER GUARANTEE

The tender guarantee is created by bank transfer, by a security bond issued by a bank or an insurance company according to the law or by deposit at the public partner’s cash office and is submitted in original, in the amount and for the period specified in the attached document. Also, the tender guarantee may be created by submitting to the public partner’s cash office: either a money order or a cheque file, subject to the bank’s confirmation before the tender opening date, or an amount in cash. The tender guarantee must be irrevocable.

PUBLICATION OF THE NOTICE IN S.E.A.P.

The notices which according to Law no. 178/2010 must be published in the Official Journal of the European Union (hereinafter called “O.J.E.U.”) shall be drafted by the public partner in an EU official language, according to the provisions and forms of Regulation (EC) no. 1564/2005 of September 7^th, 2005 – establishing standard forms for the publication of notices in the framework of public procurement procedures pursuant to Directives 2004/17/EC and 2004/18/EC of the European Parliament and of the Council.

After sending the notice to the S.E.A.P. operator, the C.U.C.P.P.P. must verify whether the notice complies with the formal completing rules within maximum 5 working days from its receipt in the S.E.A.P.. Within the same 5 working days C.U.C.P.P.P. is bound to communicate to the S.E.A.P.. operator the acceptance or rejection of the publication of the notice.

The E.S.P.P. operator is required to send the notices for publication in O.J.E.U. in the standard format adopted by the European Commission and within maximum two working days from obtaining the acceptance for publication.

Therefore, when setting the deadlines for submission of tenders/ letters of intent, the public partner must also consider a 7-working day margin , necessary for the C.U.C.P.P.P. to verify the notice and for the S.E.A.P. operator to send it to O.J.E.U..

COMPETITIVE DIALOGUE PROCEDURE

The amendments and supplementations mainly concern issues such as:

• limiting the number of private investors –  the public partners may limit the number of appropriate private investors invited to a dialogue, provided that there are sufficient private investors available; the public partners shall indicate in the notice of selection or in the attached document the objective and non-discriminatory criteria or rules estimated to be used and the minimum and, if appropriate, the maximum number of private investors estimated to be invited; at least 3 private investors must participate in the competitive dialogue procedure; however, the number of invited investors has to ensure genuine competition; if the number of private investors who meet the selection criteria and the minimum levels is less than 3, the public partner may continue the procedure by inviting the private investor/investors having the required abilities. In the same procedure the public partner may not include private investors which have not submitted a letter of intent or which do not have the required abilities;
• selection stage – after completing the selection of private investors, the evaluation committee must draft an evaluation report that sets the selected private investors to be invited to the negotiation and signing of the project agreement, approved by the head of the public partner.
• invitation to the second stage of the procedure –  the public partner must send simultaneously to all admitted private investors the invitation to the second stage of the competitive dialogue procedure; the invitation must include at least the following information: references to the published notice of selection, the address where the dialogue is to take place and also the time and date set for the start of the consultation, the language/languages used in the dialogue, if necessary, further specifications regarding the additional documents that the private investors have to submit in support of declarations or to supplement the documents submitted in the first stage as evidence of technical, economic and financial capacity.
• the second stage of competitive dialogue – the second stage of competitive dialogue consists in setting meetings with each and every admitted investor during which a dialogue is conducted in order to identify solutions/ options for technical aspects, financial arrangements, legal issues and any other elements regarding the future contract; at the end of every meeting, the negotiation committee must write down the issues discussed and aspects agreed in the minutes of the meeting; during the dialogue the public partners have to ensure equal treatment of all private investors; in particular, the public partners may not provide information in a discriminatory manner that may give some private investors an advantage over others; public partners may not disclose to the other participants the solutions proposed or other confidential information communicated by a private investor participating in the dialogue without his/her consent.
• intermediate stages–  the public partner is entitled to conduct the dialogue also in intermediate stages, in order is to successively reduce the number of solutions discussed, if the following conditions are cumulatively met: this option was provided for in the attached document and the number of participants in the dialogue is high enough so that such a reduction should not affect genuine competition; the public partner must notify all the participants about the conduct of the intermediate stage and about the evaluation factors applicable and the actual manner of applying these factors in order to reduce the number of participants; after completion of an intermediate stage of reducing the number of participants, the negotiation committee must draft another report , approved by the head of the public partner or the person appointed to such purpose; the head of the public partner or the person appointed is required to take all the necessary steps to inform all the participants on the outcome of the intermediate stage; the next stage of dialogue is conducted only with the remaining participants after the completion of the previous stage; in the following stages or in the final tender the remaining participants, once admitted after an intermediate stage may change their commitments under the partial technical and/or financial proposals submitted only in order to improve them.
• final tender submission – in the last stage of the competitive dialogue, the private investor must submit their final tenders based on the solution/solutions identified during the previous stage; the tenders must include all elements required and necessary for the performance of the project; the public partner publishes in the E.S.P.P the deadline for submission of final tenders; the tenders may be clarified, specified and improved on the request of public partners; the explanations, clarifications, improvements, or additional information may not result in changes to the basic elements of the tender or the call for tender, variations that may distort competition or have a discriminatory effect.

COMMUNICATION OF THE OUTCOME OF THE PROCEDURE

Public partners have to inform private investors as soon as possible on the decision taken in relation to concluding the PPP contract, including on the reasons for which they decide not to conclude the contract for which a notice of selection has been launched or if they intend to recommence the whole procedure. If the public partners are requested so, they may provide such information in writing.

On the request of the party concerned, the public partner shall communicate as soon as possible:

• To each private investor the reasons for rejecting the tender/letter of intent;
• To each rejected private investor the reasons for the rejection of his tender, including, if the case, the reasons for the decision of non-equivalence, or the decision that the works, goods or services do not meet the performance or functional requirements;
• To each private investor that has submitted an admissible tender/letter of intent, the characteristics and advantages of the selected tender and also the name of the successful tenderer; the time cannot exceed 15 days from the receipt of the written request in any of these cases.

However, the public partners may decide to withhold certain information regarding the award of the contracts, if such disclosure would impede law enforcement, would be contrary to the public interest, would prejudice the legitimate commercial interests of private investors or would prejudice fair competition between private investors.

FORM AND CONTENT FOR THE PPP CONTRACT

The content and the form of the PPP contract are negotiated based on a draft contract proposed by the public partner to the selected private investor, and also based on the framework project agreement in the competitive dialogue procedure.

The appendices to the PPP contract include at least the following documents:

• the pre-feasibility or substantiation study;
• the technical and financial proposals;
• the schedule of contract performance;
• firm commitment of support from a third party, if the case.

If, during the performance of the contract, it is found that certain elements of the technical proposal are lower or do not meet the requirements of the substantiation study, then, the substantiation study provisions prevail.

Furthermore, if parts of the PPP contract are to be performed by one or more subcontractors, the public partner must request upon concluding that contract the submission of the contracts concluded between the future contractor and the subcontractors nominated in the tender.

Any other change in the terms of the PPP contract is made by addendum, with the consent of the signatory parties.

MONITORING THE AWARD OF THE PPP CONTRACT

C.U.C.P.P.P. monitors the award of PPP contracts. In this respect, the public partners are required to submit to C.U.C.P.P.P. an annual report on PPP contracts awarded in the previous year.

C.U.C.P.P.P. processes the relevant information in the notices of selection and any other information received from public partners and uses it to create a statistical database used for:

• timely disclosure of the reports requested by the European Commission;
• providing information to those interested in the operation of the PPP system;
• supervision of the conclusion of PPP contracts;
• prevention, and if appropriate, ascertainment of infringements of the relevant legislation.

In order to have the results of implementing the Romanian PPP legislation assessed, C.U.C.P.P.P. submits to the European Commission, no later than 31^st October, a statistical report, that covers, separately the goods, works and services PPP contracts awarded by the public partners in the previous year.

For each public partner, the statistical report includes at least:

• the number and value of PPP contracts awarded according to Law no. 178/2010;
• the number and value of contracts awarded under derogations from the Agreement on Public Procurement Contracts concluded in the Uruguay Round of Multilateral Trade Negotiations.

Last, but not least, throughout the evaluation of tenders/ letters of intent period and the negotiation period, the public partner is required to consult with C.U.C.P.P.P., in compliance with the PPP provisions set in the Manual on Government Deficit and Debt, issued by the European Commission – EUROSTAT – , so as the investment in question not to influence the budgetary deficit.

Appendices:

Appendix no. 2 – Matrix of project risks distribution – repealed

Also, a new Appendix was introduced, Appendix no. 4 – Description of certain technical specifications.