Identifier
Created
Classification
Origin
09UNVIEVIENNA582
2009-12-22 13:17:00
UNCLASSIFIED
UNVIE
Cable title:
UNCITRAL Working Group on Procurement Makes Progress
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UNCLAS SECTION 01 OF 03 UNVIE VIENNA 000582
DEPT FOR L/PIL
SIPDIS
E.O. 12958: N/A
TAGS: AU AORC EINV ETRD UN UNCITRAL
SUBJECT: UNCITRAL Working Group on Procurement Makes Progress
Revising 1994 Model
UNVIE VIEN 00000582 001.2 OF 003
UNCLAS SECTION 01 OF 03 UNVIE VIENNA 000582
DEPT FOR L/PIL
SIPDIS
E.O. 12958: N/A
TAGS: AU AORC EINV ETRD UN UNCITRAL
SUBJECT: UNCITRAL Working Group on Procurement Makes Progress
Revising 1994 Model
UNVIE VIEN 00000582 001.2 OF 003
1. SUMMARY. At its December 7-11 meeting, the UNCITRAL Working
Group on
Procurement made significant progress in a second reading of the
current draft
revisions to the 1994 Model Law, but did not cover all of the
articles. The
remaining articles should be addressed at the next meeting in April
2010.
Much of the discussion focused on the many available methods of
procurement
set forth in the text, including the conditions for their use, the
procedures
that apply to each, and the advantages and risks of the various
methods.
There is concern about the capacity of developing countries to
administer
effectively the methods involving dialogue/negotiation. It is not
expected
that a text will be ready for submission to the annual UNCITRAL
Commission
meeting next summer. END SUMMARY.
2. Working Group I of the United Nations Commission on
International Trade
Law (UNCITRAL) met December 7-11 to continue its work on revisions
to the 1994
Model Law on Procurement of Goods, Construction and Services. In a
second
reading of the current draft, the Working Group made significant
progress, but
did not, as had been hoped, complete all of the articles. It
completed a
review of Articles 1-42 of the 66 current articles, and engaged in
partial
discussion of Articles 43-44 (which concern sophisticated
procurement
methods). In those articles that were fully reviewed, most open
issues were
resolved, with only a handful of matters remaining for further
consideration.
In a number of places, the Secretariat was asked to draft new text
to reflect
agreement on concepts.
3. Chapter I of the text, General Provisions (Articles 1-23),now
contains a
comprehensive set of provisions that apply generically to the
procurement
process notwithstanding which procurement method is used.
4. Examples of provisions that were discussed:
Definitions (Article 1): The definition of "socio-economic factors"
was
clarified. Whether to include a definition of "successful
submission," and if
so how it would be defined, were left open.
-Qualifications of suppliers and contractors (Article 9): The word
"references" was deleted from the list of things that suppliers or
contractors
must demonstrate in terms of qualifications, as the text otherwise
provides
that the procuring entity may require suppliers or contractors to
present
appropriate documentary evidence of their qualifications.
-Rules concerning evaluation criteria and procedures (Article 11):
In the
list of evaluation criteria, "environmental characteristics" of
goods or
construction was added to complement "functional characteristics".
-Prequalification proceedings (Article 16): The Secretariat was
requested to
reconsider text on the withholding of classified information in
light of the
provisions on disclosure in Article 23.
-Cancellation of the procurement (Article 17): It was agreed that a
procuring
UNVIE VIEN 00000582 002 OF 003
entity should incur no liability for cancellation of a procurement
unless the
cancellation was the consequence of irresponsible or dilatory
conduct on the
part of the procuring entity.
-Acceptance of the successful submission and entry into force of the
procurement contract (Article 20): The applicability of standstill
provisions
(to allow challenges to procurement decisions) to different aspects
of
framework agreements was discussed, with the conclusion that this
would need
to be addressed further in Chapter VII on framework agreements.
5. Chapter II (Articles 24-29) of the text addresses methods of
procurement
and the conditions for their use. These methods include:
-Open tendering (generally used for goods and quantifiable
services)
-Other methods not involving dialogue/negotiations: restricted
tendering;
request for quotations; and request for proposals without
negotiation
-Methods involving dialogue/negotiations: two-state tendering;
request for
proposals with dialogue; request for proposals with consecutive
negotiations;
and competitive negotiations
-Electronic reverse auctions
-Single-source procurement
6. The multiple methods of procurement set forth in the text
include older
methods whose usage has become less prevalent as well as newer
methods,
especially with regard to more complex procurement, intellectual
services,
etc., reflecting advances in the field of procurement. It was
recalled that
the various procurement methods were presented as part of a
"toolbox" approach
whereby enacting States could choose which methods to adopt. Some
participants, however, expressed concern over the proliferation of
methods.
Also, representatives of the World Bank and other multilateral
development
banks expressed concern that developing countries may not have the
capacity to
administer effectively the methods involving dialogue/negotiation,
and that
their use would create risks with regard to corruption. It was
agreed that
the Guide to Enactment that would accompany the new Model Law would
need to
provide detailed guidance on conditions for use of the various
methods and the
associated risks.
7. Chapter III (Articles 30-38) concerns open tendering, which is
the default
method, the use of other methods requiring justification in each
case. Among
the issues discussed in this area was the timing of the opening of
tenders.
Language was retained stating that tenders shall be opened at the
time of the
deadline for submission of tenders set forth in the solicitation
documents. It
was agreed that the Guide to Enactment would address what that means
in
practical terms, i.e., how promptly after the expiration of the
deadline the
actual opening should begin.
UNVIE VIEN 00000582 003 OF 003
8. Other procurement methods not involving dialogue/negotiations
are treated
in Chapter IV (Articles 39-41). Regarding restricted tendering, it
was agreed
that procuring entities should be allowed flexibility in determining
in each
case how to pre-select the suppliers and contractors permitted to
submit
tenders, as opposed to setting forth detailed procedures for that
process.
With respect to request for proposals without negotiation, the
working group
discussed the dangers of including in the solicitation documents a
reference
to a maximum price (as this could naturally lead to no proposals at
a lower
price),and it was agreed that the Guide to Enactment should address
those
concerns.
9. More complex procurement methods involving
dialogue/negotiations, and also
single-source procurement, are found in Chapter V (Articles 42-46).
In the
discussion of two-stage tendering, it was considered to what extent
the
procuring entity was permitted to change the description of the
procurement
after discussions with those who submitted initial tenders. It was
agreed
that changes in the technical or quality characteristics of the
subject matter
were permissible, but that changes in the evaluation criteria should
be
limited to those necessary to implement the changes in those
technical or
quality characteristics. The distinctions between request for
proposals with
dialogue and request for proposals with consecutive negotiations
were examined
in some detail, although discussion of those articles was not
completed.
Regarding the former, procedures were identified for the
pre-selection of a
limited number of suppliers or contractors who would be invited to
submit
proposals that would then be the subject of dialogue. It was agreed
that the
minimum number of suppliers or contractors should be left for the
procuring
entity to determine in any given case.
10. Next steps. The Working Group will convene again in April 2010
to
complete the second reading of the text. That will involve first
the
completion of the review of procurement methods under Chapter V,
including
Competitive Negotiations, which is sparely drafted and thus might be
subject
to misuse. That would be followed by discussion of electronic
reverse
auctions (Chapter VI),framework agreements (Chapter VII),and
remedies in
cases where the procuring entity has not complied with the law
(Chapter VIII).
It is not expected that a text of the revised Model Law will be
ready for
consideration by the UNCITRAL Commission at its annual meeting in
June-July
2010. It remains to be seen if the Guide to Enactment could be
developed over
the next year or so, so that the Model Law and Guide could be
submitted
together to the Commission in 2011.
DAVIES
DEPT FOR L/PIL
SIPDIS
E.O. 12958: N/A
TAGS: AU AORC EINV ETRD UN UNCITRAL
SUBJECT: UNCITRAL Working Group on Procurement Makes Progress
Revising 1994 Model
UNVIE VIEN 00000582 001.2 OF 003
1. SUMMARY. At its December 7-11 meeting, the UNCITRAL Working
Group on
Procurement made significant progress in a second reading of the
current draft
revisions to the 1994 Model Law, but did not cover all of the
articles. The
remaining articles should be addressed at the next meeting in April
2010.
Much of the discussion focused on the many available methods of
procurement
set forth in the text, including the conditions for their use, the
procedures
that apply to each, and the advantages and risks of the various
methods.
There is concern about the capacity of developing countries to
administer
effectively the methods involving dialogue/negotiation. It is not
expected
that a text will be ready for submission to the annual UNCITRAL
Commission
meeting next summer. END SUMMARY.
2. Working Group I of the United Nations Commission on
International Trade
Law (UNCITRAL) met December 7-11 to continue its work on revisions
to the 1994
Model Law on Procurement of Goods, Construction and Services. In a
second
reading of the current draft, the Working Group made significant
progress, but
did not, as had been hoped, complete all of the articles. It
completed a
review of Articles 1-42 of the 66 current articles, and engaged in
partial
discussion of Articles 43-44 (which concern sophisticated
procurement
methods). In those articles that were fully reviewed, most open
issues were
resolved, with only a handful of matters remaining for further
consideration.
In a number of places, the Secretariat was asked to draft new text
to reflect
agreement on concepts.
3. Chapter I of the text, General Provisions (Articles 1-23),now
contains a
comprehensive set of provisions that apply generically to the
procurement
process notwithstanding which procurement method is used.
4. Examples of provisions that were discussed:
Definitions (Article 1): The definition of "socio-economic factors"
was
clarified. Whether to include a definition of "successful
submission," and if
so how it would be defined, were left open.
-Qualifications of suppliers and contractors (Article 9): The word
"references" was deleted from the list of things that suppliers or
contractors
must demonstrate in terms of qualifications, as the text otherwise
provides
that the procuring entity may require suppliers or contractors to
present
appropriate documentary evidence of their qualifications.
-Rules concerning evaluation criteria and procedures (Article 11):
In the
list of evaluation criteria, "environmental characteristics" of
goods or
construction was added to complement "functional characteristics".
-Prequalification proceedings (Article 16): The Secretariat was
requested to
reconsider text on the withholding of classified information in
light of the
provisions on disclosure in Article 23.
-Cancellation of the procurement (Article 17): It was agreed that a
procuring
UNVIE VIEN 00000582 002 OF 003
entity should incur no liability for cancellation of a procurement
unless the
cancellation was the consequence of irresponsible or dilatory
conduct on the
part of the procuring entity.
-Acceptance of the successful submission and entry into force of the
procurement contract (Article 20): The applicability of standstill
provisions
(to allow challenges to procurement decisions) to different aspects
of
framework agreements was discussed, with the conclusion that this
would need
to be addressed further in Chapter VII on framework agreements.
5. Chapter II (Articles 24-29) of the text addresses methods of
procurement
and the conditions for their use. These methods include:
-Open tendering (generally used for goods and quantifiable
services)
-Other methods not involving dialogue/negotiations: restricted
tendering;
request for quotations; and request for proposals without
negotiation
-Methods involving dialogue/negotiations: two-state tendering;
request for
proposals with dialogue; request for proposals with consecutive
negotiations;
and competitive negotiations
-Electronic reverse auctions
-Single-source procurement
6. The multiple methods of procurement set forth in the text
include older
methods whose usage has become less prevalent as well as newer
methods,
especially with regard to more complex procurement, intellectual
services,
etc., reflecting advances in the field of procurement. It was
recalled that
the various procurement methods were presented as part of a
"toolbox" approach
whereby enacting States could choose which methods to adopt. Some
participants, however, expressed concern over the proliferation of
methods.
Also, representatives of the World Bank and other multilateral
development
banks expressed concern that developing countries may not have the
capacity to
administer effectively the methods involving dialogue/negotiation,
and that
their use would create risks with regard to corruption. It was
agreed that
the Guide to Enactment that would accompany the new Model Law would
need to
provide detailed guidance on conditions for use of the various
methods and the
associated risks.
7. Chapter III (Articles 30-38) concerns open tendering, which is
the default
method, the use of other methods requiring justification in each
case. Among
the issues discussed in this area was the timing of the opening of
tenders.
Language was retained stating that tenders shall be opened at the
time of the
deadline for submission of tenders set forth in the solicitation
documents. It
was agreed that the Guide to Enactment would address what that means
in
practical terms, i.e., how promptly after the expiration of the
deadline the
actual opening should begin.
UNVIE VIEN 00000582 003 OF 003
8. Other procurement methods not involving dialogue/negotiations
are treated
in Chapter IV (Articles 39-41). Regarding restricted tendering, it
was agreed
that procuring entities should be allowed flexibility in determining
in each
case how to pre-select the suppliers and contractors permitted to
submit
tenders, as opposed to setting forth detailed procedures for that
process.
With respect to request for proposals without negotiation, the
working group
discussed the dangers of including in the solicitation documents a
reference
to a maximum price (as this could naturally lead to no proposals at
a lower
price),and it was agreed that the Guide to Enactment should address
those
concerns.
9. More complex procurement methods involving
dialogue/negotiations, and also
single-source procurement, are found in Chapter V (Articles 42-46).
In the
discussion of two-stage tendering, it was considered to what extent
the
procuring entity was permitted to change the description of the
procurement
after discussions with those who submitted initial tenders. It was
agreed
that changes in the technical or quality characteristics of the
subject matter
were permissible, but that changes in the evaluation criteria should
be
limited to those necessary to implement the changes in those
technical or
quality characteristics. The distinctions between request for
proposals with
dialogue and request for proposals with consecutive negotiations
were examined
in some detail, although discussion of those articles was not
completed.
Regarding the former, procedures were identified for the
pre-selection of a
limited number of suppliers or contractors who would be invited to
submit
proposals that would then be the subject of dialogue. It was agreed
that the
minimum number of suppliers or contractors should be left for the
procuring
entity to determine in any given case.
10. Next steps. The Working Group will convene again in April 2010
to
complete the second reading of the text. That will involve first
the
completion of the review of procurement methods under Chapter V,
including
Competitive Negotiations, which is sparely drafted and thus might be
subject
to misuse. That would be followed by discussion of electronic
reverse
auctions (Chapter VI),framework agreements (Chapter VII),and
remedies in
cases where the procuring entity has not complied with the law
(Chapter VIII).
It is not expected that a text of the revised Model Law will be
ready for
consideration by the UNCITRAL Commission at its annual meeting in
June-July
2010. It remains to be seen if the Guide to Enactment could be
developed over
the next year or so, so that the Model Law and Guide could be
submitted
together to the Commission in 2011.
DAVIES