Article 296. Derogation
1. In order to ensure the optimum cost-effectiveness of the system, natural or legal persons from non-ACP developing countries may be authorized to participate in contracts financed by the Community at the request of the ACP States concerned. The ACP States concerned shall, on each occasion, provide the delegate with the information needed for the Community to decide on such derogations, particular attention being given to:
(a) the geographical location of the ACP State concerned;
(b) the competitiveness of contractors, suppliers and consultants from the Community and the ACP States;
(c) the need to avoid excessive increases in the cost of performance of the contract;
(d) transport difficulties or delays due to delivery times or other similar problems;
(e) technology that is the most appropriate and best suited to local conditions.
2. Participation by third countries in contracts financed by the Community may also be authorized:
(a) where the Community participates in the financing of regional or inter-regional schemes involving such countries;
(b) in the case of cofinancing projects and programmes;
(c) in the case of emergency assistance.
3. In exceptional cases and in agreement with the Commission, consultancy firms which or experts who are nationals of third countries may participate in service contracts.
Article 297. Competition
Save as provided for in Article 298, works and supply contracts financed from the Fund shall be concluded following an open invitation to tender and service contracts shall be concluded following a restricted invitation to tender.
Article 298.
1. The ACP State or States may, in accordance with the provisions of paragraphs 2, 3 and 4 and of Article 299 and in agreement with the Commission:
(a) place contracts after restricted invitations to tender following, where applicable, calls for prequalification;
(b) conclude contracts by direct agreement;
(c) perform contracts through public or semi-public departments of the ACP States.
2. Restricted invitation to tender may be used:
(a) where the urgency of the situation is established or where the nature or certain particular characteristics of the contracts so warrant;
(b) for projects or programmes of a highly specialized nature;
(c) for large-scale contracts after prequalification;
3. Direct-agreement contracts may be awarded in the following cases:
(a) small-scale operations or in urgent situations or short-term technical cooperation schemes;
(b) emergeney assistance;
(c) operations assigned to individual experts;
(d) operations which are complementary to or necessary for the completion of others already in hand;
(e) where the execution of the contract is exclusively reserved for holders of patents or licences to use, process or import the articles concerned;
(f) following an unsuccessful invitation to tender.
4. The following procedure shall apply for restricted invitation to tender and direct-agreement contracts:
(a) in the case of works and supply contracts, a short-list of prospective tenderers shall be drawn up by the ACP State or States concerned in agreement with the delegate following, where applicable, a call for prequalification of tenders;
(b) in the case of service contracts, the short-list of prospective tenderers shall be drawn up by the ACP States, in agreement with the Commission on the basis of the proposals of the ACP State or States concerned and the proposals submitted by the Commission;
(c) in direct-agreement contracts, the ACP State shall enter freely into such discussions as it may consider appropriate with the prospective tenderers whom it has short-listed in accordance with the paragraphs above and award the contract to the tenderers whom it has selected.
Article 299. Direct Labour
1. Contracts shall be performed by direct labour through public or semi-public agencies or departments of the State or States concerned, where the ACP State concerned has the qualified management staff available in its national departments, in case of emergency assistance, service contracts and all other operations the estimated cost of which is less than ECU 5 million.
2. The Community shall contribute to the costs of the department involved by providing the equipment and/or materials that it lacks and/or resources to allow it to acquire additional staff required in the form of experts from within the ACP States concerned or other ACP States. The participation of the Community shall cover only costs incurred by supplementary measures and temporary expenditure relating to execution strictly confined to the requirements of the project in question.
Article 300. Emergency Assistance Contracts
Contracts under emergency assistance shall be undertaken in such a way as to reflect the urgency of the situation. To this end, for all operations relating to emergency assistance, the ACP State may, in agreement with the delegate, authorize:
(a) the conclusion of contracts by direct agreement; (b) the performance of contracts by direct labour;
(c) implementation through specialized agencies;
(d) direct implementation by the Commission.
Article 301. Accelerated Procedure
1. With the aim of ensuring the rapid and effective implementation of projects and programmes, an accelerated tendering procedure shall be used except as otherwise indicated by the ACP State concerned, or by the Commission by way of a proposal for the agreement of the ACP State concerned. The accelerated procedure for issuing invitations to tender shall involve shorter time limits for tendering and the call for tender is confined to the ACP State concerned and the neighbouring ACP States, in accordance with the rules in force in the ACP State concerned. The accelerated procedure shall apply in the following cases:
(a) works contracts: the estimated cost of which is less than ECU 5 million;
(b) emergency assistance: irrespective of the value of the contract.
2. By way of derogation, the national authorizing officer, in agreement with the delegate, may procure supplies and/or services for a limited amount where they are available in the ACP States concerned or in neighbouring ACP States.
Article 302.
In order to speed up the procedure, the ACP States may request the Commission to negotiate, draw up and conclude service contracts on their behalf directly or through its relevant agency.
Article 303. Preference
Measures shall be taken to encourage the widest participation of the natural and legal persons of ACP States in the performance of contracts financed by the Fund in order to permit the optimization of the physical and human resources of those States. To this end:
(a) for works contracts of a value of less than ECU 5 million, tenderers of the ACP States, provided that at least one quarter of the capital stock and management staff originates from one or more ACP States, shall be accorded a 10 % price preference where tenders of an equivalent economic, technical and administrative quality are compared;
(b) for supply contracts, irrespective of the value of the supplies, tenderers of the ACP States who offer supplies of at least 50 % in contract value of ACP origin shall be accorded a 15 % price preference where tenders of equivalent economic, technical and administrative quality are compared;
(c) in respect of service contracts, given the required competence, preference shall be given to experts, institutions or consultancy companies or firms from ACP States where tenders of equivalent economic and technical quality are compared;
(d) where subcontracting is envisaged, preference shall be given by the successful tenderer to natural persons, companies and firms of ACP States capable of performing the contract required on similar terms;
(e) the ACP State may, in the invitation to tender, propose to the prospective tenderers the assistance of other ACP States' companies or firms or national experts or consultants selected by mutual agreement. This cooperation may take the form either of a joint-venture or of a subcontract or of on-the-job training of trainees.
Article 304. Selection
1. The ACP State shall award the contract to the tenderer:
(a) whose tender is found to be responsive to the tender dossier;
(b) for a works or supply contract, who has offered the most advantageous tender as assessed inter alia on the basis of:
(i) the price, the operating and maintenance costs;
(ii) the qualifications of, and the guarantees offered by the tenderers, as well as the technical qualities of the tender, including the offer of an after-sales service in the ACP State;
it) the nature of, the conditions and the time limit for executing the contracts, and the adaptation to local conditions;
(c) for a service contract, who offers the most advantageous tender taking into account inter alia the price, the technical value of the tender, the organization and the methodology proposed for the provision of the services, as well as the competence, independence and availability of the personnel proposed.
2. Where two tenders are acknowledged to be equivalent on the basis of the criteria stated above, preference shall be given:
(a) to the tenderer of an ACP State; or
(b) if no such tender is forthcoming, to the tenderer who:
(i) permits the best possible use of the physical and human resources of the ACP States;
(ii) offers the greatest subcontracting possibilities to ACP companies, firms or natural persons; or
(ii) is a consortium of natural persons, companies and firms from ACP States and the Community.
Article 305. General Regulations
The award of contracts financed from the resources of the Fund shall be governed by this Convention and the general regulations which shall be adopted by decision of the Council of Ministers at the first meeting following the signing of this Convention, upon the recommendation of the ACP-EEC Development Finance Cooperation Committee referred to in Article 325 of this Convention.
Article 306. General Conditions
Performance of works, supply and service contracts financed from the resources of the Fund shall be governed by:
(a) the general conditions applicable to contracts financed by the Fund which shall be adopted by decision of the Council of Ministers, at the first meeting following the signing of this Convention, upon the recommendation of the ACP-EEC Development Finance Cooperation Committee referred to in Article 325 of this Convention; or
(b) in the case of cofinanced projects and programmes, or where a derogation to third parties has been granted, or in accelerated procedures or in other appropriate cases, such other general conditions as may be agreed by the ACP State concerned and the Community, i.e.:
(i) the general conditions prescribed by the national legislation of the ACP State concerned or its established practices regarding international contracts; or
(ii) any other international general conditions for contracts.
Article 307. Settlement of Disputes
Any dispute arising between the authorities of an ACP State and a contractor, supplier or provider of services during the performance of a contract financed by the Fund shall:
(a) in the case of a national contract be settled in accordance with the national legislation of the ACP State concerned; and
(b) in the case of a transnational contract be settled either:
(i) if the parties to the. contract so agree, in accordance with the national legislation of the ACP State concerned or its established international practices; or
(ii) by arbitration in accordance with the procedural rules which will be adopted by decision of the Council of Ministers, at the first meeting following the signing of this Convention, upon the recommendation of the ACP-EEC Development Finance Cooperation Committee re- ferred to in Article 325 of this Convention.
Section 6. Tax and Customs Arrangements
Article 308.
The ACP States shall apply to contracts financed by the Community tax and customs arrangements no less favourable than those applied by them to the most-favoured States or international development organiz- ations with which they have relations. For the purpose of determining the most-favoured-nation treatment, account shall not be taken of arrangements applied by the ACP State concerned to other ACP States, or to other developing countries.
Article 309.
Subject to Article 308 above, the following shall apply to contracts financed by the Community:
(a) the contract shall not be subject in the beneficiary ACP State to stamp or registration duties or to fiscal charges having equivalent effect, whether such charges already exist or are to be instituted in the future; however, such contracts shall be registered in accordance with the laws in force in the ACP State and a fee corresponding to the service rendered may be charged for it;
(b) profits and/or income arising from the performance of contracts shall be taxable according to the internal fiscal arrangements of the ACP State concerned, provided that the natural or legal persons who realize such profit and/or income have a permanent place of business in that State, or that the performance of the contract takes longer than six months;
(c) enterprises which must import professional equipment in order to carry out works contracts shall, if they so request, benefit from the system of temporary admission as laid down by the national legislation of the beneficiary ACP State in respect of the said equipment;
(d) professional equipment necessary for carrying out tasks defined in a service contract shall be temporarily admitted into the beneficiary ACP State or States in accordance with its national legislation free of fiscal, import and customs duties and of other charges having equivalent effect where duties and charges do not constitute remuneration for services rendered;
(e) imports under supply contracts shall be admitted into the beneficiary ACP State without customs duties, import duties, taxes or fiscal charges having equivalent effect. The contract for supplies originating in the ACP State concerned shall be concluded on the basis of the ex-works price of the supplies, to which may be added such internal fiscal charges as may be applicable to those supplies in the ACP State;
(f) fuels, lubricants and hydrocarbon binders and, in general, all materials used in the performance of works contracts shall be deemed to have been purchased on the local market and shall be subject to fiscal rules applicable under the national legislation in force in the beneficiary ACP State;
(g) personal and household effects imported for use by natural persons, other than those recruited locally, engaged in carrying out tasks defined in a service contract and members of their families, shall be exempt from customs or import duties, taxes and other fiscal charges having equivalent effect, within the limit of the national legislation in force in the beneficiary ACP State.
Article 310.
Any matter not covered by the provisions of Articles 308 and 309 shall remain subject to the national legislation of the ACP State concerned.
Chapter 6. Management and Executing Agents
Section 1. Chief Authorizing Officer
Article 311.
1. The Commission shall appoint the chief authorizing officer of the Fund, who shall be responsible for managing the resources of the Fund.
2. The chief authorizing officer shall:
(a) commit, clear and authorize expenditure and keep accounts of commitments and authorizations;
(b) ensure that financing decisions are carried out;
(c) in close cooperation with the national authorizing officer make commitment decisions and financial arrangements that prove necessary to ensure proper execution of approved operations from the economic and technical viewpoints;
(d) approve the tender dossier before invitations to tender are issued, subject to the powers exercised by the delegate under Article 317;
(e) ensure publication in reasonable time of invitations to tender in accordance with Article 295;
(f) approve the proposal for placing of the contract, subject to the powers exercised by the delegate under Article 317.
3. The chief authorizing officer shall, at the end of the each year, make available a detailed balance sheet of the Fund showing balances of contributions paid into the Fund by the Member States, global disbursements in respect of each financing heading including regional cooperation, emergency assistance, Stabex, Sysmin and structural adjustment.
Section 2. National Authorizing Officer
Article 312.
1. The Government of each ACP State shall appoint a national authorizing officer to represent it in all operations financed from the resources of the Fund managed by the Commission. The national authorizing officer shall also be kept informed of operations financed from the resources managed by the Bank.
2. The national authorizing officer may delegate some of these functions and shall inform the chief authorizing officer of any such delegation.
Article 313.
1. The national authorizing officer shall:
(a) in close cooperation with the delegate be responsible for the preparation, submission and appraisal of projects and programmes;
(b) in close cooperation with the delegate, issue invitations to tender, receive tenders, preside over the examination of tenders, establish the results of this examination, sign contracts and riders thereto, and approve expenditure;
(c) submit, before issuing invitations to tender, the invitation to tender dossier to the delegate who shall give his agreement within the time limit set in Article 317;
(d) complete the evaluation of tenders within the tender validity period taking into consideration the period required for the approval of contracts;
(e) transmit the result of the examination of the tenders and a proposal for placing the contract to the delegate who shall, within 30 days or such other time limit as set in Article 317, give his approval;
(f) clear and authorize expenditure within the limits of the funds assigned to him;
(g) during the execution operations, make any adaptation arrangements necessary to ensure the proper execution of approved projects or programmes from the economic and technical viewpoint.
2. The national authorizing officer shall, during the execution of operations and subject to the requirement to inform the delegate, decide on:
(a) technical adjustments and alterations in matters of detail, so long as they do not affect the technical solution adopted and remain within the limits of the reserve for adjustments;
(b) alterations to estimates during execution;
(c) transfers from item to item within estimates;
(d) changes of site for multiple-unit projects or programmes where justified on technical, economic or social grounds;
(e) imposition or remission of penalties for delay;
(f) acts discharging guarantors;
(g) purchase of goods, irrespective of their origin, on the local market;
(h) use of construction equipment and machinery not originating in the Member States or ACP States provided there is no production of comparable equipment and machinery in the Member States or ACP States;
(i) subcontracting;
(j) final acceptance, provided that the delegate is present at provisional acceptance, endorses the corresponding minutes and, where appropriate, is present at the final acceptance, in particular where the extent of the reservations recorded at the provisional acceptance necessitates major additional work;
(k) hiring of consultants and other technical assistance experts.
Article 314.
All documents and proposals submitted by the national authorizing officer to the Commission or the delegate for agreement or approval in accordance with this Convention shall be approved or deemed to be approved within the time limits laid down by this Convention, or within 30 days, where no time limit is stated in the Convention.
Article 315.
At the end of each year of the period of application of the Convention, the national authorizing officer shall prepare a report on the operations covered by the national indicative programme and regional programmes in the ACP State concerned. The report shall include, inter alia:
(a) the report referred to in Article 284 of this Convention relating to commitments, disbursements and the implementation timetable for the indicative programme as well as a Progress report on projects and programmes;
(b) commitments, disbursements, implementation timetable and progress on regional projects and programmes in that State;
(c) in consultation with the Commission delegate, the report referred to in Article 290 of this Convention relating to multiannual programmes;
(d) an assessment of the operations in financial and technical cooperation in the ACP State, including regional programmes,
A copy of the report shall be submitted simultaneously to the delegate and to the ACP General Secretariat not later than 90 days from the end of the year under review.
Section 3. The Delegate
Article 316.
1. The Commission shall be represented in each ACP State, or in each regional grouping which expressly so requests, by a delegate approved by the ACP State or States concerned.
2. Where a delegate is appointed to a group of ACP States, appropriate steps shall be taken to ensure that the delegate is represented by a deputy resident in each of the States in which the delegate is not resident.
Article 317.
The delegate shall have the necessary instructions and delegated powers to facilitate and expedite the preparation, appraisal and execution of projects and programmes and shall be provided with the necessary back-up support to do so. To this end, and in close cooperation with the national authorizing officer, the delegate shall: