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September 29, 2022

European Funds: Dos and Don’ts in Procurement Procedures

by Roxana NEACȘU,  Senior Associate Gruia Dufaut Law Office

Funding projects from European funds is a great opportunity, but also a challenge for Romanian companies in all sectors, in terms of the procedures and formalities to be fulfilled.

Of the many projects funded from European funds, special attention is to be paid to the procedures to be followed for projects funded through the European Agricultural Fund for Rural Development (“EAFRD”), carried out through the Agency for Rural Investment Financing (“AFIR”).

Although all the main stages of such a project are important (preparation of the funding file, approval of the file and execution of the funding contract, project execution etc.), we would like to draw your attention to the stage of the procurement procedures necessary for the project, given the specific rules imposed by AFIR .

Procurement Procedure

Apparently similar to a classical procurement procedure, the procurement procedure for a project financed by AFIR has several particularities, especially for projects whose value exceeds EUR 15,000.

Compared to the classic public procurement procedure, the procedure for AFIR-funded projects takes place exclusively online, on the AFIR website.

Thus, the investor has to organize public procurement procedures, launch the invitation to tender and publish the tender specifications.

At the end of the bidding term, the investor analyzes and verifies whether tenders are compliant or not and designates the most advantageous tender, according to the “lowest price” criterion and not “the best value for money” criterion.

However, please note that this criterion should only be applied to tenders that are perfectly compliant with the legal requirements and with those indicated in the tender specifications.

Some examples of non-compliance: the tender value is higher than the one indicated in the specifications, the content of the tender cannot be verified, the tenderer is in a conflict of interest etc.

It should also be noted that, when analyzing the tender, the investor may ask the tenderer to provide various clarifications. These clarifications must under no circumstances determine the change of tenders.

Tenderers dissatisfied with the investor’s decision to award the contract to a particular tenderer may challenge the procurement procedure through a procedure detailed in AFIR’s regulations.

After resolving the complaints submitted by the tenderers or, where applicable, after the deadline for contestation has passed, the investor and the successful tenderer will conclude the procurement contract, the complete procurement file being subject to AFIR’s approval.

If AFIR considers that the file is compliant with the law, it will approve it and the actual purchase will be possible.

Dos and Don’ts

We would like to draw your attention to some of the precautions that must be taken in the public procurement procedure in this specific context.

Drafting the tender specifications: The conditions provided in the tender specifications must not be limitative or restrictive or oriented towards a single goods or service supplier.

Tender analysis: Carefully review the compliance of tenders, especially from a technical point of view. Also check the documents submitted by the tenderers to certify the fulfillment of the various conditions. Choosing a non-compliant offer will cause the file to be rejected. We have encountered cases where the investor had “hurried” to designate the winning tender by applying the “lowest price” criterion, but after careful consideration, such tender did not meet at least half of the required conditions!

The actual procurement: This can only be done after approval of the file submitted to AFIR. In this context, it is desirable for the investor and the successful tenderer to conclude the procurement contract under the condition precedent of the approval by AFIR. In the absence of this condition precedent, termination of the contract may prove rather difficult if the procurement procedure is rejected by AFIR.

Therefore, if you resort to the EAFRD funds and you reach the procurement stage, we recommend that you look closely at every aspect of this procedure, in agreement with your advisers, for a guaranteed success of your project.

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