FRAMEWORK AGREEMENTS December 2019 DEFINITION OF FRAMEWORK AGREEMENT

FRAMEWORK AGREEMENTS December 2019

DEFINITION OF FRAMEWORK AGREEMENT AND THE FRAMEWORK AGREEMENT PROCEDURES Framework agreement is an agreement between the procuring entity and the selected supplier or suppliers) or contractor (or contractors) concluded upon completion of the first stage of the framework agreement procedure (Article 2 (e) (i) UNCITRAL Model Law on public procurement 2011) Framework agreement procedure is a procedure conducted in two stages Article 2 (e) UNCITRAL ML): 1 Stage 23 January 2022 • To select a supplier (or suppliers) or a contractor (or contractors) to be a party (or parties) to a framework agreement with a procuring entity and to conclude a framework agreement • To award a procurement contract under the framework agreement to a supplier or contractor party to the framework agreement. 2

CONDITIONS FOR USE OF FRAMEWORK AGREEMENT PROCEDURE Article 32 (1) UNCITRAl Model Law: A procuring entity (PE) may engage in a framework agreement procedure where it determines that: (a) The need for the subject matter of the procurement is expected to arise on an indefinite or repeated basis during a given period of time; or (b) By virtue of the nature of the subject matter of the procurement, the need for that subject matter may arise on an urgent basis during a given period of time. 23 January 2022 3

MAIN CHARACTERISTICS OF FRAMEWORK AGREEMENTS § Framework agreements are concluded through an open tender and other procurement methods (Article 58, 60 UNCITRAL Model Law) § Main types of framework agreements: closed and open § Framework agreements procedure: with and without the second stage of the tender for concluding a procurement contract under a framework agreement § The parties to the framework agreement are: the procuring entity (PE), the PE acting on behalf of several procuring entities, the central procuring entity (CPE), one supplier or several suppliers § The PE may establish a minimum or maximum number of suppliers participating in the framework agreement § The criteria for awarding a framework agreement: the lowest price or the most advantageous tender (price and other criteria); § Validity of the framework agreement: can not exceed 4 years; may exceed only in exceptional cases (Article 33 (1) of the EU Directive 2014 on public procurement) 23 January 2022 4

TYPES OF FRAMEWORK AGREEMENTS: UNCITRAL MODEL LAW CLOSED FRAMEWORK AGREEMENT Article 2 (e)(ii) OPEN FRAMEWORK AGREEMENT Article 2 (e)(iii) 23 January 2022 • A framework agreement to which no supplier or contractor that is not initially a party to the framework agreement may subsequently become a party A framework agreement to which a supplier (or suppliers) or a contractor (or contractors) in addition to the initial parties may subsequently become a party or parties 5

TYPES OF FRAMEWORK AGREEMENTS CLOSED FRAMEWORK AGREEMENT ONE SUPPLIER Conclusion of a contract WITHOUT 2 nd stage of the competition 23 January 2022 OPEN FRAMEWORK AGREEMENT MULTIPLE SUPPLIERS Conclusion of a contract WITH 2 nd stage of the competition Conclusion of a contract WITHOUT 2 nd stage of the competition MULTIPLE SUPPLIERS Conclusion of a contract WITH nd 2 stage of the competition 6

Framework Agreements with more than one supplier or contractor In the FA with more than one supplier or contractor with nonfixed terms, awarding a procurement contract shall be concluded by second stage competition by means of: a) electronic reverse auction; b) request for price quotations; c) e-catalogue. 23 January 2022 7

Framework Agreements with one supplier or contractor Where the FA with one supplier or contractor set up fixed terms, the procurement contract shall be awarded directly: 1. via e-catalogue; or 2. by purchase order to supplier or contractor. In order to procure goods via e-catalogue the PE shall select the required goods from e-Catalogue from supplier or contractor that is a party to the FA and conclude an electronic procurement contract with the supplier or contractor via e-Catalogue following the procedures of the electronic procurement system. The procurement entity may also issue an electronic purchase order to the supplier or contractor that is party to the framework agreement via electronic procurement system. 23 January 2022 8

CLOSED FRAMEWORK AGREEMENT WITH 2 nd stage competition • Framework agreements with multiple suppliers • Certain conditions are defined - conditions can be changed or refined at the second stage of the procedure without making significant changes to the conditions established in the framework agreement • The second stage can be carried out by the CPE or by separate PE • The second stage is carried out when there is a need for an item of procurement • Application of various competitive procedures for the conclusion of a contract within the framework of the framework agreement. Examples of best practices: Cyprus and Portugal. 23 January 2022 WITHOUT 2 nd stage of the competition • Framework agreements with one supplier or multiple suppliers • Fixed prices for a unit of goods in the framework agreement • The contract is concluded directly with the supplier - the party of the agreement, in accordance with the conditions specified in the framework agreement, no changes are allowed • There is no need for a procedure for concluding a contract, the purchase is made by placing an order to the supplier ("framework contracts"). Examples of best practices: Italy and Portugal (contracts with a fixed price per unit of goods with one supplier for 18 -24 months) 9

OPEN FRAMEWORK AGREEMENT WITH 2 nd STAGE COMPETITION: • Framework agreements with several suppliers • Periodical publication of the invitation to become a party to the framework agreement (e. g. annually) • The conditions governing the contract may be amended or refined at the second stage of the procedure without making significant changes to the conditions established in the framework agreement • The 2 nd stage can be performed by a CPE or PE • The second stage is carried out when there is a need for an item of procurement • A maximum limit on the number of suppliers can be set • The application of various competitive procedures for the conclusion of a contract under a framework agreement • The use of various procurement mechanisms, including electronic catalogues. 23 January 2022 10

OPEN FRAMEWORK AGREEMENT Art. 60 UNCITRAL ML: 1 • Publication of an invitation to become a party to the open framework agreement 2 • Presenting indicative submissions to become a party to the FA by suppliers or contractors to the procuring entity 3 • Examination of all indicative submissions received during the period of operation of the framework agreement by procuring entity 4 • Conclusion of the framework agreement with all qualified suppliers or contractors that presented submissions Open Framework Agreement applies for centralised procurement by central purchasing body (CPB) 23 January 2022 11

MONGOLIA: OPEN FRAMEWORK AGREEMENT Ø Framework Agreement shall be concluded with several suppliers or service providers, at least three, unless a smaller number of responsive tenders were submitted, in which case at least two. Ø Framework Agreement shall be open throughout the Framework Agreement validity period to any supplier or service provider that satisfies the selection criteria. The number of suppliers or service providers shall not be limited. E-Shop and awarding contracts under the Framework Agreement Ø Upon signing the FA, the Professional body shall enable procuring goods and services covered by the Framework Agreement by the means of electronic procedures for awarding procurement contracts available in the E-Shop in the form of electronic bidding, request for price quotations and a direct selection. Ø Supplier who has not been a party to framework agreement will need to be prequalified before submitting a bid. Ø New suppliers and service providers should be registered in the E-Shop as soon as their selection process has been finalised by the Professional body. Ø If a supplier or service provider that has joined the Framework Agreement is no longer fulfilling the qualification criteria, as determined in the contract notice for awarding this Framework Agreement, the supplier or service provider is obliged to notify the Professional body without undue delay. 23 January 2022 12

FRAMEWORK AGREEMENT PROCEDURE WITH / WITHOUT THE 2 STAGE OF THE COMPETITION The 2 nd stage of the competition is a procedure within the framework of an open framework agreement or a closed framework agreement with more than one supplier or contractor in which certain procurement conditions that can not be established with sufficient accuracy at the conclusion of the framework agreement should be established or clarified in within the framework of the second stage of the competition. Within the framework of the closed framework agreement, in which all the terms of the purchase are established at the conclusion of the framework agreement, the 2 nd stage of the tender is not required to conclude a procurement contract. The procurement contracts are concluded within the framework agreement by holding the second stage of the competition among the suppliers who are participants in the framework agreement. Various competitive procedures are used to conclude a procurement contract under a framework agreement (request for quotations, reverse auction, electronic catalogue, etc. ) Procurement contracts are concluded directly with suppliers - the parties to the framework agreement on the basis of the conditions set out in the framework agreement. Parties can specify the conditions, but do not make significant changes to the conditions set out in the framework agreement. 23 January 2022 13

2 STAGE - CONCLUSION OF THE CONTRACT: REQUEST FOR PRICE QUOTATIONS ü In a closed and open framework agreement with the second stage of the tender, the CPEs or PEs can send a request for price quotations to each supplier or contractor that is a party to the framework agreement. ü This procurement method is suitable for the second stage of the tender, if all the terms of the purchase have been determined, but the price or technical specification must be updated. The evaluation criteria are established in the framework agreement, namely the lowest price or value. ü In the case of an open framework agreement, a supplier who is not a party to the framework agreement may offer a price, but must be prequalified before applying for a price quote. ü Only one quotation can be provided by the supplier or contractor in response to a request for quotes from the PE. ü The quotation can not be changed and is not subject to discussion. 23 January 2022 14

2 STAGE - CONCLUSION OF THE CONTRACT: ELECTRONIC REVERSE AUCTION Ø In a closed and open framework agreement with the second stage of the competition, the CPEs or PEs may invite each supplier or contractor that is a participant in the framework agreement to participate in electronic reverse auctions. Ø Electronic reverse auction means an online real-time purchasing technique utilized by the procuring entity to select the successful submission, which involves the presentation by suppliers or contractors of successively lowered bids during a scheduled period of time and the automatic evaluation of bids (Article 2 (d ) of the UNCITRAL Model Law). Ø This procurement method is suitable for the second stage of the tender if all the terms of the purchase are specified, but for a large volume of purchases it is required that prices are updated. Ø Evaluation criteria are established in the framework agreement, according to which the lowest price or value is understood. 23 January 2022 15

2 STAGE - CONCLUSION OF THE CONTRACT: ELECTRONIC CATALOGUE v The e-catalogue can be used to purchase goods and services of small value for concluding a procurement contract with suppliers under the framework agreement. v After the conclusion of the framework agreement, the subject of procurement (goods, service), procurement conditions are registered in the e-catalogue for the duration of the framework agreement. v PE/CA that is a party to a framework agreement may: v directly place an order for the delivery of the subject of procurement from the EC directly to the supplier that is a party to the framework agreement (with a closed framework agreement with one supplier). v initiate the conclusion of a contract for the purchase of the subject of procurement through the e-catalogue, by sending a request for price quotations to suppliers who are the initial parties to the framework agreement (with a closed framework agreement with several suppliers) to provide a price proposal / price change for certain goods or services listed in the e-catalogue. v In the case of an open framework agreement, the e-catalogue contains information on the conditions for the adoption of additional suppliers and allows the supply of proposals by additional suppliers. For this, additional suppliers must register and prequalify and place their goods in the e-catalogue. v PE/CA signs a purchase agreement with the supplier offering the best conditions (price) at the time of the request (in case the price in the framework agreement is not fixed). 23 January 2022 16

Awarding procurement contracts under FA by means of e-catalogue procedure § AB or PE after establishing FA shall establish e-catalogue under the FA and register suppliers or contractors participating in the FA in the e-Catalogue and their goods in e-catalogue. • The PE may: • award procurement contract to any qualified supplier or contractor from e-catalogue and order directly from that supplier or contractor; or • request for price quotations via e-Catalogue from all suppliers or contractors that are party of the FA in order to award procurement contract. § The PE, upon selection of necessary goods in e-catalogue, submits request for price quotation in respect of selected goods via e-Catalogue. § E-catalogue automatically transmits request for price quotation to all suppliers or contractors that are party to a framework agreement, which offer relevant goods in e-Catalogue • Each qualified supplier or contractor shall respond to received request for price quotation within deadline set out in it by PE • Upon elapse of the term for submission of quotation forms by the qualified suppliers or contractors, e-catalogue in 2 days automatically ranks the price quotations received and immediately notifies procuring entity on the winner, which price quotation had the lowest price. • Upon receiving of notification on the winner of price quotation procedure, PE request e-catalogue to generate electronic procurement contract. • The procurement contracts under the FA shall be concluded digitally, signed using electronic signature, registered and published online. 23 January 2022 17

THE FRAMEWORK AGREEMENT PROCEDURES (1) Preparatory stage 23 January 2022 Conducting a tender and concluding a framework agreement Implementation of the framework agreement 18

DESCRIPTION OF FRAMEWORK AGREEMENT PROCEDURES (2) 1. PREPARATORY STAGE - Demand Analysis - Market research and consulting - Development of standard technical characteristics - Budgeting - Development of the Framework Agreement - Preparation of the announcement and tender documents 23 January 2022 2. CONDUCTING THE TENDER AND CONCLUSION OF THE FRAMEWORK AGREEMENT - Publication of the announcement of the tender and bidding documents - Provisional qualification of suppliers or contractors in accordance with qualification requirements - Evaluation of technical proposals and financial proposals to verify compliance with technical requirements and establish an optimal price-quality ratio - Notification of award and conclusion of a framework agreement - Registration of the framework agreement 3. EXECUTION OF THE FRAMEWORK AGREEMENT - Conclusion of the procurement contract, in the case of a procedure without the second stage of the tender, in accordance with the terms of the framework agreement - Request price quotes or conduct an electronic auction in the case of the second stage of the competition, when all conditions are defined in the framework agreement - Execution of contracts: placement for an order for the supply of a procurement subject to the supplier by PE - Payment under the contract for supply 19

THANK YOU FOR ATTENTION! 23 January 2022 20