2.2. Management modes
Procurement or grant award procedures for projects financed under EU external aid programmes vary according to the different arrangements for managing the project (referred to as 'management modes').
The EU Financial Regulation3 and its Rules of Application4 in force since 01/01/2013 introduced important changes in the existing management modes. The changes entered into force on 01/01/2014. From the entry into force of the Financial Regulation for the Bridging Facility (amended 10th EDF FR) and 11th EDF, they will also be applicable to the European Development Fund.
The notion of management modes remains the same. They are different ways to implement the EU budget or the EDF funds, depending on the variable level of implication of the European Commission in its implementation. This is attained through the delegation of a number of budget implementation tasks (such as conclusion of contracts, their operational and financial management, audit, evaluation, etc.).
The former management modes (centralised5, decentralised, joint and shared) have been streamlined to just three:
The European Commission is in charge of all EU budget implementation tasks, which are performed directly by its departments either at headquarters or in the EU delegations or through European executive agencies.
Therefore, the European Commission or the European executive agency is the contracting authority and takes decisions on behalf and for the account of the partner countries. In such cases, references in this Practical Guide to the 'contracting authority' refer actually to the European Commission (or where the case may be to an EU executive agency), acting on behalf and for the account of the partner countries.
Under indirect management, the European Commission entrusts budget implementation tasks to:
partner countries (or to bodies designated by them)
development agencies of EU Member States
This Practical Guide focuses on the first case, when the European Commission entrusts the budget implementation tasks to partner countries7.
It applies mutatis mutandis in those rare cases where international organisations, development agencies or other bodies must use EU contracting procedures.
Two modalities are possible under indirect management with partner countries:
- Indirect management with ex-ante controls: Decisions on the procurement and award of contracts are taken by the partner country, which acts as the contracting authority, following prior approval of the European Commission.
- Indirect management with ex-post controls: decisions provided for in the financing agreement are taken by the partner country, which acts as the contracting authority without prior approval by the European Commission (apart from exceptions to the standard procedures given in this Practical Guide).
The different ex-ante and ex-post approval procedures are explained throughout this Practical Guide.
The European Commission delegates implementation tasks to the EU Member States. This mode is rarely used in the implementation of external actions, but there are a few cases such as joint operational programmes on cross-border cooperation implemented by a joint managing authority (for instance under the European Neighbourhood Instrument, ENI, or the Pre-accession Assistance, IPA II).
The choice of management mode is an essential element of the financing decision and it is reflected in the corresponding documents (e.g. the 'action fiche' for the relevant financing decision or (annual) action programme).
Important: For some time there will be an overlap between the new management modes and the former ones (as it will be the case for Financing Agreements signed before 2014 making reference to the former management modes). For the sake of clarity, in this Practical Guide reference is made solely to the management modes in force as from 01/01/2014 described above in this chapter. However, in the case of on-going actions under the former management modes, the explanations in this Practical Guide remain valid using the following equivalences (just for the management modes described in this Practical Guide):
FORMER MANAGEMENT MODES
NEW MANAGEMENT MODES
(in force as from 01/01/2014)
DIRECT CENTRALISED MANAGEMENT
DECENTRALISED MANAGEMENT with EX-ANTE CONTROLS
INDIRECT MANAGEMENT with EX-ANTE CONTROL
DECENTRALISED MANAGEMENT WITH EX-POST CONTROLS
INDIRECT MANAGEMENT with EX-POST CONTROL
Important points with regard to indirect management:
In most cases, this Practical Guide applies in (i) direct and (ii) indirect management with partner countries8. Note, however, that the European Commission may, in some specific cases, allow partner countries to use other procedures depending on prior positive assessment of such procedures.
The European Commission's involvement in contracts signed by the partner countries under indirect management is to authorise the financing of the contracts and check, notably with reference to established checklists, that the procedures, the implementation of the contracts and the expenditure are correctly carried out. If the procedures established in this Practical Guide (or whatever procedure the European Commission decides must be used) are not followed, the expenditure incurred on the related operations is ineligible for EU financing. The European Commission's intervention is limited to checking whether the conditions for EU financing have been met.
In no case will intervention aim at compromising the principle according to which these contracts are national contracts drafted and concluded only by the contracting authority from the partner country. Tenderers, candidates and applicants for these contracts do not possess any form of contractual relationship with the European Commission during or after the implementation of the contracts. Their only contractual relationship is with the contracting authority. A contracting authority's decision may not be replaced by a decision taken by the EU. The contracting authority assumes full responsibility for its actions and will be accountable for those actions in any subsequent audit or other investigation.
The box below summarises the control procedures that the European Commission must follow for each management mode.
The contracts are concluded directly by the European Commission, acting on behalf of the beneficiary country. It draws up shortlists (restricted procedures) and is responsible for issuing calls for tenders and calls for proposals, publishing them, receiving applications, tenders and proposals, chairing evaluation committees, deciding on the results of the procedures, managing complaints and signing the contracts.
INDIRECT MANAGEMENT WITH EX-ANTE CONTROLS:
The contracts are concluded by the contracting authority designated in a financing agreement, i.e. the government or an entity of the partner country with legal personality with which the European Commission concludes the financing agreement.
Before the procedure is launched, the contracting authority must submit the documents (tender dossier or call for proposal file) to the European Commission for approval. The European Commission verifies that they have been drafted in accordance with the procedures and templates laid down in this Practical Guide (or whatever procedure the European Commission decides must be used). The contracting authority is then responsible for drawing up shortlists (restricted procedures), issuing the calls for tenders and calls for proposals, receiving applications, tenders and proposals, chairing evaluation committees and deciding on the results of the procedure. Before signing contracts, the contracting authority submits the result of the evaluations to the European Commission for approval. The European Commission verifies conformity with the applicable procedures. The contracting authority also sends the contracts to the European Commission for endorsement before signing them9.
The European Commission must always be invited when applications and tenders are opened and evaluated and a European Commission representative should, as a rule, attend as an observer in all or part of the evaluation committee meetings. The European Commission pays a particular attention to potential conflicts of interests.
The contracting authority must submit all relevant notices in electronic form to the European Commission for publication (See annex A11e), with the exception of the cases referred to in the Practical Guide for Programme Estimates.
Under the Instrument for Pre-accession Assistance (IPA II), a phased waiver of different types of ex-ante controls may apply.
INDIRECT MANAGEMENT WITH EX-POST CONTROLS:
Contracts are concluded directly by the contracting authority designated in a financing agreement. For instance the government or an entity of the partner country with the same legal personality with which the European Commission concludes the financing agreement. The contracting authority draws up shortlists (restricted procedures) and is responsible for issuing invitations to tender, receiving tenders, chairing the evaluation committees, deciding on the results of the procedures and signing the contracts without the prior approval of the European Commission. The contracting authority must submit all relevant notices in electronic form to the European Commission for publication (See annex A11e).
SHARED MANAGEMENT AND INDIRECT MANAGEMENT WITH ENTITIES OTHER THAN PARTNER COUNTRIES:
In these cases, the delegated entity (e.g. a national agency or international organisation) concludes contracts with third parties.
The delegated entity procedures generally apply.
That delegated entity is responsible for publishing the relevant notices. Therefore those notices are published neither on the EU Official Journal nor on the Europeaid Website,
The European Commission may verify the procedure ex post, regardless of whether the European Commission has carried out a prior 'pillar review' of the delegated entity.