Preparation of tender procedures under PPA, PRAG, and FIDIC

The Public Procurement Act (PPA) is applied by those beneficiaries that generally have the capacity of a Procuring Entity, i.e., these are mainly state and local government bodies and organizations receiving funding from the state budget. These organizations apply the PPA within and outside the specific project that the Structural Funds fund. Therefore, they also have relevant experience organizing and conducting public procurement in several cases.

The practical guide on contract procedures for European Union external action (PRAG) provides contracting authorities, on the one hand, and tenderers, candidates, applicants, and contractors, on the other hand, with practical assistance in preparing and implementing procurement and grant contracts in the field of external action.

The FIDIC contracts prepare the standard terms and conditions for construction services to be agreements in international contracts. They set out the rules for tendering - what the files should include and how the complete contract documents should be formed - and instruct on using the FIDIC General Conditions. Their editions are subdivided into traditional standard contracts issued before 1999 and new standard contracts published in 1999.

The International Federation of Consulting Engineers (FIDIC) has published four model forms of construction contracts:

    • “Conditions of Contract for Construction” (the so-called “Red Book”), which applies to construction and engineering work on a project provided by the Employer (the Investor) or its agent, the Engineer. By the usual regulation of this type of contract, the Contractor shall carry out the tasks by the Employer’s design. However, the Works may include elements designed by the Contractor, such as civil, mechanical, electrical, and/or structural works.

    • The “Contractor’s Design-Build Contract Conditions for the Construction of Energy and Industrial Facilities” (the so-called “New Yellow Book”) are recommended for the provision of electrical and/or mechanical equipment and the design and execution of civil or engineering work. A characteristic of this standard contract is that the Contractor shall design and provide materials, equipment, and/or carry out an industrial or civil combination of electrical, mechanical, and civil works by the Employer’s Requirements.

    • “Turnkey Engineering, Procurement, and Construction Contract Conditions” for EPC Turnkey Projects (the so-called “Silver Book”) is recommended in cases where one of the parties assumes overall responsibility for the design and execution of an engineering project. Typical of this regulation is the full implementation of the engineering, contracting, and construction activities, the execution of all major works, and the construction of the intended installations. The site is completed and ready for use (at the “turn of the key”). The choice of this type of contract is usually subject to negotiation between the parties.

    • The “short form contract” applies primarily to construction or engineering work on sites of lower value, under $500,000. Depending on the type of work and the conditions, this form is also appropriate for higher-value projects, particularly those relatively elementary, repetitive, or complex projects that require relatively short periods. The usual regulation of these contracts includes: the Contractor shall carry out the works by design provided by the Employer or its representative /if available/, but this form is also recommended for cases involving the Contractor’s design of civil, mechanical, electrical, and/or construction works.