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Annexe IV. Implementation and management procedures

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Chapter 1 Programming (national)
Article 1

Operations financed by grants within the framework of this Agreement shall be programmed at the beginning of the period covered by the Financial Protocol.

Programming for this purpose shall mean:

  1. the preparation and development of a Country Support Strategy (CSS) based on the country's own medium-term development objectives and strategies;

  2. a clear indication from the Community of the indicative programmable financial allocation from which the country may benefit during the five year period as well as any other relevant information;

  3. the preparation and adoption of an indicative programme for implementing the CSS; and

  4. a review process covering the CSS, the indicative programme and the volume of resources allocated to it.

Article 2 Country support strategy

The CSS shall be prepared by the ACP State concerned and the EU following consultations with a wide range of actors in the development process, and shall draw on lessons learned and best practices. Each CSS shall be adapted to the needs and respond to the specific circumstances of each ACP State. The CSS shall be an instrument to prioritise activities and to build local ownership of cooperation programmes. Any divergences between the country's own analysis and that of the Community shall be noted. The CSS shall include the following standard elements:

  1. an analysis of the political, economic and social country context, constraints, capacities and prospects including an assessment of basic needs, such as income per capita, population size and social indicators, and vulnerability;

  2. a detailed outline of the country's medium-term development strategy, clearly defined priorities and expected financing requirements;

  3. an outline of relevant plans and actions of other donors present in the country, in particular including those of the EU Member States in their capacity as bilateral donors;

  4. response strategies, detailing the specific contribution the EU can provide.

    These shall, to the extent possible, enable complementarity with operations financed by the ACP State itself and by other donors present in the country; and

  5. a definition of the nature and scope of the most appropriate support mechanisms to be applied in implementing the above strategies.

Article 3 Resource allocation

  1. Resource allocation shall be based on needs and performance, as defined in this Agreement. In this context:

    1. needs shall be assessed on the basis of criteria pertaining to per capita income, population size, social indicators and level of indebtedness, export earning losses and dependence on export earnings, in particular in the sectors of agriculture and mining. Special treatment shall be accorded to the least developed ACP States, and the vulnerabilityPage 19 of island and landlocked States shall duly be taken into account. In addition, account shall be taken of the particular difficulties of countries dealing with the aftermath of conflict or natural disaster; and

    2. performance shall be assessed in an objective and transparent manner on the basis of the following parameters: progress in implementing institutional reforms, country performance in the use of resources, effective implementation of current operations, poverty alleviation or reduction, sustainable development measures and macroeconomic and sectoral policy performance.

  2. The allocated resources shall comprise two elements:

    1. an allocation to cover macroeconomic support, sectoral policies, programmes and projects in support of the focal or non focal areas of Community assistance; and

    2. an allocation to cover unforeseen needs such as emergency assistance where such support cannot be financed from the EU budget, contributions to internationally agreed debt relief initiatives and support to mitigate adverse effects of instability in export earnings.

  3. This indicative amount shall facilitate the long term programming of Community aid for the country concerned. Together with the uncommitted balances of resources allocated to the country under previous EDF, and wherever possible Community budget resources, these allocations shall be the basis for the preparation of the indicative programme for the country concerned.

  4. Provision will be made for those countries which, due to exceptional circumstances, can not access normal programmable resources.

  5. Without prejudice to Article 5(7) concerning reviews, the Community may, in order to take account of special needs or exceptional performance, increase a country's allocation.

Article 4 Preparation and adoption of the indicative programme

  1. Upon receipt of the information referred to above, each ACP State shall draw up and submit to the Community a draft indicative programme on the basis of and consistent with its development objectives and priorities as expressed in the CSS. The draft indicative programme shall contain:

    1. the focal sector, sectors or areas on which support should be concentrated;

    2. the most appropriate measures and operations for attaining the objectives and targets in the focal sector, sectors or areas;

    3. the resources reserved for programmes and projects outside the focal sector(s) and/or the broad outlines of such activities, as well as an indication of the resources to be deployed for each of these elements;

    4. the types of non-State actors eligible for funding, in accordance with the criteria laid down by the Council of Ministers, the resources allocated for non-State actors and the type of activities to be supported, which must be not-for-profit;

    5. proposals for regional programmes and projects; and

    6. a reserve for insurance against possible claims and to cover cost increases and contingencies.

  2. The draft indicative programme shall, as appropriate, contain the resources reserved to reinforce human, material and institutional ACP capacity for preparing and implementing nationalPage 20 and regional indicative programmes and for improving the management of the ACP States' public investment projects cycle.

  3. The draft indicative programme shall be the subject of an exchange of views between the ACP State concerned and the Community. The indicative programme shall be adopted by common agreement between the Commission on behalf of the Community and the ACP State concerned. It shall, when adopted, be binding on both the Community and that State. This indicative programme shall be annexed to the CSS and shall in addition contain:

    1. specific and clearly identified operations, especially those that can be committed before the next review;

    2. a timetable for implementation and review of the indicative programme, including commitments and disbursements of resources; and

    3. the parameters and criteria for the reviews.

  4. The Community and the ACP State concerned shall take all necessary measures to ensure that the programming process is completed within the shortest possible time and, save in exceptional circumstances, within twelve months of the signing of the Financial Protocol. In this context, the preparation of the CSS and the indicative programme must be part of a continuous process leading to the adoption of a single document.

  5. When an ACP State faces a crisis situation as the result of a war or other conflict, or exceptional circumstances with a comparable effect, preventing the National Authorising Officer from carrying out his duty, the Commission may itself manage the resources allocated to the State in question in accordance with Article 3 and use it for special support. Special support may concern peace building policies, conflict management and resolution, post-conflict support, including institution-building, economic and social development activities, taking particular account of the needs of the most vulnerable sections of the population. The Commission and the ACP State concerned shall revert to normal implementation and normal management procedures as soon as the authorities responsible for managing cooperation are able to do so once more.

Article 5 Review process

  1. Financial cooperation between the ACP State and the Community shall be sufficiently flexible to ensure that operations are kept constantly in line with the objectives of this Agreement and to take account of any changes occurring in the economic situation, priorities and objectives of the ACP State concerned. In this context, the National Authorising Officer and the Commission shall:

    1. annually undertake an operational review of the indicative programme; and

    2. undertake a mid-term and end-of-term review of the CSS and the indicative programme in the light of current needs and performance.

  2. In exceptional circumstances referred to in the provisions on humanitarian and emergency assistance, the review can be carried out on the demand of either Party.

  3. The National Authorising Officer and the Commission shall:

    1. take all necessary measures to ensure adherence to the provisions of the indicative programme, including ensuring that the timetable of commitments and disbursements agreed at the time of programming is adhered to; and

    2. determine any causes of delay in implementation and propose suitable measures to remedy the situation.

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  4. The annual operational review of the indicative programme shall consist of a joint assessment of the implementation of the programme and take into account the results of relevant activities of monitoring and evaluation.

    This review shall be conducted locally and shall be finalised between the National Authorising Officer and the Commission within a period of 60 days. It shall in particular cover an assessment of:

    1. the results achieved in the focal sector(s) measured against the identified targets and impact indicators and sectoral policy commitments;

    2. programmes and projects outside the focal sector(s)and/or in the framework of multi annual programmes;

    3. the use of resources set aside for non State actors;

    4. the effectiveness in implementation of current operations and the extent to which the timetable for commitments and payments have been respected; and

    5. an extension of the programming perspective for the following years.

  5. The National Authorising Officer and the Commission shall submit the report on the conclusion of the annual review to the Development Finance Cooperation Committee, within 30 days of the completion of the operational review. The Committee shall examine the report in accordance with its responsibilities and powers under the Agreement.

  6. In the light of the annual operational reviews, the National Authorising Officer and the Commission may at the mid-term and end-of-term reviews, and within the above time frames, review and adapt the CSS:

    1. where operational reviews indicate specific problems; and/or

    2. in the light of changed circumstances of an ACP State.

    Such reviews shall be completed within a further period of 30 days of the finalisation of the mid-term and end-of-term reviews. The end of Financial Protocol review shall also include adaptation for the new financial protocol in terms of both resource allocation and preparation for the next programme.

  7. Following the completion of the midterm and end-of-term reviews, the Commission may, on behalf of the Community, revise the resource allocation in the light of current needs and performance of the ACP State concerned.

Chapter 2 Programming and preparation (regional)
Article 6 Participation

  1. Regional cooperation shall cover operations benefiting and involving:

    1. two or more or all ACP States as well as any non-ACP developing countries participating in these operations, and/or

    2. a regional body of which at least two ACP States are members, including those with members which are non-ACP countries.

  2. Regional cooperation can also involve Overseas Countries and Territories and outermost regions. The funding to enable participation of these territories shall be additional to funds allocated to the ACP States under the Agreement.

Article 7 Regional programmes

The ACP States concerned shall decide on the definition of geographical regions.

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To the maximum extent possible, regional integration programmes should correspond to programmes of existing regional organisations with a mandate for economic integration. In principle, in case the membership of several relevant regional organisations overlaps, the regional integration programme should correspond to the combined membership of these organisations. In this context, the Community will provide specific support from regional programmes to groups of ACP States who are committed to negotiate economic partnership agreements with the EU.

Article 8 Regional programming

  1. Programming shall take place at the level of each region. The programming shall be a result of an exchange of views between the Commission and the duly mandated regional organisation(s) concerned, and in the absence of such a mandate, the National Authorising Officers of the countries in that region. Where appropriate, programming may include a consultation with eligible non-State actors.

  2. Programming for this purpose shall mean:

    1. preparation and development of a Regional Support Strategy (RSS) based on the region's own medium-term development objectives and strategies;

    2. a clear indication from the Community of the indicative resource allocation from which the region may benefit during the five-year period as well as any other relevant information;

    3. preparation and adoption of a Regional Indicative Programme (RIP) for implementing the RSS; and

    4. a review process covering the RSS, the RIP and the volume of resources allocated to each region.

  3. The RSS shall be prepared by the Commission and the duly mandated regional organisation(s) in collaboration with the ACP States in the region concerned. The RSS will be an instrument to prioritise activities and to build local ownership of supported programmes. The RSS shall include the following standard elements:

    1. an analysis of the political, economic and social context of the region;

    2. an assessment of the process and prospects of regional economic integration and integration into the world economy;

    3. an outline of the regional strategies and priorities pursued and the expected financing requirements;

    4. an outline of relevant activities of other external partners in regional cooperation; and

    5. an outline of the specific EU contribution towards achievement of the goals for regional cooperation and integration, complementary insofar as possible to operations financed by the ACP States themselves and by other external partners, particularly the EU Member States.

Article 9 Resource allocation

  1. At the beginning of the period covered by the Financial Protocol, each region shall receive from the Community an indication of the volume of resources from which it may benefit during a five-year period. The indicative resource allocation shall be based on an estimate of need and the progress and prospects in the process of regional cooperation and integration. In order to achieve an adequate scale and to increase efficiency, regional and national funds may be mixed for financing regional operations with a distinct national component.

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  2. Without prejudice to Article 11 concerning reviews, the Community may, in order to take account of new needs or exceptional performance, increase a region's allocation.

Article 10 Regional indicative programme

  1. On the basis of the resource allocation indicated above, the duly mandated regional organisation(s), and in the absence of such a mandate, the National Authorising Officers of the countries in the region, shall draw up a draft Regional Indicative Programme. In particular, the draft programme shall specify:

    1. the focal sectors and themes of Community aid;

    2. the most appropriate measures and operations to achieve the objectives set for those sectors and themes; and

    3. the programmes and projects enabling those objectives to be attained, insofar as they have been clearly identified as well as an indication of the resources to be deployed for each of these elements and a timetable for their implementation.

  2. The Regional Indicative Programmes shall be adopted by common agreement between the Community and the ACP States concerned.

Article 11 Review process

Financial cooperation between each ACP region and the Community shall be sufficiently flexible to ensure that operations are kept constantly in line with the objectives of this Agreement and to take account of any changes occurring in the economic situation, priorities and objectives of the region concerned. A mid-term and end-of-term review of the regional indicative programmes shall be undertaken to adapt the indicative programme to evolving circumstances and to ensure that they are correctly implemented. Following the completion of mid-term and end-of-term reviews, the Community may revise the resource allocation in the light of current needs and performance.

Article 12 Intra-ACP cooperation

  1. At the beginning of the period covered by the Financial Protocol, the Community shall indicate to the ACP Council of Ministers the part of the funds earmarked for regional operations that shall be set aside for operations that benefit many or all ACP States. Such operations may transcend the concept of geographic location.

  2. The Community may, in order to take account of new needs for increasing the impact of intra-ACP activities, increase the allocation for intra ACP cooperation.

Article 13 Requests for financing

  1. Requests for financing of regional programmes shall be submitted by:

    1. a duly mandated regional body or organisation; or

    2. a duly mandated sub-regional body, organisation or an ACP State in the region concerned at the programming stage, provided that the operation has been identified in the RIP.

  2. Requests for intra-ACP programmes shall be submitted by:

    1. at least three duly mandated regional bodies or organisations belonging to different geographic regions, or at least two ACP States from each of the three regions; or

    2. the ACP Council of Ministers or the ACP Committee of Ambassadors; or

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    3. international organisations carrying out operations that contribute to the objectives of regional cooperation and integration, such as the African Union, subject to prior approval by the ACP Committee of Ambassadors.

Article 14 Procedures for implementation

  1. [deleted]

  2. [deleted]

  3. Account being taken of the objectives and inherent characteristics of regional cooperation, including intra-ACP cooperation, operations undertaken in this sphere shall be governed by the procedures established for development finance cooperation where applicable.

  4. In particular and subject to paragraphs 5 and 6, any regional programme or project financed from the Fund shall give rise to:

    1. either, in accordance with Article 17, a financing agreement drawn up between the Commission and one of the bodies mentioned in Article 13; in such cases, the relevant body shall designate a Regional Authorising Officer whose duties correspond mutatis mutandis with those of the National Authorising Officer;

    2. or a grant contract as defined in Article 19a drawn up between the Commission and one of the bodies mentioned in Article 13, depending on the nature of the action and where the relevant body, other than an ACP State, is responsible for carrying out the programme or project.

  5. Programmes and projects financed from the Fund and for which requests for financing have been presented by international organisations in accordance with Article 13(2)(c) shall give rise to the drawing up of a grant contract.

  6. Programmes and projects financed from the Fund for which requests for financing have been presented by the ACP Council of Ministers or Committee of Ambassadors shall be implemented either by the ACP Secretariat, in which case a financing agreement shall be drawn up between the Commission and the Secretariat in accordance with Article 17, or by the Commission, depending on the nature of the action.

Chapter 3 Appraisal and financing
Article 15 Identification, preparation and appraisal of programmes and projects

  1. Programmes and projects that have been presented by the ACP State concerned shall be subject to joint appraisal. The ACP-EC Development Finance Cooperation Committee shall develop the general guidelines and criteria for appraisal of programmes and projects. These programmes and projects are generally multi-annual and may incorporate a whole range of actions of a limited size in a particular area.

  2. Programme and project dossiers prepared and submitted for financing must contain all information necessary for the appraisal of the programmes and projects or, where programmes and projects have not been completely defined, provide the broad outlines necessary for their appraisal.

  3. Programme and project appraisal shall take due account of national human resource constraints and ensure a strategy favourable to the promotion of such resources. It shall also take into account the specific characteristics and constraints of each ACP State.

  4. Programmes and projects to be implemented by non-State actors which are eli-Page 25gible in accordance with this Agreement may be appraised by the Commission alone and give rise to the establishment, between the Commission and non-State actors, of grant contracts as defined in Article 19a. This appraisal shall comply with Article 4(1)(d) regarding the types of actors, their eligibility and the type of activity to be supported. The Commission, through the Head of Delegation, shall inform the National Authorising Officer of such allocated grants.

Article 16 Financing proposal and decision

  1. The conclusions of the appraisal shall be summarised in a financing proposal, the final version of which shall be drawn up by the Commission in close collaboration with the ACP State concerned.

  2. [deleted]

  3. [deleted]

  4. The Commission, acting on behalf of the Community, shall communicate its financing decision to the ACP State concerned within 90 days from the date on which the final version of the financial proposal is drawn up.

  5. Where the financing proposal is not adopted by the Commission on behalf of the Community, the ACP State concerned shall be informed immediately of the reasons for that decision. In such a case, the representatives of the ACP State concerned may, within 60 days thereafter, request either:

    1. that the matter be referred to the ACP-EC Development Finance Cooperation Committee set up under this Agreement; or

    2. that they be given a hearing by the Community's representatives.

  6. Following such a hearing, a definitive decision to adopt or reject the financing proposal shall be taken by the Commission on behalf of the Community. Before any decision is taken, the ACP State concerned may forward to the Commission any facts which may appear necessary to supplement the information available to it.

Article 17 Financing agreement

  1. Save as otherwise provided for in this Agreement, for any programme or project financed by a grant from the Fund, a financing agreement shall be drawn up between the Commission and the ACP State concerned.

  2. The financing agreement shall be drawn up between the Commission and the ACP State concerned within 60 days of the decision taken by the Commission on behalf of the Community. The financing agreement shall:

    1. specify, in particular, the details of the Community's financial contribution, the financing arrangements and terms and the general and specific provisions relating to the programme or project concerned; and

    2. make adequate provision for appropriations to cover cost increases and contingencies.

  3. Any unexpended balance left upon closure of the accounts of programmes and projects shall accrue to the ACP State or States concerned.

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Article 18 Cost over-runs

  1. Once it appears that there is a risk of cost over-runs over and above the financing available under the financing agreement, the National Authorising Officer shall notify the Commission and request its prior approval on the measures which the National Authorising Officer intends to take in order to cover such cost over-runs, either by reducing the scale of the programme or project or by calling on national or other non Community resources.

  2. If it is not possible to reduce the scale of the programme or project or to cover the over-runs with other resources, the Commission, acting on behalf of the Community, may, on the basis of a reasoned request from the National Authorising Officer, take an additional financing decision on resources from the indicative programme.

Article 19 Retroactive financing

  1. In order to ensure early project start-up, avoid gaps between sequential projects and prevent delays, the ACP States may, on completion of project appraisal and before the financing decision is taken, pre-finance activities linked to the startup of programmes, preliminary and seasonal work, orders for equipment with long delivery lead times as well as some on-going operations. Such expenditure shall satisfy the procedures provided for in this Agreement.

  2. Any expenditure referred to in paragraph 1 shall be mentioned in the financing proposal and shall be without prejudice to the financing decision taken by the Commission on behalf of the Community.

  3. Expenditure made by the ACP State under this Article shall be retroactively financed under the programme or project, once the financing agreement is signed.

Chapter 4 Implementation
Article 19a Implementation measures

  1. Where financial execution is the Commission's responsibility, implementation of programmes and projects financed from the Fund shall consist chiefly of the following:

    1. awarding of procurement contracts;

    2. awarding of grants;

    3. performance by direct labour;

    4. direct payments as budgetary support, support for sectoral programmes, debt relief and support to cover short term fluctuations in export earnings.

  2. In the context of this Annexe, procurement contracts are contracts for pecuniary interest concluded in writing in order to obtain, against payment of a price, the supply of movable assets, the execution of works or the provision of services.

  3. In the context of this Annexe, grants are direct financial contributions awarded by way of a donation in order to finance:

    1. either an action designed to help achieve an objective of this Agreement or of a programme or project adopted in accordance with this Agreement, or

    2. the functioning of a body which pursues such an objective.

    Grants shall be covered by a written contract.

Article 19b Tender procedure with suspension clause

In order to ensure early project start-up, the ACP States may, in all duly substanti-Page 27ated cases and in agreement with the Commission, issue invitations to tender for all types of contracts with a suspension clause, once project appraisal is completed but before the financing decision is taken.

Such a provision must be mentioned in the financing proposal

Article 20 Eligibility

Save where a derogation is granted in accordance with Article 22, and without prejudice to Article 26:

  1. participation in procedures for the awarding of procurement contracts or grants financed from the Fund shall be open to all natural and legal persons from ACP States and Member States of the Community;

  2. supplies and materials purchased under a contract financed from the Fund must originate in a State that is eligible under point 1. In this context, the definition of the concept of "originating products" shall be assessed by reference to the relevant international agreements, and supplies originating in the Community shall include supplies originating in the Overseas Countries and Territories;

  3. participation in procedures for the awarding of procurement contracts or grants financed from the Fund shall be open to international organisations;

  4. whenever the Fund finances an operation implemented through an international organisation, participation in procedures for the awarding of procurement contracts or grants shall be open to all natural and legal persons who are eligible under point 1, and to all natural and legal persons who are eligible according to the rules of the organisation, care being taken to ensure equal treatment of all donors. The same rules apply for supplies and materials; 5. whenever the Fund finances an operation implemented as part of a regional initiative, participation in procedures for the awarding of procurement contracts or grants shall be open to all natural and legal persons who are eligible under point 1, and to all natural and legal persons from a country participating in the relevant initiative. The same rules apply for supplies and materials; 6. whenever the Fund finances an operation co-financed with a third State, participation in procedures for the awarding of procurement contracts or grants shall be open to all natural and legal persons eligible under point 1, and to all persons eligible under the rules of the above mentioned third State. The same rules apply for supplies and materials.

Article 21 Participation on equal terms

The ACP States and the Commission shall take the necessary measures to ensure the widest possible participation on equal terms in invitations to tender for works, supplies and services contracts, including, as appropriate, measures to:

  1. ensure publication of invitations to tender in the Official Journal of the European Communities, the Internet, the Official Journals of all the ACP States and any other appropriate information media;

  2. eliminate discriminatory practices or technical specifications which might stand in the way of widespread participation on equal terms;

  3. encourage cooperation between the companies and firms of the Member States and of the ACP States;

  4. ensure that all the awarding criteria are specified in the tender dossier; and

  5. ensure that the tender selected conforms to the requirements of the tender dossier and meets the awarding criteria stated there in.

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Article 22 Derogation

  1. In exceptional duly substantiated circumstances, natural or legal persons from third countries not eligible under Article 20 may be authorised to participate in procedures for the awarding of procurement contracts or grants financed by the Community at the justified request of the ACP States concerned. The ACP States concerned shall, on each occasion, provide the Commission with the information needed to decide on such derogation, with particular attention being given to:

    1. the geographical location of the ACP State concerned;

    2. the competitiveness of contractors, suppliers and consultants from the Member States and the ACP States;

    3. 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;

    4. technology that is the most appropriate and best suited to local conditions;

      f ) cases of extreme urgency;

    5. the availability of products and services in the relevant markets.

  2. In the case of projects financed from the Investment Facility, the procurement rules of the Bank shall apply.

Article 23 Competition

  1. To simplify and streamline the general rules and regulations for competition and preferences for EDF financed operations, contracts shall be awarded through open and restricted procedures as well as framework contract, direct agreement contracts and direct labour as follows:

    1. open international invitation to tender through or after the publication of a procurement notice in accordance with the provisions of this Agreement; b) open local invitation to tender where the procurement notice is published exclusively in the beneficiary ACP State;

    2. restricted international invitation to tender where the Contracting Authority invites a limited number of candidates to take part in the call for tender after the publication of a pre-information notice;

    3. direct agreement contracts which involve simplified procedure where the publication of the procurement notice is dispensed with and the Contracting Authority invites a limited number of service providers to present their offers; and

    4. direct labour agreement where contracts are performed through public or semipublic agencies and departments of the beneficiary States concerned.

  2. Contracts financed from the Fund shall be concluded in accordance with the following provisions:

    1. works contracts of a value:

    2. higher than EUR 5.000.000 shall be awarded in an open international invitation to tender;

      ii) between EUR 300 000 and EUR 5.000.000 shall be awarded through an open local invitation to tender; and

      iii) lower than EUR 300 000 shall be awarded by direct agreement contract which involves a simplified procedure without publication of a procurement notice.

    3. supply contracts of a value:

    4. higher than EUR 150 000 shall be awarded through an open international invitation to tender;

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      ii) between EUR 30 000 and EUR 150 000 shall be awarded through an open local invitation to tender; and

      iii) below EUR 30 000 shall be awarded by direct agreement contract which involves a simplified procedure without publication of a procurement notice.

    5. service contracts of a value:

    6. higher than EUR 200 000 shall be awarded through a restricted international tender after publication of a procurement notice; and

      ii) below EUR 200 000 shall be awarded by direct agreement contract which involves a simplified procedure or a framework contract.

  3. For works, supply and service contracts with a value of EUR 5 000 or less, these can be awarded directly without competition.

  4. In case of restricted invitation to tender, a short-list of prospective tenderers shall be drawn up by the ACP State or States concerned in agreement with the Head of Delegation following, where applicable, a call for pre-qualification of tenders based on the publication of a procurement notice.

  5. In case of 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 Articles 20 to 22 and award the contract to the tenderers whom it has selected.

  6. The ACP States may request the Commission to negotiate, draw up, conclude and implement service contracts directly on their behalf or through its relevant agency.

Article 24 Implementation by direct labour

  1. In the case of direct labour operations, programmes and projets shall be implemented through public or semipublic agencies or departments of the ACP State or States concerned or by the legal person responsible for executing the operation.

  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 Community's participation shall cover only costs incurred by supplementary measures and temporary expenditure relating to execution that are strictly confined to the requirements of the programmes and projects in question.

  3. Programme estimates implementing direct-labour operations must comply with the Community rules, procedures and standard documents laid down by the Commission, as applicable at the time of approval of the programme estimates.

Article 25 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 Head of Delegation, authorise:

  1. the conclusion of contracts by direct agreement;

  2. the performance of contracts by direct labour;

  3. implementation through specialised agencies; and

  4. direct implementation by the Commission.

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Article 26 Preferences

  1. 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 optimisation of the physical and human resources of those States. To this end:

    1. for works contracts of a value of less than EUR 5 000 000, 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;

    2. 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;

    3. in respect of service contracts, where tenders of equivalent economic and technical quality are compared, preference shall be given to:

    4. experts, institutions or consultancy companies or firms from ACP States with the required competence;

      ii) offers submitted by ACP firms, either individually or in a consortium with European partners; and

      iii) offers presented by European tenderers with ACP sub-contractors or experts;

    5. 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; and

    6. 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.

  2. Where two tenders are acknowledged to be equivalent on the basis of the criteria stated above, preference shall be given:

    1. to the tenderer of an ACP State; or

    2. if no such tender is forthcoming, to the tenderer who:

    3. allows for the best possible use of the physical and human resources of the ACP States;

    ii) offers the greatest subcontracting possibilities for ACP companies, firms or natural persons; or

    iii) is a consortium of natural persons, companies and firms from ACP States and the Community.

Article 27 Award of contracts

  1. Without prejudice to Article 24, the ACP State shall award the contract to the tenderer:

    1. whose tender is found to be responsive to the tender dossier;

    2. for a works or supply contract, who has offered the most advantageous tender as assessed, inter alia, on the basis of:

    3. 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 thePage 31 tender, including the offer of an after sales service in the ACP State; and

      iii) the nature of, the conditions and the time limit for executing the contracts, and the adaptation to local conditions.

    4. for a service contract who offers the most advantageous tender taking into account, inter alia, the price, the technical value of the tender, the organisation 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:

    1. to the tenderer of an ACP State; or

    2. if no such tender is forthcoming, to the tenderer who:

    3. 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

    iii) is a consortium of natural persons, companies and firms from ACP States and the Community.

Article 28 General regulations for contracts

  1. The award of contracts financed from the resources of the Fund shall be governed by this Annexe and the procedures which shall be adopted by decision of the Council of Ministers at the first meeting following the signing of this Agreement, upon the recommendation of the ACP-EC Development Finance Cooperation Committee. These procedures shall respect the provisions of this Annexe and the Community's procurement rules for cooperation with third countries.

  2. Pending the adoption of these procedures, the current EDF rules as contained in the current general regulations and general conditions of contracts shall apply.

Article 29 General conditions for contracts

Performance of works, supply and service contracts financed from the resources of the Fund shall be governed by:

  1. 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 Agreement, upon the recommendation of the ACP-EC Development Finance Cooperation Committee; or

  2. in the case of co-financed 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.:

  3. the general conditions for contracts 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 30 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:

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  1. in the case of a national contract, be settled in accordance with the national legislation of the ACP State concerned; and

  2. in the case of a transnational contract be settled either :

  3. 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 Agreement, upon the recommendation of the ACP-EC Development Finance Co-operation Committee.

Article 31 Tax and customs arrangements

  1. 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 organisations with which they have relations. For the purpose of determining the mostfavoured-nation (MFN) treatment, account shall not be taken of arrangements applied by the ACP State concerned to other ACP States, or to other developing countries.

  2. Subject to the above provisions the following shall apply to contracts financed by the Community:

    1. 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;

    2. 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 realise 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;

    3. 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;

    4. 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 these duties and charges do not constitute remuneration for services rendered;

    5. 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;

    6. 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; and

    7. personal and household effects imported for use by natural persons,Page 33 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.

  3. Any matter not covered by the above provisions on tax and customs arrangements shall remain subject to the national legislation of the ACP State concerned.

Chapter 5 Monitoring and evaluation
Article 32 Objectives

The objective of monitoring and evaluation shall consist in the regular assessment of development operations (preparation, implementation and subsequent operation) with a view to improving the development effectiveness of on-going and future operations.

Article 33 Modalities

  1. Without prejudice to evaluations carried out by the ACP States or the Commission, this work will be done jointly by the ACP State(s) and the Community. The ACP EC Development Finance Cooperation Committee shall ensure the joint character of the joint monitoring and evaluation operations. In order to assist the ACP-EC Development Finance Cooperation Committee, the Commission and the ACP General Secretariat shall prepare and implement the joint monitoring and evaluations and report to the Committee. The Committee shall, at its first meeting after the signature of the Agreement, fix the operational modalities aimed at ensuring the joint character of the operations and shall, on a yearly basis, approve the work programme.

  2. Monitoring and evaluation activities shall notably:

  1. provide regular and independent assessments of the Fund's operations and activities by comparing results with objectives; and thereby

  2. enable the ACP States and the Commission and the Joint Institutions, to feed the lessons of experience back into the design and execution of future policies and operations.

Chapter 6 Fund-resource management and executing agents
Article 34 The Commission

  1. The Commission shall undertake the financial execution of operations carried out with Fund resources, with the exception of the Investment Facility and interest-rate subsidies, using the following main methods of management:

    1. centralised management;

    2. decentralised management.

  2. As a general rule, the financial execution of the Fund resources by the Commission shall be decentralised.

    In this instance, the execution duties shall be carried out by the ACP States in accordance with Article 35.

  3. In order to carry out the financial execution of the Fund resources, thePage 34 Commission shall delegate its executive powers within its own departments. The Commission shall inform the ACP States and the ACP-EC Development Finance Cooperation Committee of this delegation of tasks.

Article 35 National Authorising Officer

  1. The Government of each ACP State shall appoint a National Authorising Officer to represent it in all operations financed from the Fund resources managed by the Commission and the Bank. The National Authorising Officer shall appoint one or more deputy National Authorising Officers to replace him when he is unable to carry out his duties and shall inform the Commission of this appointment. Wherever the conditions regarding institutional capacity and sound financial management are met, the National Authorising Officer may delegate his functions for implementation of the programmes and projects concerned to the body responsible within the national administration. The National Authorising Officer shall inform the Commission of any such delegation.

    When the Commission becomes aware of problems in carrying out procedures relating to management of Fund resources, it shall, in conjunction with the National Authorising Officer, make all contacts necessary to remedy the situation and take any appropriate steps.

    The National Authorising Officer shall assume financial responsibility only for the executive tasks entrusted to him.

    Where Fund resources are managed in a decentralised way and subject to any additional powers that might be granted by the Commission, the National Authorising Officer shall:

    1. be responsible for the coordination, programming, regular monitoring and annual, mid-term and end-of-term reviews of implementation of cooperation, and for coordination with donors;

    2. in close cooperation with the Commission, be responsible for the preparation, submission and appraisal of programmes and projects;

    3. prepare tender dossiers and, where appropriate, the documents for calls for proposals;

    4. submit tender dossiers and, where appropriate, documents for calls for proposals, to the Commission for approval before launching invitations to tender and, where appropriate, calls for proposals;

    5. in close cooperation with the Commission, launch invitations to tender and, where appropriate, calls for proposals;

    6. receive tenders and, if applicable, proposals, and transmit copies of tenders to the Commission; preside over the opening of tenders and decide on the results of their examination within the period of validity of the tenders, taking account of the time required for approval of contracts;

    7. invite the Commission to the opening of tenders and, if applicable, proposals and notify the Commission of the results of the examination of tenders and proposals for approval of the proposals for the award of contracts and grants;

    8. submit contracts and programme estimates and any addenda thereto to the Commission for approval;

    9. sign the contracts and addenda thereto approved by the Commission;

    10. clear and authorise expenditure within the limits of the funds assigned to him; and

      Page 35

    11. during the execution operations, make any adaptation arrangements necessary to ensure the proper execution of approved programmes or projects from the economic and technical viewpoint.

  2. The National Authorising Officer shall, during the execution of operations and subject to the requirement to inform the Commission, decide on:

    1. technical adjustments and alterations to programmes and projects 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 provided for in the financing agreement;

    2. changes of site for multiple-unit programmes or projects where justified on technical, economic or social grounds;

    3. imposition or remission of penalties for delay;

    4. acts discharging guarantors;

    5. purchase of goods, irrespective of their origin, on the local market;

    6. 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;

    7. subcontracting;

    8. final acceptance, provided that the Commission 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; and

    9. hiring of consultants and other technical assistance experts.

Article 36 Head of delegation

  1. The Commission shall be represented in each ACP State or in each regional grouping which expressly so requests, by a delegation under the authority of a Head of Delegation, with the approval of the ACP State or States concerned. Appropriate measures shall be taken in any case in which a Head of Delegation is appointed to a group of ACP States. The Head of Delegation shall represent the Commission in all spheres of its competence and in all its activities.

  2. The Head of Delegation shall be the main contact for ACP States and bodies or organisations eligible for financial support under the Agreement. He shall cooperate and work in close cooperation with the National Authorising Officer.

  3. The Head of Delegation shall have the necessary instructions and delegated powers to facilitate and expedite all operations under the Agreement.

  4. On a regular basis, the Head of Delegation shall inform the national authorities of Community activities which may directly concern cooperation between the Community and the ACP States.

Article 37 Payments

  1. For the purpose of effecting payments in the national currencies of the ACP States, accounts denominated in the currencies of the Members States or in euro may be opened in the ACP States by and in the name of the Commission with a national public or semi-public financial institution chosen by agreement between the ACP State and the Commission. This institution shall exercise the functions of National Paying Agent.

    Page 36

  2. The National Paying Agent shall receive no remuneration for its services and no interest shall be payable by it on deposited funds. The local accounts shall be replenished by the Commission in the currency of one of the Member States or in euro, based on estimates of future cash requirements, which shall be made sufficiently in advance to avoid the need for pre-financing by ACP States and to prevent delayed disbursements.

  3. [deleted]

  4. Payments shall be made by the Commission in accordance with the rules laid down by the Community and the Commission, where appropriate after the expenditure has been cleared and authorised by the National Authorising Officer.

  5. [deleted]

  6. The procedures for clearance, authorisation and payment of expenditure must be completed within a period of 90 days from the date on which the payment becomes due. The National Authorising Officer shall process and deliver the payment authorisation to the Head of Delegation not later than 45 days before the due date.

  7. Claims for delayed payments shall be borne by the ACP State or States concerned, and by the Commission from its own resources, for that part of the delay for which each Party is responsible in accordance with the above procedures.

  8. [deleted]

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