Proclamation No. 430/2005 Determining procedures of Public Procurement and Establishing its Supervisory Agency Proclamation | GOALGOOLE | Because you need Information for your goals !
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Proclamation No. 430/2005 Determining procedures of Public Procurement and Establishing its Supervisory Agency Proclamation

PROCLAMATION NO. 430/2005.
DETERMINING PROCEDURES OF PUBLIC PROCUREMENT
AND ESTABLISHING ITS SUPERVISORY AGENCY
PROCLAMATION OF THE FEDERAL DEMOCRATIC
REPUBLIC GOVERNMENT OF ETHIOPIA

WHEREAS, the economic and efficient use of public funds is essential to a well-functioning government:
WHEREAS, procurement of goods, works and services constitute a major share of public expenditure;
WHEREAS, public procurement must be carried out in a manner which is not only economic and efficient but also fair, transparent and non-discriminatory;
WHEREAS, public procurement may also be instrumental to economic development at regional and national levels in Ethiopia;
NOW,THEREFORE, in accordance with Article 55 (1) of the Constitution of the Federal Democratic Republic of Ethiopia, it is hereby proclaimed as follows;

CHAPTER I
GENERAL

1.    Short Title
This Proclamation may be cited as the “determining procedures of Public Procurement and Establishing its Supervisory Agency Proclamation No. 430/2005.”
2.    Definitions
In this Proclamation:
a)    “Good” Means raw material, products and equipment and commodities in solid, liquid or gaseous form, and electricity, as will as installation, transport, maintenance or similar obligations related to the supply of the goods if their value does not exceed that of the goods themselves:
b)    “Services” means any object of procurement other than works, goods and consultancy services:
c)    “Works” means all work associated with the construction, reconstruction, demolition, repair or renovation of a building, rood, or structure, such as site preparation, excavation, installation of equipment and materials, decoration, as well as services incidental to works, if the value of those services does not exceed that of the works themselves and includes build, own operate and build own operate transfer contracts;
d)    “Consultancy Service” means a service of an intellectual and advisory nature provided by consultants using their professional skills to study, design and organize specific projects, advise clients, conduct training and transfer knowledge;
e)    “Procurement” means the purchasing hiring or obtaining by any other contractual means of goods, works and services;
f)    “Procuring entity” means public body, which is partly or wholly financed by Federal Government budget, higher education institutions and public institutions of like nature;
g)    “Public Funds” means any monetary resources appropriated to procuring entities from the Federal Government treasury or aid grants and credits put at the disposal of procuring entities by foreign donors through the Federal Government internal revenue of procuring entities;
h)    “Public Procurement” means procurement by procuring entities using public funds;
i)    “Supplier” means a physical or juridical person under contract with a procuring entity to supply goods, works or services;
j)    “Candidate” means a physical or juridical person invited to take part in public procurement or seeking to be so invited;
k)    “Bidder” means a physical or juridical person submitting a bid;
l)    “Bid documents” means the documents prepared by the procuring entity to bidders as a basis for preparation of their bids;
m)    “Procurement directives” means the Minister or the Ministry of Finance and Economic Development respectively’
n)    “Minister or Ministry” means the Minister or the Ministry of Finance and Economic Development respectively’
o)    “Person” means natural or juridical person
3.    Scope of Application
1/ This Proclamation applies to all Federal public procurement.
2/ Notwithstanding Sub-Article (1) of this Article, the Minister, in consultation with the relevant public bodies, may in the interest of national security or national defense decide to use a different procedure, in which case the Minister shall define the method of procurement to be followed in order to serve the interest of economy and efficiency.
4.    International Obligations
1/ To the extent that this Proclamation conflicts with an obligation of the Federal Government under or arising out of an agreement with one or more other states or with an international organization, the provisions of that agreement shall prevail.
2/ Where an agreement referred to in Sub-Article (1) of this Article contains a preference or preferences in favor of national and resident bidders, a procuring entity shall ensure that the applicable preference or preferences are clearly stated in the bidding documents.
5.    Procurement Directives
1/ The Minister is authorized to issue procurement directives to fulfill the objectives and to carry out the provisions of this Proclamation.
2/ If more than one procuring entity needs the same kind of goods, works or services, the Minister may instruct one entity or a specially appointed agent to procure such items on behalf of other entities or to enter into framework agreements based on aggregate purchase under which procuring entities may place order for certain types of goods, works and services.
3/ For the purpose of Sub-Article (2) of this Article “Framework agreement” means an agreement entered into by an entity or agent appointed by the Agency and the supplier which enables procuring entities to procure same kind of goods, works and services with a price fixed in the framework agreement by each concluding a performance agreement with said supplier.
6.    Public Accessibility of Legal Texts
This Proclamation and the procurement directives of the Minister shall be promptly made accessible to the public and systematically maintained.
7.    Responsibility and Accountability
1/ Procuring entities shall have overall responsibility for the procurement process, and contract implementation in particular, shall be responsible for:
a)    causing to be established a Procurement Unit staffed at an appropriate level;
b)    establishing a tender committee and appointing its members
c)    advertising bid opportunities;
d)    communicating award decisions;
e)    certifying the availability of funds to support the procurement activity before signing a contract;
f)    signing contracts for procurement activities;
g)    investigating complaints by bidders; and rendering decisions thereon;
h)    submitting a copy of any complaints and reports of the findings and decisions to the Agency;
i)    ensuring that the implementation of the awarded contract is in accordance with the terms and conditions of the award.
j)    Outsource procurement activities to third parties, if necessary.
2/ Procuring entities and persons employed or appointed to manage public procurement are responsible and accountable for action taken pursuant to the provisions of this Proclamation and to any such further conditions as may be laid down in the procurement directives.

CHAPTER II
THE PUBLIC PROCURMENT AGENCY

8.    Establishment
1/ There is hereby established Public Procurement Agency (hereinafter referred to as the “Agency”) as an autonomous Federal Government organ having its own juridical personality.
2/ The Agency shall be accountable to the Minister.
9.    Head Office
The head office of the Agency shall be in Addis Ababa and may have branch offices else where may be necessary.
10.    Objectives of the Agency
The objectives of the Agency are:
1/ ensure the application of fair, competitive, transparent, non-discriminatory and value for money procurement;
2/ set standards for the public procurement systems of the Federal Government;
3/ monitor compliance of this proclamation by procuring entities;
4/ build procurement capacity in the Federal Government.
11.    Functions of The Agency
The Functions of the Agency are:
1/ advise the Federal Government  on all public procurement policies, principles and implementation, and provide technical assistance to the regional governments;
2/ monitor and report to the minister the performance of the public procurement systems in the federal government, initiate amendments on lows and implementation system improvements;
3/ set training standards, competence levels, certification requirements and professional development paths in consultation with competent authorities;
4/ prepare, update and issue authorized versions of the standard bidding documents, procedural forms and any other attendant documents to procuring entities;
5/ ensure that any deviation from the use of the standardized bidding documents, procedural forms and any other attendant documents is effected only after the prior written approval of the Agency;
6/ receives, reviews, and records applications by candidates for registered supplier status in accordance with Article 21 Sub-Article (6) and issue certificates to those registered in the suppliers list;
7/ maintains a list of suppliers who by reason of having seriously neglected their obligations under a public procurement contract, or having provided false information about their qualifications or having offered inducements of the kind referred to in Article 24, have been debarred from participating in public procurement by the Agency;
8/ conduct periodic inspections of the records and proceedings of the procuring entities to ensure full and correct application of this Proclamation.
9/ organize and maintain a system for the publication of data on public procurement opportunities, awards and any other information of public interest as may be determined by the Agency;
10/ To ensure that the process is in accordance with this Proclamation conduct;
a)    procurement audits during the bid preparatory process;
b)    contract audits in the course of the execution of an award bid; and
c)    performance audit after completion of the contract in respect of any procurement, as may be required;
11/ adopt, adapt and update common specifications standards, the use of which shall be mandatory for all procuring entities;
12/ determine, develop, introduce, maintain and update relate system-wide data bases and technology, that serves the entire procedure of procurement
13/ develop policies and maintain an operational plan on capacity building, both for institutional and human resource development;
14/ agree on a list, which shall be reviewed annually, of works, goods and services in common use by more than one procuring entity which may be subject to common procurement in accordance with Article 5(2) of this proclamation;
15/ establish and maintain institutional linkages with entities with professional and related interest in public procurement;
16/ undertake public procurement execution research and surveys nationally and internationally;
17/ administer and enforce compliance with all the provisions of this Proclamation, regulations and directives issued under this Proclamation and other functions given to it by the minister.
18/ presents on annual report to the Minister regarding the overall functioning of the public procurement system based on information provided to it by procuring entities and specifying such data as the Minister may request regarding the nature and volume of public procurement handled by each entity;
12.    Powers of the Agency
In the exercise of its functions, the Agency shall have the power to:
1/ require any information, documents, records and reports in respect of any aspect of the public procurement process where a breach, wrongdoing, mismanagement or collusion has been alleged, reported or proven against any procuring entity or supplier;
2/ summon witnesses, call for the production of books of accounts, plans, documents and examine witnesses and parties concerned on oath;
3/ cause or undertake investigations and conduct procurement contract and performance audits;
4/ cause to be inspected any procurement transaction to ensure compliance with a bid award by a procuring entity;
5/ act upon complaints by procuring entities, suppliers and any other entity or person in respect of any party to a procurement activity in accordance with the procedure set out in Chapter VIII of this Proclamation.
13.    Organization of the Agency
The Agency shall have:
1/ General Manager to be appointed by the Government; and
2/ the necessary staff.
14.    Powers and Duties of the General Manager
1/ The General Manager shall be the chief executive officer of the Agency and shall subject to the general directives of the Minister, direct and administer the activities of the Agency.
2/ Without limiting the generally provided in sub-Article (1) here in above, the General Manger shall:
a)    Exercise the powers and functions of the Agency specified under Article 10 and 11 of this Proclamation;
b)    Employ, administer and dismiss personnel of the Agency in accordance with the Federal Civil service law;
c)    Prepare the work program and budget of the Agency and implement the same upon approval;
d)    Prepare and submit to the Minister operational and financial report on the activities of the Agency.
e)    Represent the Agency in all its relations with third parties.
3/ The General Manger may delegate part of his powers and duties to other officials and employees of the Agency to the extent necessary for the effective management of the Agency.
15.    Source of Budget
The budget of the Agency shall be drawn from the following sources;
1/ an annual budget allocated by the Government;
2/ aid in cash.
16.    Books of Accounts
1/ The Agency shall keep complete and accurate books of accounts,
2/ The books of accounts and other financial documents of the Agency shall be audited annually by the Auditor General or by an auditor designated by him.

CHAPTER III
BASIC PROCUREMENT RULES

17.    Records of Procurement
1/ Procuring entities must maintain records and documents regarding their public procurement for a period of ten years from the date of concluding any procurement proceeding which for each proceeding will contain:
a)    A brief description of the goods, works or services to be procured;
b)    The invitation to bid
c)    The names and addresses of suppliers that submitted bids, proposals or quotations, and the name and address of the winning suppliers;
d)    The evaluation criteria stipulated and applied and a summary of the evaluation and comparison of bids, proposals and quotations received;
e)    Information on any decision to suspend or cancel proceedings after having been initiated: and
f)    The  grounds for using a procurement procedure other than open bidding.
2/ The record concerning any proceeding shall on request, and once the proceedings have resulted in a contract or have otherwise been terminated, be made available to candidates who participated in the proceedings. However, except when ordered to do so by a competent court and subject to the conditions of such an order, the procuring entity shall not disclose.
a)    Information if its disclosure would be contrary to law, would impede law enforcement, would not be in the public interest, would prejudice legitimate commercial interest of the parties or would inhibit fair competition;
b)    information relating to the examination and evaluation of bids proposals or quotations and the actual content of bids, proposals or quotations other than in the summary form referred to in Sub-Article (1) (d).
18.    Non-discrimination
Without prejudice to Article 19 of this Proclamation, candidates shall not be excluded from participation in public procurement on the basis of nationality, race or any other criterion not having to do with their qualifications.
19.    Preference
1/ A preference margin of:
a)    up to 15% for goods produced in Ethiopia; and
b)    up to 7.5% for works carried out by Ethiopian nationals;
shall be granted in the evaluation process.
2/ For the purpose of Sub-Article (1) of this Article any good to which more than 20% of the value added occurs in Ethiopia shall be defined as one which is produced in Ethiopia.
20.    Form of Communications
1/ Communications between candidates and procuring entities shall be in writing Communications in any other form shall be referred to and confirmed in writing.
2/ Subject to necessary safeguards with regard to authenticity and confidentiality, and when technical conditions so permit, the Agency may determine the extent by which communication by electronic means may be used in addition to or instead of writing.
21.    Qualification of candidates
1/ In order to participate in public procurement candidates must qualify by meeting the following criteria and such other criteria, as the procuring entity considers appropriate under the circumstances:
a)    That they possess the necessary professional and technical qualifications and competence, financial resources, equipment and other physical facilities, managerial capability experience in the procurement object, reputation, and the personnel to perform the contract;
b)    That they have legal capacity to enter into the contract;
c)    That they are not insolvent, in receivership, bankrupt or being wound up, their business activities have not been suspended, and they are not the subject of legal proceedings for any of the foregoing;
d)    That they have fulfilled their obligations to pay taxes according to Ethiopian tax laws;
2/ The procuring entity may require candidates to provide such appropriate documentary evidence or other information as it may deem useful to satisfy itself that the candidates are qualified in accordance with the criteria referred to in Sub-Article (1)
3/ Any requirement established pursuant to this Article shall be set forth in the bid documents or other documents for solicitation of proposals, and shall apply equally to all candidates.
4/ The procuring entity shall evaluate the qualifications of candidates in accordance with the criteria and procedures set forth in the documents referred to in Sub-Article (3) of this Article.
5/ The procuring entity shall disqualify a candidate who submits a document containing basic error for purposes of qualification; it may disqualify a candidate if it finds at any time that the information submitted concerning the qualifications of the candidates was materially inaccurate or materially incomplete.
6/ In order to simplify the process of demonstrating, and verifying, the formal qualifications of candidates of the kind set out in Sub-Article (1), Sub Articles (b)-(d), the Agency shall review in a speedy manner, and record documentary evidence submitted by candidates for registered supplier status. Such records shall be periodically updated. Excerpts from the record shall be made available to registered candidates and procuring entities on request. The Agency shall issue detailed rules concerning the registration procedure.
22.     Technical Specification
1/ Technical specifications and descriptions laying down the characteristics of the goods, works or services to be procured shall be prepared for the purpose of giving a correct and complete description of the object of procurement and for the purpose of creating conditions of fair and open competition between all candidates.
2/ The technical specifications shall clearly describe the procuring entity’s requirements with respect to quality, performance, safety and dimensions, symbols, terminology, packaging, marking and labeling or the processes and methods for production and requirements relating to conformity assessment procedures.
3/ Technical specification prescribed by procuring entities shall, where appropriate:
a)    be in terms of performance rather than design or descriptive characteristics: and
b)    be based on national standards, where such exist, or otherwise on internationally recognized standards or construction codes.
4/ There shall be no requirement or reference in the technical specifications to a particular trademark or name, patent, design or type, specific original, producer or service provider unless there is no sufficiently precise or intelligible way of describing the procurement requirements and provided that words such as “or equivalent” are included in the specifications.
23.    Rejection of all Bids, Proposals and Quotations
1/ The procuring entity may reject all bids, proposals or quotations at any time prior to their acceptance. The procuring entity shall upon request communicate to any candidate the grounds for rejecting all bids, but is not required to justify those grounds.
2/ The procuring entity shall incur no liability towards candidates solely by virtue of its invoking Sub-Article (1) of this Article.
3/ Notice of the rejection shall be given promptly to all participating candidates.
4/ If the decision to reject all bids is taken before the closing date, bids received shall be returned up opened to the bids submitting them.
24.     Inducements from Candidates
The procuring entity shall reject a bid, proposal or quotation if the candidate that submitted it gives or promises to give, directly or indirectly to any officer or employee of the procuring entity or other governmental authority a gratuity in any form, an employment or any other thing or service of value, as an inducement with respect to an act or decision of, or procedure followed by the procuring entity in connection with the procurement proceedings. Such rejection of an offer and the reasons therefore shall be recorded in the record of the procurement proceedings and promptly communicated to the candidate concerned.

CHAPTER IV
CHOICE OF PROCUREMENT METHODS

25.    Procurement Method
1/ Except as otherwise provided in this Proclamation, the procuring entity shall use open bidding as the preferred procedure of procurement.
2/ A procuring entity may use a procedure other than open bidding only pursuant to the following Article 26-30.
3/ Exceptionally and when justified on sound economic grounds, the Agency may permit the use of a procedure other than open bidding in situations not foreseen in Article 26-30.
4/ A procuring entity shall plan its procurement in a rational manner, and no procurement requirements for a given quantity of goods, works or services shall be split up with the intention of avoiding a procurement procedure stated in this Proclamation or in the procurement directives.
26.    Conditions for use of Restricted Tendering
1/ The procuring entity may engage in procurement by means of restricted tendering in accordance with Article 44, when:
a)    the goods, works or services, by reason of the highly complex or specialized nature, are available only from a limited number of suppliers; or
b)    the time and cost required to examine and evaluate a large number of bids would be disproportionate to the value of the goods, works or services to be procured.
2/ The condition referred to in Sub-Article (1) (b) shall in any case be considered to be fulfilled when the estimated value of the contract does not exceed a threshold set out in the procurement directives.
27.    Conditions for use of Direct procurement
1/ The procuring entity may use direct procurement in accordance with Article 45 if this method is not resorted to with a view to avoiding possible competition or in a manner which would constitute a means of discrimination among candidates:
a)    when in absence of competition for technical reasons the goods, works or services can be supplied or provided only by one candidate;
b)    within limits defined in the procurement directives, for additional deliveries of goods by the original supplier which are intended either as parts replacement for existing supplies, services or installations or as the extension of existing supplies, services or installations where a change of supplier would compel the procuring entity to procure equipment or services not meeting requirements of interchangeability with already existing equipment or services;
c)    within limits defined in the procurement directives, when additional works which were not included in the initial contract have through unforeseeable circumstances become necessary sine the separation of the additional works form the initial contract would be difficult for technical or economic reasons;
d)    within limits defined in the procurement directives, for new works consisting of the repetition of similar works which conform to a basic project of which an initial contract was awarded on the basis of open or restricted bidding.
e)    within limited defined in the procurement directives, for continuation of consultant services, where the original contract has been satisfactorily performed and the continuation is likely to lead to gains in economy and efficiency.
f)    for purchase of goods made under exceptionally advantageous conditions which only arise in the very short term. This provision is intended to cover unusual disposal by firms, which are not normally suppliers. It is not intended to cover routine purchases from regular suppliers.
g)    the head of the procuring entity has determined that the need is one of pressing emergency in which delay would create serious problems and therefore injurious to the performance of that procuring entity.
2/ The procuring entity may also use direct procurement when the contract price does not exceed an amount stated in the procurement directives.
28.     Conditions for use of Request for Proposals
The procuring entity may engage in procurement by means of request for proposals in accordance with Article 46 when it seeks to obtain consultancy services or contracts for which the component of consultancy services represents more than 50% of the amount of the contract.
29.    Conditions for use of Request for Quotations
The procuring entity may engage in procurement by means of request for quotations in accordance with Article 47 for the purchase of readily available goods or for procurement of works or services for which there is an established market, so long as the estimated value of the contract does not exceed an amount stated in the procurement directives.
30.    Conditions for use of Two-stage Bidding
Procuring entities may engage in procurement by means of two-stage bidding in accordance with Article 48:
1/ When it is not feasible for the procuring entity to formulate detailed specifications for the goods or works or in the case of services to identify their characteristics and, in order to obtain the most satisfactory solution to its procurement need;
a)    it seeks bids, proposals or offers as to various possible means of meeting its needs; or
b)    because of the technical character of the goods or works, or because of the nature of its services it is necessary for the public body to negotiate with the suppliers.
2/ When the procuring entity seeks to enter into a contract for the purpose of research, experiment, study or development except where the contract includes the production of goods in quantities sufficient to establish their commercial viability or to recover research and development costs.
3/ When bid proceeding have been engaged in but no bids where submitted or all bids were rejected by the procuring entity, and when, in the judgment of the procuring entity, engaging in new bid proceedings would be unlikely to result in a procurement contract.

CHAPTER V
OPEN TENDERING

31.    Advertisements
1/ Invitation to bid shall be advertised in at least one national newspaper of general circulation;
2/ The time allowed for preparation of bids shall not be less than a minimum number of days stated in the procurement directives.
32.    Invitation to Bid
The invitation to bid shall contain, as a minimum,
1/ the name and address of the procuring entity,
2/ a brief description of the goods, works or services to be obtained, including desired time limit for delivery or completion,
3/ the means and conditions for obtaining the bid documents and the place from which they may be obtained,
4/ the place and deadline for the submission of bids, and
5/ the place and time for opening of bids, along with an announcement that bidders; representatives are allowed to attend the opening of bids.
33.    Bid Documents
1/ The bid documents shall contain sufficient information to enable competition among the bids to take place on the basis of complete, neutral and objective terms. In particular, bid documents must include:
a)    instructions for the preparation and submission of bids;
b)    information on the final date for receipt of bids, the address to which bids must be sent, the date, hour and place of opening, as well as an announcement that bidders’ representatives are allowed to attend the opening;
c)    forms of bid and, where applicable, forms of bid security to be provided;
d)    the number of copies to be submitted with the original bid;
e)    conditions of contract, general and special;
f)    specification of requirements, including time limit for delivery or completion, as appropriate;
g)    evidence to be provided by the bidder to demonstrate its qualifications as well as its standing with regard to fiscal and registration in the suppliers list.
h)    the period during which the bid must remain valid;
i)    the criteria and the points given to each criterion for evaluation of bids and award of the contract; and
j)    a reservation to the effect that the procuring entity may reject all bids at any time prior to the acceptance of a bid.
34.    Provision of bid documents
Bid documents shall be made available to candidates in an expeditious manner, at a price not exceeding the cost of reproduction and delivery to candidates, and otherwise in the manner specified in the invitation to bid.
35.    Modification to bid documents
1/ At any time prior to the deadline for submission of bids, the procuring entity may, on its own initiative or in response to an inquiry by a candidate having purchased the bid documents, modify the bid documents by issuing an addendum, which becomes an integral part of the bid documents.
2/ Any addendum shall be communicated promptly to all candidates having purchased the bid documents.
3/ If the procuring entity considers it necessary to amend the bid documents, and if it determines that there is no enough time to incorporate the modification shall postpone the closing date by a number of days, depending on the procurement object, which is sufficient to enable the bids to take the addendum into account in preparing their bids.
36.    Bid Security
1/ Unless otherwise provided in this Proclamation, the procuring entity shall include in the bid documents a condition that bids must be accompanied by security in the form of a deposit or bid guarantee. The amount of such security shall be sufficient to discourage irresponsible bids and shall remain within limits stated in the procurement directives.
2/ Any bid security will be forfeited if a bidder withdraws his bid within the validity period thereof or, in the case of a successful bidder, if the bidder repudiates the contract or fails to furnish performance security, if so required.
37.    Submission and receipt of bids
1/ Bids shall be submitted in writing, signed and in a sealed envelope, to the place and before the deadline stated in the invitation to bid.
2/ The procuring entity shall give a receipt to the bidder indicating the time and date on which the bid document is submitted, where it becomes impossible to put the bid document in a bid box due to its large size.
3/ A kind of bid document stated under Sub Article 2 above is received after the deadline for submission shall be returned unopened to the bidder.
38.    Opening of Bids
1/ At the time stipulated in the bid documents for opening of bids, which should follow immediately after the deadline for submission of bids, the procuring entity shall open all bids received before the deadline.
2/ Bidders, or their authorized representatives, shall be allowed to attend the opening of bids.
3/ The name of the bidder and the total amount of each bid shall be read out aloud and recorded, and a copy of the record shall be made available to any bidder on request.
39.    Examination and Evaluation of Bids
1/ The procuring entity may ask bidders for clarification of their bids in order to assist in the examination and evaluation of bids. No change in the substance of the bid, including changes in price, shall be sought, offered or permitted.
2/ Notwithstanding Sub-Article (1), the procuring entity shall correct purely arithmetical errors that are discovered during the examination of bids. The entity shall give prompt notice of any such correction to the bidder that submitted the bid.
3/ Subject to Sub-Article (4), of this Article, the procuring entity may regard a bid as responsive only if it conforms to all requirements set forth in the bid documents.
4/ The procuring entity may regard a bid as responsive even if it contains minor deviations that do not materially alter or depart from the characteristics, terms, conditions and other requirement set forth in bid documents or if it contains errors or oversights that are capable of being corrected without touching on the substance of the bid. Any such deviations shall be quantified, to the extent possible, and appropriately taken account of in the evaluation and comparison of bids.
5/ The procuring entity shall not award a contract when:
a)    the bidder has failed to demonstrate, in the manner foreseen in Article 33(g), that it is qualified;
b)    the bidder does not accept a correction of an arithmetical error made pursuant to Sub-Article (2) of this Article;
c)    the bid is not responsive.
6/ The procuring entity shall evaluate and compare the bids that have been held responsive in order to ascertain the successful bid, as defined in Sub-Article (7), of this Article, in accordance with the procedures and criteria set forth in the bid documents. No criterion shall be used that has not been set forth in the bid documents.
7/ The successful bid shall be:
a)    the bid with the lowest evaluated price; or
b)    if the procuring entity has so stipulated in the bid documents, the lowest evaluated bid ascertained on the basis of factors affecting the economic value of the bid which have been specified in the bid documents, which factors shall, to the extent practicable, be objective and quantifiable, and shall be given a relative weight in the evaluation procedure or be expressed in monetary terms wherever practicable.
8/ The procuring entity shall prepare an evaluation report, containing a summary of the examination and evaluation of bids.
40.    Process to be confidential
1/ After the opening of bids, information relating to the examination, clarification, and evaluation of bids and recommendations for award must not be disclosed to bidders or other persons not officially concerned with this process until the award of the contract is announced.
2/ Following opining of the bids, and until the contract is awarded; no bidder shall try in any way to influence the entity’s examination and evaluation of the bids.
3/ From the time of bid until time of contract award if any bidder wishes to contact the procuring entity on any matter relating to the bid it shall do so in writing.
41.    Bidders not to be requested to modify their bids as a condition for award
A bidder shall not be requested or required, as a condition for award, to undertake responsibilities not stipulated in the bid documents, to change its price or otherwise to modify its bid.
42.    Notification of award and signing of contract
1/ Prior to the expiry of the period of bid validity, the procuring entity shall notify the successful bidder that its bid has been accepted. The notification of award shall specify the time within which the contract must be signed. The unsuccessful bidder shall also be informed who the successful bidder is and why he has lost the bid.
2/ The existence of contract shall be confirmed through the signature of a contract document incorporating all agreements between the parties.
3/ The contract shall not be signed by the procuring entity prior to the receipt of the notice by the unsuccessful bidder and before the period specified under Article 52 has lapsed.
43.    Contract Security
A supplier shall provide the procuring entity with a contract security to make good on any default by the supplier under the contract. The type of procurement for which contract security is required and the type and amount of contract security shall be determined by a directive to be issued by the Minister.

CHAPTER VI
OTHER PROCUREMENT METHODS

44.    Restricted Tendering Procedures
Restricted tendering procedures are the same as those applied in open tendering, except that:
1/ the invitation to bid is addressed to a limited number of qualified candidates which have declared an interest in submitting bids. The selection should be made in a non-discriminatory manner, and the number of candidates invited should be, if possible, sufficient to ensure effective completion;
2/ procuring entities shall select candidates to be invited to bid from among those registered in the suppliers list. Any selection shall allow equitable opportunities for suppliers on the list. The procuring entity may also advertise the opportunity to bid in the manner provided for under Article 31 (5), inviting candidates to submit expressions of interest in being invited to bid.
3/ the time allowed for preparation of bids shall not be less than a minimum number of days stated in the procurement directives; and
4/ the procuring entity may decide, depending on the circumstances, if bid security will have to be submitted or not
45.    Direct Procurement Procedure
1/ When the procuring entity engages in direct procurement according to article 27(2), it shall prepare a description of its need and any special requirements as to quality, quantity, terms and time of delivery, and shall be free to negotiate with the sole candidate. Any agreement reached to conduct the procurement according to Article 27(1) shall be confirmed by a contract signed by both parties.
2/ Direct procurement according to Article 27 (2) requires no signed contract.
46.    Request for Proposals Procedure
1/ Requests for proposals shall be addressed to no less than three, not more than seven candidate selected by the procuring entity. The selection of candidates for consultancy services above threshold to be determined by a directive shall be made after inviting candidates to submit expression of interest in being invited to bid.
2/ A request for proposals shall contain at least the following information:
a)    the name and address of the procuring entity;
b)    description of the services required normally through terms of reference;
c)    in the case of consultancy assignments which may involve potential conflicts of interest, a reminder that candidates for such assignments must exclude themselves from procurement of goods and works which may follow as result of or in connection with the consultancy agreement;
d)    the criteria for evaluating the proposals, the relative weight to be given to price and other criteria, and the manner in which they will be applied in the evaluation of proposals;
e)    place and deadline for the submission of proposals.
3/ Candidates shall be given adequate time in which to prepare their proposals
4/ The procuring entity may negotiate with the first ranked candidate with respect to the nature, volume and organization of the services included in their proposals and may seek or permit revisions thereof.
5/ Any award by the procuring entity shall be made to the candidate whose proposal is most advantageous, determined in accordance with the criteria and procedures for evaluating proposals set forth in the request for proposals.
47. Request for Quotations Procedure
1/ The procuring entity shall request quotations from as many candidates as practicable, but from at least three, if possible.
2/ The request shall contain a clear statement of the requirements of the procuring entity as to quality, quantity, terms and time of delivery as well as other special requirements.
3/ Candidates shall be given adequate time in which to prepare their quotations
4/ A purchase order shall be placed with the candidate who meets the requirements of the procuring entity stipulated in Sub-Article (2) and who quotes the lowest price.
5/ Procuring entitities shall ensure that suppliers registered in the suppliers list have equal opportunity.
48. Two-stage Bidding
1/ The solicitation documents shall call upon suppliers to submit, in the first stage of the two-stage bidding proceedings, initial tenders containing their proposals without a tender price. The solicitation documents may solicit proposal relating to the technical, quality or other characteristics of the goods, works or services as well as to contractual terms and conditions of supply and where relevant the professional and technical competence and qualifications of the suppliers.
2/ In the second stage of the two-stage tendering proceedings, procuring entities shall invite suppliers whose bids have not been rejected to submit final tenders with prices with respect to a single set of specifications. In formulating those specifications, procuring entities may delete or modify any aspect originally set forth in the solicitation documents of the technical or quality characteristics of the goods, works or services to be procured and any criterion originally set forth in those documents for evaluating and comparing bids and for ascertaining the successful bids and may add new characteristics or criteria that conform with this Proclamation. Any such deletion, modification or addition shall be communicated to suppliers in the invitation to submit final bids. A supplier not wishing to submit a final bid may withdraw from the bid proceedings without forfeiting any bid security that the supplier may have been required to provide.
3/ The final bids shall be evaluated and compared in order to ascertain the successful bidder pursuant to Article 39 of this Proclamation.
4/ The procuring entity may engage in negotiation with the first ranking bidder concerning any aspect of its bid, except price.

CHAPTER VII
INTERNATIONAL PROCUREMENT METHODS

49. Open International Bidding
1/ Open international bidding shall be used whenever in open bidding an effective competition cannot be obtained unless foreign firms are invited to bid and for procurements above a threshold to be determined by a directive to be issued by the Minister.
2/ Open international bidding shall observe the provisions of Chapter V as well as the following provisions:
a)    The invitation to bid and the bid documents shall be prepared in a language generally used in international trade.
b)    The invitation to bid shall be placed in a newspaper using the same foreign language as the invitation and being of sufficient circulation and attract foreign competition.
c)    The time allowed for submission of bids shall be sufficient for the invitation to reach candidates and for enabling them to prepare and submit bids.
d)    Technical specifications of the goods and services shall, to the extent compatible with national requirements be based on international standards or standards widely used in international trade.
e)    Candidates shall be permitted to express their bids as well as any security documents to be presented by them in Ethiopian Birr or in a currency widely used in international trade and stated in the bid documents.
f)    General and special conditions of contract shall be of a kind generally used in international trade.
50. Other International Procedures
Whenever effective competition cannot be obtained unless foreign firms are invited to participate in procedures other than open international bidding, such as restricted bidding or request for proposals, the provisions of Article 46 (2) shall apply to the extent practicable in addition to the stipulations of Chapter V.

CHAPTER VIII
SUBMISSION OF COMPLATNT ON PUBLIC
PROCUREMENT

51. General
1/ Subject to the provisions of this Part any candidate is free to seek administrative review of an act or omission by a procuring entity which the candidate considers to be in breach of these Proclamation, the procurement directives or any instructions issued pursuant thereto.
2/ The following shall not be subject to the review provided for in Article (1) of this Section:
a)    the choice of a procurement procedure pursuant to Chapter IV;
b)    a decision by the procuring entity under Article 23 to reject all bids, proposals or quotations;
3/ Once the procuring entity concluded a contract, a complaint against an act or omission in the process leading up to that stage cannot be entertained through administrative review.
52. Review by the Head of the Procuring Entity
1/ A complaint against an act or omission by the procuring entity shall in the first instance be submitted to the head of the procuring entity.
2/ the candidate can Submit complaint within five days from the date he knew or should have known the circumstances giving rise to the complaint.
3/ Unless the complaint is resolved by mutual agreement, the head of the procuring entity shall suspend the procurement proceedings and shall within 15 days after submission of the complaint, issue a written decision, stating the reasons, and if the complaint is upheld, indicating the corrective measures to be taken.
4/ If the head of the procuring entity does not issue a decision within the time stated in Sub-Article (2) or if the candidate is not satisfied with the decision of the head of the procuring entity, the candidate is entitled to submit a complaint to the Agency within five working days from the date of the communication of the decision by the procuring entity.
53. Reviews by the Agency
1/ Upon receipt of a complaint, the Agency shall promptly give notice of the complaint to the respective procuring entity. Such action automatically suspends further action by the procuring entity until the Agency has settled the matter.
2/ The Agency, unless it dismisses the complaint, may prohibit the procuring entity from acting or deciding unlawfully or from following an unlawful procedure may order the procuring entity to proceed in a manner conforming to his Proclamation and may annul, in whole or in part an unlawful act or decision by the procuring entity other than a decision to award or conclude a contract.
3/ The Agency shall before taking any decision regarding a complaint notify interested candidates of the complaint and shall take into account information and arguments received from such candidates and from the procuring entity.
4/ The Agency shall issue its decision within 15 days of receiving the complaint stating the reasons for its decision and remedies granted if any,

CHAPTER IX
MISCELLANEOUS

54. Offences and Punishment
1/ Every person appointed to or employed by a procuring entity in carrying out the provisions of this Proclamation who:
a)    receives any payment for the performance of his official duty except as provided by law;
b)    conspires or colludes with any person to defraud the procuring entity or provides an opportunity for any person to defraud the procuring entity;
c)    contravenes this Proclamation or intentionally permits any contravention of the law;
d)    willfully makes or signs any false entry in any document or willfully makes or signs false certificates; is liable on conviction to a fine not less than Birr 25,000 and not more than 35,000 and to a rigorous imprisonment for a term of not less than 10 years and not more than 15 years.
2/ A procurement officer employed in carrying out the provisions of this Proclamation, except such information is required by this Proclamation to be official, who;
a)    discloses to any person or that person’s representative any matter in respect of another person that may in the exercise of the procurement officer’s powers or the performance of the procurement officer’s duties come to the procurement officer’s knowledge;
b)    permits any other person to have access to records in the possession or custody of the Procuring entity, except in the exercise of the procurement officer’s powers or the [performance of the procurement officer’s duties under this Proclamation or by order of a court;
c)     commits an offence and is liable on conviction to a fine of not less than Birr 5,000 and not more than Birr 10,000 and to imprisonment for a term of not less than 2 years and not more than 5 years.
3/ Every person appointed to or employed by a procuring entity in carrying out the provisions of this Proclamation who:
a)    directly or indirectly asks for or receives in connection with any of his duties a payment or gift whether pecuniary or otherwise or promise or security for that payment or reward;
b)    enters into or acquiesces in an agreement to do or to abstain from doing, permit conceal, or connive at any act or thing whereby the procurement is or may be defrauded or which is contrary to the provisions of this Proclamation or to proper execution of the procurement officer’s duty; commits an offence and is liable on conviction to a fine of not less than 50,000 Birr and to imprisonment for a term of not less than ten 10 years and not more than twenty 20 years.
4/ Every person who, promises, offers or gives any bribe to any person appointed to or employed in any procuring entity with intent:
a)    to influence the decision or action of that person on any question or matter that is pending, or may be brought before him in his official capacity; or
b)    to influence that person to commit, or aid or abet in committing any fraud on the procurement, or to connive at, collide in or allow or permit any opportunity for the commission of any such fraud;
c)    is guilty of an offence and liable on conviction to a fine of not less than Birr 50,000 and to rigorous imprisonment for a term of not less than ten (10) years and not more than twenty (20) years it the penal higher punishment it prescribed on the penal code this will have effect.
55. Power to issue Regulation and Direction
1/ Where it is necessary for the implementation of this proclamation, the Council of Ministers may issue a Regulation.
2/ The Minister may issue directive to implement this Proclamation.
56. Repeals and Non-Applicability
1/  The following are repealed;
a)    Article 54-56 of the Federal Government Financial Administration Proclamation No. 57/1996;
b)    Article 66-73 of the Council of Ministers Financial Regulations No. 17/1997;
c)    The Council of Ministers Financial Regulation No. 71/2001
2/ No law, regulations, directives or practices inconsistent with this Proclamation shall have effect with respect to matters provided for in this Proclamation;
57. Entry into Force
This Proclamation shall enter into force as 12th day of January, 2005.
Done at Addis Ababa, this 12th day of January, 2005.

GIRMA WOLDEGIORGIS
PRESIDENT OF THE FEDERAL
DEMOCRATIC REPUBLIC OF ETHIOPIA
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