Purpose and term definitions
The purpose of the Act
The purpose of the present Act is to ensure equal treatment of bidders on public procurement and to encourage active competition and efficiency in public operations.
The definition of terms in the present Act is as follows:
Open procedures: a publicly advertised procedure in which an unspecified number of bidders may submit bids.
Bidder: an individual or legal entity that offers the supply, work or services obtained according to the present Act.
European standard: a standard which has been approved by the European Committee for Standardisation (CEN) or the European Committee for Electrotechnical Standardisation (CENELEC) as a European Standard (EN) or document of harmonisation (HD), in accordance with the joint rules of these Committees, or by the European Telecommunications Standards Institute (ETSI) as a European Telecommunication Standard (ETS).
European technical approval: a favourable assessment of the fitness for use of a product, based on fulfilment of the essential requirements for construction works, by means of the physical characteristics of the product and the defined conditions of application and use. European technical approval shall be issued by a body approved for this purpose by the Member States of the European Economic Area.
Pre-qualification: a method of choosing participants in a restricted procedure or negotiated procedure.
Variant offer: a bid that meets the requirements of the purchaser in a manner different from the one assumed in the technical tender specifications, as well as the minimum requirements.
Contracting authority: the State, local authorities, their institutions and organisations and other public entities as stated in Article 3, Paragraph 2.
Restricted procedure: procedure where only specified suppliers may submit tenders.
Framework agreements: contracts with one or more bidders where the quantity and extent of a contract is more or less unspecified, but contracting authorities, one or more, commit themselves to buy the supply, service or work specified in the contract from the bidders, including matters of quality, technology, service, delivery date and price during the contract period.
Common technical specification: a technical specification drawn up in accordance with the joint rules of Member States of the European Economic Area for the purpose of ensuring uniform application in all states and which has been published in the EEA Appendix of the Official Journal of the European Union.
Negotiated procedure: a contracting authority consults with vendors according to a predetermined process, introduced beforehand, and makes an agreement with one or more of them.
Work concessions: a work contract where the payment for a project is included, partially or fully, in the right to make use of the result of the project.
Standard: a standard approved by a recognised standardisation organisation that may be used repeatedly and regularly without being a mandatory requirement. A standard is a public document and intended for general use.
Technical specification: all technical requirements specified in a tender which define the characteristics required of work, material, a product or input, and which give objective descriptions of the work, material, product or input in order for it to serve the purchaser's intended purpose. Such requirements may concern levels of quality, performance characteristics, safety or dimensions, including requirements on quality assurances, markings, testing and packaging. A technical specification may also concern rules for design, determination of cost, requirements for testing, inspection and approval of work and methods or technology used in construction, together with all other technical requirements which a purchaser may stipulate in accordance with general or specific rules for completed work and for materials or parts connected with them;
Tender: when a contracting authorities seeks written binding bids for a supply, service or work from more than one entity on the basis of the same information and within the same response deadline.
The scope of the Act
This Act concerns the State, local authorities, their institutions and other public entities, in accordance with Paragraph 2. The Act also concerns associations formed by one or more of such authorities.
An entity is considered public if it is governed by public law and if it has been established for the specific purpose of meeting needs in the general interest, provided it does not conduct operations that may be compared with the operation of private entities, such as in the field of business or industry. Furthermore, at least one of the following should apply:
|a.||It is mostly operated at the expense of the State or Local authorities, their institutions or other public entities. The entity shall be considered mostly operated at the expense of the State or local authorities, their institutions or other public entities, if public funding exceeds 50% of operation cost. The income of an entity on the basis of a mutual business agreement with a public entity is not considered public funding.|
|b.||It is supervised by the State or local authorities, their institutions or other public entities.|
|c.||It is subject to a special board of directors, the majority of which is appointed by the State or local authorities, their institutions or other public entities.|
The scope of the present Act concerning contracts
The present Act applies to contracts made by public authorities, cf. Article 3, with bidders for the purchase of supplies, service and works.
A public supply contract is a contract involving the purchase , lease rental or a hire purchase, with or without option to buy, of products. A public supply contract may include transports, delivery and installation of a commodity.
A public service contract is a contract that is neither a public supply contract nor a public work contract.
A public work contract is an agreement on the construction, or the construction and design, of the projects specified in Appendix II of the present Act or projects where a construction or the making of equipment with engineering methods is planned in order to meet financial or technical requirements. The same applies to other public work contracts carried out according to specific requirements set by the contracting authority. Public works concessions are considered public work contracts.
The following shall not be considered supply, service or work contracts:
|a.||contracts for the purchase or rental of land, existing buildings or other real estate or rights to same, with the exception of contracts for financial services which are concluded prior to, following, or concurrent to a contract for the purchase or rental of real estate;|
|b.||contracts for the purchase, development and production of broadcast material for radio or television or contracts on broadcast time;|
|c.||contracts for telephony, telex, radiotelephony, paging systems and satellite services;|
|d.||contracts for arbitration and conciliation;|
|e.||contracts for financial services in connection with the issuing, sale, purchase or change of ownership of securities or other comparable instruments and central bank services;|
|g.||contracts for research and development of services, with the exception of contracts where the purchasers as referred to in Article 3 shall bear all costs of the service and have exclusive rights to enjoy the benefits of the outcome in its activities.|
Notwithstanding the provisions in Paragraph 5, the Minister of Finance may decide that institutions and companies of the State shall make their purchases in accordance with the present Act, also in the making of the contracts specified therein.
If a public contract covers both the purchase of commodities and service it is considered a service contract if the service part of the contract is worth a greater amount than the commodity part.
Funding by public entities
The provisions of the present Act shall apply when the purchasing entities, cf. Article 3, pay more than 50% of the purchase cost of a service or a project carried out by another entity. However, this only applies to work contracts that cover construction projects for hospitals, sports and leisure activities, schools and universities and public administration, as well as the projects specified in class 50, group 502 in the Nomenclature of Economic Activities in the European Communities (NACE), cf. Appendix II of the present Act.
Contracts of institutions in charge of water supplies, power supplies, transports and telecommunications
The provisions of Chapters XIII and XIV of the present Act shall apply to the purchases of the entities that fall under Directive No. 93/38/EEC dated 14 June 1993, covering the harmonisation of rules on purchases of institutions in charge of water supplies, power supplies, transports and telecommunications, as ratified in the agreement of the European Economic Area. In other respects, the present Act does not cover purchases made by such entities.
The Minister may issue a regulation further defining the purchases of the entities specified in Paragraph 1 in accordance with the commitments of the Icelandic State in the field of the State procurement according to the agreement of the European Economic Area or other international treaties.
Agreements excluded from the scope of the present Act
The present Act does not cover the following:
|a.||Service contracts concluded with entities who are considered purchasers, cf. Article 3, on the basis of exclusive rights they bear by law, or according to instructions issued by the authorities.|
|b.||Product contracts, service contracts or work contracts declared as confidential, or if special security measures must be taken in their execution in accordance with the current legislation and instructions issued by the authorities, or if the vital interest of the State so requires.|
|c.||Contracts which are subject to other rules on public procurement and that are made on the basis of an international treaty between the Icelandic Government and states outside of the European Economic Area covering the purchase of services for joint ventures or the utilisation of projects, provided that such a contract is announced to the EFTA Surveillance Authority.|
|d.||Contracts on the basis of an international treaty on military bases.|
|e.||Contracts concluded according to specific rules of international institutions.|
Holders of rights according to the Act.
Rights according to the present Act are enjoyed by individuals and legal entities domiciled in any of the states in the European Economic Area. The same applies to other individuals and legal entities that have such rights on the basis of international treaties to which the Icelandic Government is a party.
Further instructions for public procurement may be set by regulation, in accordance with the Government Procurement Agreement of the World Trade Organisation and other treaties on government procurement of which the Icelandic Government might become a party.
State procurement below the thresholds
of the European Economic Area
The scope of this Title
Procurement below thresholds of the European Economic Area
The provisions of the present Act cover State procurement below the thresholds of the European Economic Area cf. Article 56.
Contracting authorities excluded from the provisions of the present Title.
The provisions of the present Title do not affect the procurement made by local authorities, their institutions, other public entities on their behalf, cf. Paragraph 2, Article 3, or associations these entities may have founded with each other.
Government procurement procedures
Equal treatment of bidders
In the case of public procurement, contracting authorities shall ensure equal treatment of bidders.
According to the present Act, it is permitted to stipulate in tender documents that a supply is to be delivered, service given or work carried out at a specified location, provided that such a stipulation is based on legitimate arguments.
All procurement of supplies exceeding ISK 5,000,000 and procurement of services and works exceeding ISK 10,000,000 shall be put to tender. However, work concession agreements do not need to be put to tender. The same applies to the procurement of services listed in Appendix I B.
Despite the provisions of Paragraph 1, institutions and companies of the State shall solely make work concession contracts and contracts covering the procurement of services listed in Appendix I B in accordance with rules set by the Minister by regulation.
Amounts defined in Paragraph 1 shall be revised every other year, in accordance with fluctuations to the consumer price index, the first revision taking effect on January 1st 2002. These amounts may be approximated up to the next thousand. The Minister shall, with an appropriate notice, make public and official the changes to be made to the thresholds according to the present Article.
Procurement below the thresholds
In the case of a procurement the estimated amount is below the thresholds of Article 12, Paragraph 1, the purchaser shall at all times ensure efficiency and compare as many sellers' offers as possible.
Estimation of contract value
When estimating the value of a prospective contract, all procurement cost net of VAT, at the time at which a notice thereof should be published, shall be included. If supplies, services or works are to be procured in stages, the aggregated value of all stages shall be taken into consideration.
In the case where proposed procurement specifies option clauses, the basis for calculating the contract value shall be the highest possible total of the purchase.
It is not permissible to divide procurement into smaller units, or to select special valuation method methods with the intention to avoid publication.
Estimation of supply contract value
Upon the estimation of the value of a prospective supply contract, supply transports cost shall be included in the supplies price. If a supply is purchased "free on board" (fob) in a foreign port, however, the transports shall not be included in the supply price.
In the case of contracts for the lease, rental or hire purchase of products, the basis for calculating the estimated contract value shall be:
|a.||In the case of fixed-term contracts, where their term is 12 months or less the total contract value for its duration shall be taken into consideration, or, where their term exceeds 12 months, its total value including the estimated value.|
|b.||In the case of a contract for an indefinite period or in the cases where there is doubt as to the duration of the contracts the estimated value shall be based on the monthly value multiplied by 48.|
In the case of regular contracts or contracts which are to be renewed within a given time, the estimated contract value shall be established on the basis of either of the following methods:
|a.||According to the aggregate value of similar contracts concluded over the previous fiscal year or 12 months, adjusted where possible, for anticipated changes in quantity or value over the 12 months following the initial contract.|
|b.||According to the estimated aggregate value during the 12 months or a greater period if applicable, following the first delivery.|
If two or more independent contracts are to be made at the same time, covering the same type of supplies, meant for meeting the same requirements, the estimated value shall be the aggregate value of all the contracts.
Estimation of public service contract value
As regards insurance services, it shall be based on the amount of the premium payable.
As regards banking and financial services, it shall be based on the amount of fees, commissions and interests as well as other types of remuneration.
As regards contract which involve design, it shall be based on the fees or commission payable.
As regards contracts which do not specify a total price, the basis for calculating the estimated contract value shall be:
|a.||In the case of a contract for 48 months or less it shall be based on the estimated contract value for its duration.|
|b.||In the case of a contract of indefinite duration or with a term of more than 48 months, it shall be based on the monthly instalment multiplied by 48.|
In the case of regular contracts or contracts which are to be renewed within a given time the contract value shall be established on the basis of:
|a.||Either the actual aggregate cost of similar contracts from the previous fiscal year or the previous 12 months, adjusted for anticipated changes in quantity or value over the twelve months following 12 months.|
|b.||Or the estimated aggregate cost during the twelve months, or a greater period if applicable, from the first service performed.|
Estimation of work contract value
The value of supplies provided by the contracting authority to the bidder while the latter is carrying out the work shall also be taken into consideration when calculating the value of a work contract.
Where a work is subdivided into several lots, each one the subject of a contract, the value of each lot must be taken into account for the purpose of calculating the total value of the contracts. Where the aggregate value of the lots exceeds the thresholds, individual contracts may be made without a publication, provided that the total estimated value of all the lots exempted does not, in consequence, exceed 20% of the total estimated value of all lots.
The main principle on open procedure and restricted procedure
In all other instances than those provided for by Articles 19 and 20, the open procedure or the restricted procedure shall be applied. A pre-qualification process shall always be applied prior to the restricted procedure.
A pre-qualification process is subject to the rules on open procedure as applicable.
Negotiated procedure with prior publication of a contract notice
In the event of irregular tenders in response to an open or restricted procedure or in the event of tenders which are unacceptable on the basis of the provisions of Chapter VI, a negotiated procedure may be applied following the publication of a notice, as the original terms of the contract are not substantially altered. Contracting authorities may in such cases refrain from publishing a contract notice where they include in the negotiated procedure all the tenderers who satisfy the criteria specified in Chapter VI and who, during the prior open or restricted procedure, have submitted tenders in accordance with the formal requirements of the tendering procedure.
Procurement of services using the negotiated procedure with a prior publication of notice, is permitted when the contract specifications cannot be established with sufficient precision due to the nature of the service or risks involved. The same applies when the nature of the services to be procured, in particular in the case of intellectual services or research and development, is such that the contract specification cannot be established in open or restricted procedures.
Procurement of work using the negotiated procedure with a prior publication of notice, is permitted in the case when the works involved are carried out purely for the purpose of research, experiment or development, and not to establish commercial viability or to recover research and development costs. The same applies when the total cost cannot be estimated in advance due to the nature of the project or the risks involved.
Negotiated procedure without prior publication of a contract notice
Contracting authorities may award public contracts by negotiated procedure without prior publication of a contract notice in the following cases:
|a.||In the absence of tenders or of appropriate tenders in response to an open or restricted procedure provided that the original terms of the contract are not substantially altered.|
|b.||When the products involved are manufactured purely for the purpose of research, experiment, study or development. This provision does not extend to quantity production to establish commercial viability or to recover research and development costs.|
|c.||When only a particular provider for supply, service or works may perform the contract, for technical or artistic reasons, or for reasons connected with the protection of exclusive rights.|
|d.||When the time limit cannot be met in the open, restricted or negotiated procedures cf. Article 19 for a supply, service or work, brought about be events unforeseeable by the contracting authorities.|
|e.||In the case of additional deliverers which are intended either as a partial replacement of normal supplies or installations or as the extension of existing supplies or installations where a change of supplier would oblige the contracting authority to acquire material having different technical characteristics which would result in incompatibility or disproportionate technical difficulties in operation and maintenance. The length of such contracts as well as that of recurrent contracts may as a general rule, not exceed three years.|
|f.||In the case of an additional work not included in the project initially considered but must, through unforeseen circumstances, be carried out by the same bidder. provided that such work cannot be technically or economically separated from the main contract without great inconvenience to the contracting authorities. The same applies if an additional work is necessary in order to finish an agreed work. The aggregate estimated value of contracts awarded for additional work may not exceed 50% of the amount of the main contract.|
|g.||In the case of new works consisting of the repetition of similar works entrusted to the bidder on the basis of open or restricted procedure. However, this only applies if the tender documents notify that the negotiated procedure might be adopted and provided that three years have not passed since the conclusion of the original contract.|
|h.||In the case of additional services that have, through unforeseen circumstances, become necessary for the performance of the service described therein, on conditions that such services cannot be technically or economically separated from the performance of the original contract without great inconvenience to the contracting authority, or if the additional service is necessary in order to perform the service, where the contract concerned follows a design contest and must, under the rules applying, be awarded to the successful candidate or to one of the successful candidates. In the latter case, all successful candidates shall be invited to participate in the negotiations.|
Negotiated procedure in a design contest
If a negotiation procedure is applied in a design contest in accordance with item i of Article 20, the admission of participants shall not be limited, or, where design contests are restricted to a limited number, the contracting authorities shall lay down clear and non-discriminatory selection criteria. In any event, the number of candidates invited to participate shall be sufficient to ensure genuine competition.
The jury shall be composed exclusively of natural persons who are independent of participants in the contest. Where a particular professional qualification is required from participants in a contest, at least a third of its members must have the same qualification or its equivalent.
The right to participate in a design competition shall not be limited to individuals or legal entities in Icelandic jurisdiction or parts thereof.
Framework agreements shall be made, following an open or restricted procedure.
If a supply, service or work is purchased according to a framework agreement, it shall be regarded as fulfilling the obligation to publish a notice, even though the value of the purchase exceeds the thresholds provided for in Article 12, Paragraph. 1.
A framework agreement may state that contracting entities are not bound to trade solely with parties to the framework agreement on the purchases specified in a agreement. Such variances shall be specified in the tender documents.
Tender documents shall include all information necessary for the bidder to make a tender. The following shall be included in tender documents, as applicable:
|a.||Tender specifications where quantity and other relevant issues are stipulated.|
|b.||The name of the contracting authority and all information concerning communications with the tender supervisor.|
|c.||Presentation of tenders.|
|d.||Listing of tender documents.|
|e.||Time limits and location and timing of tender opening.|
|f.||Delivery time or duration of execution.|
|g.||Duration of tenders.|
|h.||Payments, indexation and insurance, if applicable.|
|i.||Documents to prove financial and technical competencies that the bidder shall provide, or may be required to provide, cf. Articles 30 and 31.|
|j.||Handling of inquiries from prospective bidders.|
|l.||Language or languages in which the tenders shall be submitted.|
|n.||Whether it is permitted to tender for part of the intended procurement.|
|o.||Whether variant offers are unacceptable and the prerequisites for such.|
|p.||Deadline for the purchaser to accept a bid.|
The Minister may by regulation set further rules on the structure and presentation of tender documents.
The tender documents shall include technical specifications for supply , service or work in as much detail as possible. If variant offers are accepted, the minimum requirements for such a tender shall be specified.
Technical specifications shall generally be in accordance with European standards, or the Icelandic standards, which comply with those, a European technical approval, or common technical specifications.
Exceptions may be made to the stipulation in Paragraph 2 in the following instances:
|a.||When standards, European technical approvals, or common technical specifications do not include any provisions for establishing conformity, or technical means do not exist for establishing satisfactorily the conformity of a product with these standards or that there is a lack of technical methods which would render this feasible.|
|b.||When standards, European technical approvals or common technical specifications would oblige the contracting authority to use products or materials incompatible with equipment already in use or would entail disproportionate costs or disproportionate technical difficulties.|
|c.||When the project concerned is of a genuinely innovative nature for which use of existing European standards, European technical approvals or common technical specifications would not be appropriate.|
|d.||When the application of Paragraph 2 would prejudice the application of Council Directive 86/361/EEC of 24 July 1986 on the initial stage of the mutual recognition of type approval for telecommunications terminal equipment, or Council Decision 87/95/EEC of 22 December 1986 on standardisation in the field of information technology and telecommunications (1) OJ No. L 36, 7. 2. 1987, p. 31. (1) or other Community instruments in specific service or product areas.|
In the absence of European standards or European technical approvals or common technical specifications, the technical specifications shall be defined by reference to Icelandic specifications recognised as complying with the basic rules listed in the EEA on technical harmonisation. Icelandic technical specifications may be referred to with regard to the design and method of calculation and execution of works and use of materials. Icelandic standards that have been standards implementing international standards may also be referred to. If this is not possible, references shall be made to other national standards and national technical approvals, and should that not be possible, then to yet any other standards.
Unless it is justified by the subject of the contract, it is prohibited to indicate trademarks, patents, types, or of specific origin or production in the contractual clauses. However, if there is no way to give a sufficiently precise description for the purchaser and bidders, of the subject of the contract with technical specifications, it is authorise provided such a reference is followed by the phrase "or equivalent" or a similar phrase.
A Tender form shall be included in tender documents and it shall be presented in such a manner that all bids are presented in the same way, and may thus be readily compared.
The Minister may, by issuing a regulation, set further rules on the making and presentation of tender forms.
Contract award criteria
The tender documents shall include a description of the criteria for the selection of a contract in as detailed a manner as possible. Such criteria may not refer to other factors than those that may be proved relevant on the basis of materials provided by tenderers, or in another objective manner.
If a contracting authority intends to award the contract on the basis of the most advantageous tender, such criteria shall be specified and listed in order of importance unless it is not possible.
Environmental factors may be considered in the evaluation of the most economically advantageous tender.
If a contracting authority intends to evaluate a tender on the basis of financial efficiency, a variant offer may be allowed, provided such a tender meets the minimum specifications laid down in the tender. If variant offers are not accepted, this shall be stated in the tender documents.
Exclusion of bidders
Any bidder shall be excluded at any stage of a tender who:
|a.||Is bankrupt, or is being wound up, whose arrears are being administered by the court, who has entered into an arrangement with creditors, or has entered into other similar situation.|
|b.||Is the subject of proceedings for a declaration of bankruptcy, for an order for compulsory winding-up or administration by the court or for an arrangement with creditors or has entered into other similar situation.|
|c.||Has been convicted of an offence concerning his professional conduct.|
|d.||Has been guilty of grave professional.|
|e.||Has not fulfilled obligations relating to the payment of social security contributions, pension fund premium, or similar legally statutory payments.|
|f.||Is guilty of serious misrepresentation in supplying or failing to supply the information on financial and technical capacity, cf. Articles 30 and 31.|
When the contracting authority requires of the bidder proof that none of these cases quoted in items a-f of Paragraph 1 applies to him it shall accept as sufficient evidence the production of an extract from a relevant public certificate, wherein it is confirmed that the bidder fulfils these conditions.
It may be requested that the bidder prove his registration in a directory of firms or a comparable registry, according to the rules in his country of residence.
Financial standing of the bidder
The financial standing of the bidder shall be sufficiently secure so that commitments to the contracting authority may be fulfilled.
In general, a tenderer may prove his financial capacity by providing the appropriate statements from bankers, audited books of previous years, information on the revenue of previous years or the share of the respective commodity, service or project in that revenue.
Tender documents shall specify which reference or references mentioned in Paragraph 2 have been chosen and which other references are to be produced. More documents than necessary, with regard to the nature and extent of the proposed purchase, shall not be required.
If for any valid reason, the bidder is unable to provide the references specified in Paragraph 2, he may prove his economic and financial standing by providing other documents.
The technical standing of the bidder shall be sufficiently secure so that commitments to the contracting authority may be fulfilled.
A bidder may prove his technical standing by presenting the following documents:
|a.||Certificates of the discharge of essential contracts for the past three years, in the case of tenders for supplies and services, and for the past five years in the case of work contracts. The certificates shall include contract sums, dates and a statement on the satisfactory discharge of contract.|
|b.||Description of the number of employees, technical equipment, quality control, and facilities for observations and research.|
|c.||Information on the education and professional qualifications of managerial staff and others who will be responsible for the execution of the contract, be they employees of the bidder or not.|
|d.||In the case of supplies: with samples, descriptions or photographs, the authenticity of which must be certified if the contracting authority so requests.|
|e.||In the case of supplies: certificates drawn by official quality control institutes or agencies of recognised competence attesting conformity to certain specifications or standards of products clearly identified by references to specifications or standards.|
|f.||In the case of complex products or services, or products or services required for a special purpose, with a public certificate of the manufacturing, research facilities and quality control measures.|
Tender documents shall specify which reference or references mentioned in Paragraph 2 have been chosen and which other references are to be produced. More documents than necessary, with regard to the nature and extent of the proposed purchase, shall not be required.
The legitimate interests of the bidders as regards the protection of their technical or trade secrets shall be taken into consideration.
Documentation and additional information
The contracting authorities may invite the bidder to supplement the presented documents, cf. Articles 28-31 or to clarify those at any stage of the tender.
Notification of tender
Open procedures must be advertised in a conspicuous manner, so that all possible tenderers for the supply, service or work in question shall have the opportunity to submit a tender. The notice shall provide sufficient information for providers of the supply, service or work in question to decide whether they intend to participate in the tender or pre-qualification.
Concurrent to or following such publication of a notice, a contracting authority may encourage specific parties to participate in the pre-qualification or the tendering process. Such parties may not, however, be provided with information other than that indicated in the notification of tender.
Restricted and negotiated procedures
In restricted and negotiated procedures, pre-qualification shall be applied to select those parties invited to submit tenders.
In the case of restricted procedures, or negotiated procedures as provided for in Article 19, pre-qualification shall be advertised in a conspicuous manner with the intention of providing all parties who can provide the supply, service or work in question, the opportunity of participating in the pre-qualification.
In the case of restricted procedures, the number of participants selected to be invited to tender may be limited. As a rule, participants shall not be fewer than five or more than twenty in number. The number of participants selected must, in all cases, be sufficient to ensure genuine competition in the procedure. If the number of participants to be selected in pre-qualification is to be limited, mention must be made of such in the tender documents.
In the case of negotiated procedures as provided for in Article 19, the number of participants to be selected in pre-qualification to submit tenders shall not be fewer than three, as long as the number of participants is sufficient.
In restricted or negotiated procedures, the parties selected for participation by a pre-qualification shall be invited to submit a tender in a notification sent to all of them concurrently. The notification shall be accompanied by tender documents and accompanying documentation, where applicable.
Time limit for submission of tenders
The tendering time shall be sufficiently long to allow tenderers to prepare their tenders.
Time limit in open procedures
The time limit for submission of tenders in open procedures shall be at least 15 calendar days. This period shall be calculated from the day following the notice of the tender up to and including the opening day. All calendar days are included.
Time limit in restricted or negotiated procedures
The time limit for submitting requests to participate in pre-qualification for restricted procedures or negotiated procedures, as provided for in Article 19, shall be at least 15 calendar days. This period shall be calculated from the day following the notice of the tender up to and including the opening day.
Parties selected in pre-qualification shall be given at least 10 calendar days to submit tenders. The time limit shall be calculated from the date that tender documents are sent. In other respects the same rules shall apply on the determination of the time limit as apply to open procedures.
If it is necessary to accelerate the tendering process for reasons beyond the control of the contracting authority, the time limits specified in Articles 36, 37 and 41 may be waived. However, the time limit for submitting tenders may never be shorter than 7 calendar days from the publication of the notice.
Delivery of documents
Tender documents must be ready for delivery within three days of the publication of the notice.
If it is impossible for a tenderer to submit a tender without inspecting the site, or if on-site inspection is offered, the time limit for submitting tenders shall be extended to include a reasonable time for on-site inspection if this is requested by tenderers.
Queries and comments during the tender period
If more detailed documentation or further explanations concerning tender documents are desired, a written request must be received by the tender co-ordinator no later than 7 calendar days before the expiry of the time limit.
If the purchaser deems reason to provide new documents or respond to a query as provided for in the first Paragraph, the documents or query, together with response to this, must be sent to all parties who have requested or whom have been sent tender documents. The tenderers must receive new documents or explanations no later than 4 calendar days prior to the expiry of the time limit.
All comments on tenders and their implementation must be made in writing.
Revoking of tenders
A tenderer may revoke his tender prior to opening, provided this is done in writing or by other equally secure means.
Postponement of opening of tenders
If the opening of tenders has to be postponed this must be done with at least 4 calendar days' notice. If less than 4 days remain until the opening, postponement may not be announced, but instead an opening meeting must be held and the names of parties submitting tenders shall be recorded without opening them. Only those parties who submitted tenders shall be invited to participate further.
Delivery of tenders
Tenders shall be submitted in a sealed envelope; the name and address of the tenderer must be indicated on the envelope, together with the name of the tender and number, where applicable.
If tenders are sent by mail or telefax, the tenderer is responsible for ensuring that they are delivered to the proper destination before the tender opening.
The total sum amount only may be submitted, if unit prices and other required documents accompany it in a sealed envelope or have verifiably been mailed the day before tenders are opened. A tenderer may subsequently request that the unit prices not be examined unless his tender is under consideration.
Submission of variants
If a variant is submitted, special mention of such shall be made on the tender application form. Variants must be accompanied by a clear and comprehensive description as to how the tender deviates from the technical description of the tender documents.
Tenders from more than one party
Several parties may jointly submit a tender, in which case they shall then be considered to bear responsibility for fulfilling the contract in solidum.
In the case of joint tenders by several parties, the documents referred to in Chapter VI must be submitted for all tenderers.
A contracting authority may stipulate in tender documents that one tenderer must represent the others in executing the contract and fulfilling all commitments to the purchaser.
Opening of tenders
Tenderers may be present when tenders are opened and are entitled to have the following information read aloud as it is indicated in the tenders:
|a.||name of the tenderer;|
|b.||total amount of the tender;|
|c.||terms of payment;|
|d.||terms of delivery;|
|e.||nature of variants.|
Tenders received too late must be returned to the tenderers unopened together with an explanation of the reasons for their return.
Format of tenders and other documents
Tenders must be made in writing and delivered to the purchaser or his co-ordinator or sent by mail.
A contracting authority may decide that tenders may be submitted in other than written form, if it can be ensured that unauthorised parties do not learn of the contents of the tender and if its reception and reception time can be verified.
A purchaser may receive and respond to queries by tenderers as referred to in Article 41 by means other than written, for example, by fax, e-mail, telegram or other equally secure manner.
Selection of tender
Tenders to be considered
In selecting tenderers only valid tenders shall be considered.
Evaluation of the most advantageous tender
The basis for selecting tenderers shall be the most advantageous tender. The most advantageous tender is the one which has the lowest price or the tender which best fulfils the needs of the contracting authority according to the criteria laid down in the tender documents, cf. Article 26.
Tenders may not be evaluated against criteria other than those indicated in the tender documents, cf. Article 26.
More than one tender may be accepted if the procurement is divided into a number of independent parts in the tender documents.
Abnormally low tenders
If a tender appears to be abnormally low in relation to the real value of what is to be purchased, the contracting authority shall, before it may reject such tender, request further information from the tenderer on the significant points and verify this. If a purchaser rejects a tenderer on the above mentioned basis he must notify the tenderer of those points which he cannot accept.
If the tender documents provide for contract award at the lowest price tendered, the contracting authority must communicate the rejection of tenders, which are considered abnormally low.
Information, which a purchaser receives in accordance with this Article, shall be treated as confidential.
Rejection of a tender
The contracting authority shall be deemed to have rejected a tender if he has concluded a contract with another party, if the validity of the tender has expired without an extension having been requested, or if all tenders have been formally rejected.
Once a contracting authority has rejected a tender the tenderer may request that the tender and all accompanying documents be returned.
A contracting authority may not utilise ideas or a tender from a tenderer in any manner after rejecting it.
Reasons for rejection of a tender or other decisions
A contracting authority must notify the tenderers of the results of a tender or pre-qualification as promptly as possible. If it has been decided to reject all tenders or to arrange for a new tender, the reasons for such shall accompany such notification. The notification shall be made in writing if requested.
The reasons for the rejection of a tender by a specific tenderer must be given at the request of that tenderer. The reasons shall be available no later than 15 days after a request for such was received by the contracting authority or the tender co-ordinator. The reasons shall not, however, provide information which could impede law enforcement or be otherwise contrary to public interest, or which could prejudice the legitimate business interests of individual enterprises or competition among them.
Acceptance of a tender
A tender must be accepted in writing within the time of its validity, which constitutes a binding agreement based on the tender documents and the tenderer's offer. A special contract shall, however, be concluded for the purchase of supplies, services or work based on the tender where appropriate or where one of the contracting parties so requests.
Once a contract as referred to in the first Paragraph has been awarded this shall be notified to all tenderers without delay.
A contractor or sub-contractor may not conclude a contract for sub-contracting with individual workers or groups of workers where an employment relationship is involved and such is appropriate with regard to normal practice and the nature of the situation.
Public procurement in the European Economic Area
Scope of this Title
The provisions of this Title shall apply to public procurement above the threshold amounts in accordance with Council Directive 92/50/EEC of 18 June 1992 which the Minister shall publish in a regulation, relating to the co-ordination of procedures for the award of public service contracts, Council Directive 93/36/EEC of 14 June 1993, co-ordinating procedures for the award of public supply contracts and Council Directive 93/37/EEC of 14 June 1993, co-ordinating procedures for the award of public work contracts, as these Directives may have subsequently been amended and incorporated into the Agreement on a European Economic Area. Other threshold amounts of importance for the implementation of public procurement in the European Economic Area, such as threshold amounts for total procurement, shall also be published in a regulation.
In a regulation as referred to in the first Paragraph, detailed rules may also be laid down on public procurement in the European Economic Area to comply with the provisions of the Directives there referred to.
Implementation of procurement in the European Economic Area
For public procurement above the threshold amounts of Article 56 the rules of Title 2 must be complied with, unless otherwise entailed by provisions in this Chapter.
Determination of periods, dates and time limits shall comply with the provisions of Council Regulation 1182/71/EEC/EURATOM of 3 June 1971, determining the rules applicable to periods, dates and time limits.
Contracts for the design and construction of public housing scheme
In the case of contracts relating to the design and construction of a public housing scheme whose size and complexity, and the estimated duration of the work involved, require that planning be based from the outset on close collaboration within a team comprising representatives of the contracting authorities, experts and the contractor to be responsible for carrying out the works, a special award procedure may be adopted for selecting the contractor most suitable for integration into the team. In other respects, the rules on restricted procedures shall apply to such a tender.
Notification of total procurement
Contracting authorities shall publish, as early as possible during each financial year, an estimate of total procurement of supplies, services or work, as listed in Annex A, for the ensuing 12 months, if the total amount of procurement reaches the threshold amounts for total procurement published by the Minister in a regulation as provided for in the first Paragraph of Article 56.
Notification of individual procurements
A contracting authority intending to tender public procurement in excess of the threshold amounts published by the Minister in a regulation as provided for in Article 56 shall indicate this intention at this time. The same shall apply in the case of a design competition or the awarding of a public work concession contract. Planned procurement of services listed in Annex I B need not, however, be notified.
Notification of contract
When a contract has been concluded as the result of a tender in the European Economic Area, notification must be made of the results of the tender. The same shall apply to the results of a design contest.
Derogation may be made from the first Paragraph if the publication of a notification could impede law enforcement or otherwise be contrary to public interest, would prejudice the legitimate commercial interests of individual enterprises, public or private, or restrict competition.
In the cases of services listed in Annex I B, the contracting authority shall decide in a notification on the contract whether such notification shall be published in accordance with Article 62.
Publication of notifications
Notifications must be sent by secure means and as rapidly as possible to the Office for Official Publications of the European Communities, to be published in the Official Journal of the European Union and databases. A notification shall as a rule not exceed 650 words in length.
A notification as referred to in Article 59 must be sent as early as possible each financial year.
A notification as referred to in Article 61 must be sent at the latest 48 days following the award of the contract in question or the conclusion of a design contest.
Other notifications on the tender may not be published until the corresponding notification has been sent to the Office for Official Publications of the EU. Similarly, more detailed information than is stated in the latter notification must not be included in other notifications.
Form and content of notifications
The Minister may, in a regulation, prescribe the form and contents of notifications as referred to in Articles 59 to 62.
Time limits in open procedures
In open procedures the time limit for submitting tenders shall not be less than 52 days from the date of dispatch of the notification.
Should a contracting authority have sent notification of total procurement, as provided for in Article 59, in a satisfactory manner no later than 52 days prior to sending notification of individual procurement and no earlier than 12 months prior to the same day, the time limit for submitting tenders may be shortened, if the notification of total procurement contained comparable information on the procurement as is subsequently provided in the notification of individual procurements. The time limit shall as a rule be no shorter than 36 days and never shorter than 22 days.
Provided they have been requested in good time, the tender documents must be sent out within six days of receiving a request for such.
Additional information as provided for in Article 41 must be sent to tenderers no later than six days before the expiry of the time limit for submitting tenders, provided such information has been requested in good time. In the case of services, however, this time limit shall be four days.
Where the tender documents or additional information is too extensive for it to be supplied within the time limits laid down in the second and third Paragraph, or if an on-site visit is necessary, the time limit shall be extended in accordance with any delays this may result in.
The time limit to apply for participation in a public work concession contract shall not be less than 52 days from the date of dispatch of the notice.
Time limits in restricted or negotiated procedures
In restricted or negotiated procedures the time limit for receipt of requests to participate shall not be less than 37 days from the date of dispatch of the notification.
The time limit for submitting a tender in restricted procedures shall not be less than 40 days.
Should a contracting authority have sent notification of total procurement, as provided for in Article 59, in a satisfactory manner no later than 52 days prior to sending notification of individual procurement and no earlier than 12 months prior to the same day, the time limit for submitting tenders may generally be shortened, if the notification of total procurement contained comparable information on the procurement as is subsequently provided in the notification of individual procurements. The time limit shall not be less than 26 days.
Where the tender documents or additional information is too extensive for it to be supplied within the time limits laid down in the first and second Paragraph, or if an on-site visit is necessary, the time limit shall be extended in accordance with any delays which may result.
If the time limit for submitting tenders proves to be too short in awarding urgent contracts, the time limit for tenderers to request to participate and submit a tender may be shortened. The time limit for sending a request to participate may not, however, be less than 15 days from the dispatch of the notification and the time limit for submission of tender may not be less than 10 days from the dispatch of the notification.
Authorisation for the advertisement of tenders below the threshold amounts
A contracting authority may publish a notice in the Official Journal of the European Union for public procurement which is below the threshold amounts of Article 56.
Reports, EFTA Surveillance Authority, etc.
Reports on public procurement
A contracting authority must send the Ministry of Finance a report on contracts he has concluded. The Ministry of Finance shall forward the report to the EFTA Surveillance Authority upon request.
A contracting authority must, no later than 1 February each year, send the Ministry of Finance a summary of the judgements pronounced concerning its infringement of the provisions of this Act and which concern procurement which must be tendered in the European Economic Area.
Details of the information to be included in reports as provided for in this Article may be laid down in a regulation.
Examination by the EFTA Surveillance Authority
If the EFTA Surveillance Authority deems there to be a clear violation of the rules of the European Economic Area concerning public procurement it can initiate an examination of the presumed violation. Within 14 days of notification by the EFTA Surveillance Authority of the reasons for its contention that a clear violation has been committed, a contracting authority must send the Ministry of Finance confirmation that the violation has been corrected, an explanation of the reasons why no remedy has been made, or notification that the tender procedures and awarding of the contract have been temporarily suspended.
The Minister of Finance may suspend tender procedures or the awarding of a contract as a result of notification from the EFTA Surveillance Authority as provided for in this Article.
Public administration, handling of complaints, etc.
Supervision of public procurement and activities of a procurement agency
Supervision of public procurement
Public procurement is under the jurisdiction of the Minister of Finance who shall be responsible for the implementation of this Act.
State Trading Centre
The State shall operate a procurement agency, the State Trading Centre (Ríkiskaup). The Centre shall handle procurement for state institutions and state corporations, examine joint needs for supplies and services and endeavour to co-ordinate procurement for state needs. The Centre shall also provide assistance and instructions concerning tenders and procurement as necessary. Should disagreement arise concerning a decision on selection of tenders between the State Trading Centre, as tender co-ordinator, and a contracting authority, the disagreement may be referred to the Ministry of Finance.
The Centre shall dispose of state property, which is no longer needed in accordance with the specific decision of the Minister of Finance.
The State Trading Centre shall conclude framework agreements on behalf of the state and handle tenders by state institutions for public procurement above the threshold amounts provided for in Article 12 of the Act. The Minister of Finance may, however, authorise individual state institutions to handle their own procurement above the threshold amounts.
Operating objectives of the State Trading Centre
The State Trading Centre shall endeavour to ensure cost-efficiency in state procurement. It shall achieve this objective by:
|a.||developing a quality service institution in the field of public procurement, with knowledgeable and experienced personnel in the field of procurement for state institutions;|
|b.||developing procedures for tendering and procurement which ensure equal treatment of tenderers and effective competition;|
|c.||increasing the productivity of and simplifying public procurement with a modern procurement system, tenders and co-ordinated procurement;|
|d.||facilitating commercial connections between suppliers and state institutions;|
|e.||sharing its knowledge and experience with state institutions, in order to optimally fulfil the commercial needs of the state.|
Direction of the State Trading Centre
The Minister of Finance shall appoint the Board of the State Trading Centre for a three-year term; it shall consist of three members and three alternates. The role of the Board is to formulate policy on main areas of emphasis, tasks and working methods of the institution in consultation with the director.
Director of the State Trading Centre
The Minister of Finance shall appoint a director for a five-year term upon receiving the opinion of the Board. The director shall supervise the day-to-day operations of the State Trading Centre and shall be responsible for the Centre's financial dealings and accounts. The director shall make proposals concerning the budget of the Centre, and shall submit these to the Board for consideration. The director shall engage personnel in consultation with the Board of the Centre.
Tariffs of the State Trading Centre
The State Trading Centre shall sell its services to state institutions and state corporations at cost price, plus remuneration as provided for in a tariff set by the Minister of Finance in accordance with proposals from the Centre's Board. The tariff shall be aimed at providing the Agency with sufficient income to cover its operations.
Tender Complaints Committee
The role and composition of the Tender Complaints Committee
The Tender Complaints Committee shall be comprised of three persons appointed by the Minister for a four-year term. Alternates shall be appointed in the same manner. The chairman of the Committee and alternate must fulfil the legal requirements made of district court judges. Other members of the Committee must have comprehensive commercial knowledge and experience. Committee members must be independent of interests of the state or other public authorities.
The role of the Tender Complaints Committee is to resolve promptly and impartially complaints by individuals and legal entities concerning claimed violations of this Act and rules adopted pursuant to it.
The Committee shall work independently. Its rulings and decisions as provided for in this Act may not be referred to other public authorities.
At the request of the Ministry of Finance or a relevant contracting authority, the Tender Complaints Committee may deliver an advisory opinion on particular procurement even in the absence of any complaint.
The Committee may summon experts to provide advice and assistance if it feels in need of such. These parties shall work with the Complaints Committee as determined in more detail by the chairman or vice-chairman, who will determine their remuneration for such work.
Right of referral
Complaints may be referred to the Committee by individuals and legal entities who enjoy rights as provided for by this Act and have legitimate interests in the resolution of the complaint.
A complainant may transfer the right to lodge a complaint to an association or organisation which safeguards his interests.
Time limit for lodging a complaint
A complaint must be lodged in writing with the Tender Complaints Committee within four weeks of the complainant having learned, or having been able to learn, of the decision, action or failure to act which he considers a violation of his rights.
The complaint shall provide information on the complainant, the party against which the complaint is directed and the decision, action or failure to act which is the grounds for the complaint. A complaint must state the claims of the complainant together with a brief description of the circumstances of the case, developments and reasoning. Claims advanced by a complainant must concern the remedies available to the Committee as provided for in Articles 79 and 80.
If a complaint does not fulfil the conditions of the second Paragraph, the Complaints Committee shall request that the complainant remedy the deficiencies within a reasonable time limit. If the complainant fails to do so the Complaints Committee shall dismiss the complaint.
The Complaints Committee may as a rule, invite a complainant to submit further documentation or information to explain a question if it feels the question is not sufficiently clear and may grant him a certain time limit for so doing.
Processing of complaints and gathering of documentation
Should a complaint be acceptable for substantial handling, as provided for in Article 78, the Committee shall grant the party against which the complaint is directed an opportunity to express himself on the substance of the complaint. The complainant shall as a rule be given a brief time limit in which to express himself on the comments from the respondent. The proceedings shall be carried out in writing, but the Committee may also grant the parties the opportunity to present arguments orally, if the question is unusually complex or comprehensive.
The Committee may demand that the parties to the case submit any documentation or other information concerning the question. If a complainant fails to respond to such a demand his complaint may be dismissed immediately. If the party against whom a complaint is directed fails to respond to such a demand, his disregard may serve to his disadvantage in resolution of the question.
A majority vote by the Committee members shall determine the outcome of a question. The conclusion of the minority, where such exists, shall be included in the committee's opinion. The chairman or vice-chairman shall direct the work of the committee. When Committee members are not unanimous in their conclusions, the majority shall determine the outcome of a question. If the Committee is divided into three in its conclusion, or the conclusion cannot be determined by a majority vote, the vote of the chairman shall determine the outcome.
The Complaints Committee must deliver its ruling on a complaint as rapidly as possible, and no later than one month after it receives the documents referred to in Articles 78 and 79.
Handling of questions shall in other respects comply with the Public Administration Act, No. 37/1993.
Temporary suspension of contract procedures
If the Committee is of the opinion that there is considerable likelihood of a violation against this Act, or rules adopted pursuant to it, in a certain procurement it may, at the demand of a complainant, suspend the tender or awarding of the contract until a final decision has been reached on the complaint.
The party against whom the complaint is directed shall as a rule be given a brief time limit for expressing an opinion concerning possible temporary suspension of the tender or awarding of a contract. Derogation may be made from this provision in the case of a clear and obvious violation of this Act or rules adopted pursuant to it.
A party involved may demand that the Committee give written grounds for a decision as provided for in this Article if such grounds did not accompany the decision when notice of it was given.
Remedies available to the Tender Complaints Committee
The Committee may with a ruling invalidate or alter a decision by the contracting authority for public procurement, cf. however Article 83. The Committee may instruct the contracting authority to tender certain procurement, advertise a tender once again or alter a tender notice, description of tender or other aspect of tender documents.
The Committee may express its opinion on the liability of the contracting authority for damages towards the complainant, but shall not express itself concerning the amount of damages.
The Committee may decide that the party against whom a complaint is directed shall pay the complainant the cost of lodging the complaint. If a complaint is clearly unjustified or lodged for the purpose of delaying the implementation of public procurement the Committee may rule that the complainant pay legal costs of the case, which shall accrue to the national treasury.
If a ruling of the Committee as provided for in the first Paragraph is not complied with, it may levy per diem fines on the party at which the ruling is directed. Fines may amount to up to ISK 500,000 for each day which elapses without compliance with the Committee's ruling. If a ruling is referred to a court the per diem fines shall not commence until final judgement is pronounced.
Per diem fines as provided for in the fourth Paragraph shall accrue to the national treasury. Per diem fines and a ruling on legal costs, as provided for in the third Paragraph, are enforceable by execution without prior court judgement.
Procedural rules for the Tender Complaints Committee
The Tender Complaints Committee may adopt detailed rules, which must be approved by the Minister, on the submission of documents, procedures before the Committee and publication of its rulings.
Validity of contracts and damages
Invalidation of contracts
Once a contract has been concluded it shall not be invali0dated or altered, even though the decision of the purchaser on the tendering or awarding of the contract may have been contrary to law.
Should a contracting authority conclude a contract despite the suspension of the awarding of the contract, as provided for in Article 80, then such contract may be invalidated and the remedies listed in Article 81 may be applied.
In other respects the validity of contracts concluded under this Act shall be subject to general rules.
Liability for damages
A contracting authority is liable for compensation for damages to a tenderer resulting from a violation of this Act or rules adopted pursuant to it. A tenderer need only prove that he had a realistic possibility of being selected by the contracting authority and that this possibility has been prejudiced by the violation. The amount of damages shall be based on the cost of preparing a tender and participating in the tender procedure.
Damages resulting from violations of this Act and rules adopted pursuant to it shall otherwise be subject to general rules.
Entry into force, repealed Acts, etc.
The Minister of Finance may issue a regulation on the detailed implementation of this Act.
This Act shall enter into force at once.
Upon the entry into force of this Act, Act No. 52/1987, on Public Procurement, as subsequently amended, and Regulation No. 302/1996, on procurement by the state, shall be repealed.
Services as provided for in Article 8 of Council Directive 92/50/EEC.
|(1)||Except for rail transport services covered by Category 18.|
|(2)||Except voice telephony, telex, radiotelephony, paging and satellite services.|
|(3)||Except contracts for financial services in connection with the issue, sale, purchase or transfer of securities or other financial instruments, and central bank services.|
|(4)||Except research contracts other than those where the cost of the service provided is borne wholly by public parties who hold exclusive right to enjoy benefits from it in the conduct of their own affairs.|
|(5)||Except arbitration and conciliation services.|
Services as provided for in Article 9 of Council Directive 92/50/EEC.
List of professional activities as set out in the general industrial classification of economic activities within the European Communities (NACE), cf. Annex II to Council Directive 93/37/EEC.