1. AMENDMENTS TO THE CERN FINANCIAL RULES CERN/FC/6129/RA Anders Unnervik ILO Forum – 26 September 2017

2. History Dec 2015, FC Discussion about contract splitting
Mar 2016, FC The Management proposed an internal review in order to reduce the number of poorly balanced Member States
Dec 2016, ILO Forum Discussion about various proposals to be presented to the FC as a White Paper
Mar 2017, FC White Paper presented and discussed, Delegations invited to comment on the proposed amendments before 15 April 2017
Jun 2017, Council, FC Amendments to the Financial Rules for approval

3. Proposed changes
Simplifying and clarifying some rules, e.g. the way the industrial return is calculated;
Introduction of the possibility to reject abnormally low bids;
Introduction of a new category of purchases – Utilities- supplies and services necessarily originating in France or Switzerland for compelling technical, geographical or legal reasons;
Contract splitting between bidders offering supplies or services originating in poorly balanced Member States;
Increase the threshold for “very poorly balanced” Member States from 0.3 to 0.4 allowing more often limited tendering among firms from very poorly balanced Member States.

4. Abnormally low bids
Rejection of abnormally low bids only after having followed a process which is transparent and give the bidder concerned an opportunity to explain a very low price.
Only in case the bidder’s explanations indicate:
non-compliance with the requirements of the price enquiry or the invitation to tender;
that the price is not economically viable, or
any other substantial risk to the proper performance of the contract,
then CERN shall reject the bid.

5. Utilities
Supplies and services necessarily originating in France or Switzerland for compelling technical, geographical or legal reasons. A new Overall return coefficient will be published in the annual procurement report. The coefficient will be based on all purchases of supplies and services, including purchases of utilities (but excluding purchases funded by non-Member States and individual purchases for an amount below 1000 CHF). A list of all utility orders and contracts will be published in the annual procurement report, showing the type of supply/service, name of contractor, country or origin and amount.

6. Utilities, examples, 2016 Supplier Order/contract Supply Amount, 2016
CoO
EDF - ELECTRICITE DE FRANCE
E123
Electricity
48,591,056 FR
RTE
E124
transport of electricity
4,340,756
ALPIQ
E127 - CH
SIG - SERVICES INDUSTRIELS DE GENEVE
E106
350,000
E047
Gas for heating
3,359,903
E059
Water
2,307,990 CD
Used water treatment
490,000
SOGEDO
Div orders
Water SPS and LHC sites
91,136
E046
Waste treatment
358,469
ANDRA
B1431
Elimination of radioactive waste
739,305
PSI - PAUL SHERRER INSTITUTE
KE1684
SWISSCOM
X128
Mobile telephony services
733,539
LA POSTE SUISSE
KE2090
postal charges
90,389
LA POSTE FRANCE
KE2377
84,032
VAUDOISE GENERALE ASSURANCES KE
Vehicle insurance
536,753
GRUNDERCO
B1419
Maintenance and repair of heavy vehicles
150,502
TOTAL FR (CHF)
53,846,285
TOTAL CH (CHF)
8,377,545

7. Contract splitting
CERN will give priority to bidders offering supplies or services originating in a poorly balanced Member State in case of splitting, provided their bids fall within 20% of the lowest bid.

8. Contract splitting, case 1
Lowest bid from a PB MS, another bid from a PB MS falls within 20% of the lowest bid
bidder from PB MS aligns contracts placed with the 2 lowest bids from PB MS
Bid (CHF)
<20%
The animation is perfect. Little detail can the red bid move to the level of the green one and not below?
It’s difficult – I tried to adjust the best I could – what do you think now?
Well balanced MS
Poorly balanced MS
Contracts

9. Contract splitting, case 2
Lowest bid from a WB MS and two bids from PB MS fall within 20% of the lowest bid
Both bidders from PB MS align contracts placed with bids from PB MS
Bid (CHF)
<20%
The animation is perfect. Little detail can the red bid move to the level of the green one and not below?
It’s difficult – I tried to adjust the best I could – what do you think now?
Well balanced MS
Poorly balanced MS
Contracts

10. Contract splitting, case 3
Lowest bid from a WB MS and only one bid from PB MS falls within 20% of the lowest bid
Lowest bidder from PB MS align contracts placed with the lowest bid and the bid from PB MS
Bid (CHF)
<20%
The animation is perfect. Little detail can the red bid move to the level of the green one and not below?
It’s difficult – I tried to adjust the best I could – what do you think now?
Well balanced MS
Poorly balanced MS
Contracts

11. Thank you for your attention!