1. Page 1 Assembly and Installation Information Day – 21 st May 2015 © 2015, ITER Organization ITER_D_RDUX69Page 1 Tender Processes and Rules Françoise Flament 21 May 2015 Assembly and Installation Industry Information Day Disclaimer: The views and opinions expressed herein do not necessarily reflect those of the ITER Organization

2. Page 2 Assembly and Installation Information Day – 21 st May 2015 © 2015, ITER Organization ITER_D_RDUX69Page 2 Table of Contents: 1.General – ITER Specifics 2.Overview of the Procurement Process 3.Overall Schedule 4.Contract Award and Contracting Rules

3. Page 3 Assembly and Installation Information Day – 21 st May 2015 © 2015, ITER Organization ITER_D_RDUX69Page 3 ITER Council Procurement Arrangements In Kind Contribution Contractors Overall ITER Project Organization In Kind Contribution 7 Members: -China -European Union -India -Japan -Korea -Russia -United States Management Advisory Committee (MAC) Scientific &Technical Advisory Committee (STAC) IO-Domestic Agencies Contractors IO-CT In Cash Contribution 1. General – ITER Specifics

4. Page 4 Assembly and Installation Information Day – 21 st May 2015 © 2015, ITER Organization ITER_D_RDUX69Page 4 In Kind Procurement Value / Sharing per DA As of today, 83% of the Procurement are In-kind contributions from DAs 1. General – ITER Specifics

5. Page 5 Assembly and Installation Information Day – 21 st May 2015 © 2015, ITER Organization ITER_D_RDUX69Page 5 China: magnet conductor, correction coils, feeders and supports, blankets, remote handling transfer casks, gas injection system, electrical switchgear, part of diagnostics. India: in wall shielding, cryostat, cryolines and cryodistribution, heat rejection system, ion cyclotron and startup electron cyclotron heating power supplies, diagnostic neutral beam, part of diagnostics. Japan: half the TF coils, most of the TF coil structure, part of the TF and all the CS conductors, part of the first wall, divertor outer target, blanket remote handling equipment, atmosphere detritiation (together with the IO-CT), equatorial electron cyclotron launchers and power supplies, neutral beam components, part of diagnostics. Korea: part of conductor strands, part of the vessel and vessel ports, blankets, assembly tooling, thermal shield, tritium storage, part of the power supplies, some diagnostics. In-kind Contributions Sharing 1. General – ITER Specifics

6. Page 6 Assembly and Installation Information Day – 21 st May 2015 © 2015, ITER Organization ITER_D_RDUX69Page 6 Russian Federation: PF coils 6 and some PF and TF coil conductor, part of vacuum vessel ports, blankets and connectors, divertor dome and testing, electrical switchgear, part of klystron tubes, part of plasma diagnostics USA: wind CS coils, part of TF conductor, part of blankets, port limiters, part of the cooling system, part of the vacuum pumping and fuelling system, tokamak exhaust processing, part of the steady power supplies, RF transmission lines, part of plasma diagnostics. Europe: includes sharing in most of the above procurements, and all the buildings. In-kind Contributions Sharing 1. General – ITER Specifics

7. Page 7 Assembly and Installation Information Day – 21 st May 2015 © 2015, ITER Organization ITER_D_RDUX69Page 7 In-cash contribution to the Project IO-CT: magnet feeder sensors, diagnostics first wall, hot cell maintenance equipment, on-site assembly of the tritium, atmosphere detritiation system, vacuum, heating, cooling and cryoplant systems, control and data acquisition, part of plasma diagnostics, and assembly operations and tooling. IO-CT and DAs joint procurement packages: PLCs, cubicles, port plugs, all metal valves, elastomer valves, cables, pipes, etc… 1. General – ITER Specifics

8. Page 8 Assembly and Installation Information Day – 21 st May 2015 © 2015, ITER Organization ITER_D_RDUX69Page 8 Nuclear safety and licensing requirements ITER is a Nuclear facility (Installation Nuclear de Base #174) for which the IO is the Nuclear Operator: French nuclear regulation applies, in particular the Order dated 7th February 2012 concerning nuclear facilities. The Order applies to all contractors and sub-contractors dealing with structures, systems, components and activities in relation with nuclear safety requirements. Evidence of compliance with the regulation must be provided to the IO and French Safety Authorities. Technical specifications will include both the nuclear regulatory framework and the nuclear safety requirements. 1. General – ITER Specifics

9. Page 9 Assembly and Installation Information Day – 21 st May 2015 © 2015, ITER Organization ITER_D_RDUX69Page 9 Table of Contents: 1.General – ITER Specifics 2.Overview of the Procurement Process 3.Overall Schedule 4.Contract Award and Contracting Rules

10. Page 10 Assembly and Installation Information Day – 21 st May 2015 © 2015, ITER Organization ITER_D_RDUX69Page 10 Common guidelines for IO-CT procedures − Fairness, integrity and transparency, − Competition, − Economy and effectiveness, − Best value for the ITER Project either based on best value for money, or lowest technically compliant offer. ITER Project Management Advisory Committee to ITER Council approval thresholds − > 5 000kEur for works, supply or service contracts, − > 2 500KEur for framework contracts − In between two MAC meetings (every 6 months), approval could be sought through written procedure. IO-CT Procurement Procedures Principles 2. Overview of the Procurement Process

11. Page 11 Assembly and Installation Information Day – 21 st May 2015 © 2015, ITER Organization ITER_D_RDUX69Page 11 Steps of IO-CT Call for Tenders (1/3) First Step: Call for Nomination −The IO-CT formally invites the Domestic Agencies to nominate companies that are able to provide required supplies, services or works. Second Step: Pre-qualification −The IO-CT ensures that offers are sought only from companies who have the requested knowledge, experience, financial capabilities and resources to perform the work at the highest satisfactorily level in line with the technical requirements. −The aim of the pre-qualification is to establish a list of qualified companies based on a set of selection criteria as described in the pre-qualification questionnaire. −Pre-qualification includes: a summary of the technical specifications, the procurement schedule, selection criteria, the candidate information form, and various templates in order for the candidate to present technical and financial capabilities, declaration of honour form, QA and safety questionnaires, and any relevant information. 2. Overview of the Procurement Process

12. Page 12 Assembly and Installation Information Day – 21 st May 2015 © 2015, ITER Organization ITER_D_RDUX69Page 12 Third step: Call for Tender –The Instructions to Tenderer (ITT) package is sent to all pre-qualified companies/consortia. –It includes the following documents: Instructions to Tenderers (ITTs), describing: -IO Conditions of Tendering (special and general), -Commercial requirements, -Price breakdown, -Payment schedule, -Risk Register, -Schedule, -Contract management principles, -Award criteria to be used for assessing the technical and financial offers. Detailed technical specifications Draft contract (Special Conditions and General conditions) Steps of IO-CT Call for Tenders (2/3) 2. Overview of the Procurement Process

13. Page 13 Assembly and Installation Information Day – 21 st May 2015 © 2015, ITER Organization ITER_D_RDUX69Page 13 Tenderers Conference –Some weeks after the Call for Tender package is launched, IO-CT will organize Tenderers Conference presenting the ITTs, contractual and technical requirements. Submission and Receipt of Tenders –The Tenderers shall strictly follow the provisions given in the Instructions to Tenderers (ITTs). –A two-envelope procedure is used whereby the technical and financial tenders are submitted in separate sealed envelopes, with the requested information mentioned on the envelopes. –Tenders shall arrive at ITER- HQ on time (local time at ITER site). Late Tenders are rejected. Changes in the composition of a consortium –Are not allowed, except in case of pre-qualified consortia/companies propose to group together. But this is subject to IO-CT authorization. Steps of IO-CT Call for Tenders (3/3) 2. Overview of the Procurement Process

14. Page 14 Assembly and Installation Information Day – 21 st May 2015 © 2015, ITER Organization ITER_D_RDUX69Page 14 Communication −Communication with the IO is not authorized during the procurement process, except with the Procurement Officer in charge. Clarifications −The Tenderers are authorized to request clarification through written correspondence. −Answers will be equally and anonymously distributed to all Tenderers. Oral presentations of the technical offers: −The Evaluation Committee may require a presentation from the companies or consortia in order to fully understand the technical aspects of the offers. −Financial data are not part of this presentation. −All members of a Consortium shall attend the presentation. Exchanges During the Process 2. Overview of the Procurement Process

15. Page 15 Assembly and Installation Information Day – 21 st May 2015 © 2015, ITER Organization ITER_D_RDUX69Page 15 Technical evaluation −Determines whether each technical offer meets all technical requirements and specifications, −Grids are filled in by each voting member for each offer. They include the ranking and justification based on detailed strengths and weaknesses, −The technical evaluation will result in a technical scoring, −If a minimum threshold for technical compliance is set in the ITTs, only the tenders meeting this requirement will be brought to the financial evaluation step. Financial evaluation −Financial offers are analysed according to the award criteria given in the ITTs. Technical and financial combination −According to the award method described in ITTs, the best scoring for the combination of quality and price or the lowest priced offer will be awarded. Assessment of the Offers 2. Overview of the Procurement Process

16. Page 16 Assembly and Installation Information Day – 21 st May 2015 © 2015, ITER Organization ITER_D_RDUX69Page 16 AWARD IO sends a Prequalification Package to each company on the list IO prequalifies companies on the list Prequalification 1.5 month Ensure that offers are sought only from suppliers who have the required skills as well as financial capabilities, equipment and experience to perform works or services as described in the technical specifications. IO sends the Instructions to Tenderers to qualified companies IO assesses the offers and awards the contract Tender 3 to 6 months Clarifications, Tenderer’s technical offers presentations. Evaluation Committee: Experts, Tenderers' conference, answers to clarifications. Call for Nomination (CFN) IO sends the summary of the Technical Specifications to DAs Each DA sends a table with interested companies to the IO 1.5 month Publicity on the IO Web Site and DAs’ Sites Sourcing Summary of the IO-CT Procurement Process 2. Overview of the Procurement Process

17. Page 17 Assembly and Installation Information Day – 21 st May 2015 © 2015, ITER Organization ITER_D_RDUX69Page 17 Table of Contents: 1.General – ITER Specifics 2.Overview of the Procurement Process 3.Overall Schedule 4.Contract Award and Contracting Rules

18. Page 18 Assembly and Installation Information Day – 21 st May 2015 © 2015, ITER Organization ITER_D_RDUX69Page 18 20152016 Indicative Procurement Schedule Industry Information Day 2017 Machine Assembly Construction Manager-as-Agent 2018 VV-06 (KO) Mechanical & Piping Call for Nominations and Pre-qualification Call for Tender Contract Award Call for Tender Contract Award Mobilization Call for Tender Contract Award Mobilization Electrical, I&C, Cabling Call for Tender Contract Award Mobilization Call for Nominations and Pre-qualification

19. Page 19 Assembly and Installation Information Day – 21 st May 2015 © 2015, ITER Organization ITER_D_RDUX69Page 19 Table of Contents: 1.General – ITER Specifics 2.Overview of the Procurement Process 3.Overall Schedule 4.Contract Award and Contracting Rules

20. Page 20 4. Contract Award and Contracting Rules IO is considering NEC3 type of Contract (to be confirmed) –Facilitates the implementation of sound project management principles and practices, –As well as defining legal relationships, –Provides clarity and flexibility, effective control of changes, –Spirit of mutual trust and cooperation. Priced contract or Target contract with activity schedule –Prices for each activities or group of activities which have been completed, –Based on 2 scenarios frozen for the tender “Baseline” and “Late finish”. –Mobilization period, –Activity schedule reviewed periodically. Selection to be based upon Price and Technical Proposal –Organization, capacity, resources, proven knowledge and experience in large scale projects. Assembly and Installation Information Day – 21 st May 2015 © 2015, ITER Organization Construction Management ITER_D_RDUX69

21. Page 21 4. Contract Award and Contracting Rules FIDIC Red Book Construction Contract –Building and Engineering Works Designed by the Employer –IO is the Employer Pricing to be based upon Cost-plus (To be confirmed) –Incentives and target costs Selection to be based upon Price and Technical Proposal –Approach, organization, capacity, resources, proven experience etc… Assembly and Installation Information Day – 21 st May 2015 © 2015, ITER Organization Machine Assembly Contract ITER_D_RDUX69

22. Page 22 4. Contract Award and Contracting Rules FIDIC Red Book Construction Contract –Building and Engineering Works Designed by the Employer –IO is the Employer Pricing to be based upon unit prices for standard items –Tender will include scenarios on estimated quantities –Periodic adjustments based upon location, complexity etc. Pricing as Cost-plus for special, non-standard works −Target costs and incentives Selection to be based upon Price and Technical Proposal –Approach, organization, capacity, resources, proven experience etc… Assembly and Installation Information Day – 21 st May 2015 © 2015, ITER Organization Works Contracts ITER_D_RDUX69

23. Page 23 4. Contract Award and Contracting Rules Companies may bid for multiple contracts but shall only be awarded one contract –Applies to single contractor or consortia members, –Companies awarded a contract, or any consortium they are member of, shall be withdrawn from later tenders. Expected Order of Tender 1. Construction Manager 2. Machine Assembly Works 3. Mechanical and Piping Works 4. Electrical, Cabling and I&C Works Assembly and Installation Information Day – 21 st May 2015 © 2015, ITER Organization ITER_D_RDUX69

24. Page 24 Construction Manager −Sub-contracting limited to: ONE level Less than 30% of contract value −Pre-qualification based upon consortium members capacity and experience. It does not include sub-contractors. −Awarded consortium member or sub-contractor shall not participate in works contracts Construction Management Contractor Sub-contracting <30% of contract value Prime/consortia Single level of sub-contractors Sub-sub contracting not permitted Prequalification 4. Contract Award and Contracting Rules Assembly and Installation Information Day – 21 st May 2015 © 2015, ITER Organization ITER_D_RDUX69

25. Page 25 −Sub-contracting limited to: ONE level. Less than 10% of contract value for any single works contract for a single sub-contractor. No more than 50% total. −Prequalification will include consortium members and sub- contractors. A letter of intention will be required for the sub- contractors. −Changes in identified sub-contractors only permitted with authorisation by IO and following re-qualification −e.g. due to a conflict of interest. −Same rules apply to parent companies or subsidiaries. Prime/Consortia Works Contractors Sub-contractor <10% Sub-contractor <10% Sub-sub contracting not permitted Included in Prequalification 4. Contract Award and Contracting Rules Works Contracts Assembly and Installation Information Day – 21 st May 2015 © 2015, ITER Organization ITER_D_RDUX69

26. Page 26 Assembly and Installation Information Day – 21 st May 2015 © 2015, ITER Organization ITER_D_RDUX69Page 26 Doing Business in France W@I: Welcome Around ITER Partnership –A strong regional network has been deployed to welcome international leaders, high-tech companies, specialized laboratories and SMEs and provide them with services matching their needs. Immigration and workers accommodation: Agence ITER France Industrial partnerships, subcontracting, local support: C2I - French ITER Industrial Committee Local recruitment and training: Pôle Emploi and PACA Mode d’Emploi Business setup: WOIC (Welcome Office for International Companies) –More information: http://welcome-around-iter.com Other Information

27. Page 27 Assembly and Installation Information Day – 21 st May 2015 © 2015, ITER Organization ITER_D_RDUX69Page 27 Read more on the IO Procurement Web Site − www.iter.org - Procurement / General information − iopcd@iter.org - Point of contact Please send all questions to: − assemblyinfoday@iter.org − Replies to all questions received within 2 weeks will be published on the ITER web site and sent to all attendees

28. Page 28 Assembly and Installation Information Day – 21 st May 2015 © 2015, ITER Organization ITER_D_RDUX69Page 28 Thank You for Your Attention