Overview of CERN Procurement Procedures and Policy

CERN, an intergovernmental organization established in July 1953, follows transparent procurement policies to ensure fairness and efficiency in purchasing supplies and services. The organization seeks competitive tenders, limits invitations to suppliers in Member States, and prioritizes cost-effectiveness and industrial returns. Procurement items range from recurrent supplies to specialized accelerator technologies required for projects and developments. CERN's legal framework allows for international arbitration in case of disputes.

• CERN
• Procurement
• Policy
• Intergovernmental Organization
• Supply Chain

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1. CERN Procurement Procedures Rome, 28thJune 2016 Adam Horridge

2. Overview CERN status and procurement policy Key figures and cooperation with Italian industry Procurement procedures Contacts

3. Legal Framework Intergovernmental Organization established in July 1953. As an Intergovernmental Organization, CERN is not a legal entity under national law but governed by public international law. CERN benefits from immunity from national jurisdiction and execution. Thus, legal disputes between CERN and its suppliers and contractors are not submitted to national courts but solved via international arbitration. CERN is thus entitled to establish its own internal rules necessary for its proper functioning, such as the rules under which it purchases equipment and services.

4. Procurement Policy - Principles Based on transparency, equal treatment of bidders Ensure bids fulfil all the necessary technical, financial and delivery requirements; Keep overall costs for CERN as low as possible; Achieve balanced industrial returns for the Member States; Not less than three competitive tenders to be sought for the purchase of supplies (including construction works) and services; Invitations to tender to be limited to suppliers and contractors located within Member States.

5. What do we buy? Recurrent supplies and services Civil engineering Buildings, roadworks, Utilities Cooling & ventilation Power distribution, cables Infrastructure & services Metal structures Mechanical engineering Radiation shielding Transport & handling Safety & access control Installation, operation & maintenance Data acquisition, computing & networking Various supplies Furniture, tooling, gases, stationary, etc..

6. What do we buy? Accelerator technologies required for consolidation projects and new developments Industrial controls & field buses Timing & fast real-time controls Beam collimation Beam injection, ejection & dump Radio-frequency equipment Power converters Beam instrumentation & diagnostics Permanent and electromagnets Cryogenic equipment Vacuum equipment

7. Supplies and Services Supply contracts: Contracts for supplies of equipment including R&D contracts, electricity, telecommunications and civil engineering work as well as maintenance and leasing contracts covering data processing, printing and telecommunication equipment. Country of origin: In accordance with standards defined by EU i.e. the country(ies) where the supplies (including their components and sub- assemblies) are manufactured or undergo the last major transformation by the contactor or his sub-contractor. Service contracts: Contracts for the provision of services to be executed on the CERN site. Country of origin: The country in which the bidder is established.

8. Member States Contribution 2016 (CHF) Israel 1.42 % 15 728 950 Germany 20.52 % 227 506 500 Finland 1.36 % 15 133 450 United Kingdom 14.64 % 162 375 900 Greece 1.32 % 14 612 200 France 14.61% 162 000 700 Portugal 1.14 % 12 680 500 Italy 11.04 % 122 445 150 Czech Rep. 1.00 % 10 881 400 Spain 7.61 % 84 421 350 Hungary 0.61 % 6 741 250 Netherlands 4.74 % 52 603 200 Slovakia 0.49 % 5 412 150 Switzerland 4.03 % 44 646 150 Bulgaria 0.29 % 3 237 850 Norway 2.90 % 32 208 600 2.78 % 30 797 900 https://encrypted-tbn0.gstatic.com/images?q=tbn:ANd9GcQ7kKv7RAn_QI5d7pWhk0J50RHcOhxEDmF5PnPUYLPQjwLOaCAv Romania* 10 912 650 Sweden Serbia** 1 317 000 Poland 2.81 % 31 110 450 Cyprus** 750 000 Belgium 2.74 % 30 416 150 Pakistan*** 1 349 950 Austria 2.20 % 24 381 400 Turkey*** 4 751 750 Denmark 1.75 % 19 434 050 Total * Candidate for Accession ** Associate Member State in the pre-stage to Membership *** Associate Member State 1 127 836 550

9. Industrial Return Coefficient The return coefficient of a Member State for Supply contracts for a given twelve-month period starting on 1st March is defined as: The ratio between that Member State's percentage share of all purchases of supplies (excluding purchases funded by non-Member States) during the preceding four calendar years and that State's percentage contribution to the Budget over the same period.

10. Well Balanced Member States For calls for tenders for Supply contracts issued between 01.03.2016 and 28.02.2017, the following CERN Member States are considered to be well balanced: Bulgaria, Czech Republic, France, Italy, Hungary, Switzerland For calls for tenders issued between 01.03.2016 and 28.02.2017, the following CERN Member States are well balanced for Industrial Service contracts: Austria, Denmark, France, Spain, Switzerland, United Kingdom

11. Procurement Expenditures 2000-2013 1,000,000 Supplies Services Total 900,000 800,000 700,000 Long term average 600,000 kCHF 500,000 400,000 300,000 200,000 100,000 0 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013

13. Collaboration with Italian industry Industrial return for supplies, target for 2016 = 0.90 Industrial return for services, target for 2016 = 0.40

14. Procedures for obtaining offers Requirements not exceeding 10 000 CHF; Users may issue enquiries directly provided CERN procurement rules are followed; Purchases between 10 000 CHF and 200 000 CHF Price Enquiries issued by Procurement Service; Purchases exceeding 200 000 CHF Market Surveys & Calls for Tenders issued by Procurement Service.

15. Requirements between 10000 and 200000 CHF Price enquiries Deadline for bidders to submit bid is at least 4 weeks from mailing date; Invite min of 3 firms; All enquiries exceeding 50 000 CHF are also sent to Industrial Liaison Officers (ILOs) for information; Adjudication based on lowest compliant bid (FCA price) ie which complies with the technical, financial and delivery requirements, subject to the rules aimed at achieving well balanced industrial return coefficients for the Member States (from 100 000 CHF).

16. Requirements exceeding 200000 CHF Market Survey (MS) followed by a Call for Tenders (IT) Announcement in the document Advance information on Forthcoming Market Surveys and Calls for Tenders expected to exceed 200 000 Swiss francs ; Market survey: brief technical description (1-2 pages); qualification criteria (financial and technical); questionnaire. Current Market Surveys available on Procurement Service home page https://found.cern.ch/java- ext/found/CFTSearch.do

17. Requirements exceeding 200000 CHF Call for tenders: Deadline for bidders to submit bid is at least 4 weeks from mailing date; Invite - 10 firms for contracts between 200 000 and 750 000 CHF; - 15 firms for contracts exceeding 750 000 CHF; All call for tenders are also sent to Industrial Liaison Officers (ILOs) for information;

18. Adjudication - Supplies Supply contracts whose estimated value exceeds 100 000 CHF are awarded on the basis of the lowest compliant bid to the firm whose bid complies with the technical, financial and delivery requirements and is the lowest, subject, however, to the following rules aimed at achieving well balanced industrial return coefficients for the Member States:

19. Adjudication - Services Industrial Service contracts, whose estimated value exceeds 200 000 CHF, are sometimes awarded according to the same lowest cost scenario, including being subject to the alignment rule, but are more often awarded on the basis of Best Value for Money (BVFM): Price (at least 50% of the total weight) and Quality (a maximum of 50% of the total weight) are taken into consideration; Double envelope procedure; Only technically compliant bids are evaluated and scored. Adjudications not be subject to the alignment rule;

20. Realignment Rule (Scenario 1) Lowest bid from a PB MS contract placed with it Bid (CHF) Poorly balanced MS Well balanced MS Contract

21. Realignment Rule (Scenario 2) Lowest bid from a WB MS realignment rule applies if bid difference <20% Bid (CHF) <20% Poorly balanced MS Well balanced MS

22. Realignment Rule (Scenario 2) Lowest bid from a WB MS (a) 1st bidder from PB MS aligns contract placed Bid (CHF) <20% Poorly balanced MS Well balanced MS Contract

23. Realignment Rule (Scenario 2) Lowest bid from a WB MS (b) if not, 2nd lowest bidder from PB MS aligns contract placed Bid (CHF) <20% Poorly balanced MS Well balanced MS Contract

24. Realignment Rule (Scenario 2) Lowest bid from a WB MS (c) if no alignment, contract placed with lowest bidder from WB MS Bid (CHF) <20% Poorly balanced MS Well balanced MS Contract

25. Indicative Procurement Timeline for HL-LHC MS issued by CERN Q4 / 2016 MS responses due Q1 / 2017 IT issued by CERN Q2 / 2017 IT responses due Q3 / 2017 Bid clarification Q4 / 2017 Contract award Q1 / 2018 after CERN Finance Committee approval Combined MS for Point 1 & Point 5; Separate IT for Point 1 & Point 5.

26. HL-LHC Construction Contracts Adjudication Considerations 1 Bids to be evaluated using a double envelope procedure Submission of a technical and commercial bid in separate envelopes If a technical bid is deemed not to be compliant, the corresponding commercial bid will not be opened The content and criteria of the technical and commercial bids will be defined at IT stage The same bidder cannot be awarded both contracts even if his is the lowest compliant in both cases The highest value contract will be adjudicated first

27. HL-LHC Construction Contracts Adjudication Considerations 2 Remeasurement basis (FIDIC red book) With regard to the alignment rule, as per CERN s selection and adjudication criteria (April 2016), any bid for which 60% of its value originates from poorly balanced member states will be considered as wholly originating from a poorly balanced member state

28. Registering as a Supplier

29. Contacts with CERN Procurement web page http://procurement.web.cern.ch/ In the Procurement Group: Adam Horridge, senior procurement officer adam.horridge@cern.ch +41 22 766 3054 Lisa Bellini-Devictor, section leader Administration and Infrastructure lisa.bellini.devictor@cern.ch +41 22 767 3626 Industrial liaison Officer (ILO) Mauro Morandin, Italian ILO ilo@pd.infn.it +39 049 967-7067

30. Thank you for your attention