Federal Office of Bundeswehr Equipment, Information Technology and In-Service Support (FOBwEITISS) The Bundeswehr as a contracting entity

Transcription

1 Federal Office of Bundeswehr Equipment, Information Technology and In-Service Support (FOBwEITISS) The Bundeswehr as a contracting entity

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3 The Bundeswehr as a contracting entity

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5 Preface by Harald Stein Director-General of the Federal Office of Bundeswehr Equipment, Information Technology and In-Service Support Source: BAAINBw / Anneken The Bundeswehr is tasked by the constitution (Basic Law) with the duty of providing national defense. In order to be able to accomplish this mission and the resulting tasks, the armed forces must be provided with the necessary capabilities by making available the equipment required. The task of satisfying the armed forces requirements for materiel and services has been assigned to the Federal Defense Administration. The contracts required for providing the necessary equipment to the armed forces are awarded to industry, trade and commerce by the designated authorities of the Federal Defense Administration, taking into consideration the budgetary and awarding regulations as well as the relevant administrative guidelines. This brochure The Bundeswehr as a Customer is designed to inform citizens and especially companies interested in obtaining Bundeswehr contracts about the Bundeswehr organization, awarding and contracting procedures and to serve as a guideline for getting into business. The award of construction contracts is not covered by this brochure as construction projects are managed by the finance construction agencies of Germany s federal states. The Bundeswehr as a Customer 3

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7 Contents SECTION I - THE PROCUREMENT ORGANIZATION 7 1. The Federal Defense Administration Procurement of Equipment, Information Technology and In-Service Support Procurement of Infrastructure, Environmental Protection and Services The Procurement Organization Central Procurement Decentralized Procurement 28 SECTION II - THE PROCUREMENT PROCEDURES Public Procurement Law The Threshold Values Procurement Notices Special Aspects Direct Purchasing: A Simplified Awarding Procedure Types of Contract Awarding Procedures Types of Award Procedures in the Below-Threshold Sector Types of Award Procedures in the Above-Threshold Sector Electronic Tendering in the Bundeswehr EDA Procurement Procedure 55 SECTION III - THE CONTRACTS Contract Terms General Terms of Contract General Terms of Contract for IT Supplies/Services Open-End Contracts Quality Assurance Promotion and Encouragement Promotion and Encouragement of Small and Medium-Sized Enterprises Promotion and Encouragement of Occupational Therapy 64 Installations and Workshops for the Blind SECTION IV - SUMMARY AND OVERVIEW Where to Find Contract Notices How to Get a Contract How to ask questions or contact the Bundeswehr as a customer 68 Contents 5

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9 Section I: The Procurement Organization The Federal Defense Administration has been tasked by the constitution (Basic Law) with meeting the immediate procurement needs of the armed forces. By handling numerous tasks, including barracks management, materiel procurement and implementation of environmental protection requirements, the Administration eases the burden on the field units. The Administration is divided into the organizational elements of Infrastructure, Environmental Protection and Services, Equipment, Information Technology and In-Service Support and Personnel. Civilian personnel also fulfill important functions in the administration of justice in the Bundeswehr and in the military chaplaincy. The Procurement Organization 7

10 1. The Federal Defense Administration 8 The Federal Defense Administration Within the Federal Ministry of Defense (FMOD), there are two departments in charge of Bundeswehr procurement: The Directorate-General for Equipment (E) is responsible for the procurement of defense materiel. It is part of the Federal Defense Administration and provides the armed forces, in a requirementsoriented and cost-efficient manner, with the materiel needed to accomplish their mission. All other procurements needed to meet the armed forces demand are handled by the Directorate-General for Infrastructure, Environmental Protection and Services (IEPS). It is part of the Federal Defense Administration and provides the armed forces, in a requirementsoriented and cost-efficient manner, with the infrastructure and services needed to accomplish their mission.

11 FMOD Federal Defense Administration (Basic Law Art. 87 b (1)) IEPS (former territorial defense administration) E (Information Technology and In-Service Support (EITISS) former armaments organization) FOBwIEPS FOBwEITISS Companies with Government Participation FOBwIEPS agencies FOBwEITISS agencies Armed Forces (Basic Law Art. 87 a (1)) Services/ major military organizational elements Military agencies The Federal Defense Administration 9

12 1.1 Procurement of Equipment 10 Procurement of Equipment

13 1.1.1 The Directorate-General for Equipment (E) at the Federal Ministry of Defense (FMOD) The Equipment Directorate-General is responsible for the planning, management and supervision of national and international armaments activities in view of the tasks of the Bundeswehr and the capability profile deriving from them. It has overall responsibility for the procurement and in-service process in the Bundeswehr. This also comprises material responsibility for the operational viability of all defense materiel, which lies with the Director-General for Equipment. The Director-General is at the same time the National Armaments Director (NAD) and as such responsible for the detailed planning of armaments policy in accordance with the strategic guidelines (Directorate- General for Security and Defense Policy). He/she also represents Germany s national and defense industry-related interests in international bodies. A 11

14 1.1.2 The Federal Office of Bundeswehr Equipment, Information Technology and In-Service Support (FOBwETISS) FOBwEITISS is one of Germany s largest technical authorities. It is in charge of providing the Bundeswehr with state-of-the-art equipment and technology, according to demand and in a cost-efficient manner. It is the central authority for the management of all armaments projects, including information technology projects. The following FOBwEITISS directorates are responsible for actual procurement: The four directorates, Combat, Land Support, Sea, and Air, are responsible for - the management of complex projects; - systems engineering and integration; - research and technology; - technical/economic aspects of in-service support management; - procurement of the equipment required by each of them, respectively. 12 FOBwEITISS Source: FOBwEITISS / Anneken

15 IT-related tasks are now handled by the directorates for information technology (Directorate I) and IT support (Directorate G) as well as the Special Organization Herkules. The Bundeswehr Information Technology Center (Bundeswehr IT Center) manages tasks relating to IT security, system integration and project support, as well as the conduct of fi eld trials. A central role in the procurement of commercial and Bundeswehr-specifi c supplies and equipment is played by Directorate E, which also handles the procurement of complex services. FOBwEITISS subordinate agencies include six Bundeswehr technical centers (WTD) and two Bundeswehr research institutes (WIS and WIWeB). In particular, these agencies are responsible for: - providing technical advice and support to the project management for components and equipment; - perfoming studies, research and technology tasks, and - perfoming of experiments and analyses. Another subordinate agency is the Naval Arsenal (MArs) which mostly awards repair contracts for the Navy. The Liaison Offi ce for Defense Materiel USA/Canada (DtVStRü USA/ Ka) near Washington D.C. establishes and maintains contacts with the transatlantic partners. Organizational Chart of the Federal Office of Bundeswehr Equipment, Information Technology and In-Service Support (FOBwEITISS) Director-General Deputy Deputy Director- Director- General (civ.) General (mil.) Legal Affairs Staff Staff Occupational Safety Officer PoC for Corruption Prevention Commissioner for Gender Equality (civilian) Commissioner for Gender Equality (military) Project Organization (PMO) Combat Directorate (K) Air Directorate (L) Sea Directorate (S) Land Support Directorate (U) Information Technology Directorate (I) IT Support Directorate (G) Special Organization Herkules (H) Purchasing Directorate (E) Technical Quality Management Center (T) Common Technical, Logistic and Economic Tasks (ZtQ) Central Affairs Directorate (ZA) WTD 91 WTD 61 WTD 71 WTD 41 WTD 81 DEU LiaisonOffice USA/CAN WTD 52 MArs WIS WIWeB FOBwEITISS 13

16 1.2 Procurement of Infrastructure, Environmental Protection and Services 14 Procurement of Infrastructure, Environmental Protection and Services

17 1.2.1 The Directorate-General for Infrastructure, Environmental Protection and Services (IEPS) at the Federal Ministry of Defense (FMOD) The Directorate-General for Infrastructure, Environmental Protection and Services (IEPS) monitors, bears conceptual responsibility and provides ministerial control for the following areas: infrastructural tasks, such as the construction and operation of sites and garrisons, all services relating to them, messing and MWR food service, as well as statutory protective tasks such as occupational safety and health, environmental protection and firefighting and protection for the armed forces and the Federal Defense Administration within Germany, abroad, and in theater. IEPS 15

18 1.2.2 The Federal Office of Bundeswehr Infrastructure, Environmental Protection and Services (FOBwIEPS) FOBwIEPS is organized into five directorates and two staff elements and is responsible for all central non-ministerial activities relating to finance, controlling, infrastructure, services, and statutory protective tasks (environmental protection, firefighting and protection, occupational safety and health, and hazardous cargo transportation). FOBwIEPS s subordinate agencies include the Bundeswehr Subsistence Office in Oldenburg, the Bundeswehr Firefighting and Fire Protection Center in Sonthofen and once the current target 16 FOBwIEPS Source: Bundeswehr / Jenny Bartsch structure has been successfully implemented 41 Bundeswehr Service Centers all over Germany. Furthermore, there are Federal Republic of Germany offices of defense administration in the U.S.A./ Canada, Italy, France, Belgium, Poland, the Netherlands and the United Kingdom, each with its own branch offices. Other agencies abroad include the field offices of defense administration providing field units with supplies, counseling, and support in all budgetary and administrative matters in the contingents.

19 Organizational Chart of the Federal Office of Bundeswehr Infrastructure, Environmental Protection and Services (FOBwIEPS) Director-General Deputy Director-General Central Affairs Bundeswehr Finance and Controlling Infrastructure Environmental Protection and Occupational Safety Services and legal affairs 7 x Centers of Expertise for Construction Management Centers of Expertise for Travel Management Bundeswehr Firefighting and Fire Protection Center Bundeswehr Subsistence Office Bundeswehr Fire Brigades 7x Federal Republic of Germany Offices of Defense Administration Field Office of Defense Administration 41 Bundeswehr Service Centers FOBwIEPS 17

20 2. The Procurement Organization The satisfaction of the demand of the armed forces and the civilian Bundeswehr administration for supplies and services is shared among different procurement agencies. Depending on the type of supplies/services required, they are procured either centrally or locally. 18 The Procurement Organization

21 Procurement and in-service process CPM (amended) Bundeswehr Purchasing Complex services The procurement and in-service process consists of three pillars. The Customer Product Management (CPM) process for the procurement of defense materiel forms the fi rst pillar. The term CPM designates a procedural regulation for determining and meeting the Bundeswehr demand.the aim is to meet the Bundeswehr demand for defense materiel faster and in a more cost-effective way by streamlining the pertinent procedures. The FMOD's Directorate-General for Equipment, Information Technology and In- Service Support has published a brochure to provide information about the amendment of the Customer Product Management process. ( (English) Projects CPM CPM (nov.) - English version) Glossary: Vorlauf Analyse Pre-analysis phase Analyse (Teil 1) Analysis phase (part 1) Realisierung Realization phase Nutzungssteuerung Control of in-service support Nutzung In-service phase Verwertung Disposal Verantwortung Resposibility Generalinspekteur Chief of Defense The Procurement Organization 19

22 Inspekteure Abteilungsleiter Ausrüstung, Informationstechnik und Nutzung bzw. Präsident Bundesamt für Ausrüstung, Informationstechnik und Nutzung der Bundeswehr Industrie (schraffiert: Teilnahme, wenn immer möglich und soweit [vergabe-] rechtlich vertretbar) Abkürzungen GeNu = Genehmigung zur Nutzung ZV = Zielvereinbarung AWE = Auswahlentscheidung LV = Lösungsvorschläge (mehrere) FFF = Fähigkeitslücke und funktionale Forderung IPT = Integriertes Projektteam Mit einem Flyer informiert die Abteilung Ausrüstung, Informationstechnik und Nutzung des BMVg über die Novellierung des Customer Product Management. ( Projekte CPM Novellierung des CPM) Service Chiefs FMOD Director-General for Equipment, Information Technology and In-Service Support or Director-General of the Federal Office of Bundeswehr Equipment, Information Technology and In-Service Support Industry (shaded: participation whenever possible and to the extent justifiable by public procurement law) Acronyms and Abbreviations GeNu = Approval for service use ZV = Agreement on objectives AWE = Selection decision document LV = Proposals for solutions (several) FFF = Capability gap and functional requirement document IPT = Integrated Project Team The FMOD's Directorate-General for Equipment, Information Technology and In-Service Support has published a brochure to provide information about the amendment of the Customer Product Management process. ( Projects CPM CPM (nov.) - english version) The second pillar of the procurement and in-service process is procurement for the satisfaction of non-project requirements (Bundeswehr Purchasing). The responsible agencies procure commercial as well as Bundeswehr-specific supplies, equipment, and services. This includes the follow-on procurement of spare parts for weapon systems/equipment in the in-service phase, procurement via international procurement channels, and interministerial procurement. The third pillar of the procurement and in-service process comprises complex services, i.e. services that cannot or are not supposed to be provided entirely by the Bundeswehr itself. This includes services currently provided, for instance, by HIL GmbH (army maintenance logistics), LHBw GmbH (clothing), BwFuhrparkService GmbH (vehicle fleet management) or BWI IT GmbH (IT services). 20 The Procurement Organization

23 2.1 Central Procurement Central procurement means that the Bundeswehr s entire demand for supplies and services is jointly determined and procured. This results in larger order quantities for combined demand which in turn allow for broad competition and lower prices. Central procurement includes the satisfaction of initial and follow-up requirements for defense materiel and supplies including repair work for the armed services as well as the award of study, research and development contracts. Central Procurement 21

24 2.1.1 Examples of Central Procurement Central procurement includes contracts concerning initial and follow-up requirements for defense materiel and supplies (vehicles, Air Force and Navy equipment, communications equipment, information technology, weapons, ammunition, missiles, POL, long-life food, etc.) including repair work for the armed services as well as studies, research and development. 22 Central Procurement

25 2.1.2 Competent Authorities Contracts under the central procurement procedure are mainly awarded by the following authorities: The Federal Office of Bundeswehr Equipment, Information Technology and In-Service Support (FOBwEITISS) Ferdinand-Sauerbruch-Strasse Koblenz, Germany Internet: and the Federal Office of Bundeswehr Infrastructure, Environmental Protection and Services (FOBwIEPS) Fontainengraben Bonn, Germany Internet: Subordinate agencies of both offices, too, award contracts for central procurement. The Bundeswehr Subsistence Office in Oldenburg, for instance, is subordinate to FOBwIEPS and responsible for the central procurement, storage and supply of long-life groceries and for providing German units deployed abroad with fresh and nonperishable food. Central Procurement 23

26 In individual cases, central procurement contracts are also awarded by the Federal Ministry of Defense Fontainengraben Bonn Stauffenbergstraße Berlin Internet: Source: Bundeswehr Procurement for the Bundeswehr is no longer handled completely by the Bundeswehr itself as the contracting authority. In order to achieve more efficiency and operational readiness, the Bundeswehr is now confined to providing supplies and services which are indispensable core tasks or which it can provide at less cost than commercial suppliers. For this reason, the Bundeswehr has entered into public private partnerships, thus outsourcing part of its tasks to independent companies with government participation. Consequently, certain equipment items are procured by separate contracting authorities that are not part of the Bundeswehr. 24 Central Procurement

27 Procurement, distribution, cleaning and maintenance of Bundeswehr clothing is handled by Bw Bekleidungsmanagement GmbH. Internet: Heeresinstandsetzungslogistik GmbH (HIL GmbH) is responsible for the procurement of whatever is needed to maintain availability of the land-based Bundeswehr weapon systems. HIL GmbH awards contracts to this end, e.g. for necessary repair and maintenance work. 100 % of shares in HIL GmbH are held by the Federal Republic of Germany. HIL GmbH is an independent contracting authority under functional supervision of the FMOD. Internet: BWI Informationstechnik GmbH (BWI IT GmbH) is responsible for any procurement required for the modernization and operation of the Bundeswehr s non-military information and communications technology in the approximately 1,200 Bundeswehr sites and garrisons in Germany % of shares in BWI IT GmbH are held by the Federal Republic of Germany. BWI IT GmbH is an independent contracting authority under functional supervision of the FMOD. Internet: Central Procurement 25

28 BwFuhrparkService GmbH is responsible for any procurement with regard to vehicle fl eet management and the vehicles managed by it, ranging from commercially available vehicles with and without military equipment to special-duty vehicles. 100 % of shares are held by the Federal Republic of Germany. BwFuhrparkService GmbH is an independent contracting authority under functional supervision of the FMOD. Internet: bwconsulting is a company of the Federal Ministry of Defense (FMOD). We advise the FMOD, the armed forces and Federal Defefnse Administration on economic and methodological matters, provide neutral support for comprehensive analyses and offer project management know-how. bwconsulting is committed exclusively to the objectives of the FMOD s executive level without pursuing any interests of its own and is funded from the defense budget. Internet: The Gesellschaft zur Entsorgung von chemischen Kampfstoffen und Rüstungsaltlasten mbh (GEKA) works on behalf of the federal government. It has only one shareholder, the FMOD. GEKA s primary responsibility is to safely and sustainably dispose of chemical agents and soil contaminated due to armaments production. Internet: 26 Central Procurement

29 The responsibilities of the Fernleitungs- Betriebsgesellschaft mbh (FBG) include the operation of NATO pipeline systems in Germany CEPS (Central Europe Pipeline System covering Germany, France and Benelux) NEPS (North European Pipeline System covering Germany and Denmark) These contracting authorities publish their invitations to bid not only in the media described under Section II No. 3, but also on their respective websites. as well as the transportation and storage of aviation and ground fuels for NATO forces and, to the extent possible after satisfaction of military demand, civilian customers (mineral oil producers and traders). FBG thus contributes to ensuring a secure supply of aviation and ground fuel to NATO forces in peace, crisis and war. Internet: Central Procurement 27

30 2.2 Decentralized Procurement Decentralized procurement means that several procurement agencies cover the demand of the regional sectors of the Bundeswehr for materiel or other types of supplies/ services. All products and services for which central procurement is inappropriate because of their nature or for economic reasons are subject to decentralized procurement. These are mainly commercial items of supply for the daily demand of the units, garrisons and the local elements of the Federal Defense Administration. Source: Bundeswehr / Holzbrecher 28 Decentralized Procurement

31 2.2.1 Examples of Decentralized Procurement These are mainly commercial items of supply for the daily demand of the units, garrisons and the local elements of the Federal Defense Administration. These include: consumables for the maintenance of billets, sites and garrisons (hardware, special oils, fertilizers); terrain maintenance equipment, facility housekeeping and domestic equipment (e.g. agricultural equipment, furniture, mattresses, bedding, flags, coffee machines, all-purpose slicers); spare parts for commercial items; guard and cleaning services. Decentralized Procurement 29

32 2.2.2 Competent Authorities in Decentralized Procurement First and foremost, decentralized procurement is handled by FOBwIEPS subordinate Bundeswehr Service Centers in their capacity as local authorities of the Federal Defense Administration. With regard to staff and material, they are responsible for the direct support of and supply to the armed forces and defense administration agencies. For an overview of Bundeswehr service centers (in German), see > Organisation > Bw-Dienstleistungszentren The field offices of defense administration and the offices of defense administration abroad, too, handle procurement for part of their own demand themselves. For an overview of field offices and offices abroad (in German), see > Organisation > BwVSt oder Einsatzwehrverwaltungsstellen Agencies and institutes subordinate to FOBwEITISS award research and study contracts within the scope of their technical responsibilities, as well as procurement and maintenance contracts to meet their own demand for basic equipment, consumables, and test rigs/tools. 30 Decentralized Procurement

33 Bundeswehr Technical Center for Land-Based Vehicle Systems, Engineer and General Field Equipment (WTD 41) Trier Bundeswehr Technical Center for Ships and Naval Weapons, Maritime Technology and Research (WTD 71) Eckernförde Bundeswehr Technical Center for Aircraft and Aeronautical Equipment (WTD 61) Manching Bundeswehr Technical Center for Weapons and Ammunition (WTD 91) Meppen Bundeswehr Technical Center for Information Technology and Electronics (WTD 81) Greding Bundeswehr Research Institute for Materials, Fuels and Lubricants (WIWEB) Erding Bundeswehr Research Institute for Protective Technologies and CBRN Protection (WIS) Munster Liaison Office for Defense Materiel USA/Canada (DtVStRü USA/Ka) Reston VA USA Naval Arsenal (MArs) Wilhelmshaven und Kiel Bundeswehr Technical Center for Protective and Special Technologies (WTD 52) Oberjettenberg Decentralized Procurement 31

34 For the agencies homepages and organizational charts (in English), see (English) > About us > Agencies Under certain conditions and if dictated by expediency, operational readiness and cost effectiveness requirements, the armed forces are able and authorized to undertake procurement activities themselves. 32 Decentralized Procurement

35 Section II: The Procurement Procedures When awarding contracts, the Bundeswehr as a contracting authority has to comply with budget and contract awarding regulations. In other words, it is only very rarely allowed to award contracts directly to a certain company because procurement, as a rule, has to take place on a competitive basis. This means that companies will only be awarded a contract if they participate in the respective bidding procedure. This section will explain how bidding works. See No. 3 for a description of where to find the latest invitations to bid. Procurement Procedures 33

36 1. Public Procurement Law Public procurement law comprises the regulations with which a contracting authority has to comply in awarding contracts. German public procurement law primarily consists of elements of budget law and European directives that have been transposed into a number of German laws and regulations. 34 Procurement Procedures

37 As this brochure went to press, German public procurement law for supplies and services as the most relevant law for the Bundeswehr as a customer comprised the following components: Structure of German public procurement law for supplies and services provided to the Bundeswehr* Below-threshold sector Above-threshold sector Budget law, in particular: BHO VV-BHO Public Procurement Directive Remedies Directive 89/665 EWG Defense Procurement Directive VOL/A GWB VgV VSVgV BHO = Federal Budget Code, spec. Art. 55 VV-BHO = administrative instructions to BHO VOL/A = Conditions Concerning Contracts for Supplies and Services GWB = Act against Restraints of Competition VgV = Regulation on the Award of Public Contracts VSVgV = Regulation on the Award of Public Contracts in the Fields of Defense and Security * excluding Statistics Regulation and concessions Public procurement law stipulates two objectives for the Bundeswehr as a customer: maintaining cost effectiveness and economic viability, and ensuring competition. As a rule, VgV or VOL/A apply to the award of supply and service contracts with VOL/A being authoritative in the below-threshold sector (see No. 2 below). In exceptional cases, however, such services may be procured by application of VSVgV. VSVgV applies if the supplies or services to be procured exceed a certain contract value (see No. 2 below) and relate to the delivery of equipment that is either military in nature, required under a classified contract, or needed for specific military purposes. Procurement Procedures 35

38 2. The Threshold Values Which regulations apply to an award procedure depends on the so-called threshold values. Threshold values are limits that determine whether national (below-threshold sector) or European award regulations (above-threshold sector) apply. The parameter relevant here is the estimated contract value of a procurement, including all options but excluding turnover tax. 36 Procurement Procedures

39 These threshold values are updated every two years by a regulation of the EU Commission. At the moment and until 31 December 2017, the following threshold values apply: Application of VSVgV Application of VgV EUR EUR For higher and supreme federal authorities with exceptions EUR For defense supplies only those listed in Annex III of Directive 2014/24/EU A Europe-wide notice is required only for contracts with an estimated contract value equal to or higher than these threshold values; in these cases, European anti-trust regulations apply. This does not mean, however, that only German or German-based businesses may participate in national tenders. The term national refers merely to the way the invitation to bid is announced and to the awarding scheme based on German budget law. Procurement Procedures 37

40 3. Procurement Notices As a rule, the current Bundeswehr requirements for supplies and services with a contract value equal to or exceeding the applicable threshold value are announced in the Supplement to the Official Journal of the European Union under: Invitations to bid for these contracts as well as contracts of a value below the applicable threshold are also published in the Federal Administration s central online portal 38 Procurement Procedures

41 In this portal, companies interested in doing business with the Bundeswehr can find out about current invitations to bid to which they might submit an offer. The Bundeswehr does not keep bidders lists with the intention of automatically informing the listed companies of new notices in the internet portals, although businesses may set up automated notifications on the above-mentioned web portals. Initiative offers not relating to a published invitation to bid cannot be accepteded by the Bundeswehr. Procurement Procedures 39

42 4. Special Aspects 40 Procurement Procedures

43 4.1 Direct Purchasing: A Simplified Awarding Procedure Purchases below a value of 500 EUR excluding turnover tax may be made without a formal award procedure. However, even without a formal award procedure, the contracting authorities are obliged to award contracts taking into account the principles of cost effectiveness and economic viability, i.e. by comparing competing offers, and to conclude them based on their own general terms of contract (see Section III No. 1). Procurement Procedures 41

44 5. Types of Contract Awarding Procedures The customer is not free to choose the type of contract awarding procedure for its procurement projects. First and foremost, the applicable type of procedure depends on whether the estimated contract value exceeds the applicable threshold value and whether the purchase is covered by VOL/A, VgV or VSVgV. If the estimated contract value is below certain thresholds, procurement may be made without a strictly formalized award procedure, although all other awarding and budgetary regulations still have to be observed. 42 Procurement Procedures

45 5.1 Types of Award Procedures in the Below-Threshold Sector With regard to the below-threshold sector, the provisions of VOL/A *) apply. This regulation stipulates that as rule, contracts must be awarded by means of Public Competitive Bidding. If certain conditions are met, another two types of procurement are available to the customer: Restricted Bidding and Negotiated Contracting. *) in the future: UVgO (Below-Threshold Awarding Regulation) Procurement Procedures 43

46 5.1.1 Public Competitive Bidding In a Public Competitive Bidding procedure, the customer publishes an invitation to bid, and an unlimited number of companies can submit offers. The companies interested in the bedding have to submit their bid within the specified deadline. The bid will then be evaluated by the customer based on qualification and award criteria which have been announced beforehand. Out of those bids that meet the requirements in form and content, the most cost-efficient bid is selected. Bekanntmachung Keine Verhandlungsspielräume Unbeschränkter Bieterkreis streng formale Verfahrensführung Glossary: Bekanntmachung Unbeschränkter Bieterkreis Keine Verhandlungsspielräume Streng formale Verfahrensführung Public announcement by contract notice Unlimited set of bidders No leeway for negotiations Strictly formal procedure 44 Procurement Procedures

47 5.1.2 Restricted Bidding The contracting authority may conduct a Restricted Bidding procedure in cases where, for instance, exceptional competence is required to perform a service. Once the notice has been published and a Request for Interest procedure conducted, only a limited number of bidders are invited to submit offers. Bekanntmachung Out of those bids that meet the requirements in form and content, the most cost-efficient offer is selected. Beschränkter Bieterkreis Teilnahmewettbewerb Keine Verhandlungsspielräume Spielräume streng formale Verfahrensführung Glossary: Bekanntmachung Teilnahmewettbewerb Beschränkter Bieterkreis Keine Verhandlungsspielräume Spielräume Streng formale Verfahrensführung Public announcement by contract notice Request for Interest by publication of a contract notice Limited set of bidders No leeway for negotiations Leeway Strictly formal procedure Procurement Procedures 45

48 5.1.3 Negotiated Contracting Negotiated Contracting may take place if, for instance, Public Competitive Bidding yielded no economically viable result or an insignificant repeat order is required. The customer approaches a number of companies, if possible, to invite them to submit an offer, the content of which may then be subject to negotiations. If applicable, a Request for Interest procedure will be held beforehand. Keine Bekanntmachung Verhandlungsspielräume Beschränkter Bieterkreis weitgehend formfreies Verfahren Glossary: Keine Bekanntmachung Beschränkter Bieterkreis Verhandlungsspielräume Weitgehend formfreies Verfahren No announcement by contract notice Limited set of bidders Leeway for negotiations Mostly informal procedure 46 Procurement Procedures

49 5.2 Types of Award Procedures in the Above-Threshold Sector With regard to the above-threshold sector, the provisions of VgV and/or VSVgV apply. Within the scope of VgV, the contracting authority is free to choose between the Open Procedure and the Restricted Procedure, the latter including a Request for Interest. Under certain conditions, another three award procedures are available to the customer: the Negotiated Procedure with or without a Request for Interest by publication of a contract notice, the Competitive Dialog, and the Innovation Partnership. As a rule, VSVgV allows for the Restricted Procedure and the Negotiated Procedure with a Request for Interest. In addition, the customer may under certain circumstances conduct a Negotiated Procedure without a Request for Interest, or a Competitive Dialog. Procurement Procedures 47

50 5.2.1 The Open Procedure Under the Open Procedure, the customer publishes an invitation to bid, and an unlimited number of companies can submit offers (cf. VgV Art. 15; GWB Art. 119). The companies interested in bidding have to submit their bid within the specified deadline. The bid will then be evaluated by the customer based on qualification and award criteria which have been announced beforehand. Out of those bids that meet the requirements in form and content, the most cost-efficient offer is selected. Offers that include changes to the contract award documents particularly with regard to the requirements for the supplies/ services specified in the statement of work or the contract will be disregarded. Bekanntmachung Keine Verhandlungsspielräume Unbeschränkter Bieterkreis streng formale Verfahrensführung Glossary: Bekanntmachung Unbeschränkter Bieterkreis Keine Verhandlungsspielräume Streng formale Verfahrensführung Public announcement by contract notice Unlimited set of bidders No leeway for negotiations Strictly formal procedure 48 Procurement Procedures

51 5.2.2 The Restricted Procedure Under the Restricted Procedure, only a limited number of bidders are invited to submit offers once the notice has been published and a Request for Interest procedure conducted (VgV Art. 16 and VSVgV Art. 11; GWB Art. 119). Out of those bids that meet the requirements in form and content, the most costefficient offer is selected. Offers that include changes to the contract award documents particularly with regard to the requirements for the supplies/ services specified in the statement of work or the contract will be disregarded. Bekanntmachung Beschränkter Bieterkreis Teilnahmewettbewerb Keine Verhandlungsspielräume Spielräume streng formale Verfahrensführung Glossary: Bekanntmachung Teilnahmewettbewerb Beschränkter Bieterkreis Keine Verhandlungsspielräume Spielräume Streng formale Verfahrensführung Public announcement by contract notice Request for Interest by publication of a contract notice Limited set of bidders No leeway for negotiations Leeway Strictly formal procedure Procurement Procedures 49

52 5.2.3 The Negotiated Procedure Within the scope of VgV, the contracting authority may conduct a Negotiated Procedure with a Request for Interest if, for instance, an Open or a Restricted Procedure or a Competitive Dialog only yielded offers which had to be disregarded. However, this is only admissible if no significant changes are made to the original terms of contract. Within the scope of VSVgV, on the other hand, this is one of the standard procedures. According to both VgV and VSVgV, a Negotiated Procedure without a Request for Interest is admissible only in certain exceptional cases, for instance if an Open or Restricted Procedure yielded no economically viable result or when additional Bekanntmachung deliveries are required where a change in supplier might lead to technical inconsistencies in the system. Under the Negotiated Procedure, only a limited number of bidders are invited to submit offers once the notice has been published and a Request for Interest procedure conducted (if applicable). The submitted offers will then be negotiated. Unless specifically ruled out by the customer, the subject of performance, the price and any other contract terms may be subject to negotiation. Once the best and final offers have been submitted, these offers turn into the basis for the Competitive Dialog. Beschränkter Bieterkreis ggf. Teilnahmewettbewerb Verhandlungen Glossary: Bekanntmachung Ggf. Teilnahmewettbewerb Beschränkter Bieterkreis Verhandlungen Spielräume Bekanntmachung 50 Procurement Procedures Spielräume Public announcement by contract notice Request for Interest by publication of a contract notice, if applicable Limited set of bidders Negotiations Leeway Public announcement

53 5.2.4 The Competitive Dialog The Competitive Dialog is an award procedure that may be used by the contracting authority only in rare exceptional cases as it is subject to very strict prerequisites. (VgV Arts. 14 and 17 and VSVgV Art. 13; GWB Art. 119) The Competitive Dialog may be applied only in cases where especially complex contracts are to be awarded and only if the customer is objectively unable to specify either the technical means by which the customer s requirements and objectives may be met, or the legal and financial conditions of the project. Bekanntmachung Dialogphase Teilnahmewettbewerb Keine Verhandlungsspielräume Gestaltungsspielräume Streng formale Verfahrensführung Glossary: Bekanntmachung Dialogphase Teilnahmewettbewerb Keine Verhandlungsspielräume Gestaltungsspielräume Streng formale Verfahrensführung Public announcement by contract notice Dialog phase Request for Interest by publication of a contract notice No leeway for negotiations Scope for action Strictly formal procedure Procurement Procedures 51

54 5.2.5 The Innovation Partnership Within the scope of VgV (but not VSVgV), the contracting authority may use the Innovation Partnership procedure if the relevant requirements are met (cf. VgV Art. 19, GWB Art. 119). The Innovation Partnership is a procedure for the development of innovative supplies and services that are not yet available on the market; the resulting products will then be purchased by the customer. By means of a public notice, the contracting authority calls for requests to participate. Suitable candidates are then requested to submit an offer. Contracting authority and bidder then undergo several phases of negotiations regarding submitted research and innovation projects to improve the content of the offers. Minimum requirements and award criteria are not subject to negotiation. The launch of an Innovation Partnership is marked by the acceptance of offers of one or more bidders, each of whom will conduct separate R&T activities. The partnership comprises two consecutive phases: 1. research and development phase (e.g. prototype production); 2. performance phase (delivery of the product (newly) developed within the partnership). Each phase is subdivided by intermediate objectives. Advancement of the Innovation Partnership and remuneration payments both depend on the achievement of these milestones. Glossary: Bekanntmachung Teilnahmewettbewerb Beschränkung Bieterkreis Verhandlungen Zuschlag F&E Phase Public announcement by contract notice Request for Interest by publication of a contract notice Limitation of set of bidders Negotiations Contract award R&D phase 52 Procurement Procedures

55 6. Electronic Tendering in the Bundeswehr With the legislative package modernizing European public procurement law, the European legislator has issued a thoroughly revised set of rules for the award of government contracts and concessions. The regulations have been transposed into German law in a timely manner and since 18 April 2016 have had an impact on contract awards by the Bundeswehr as a contracting authority. This has immediate implications for contracts above the EU threshold values. Besides the structural changes that have been implemented, electronic tendering is now mandatory for contracts awarded under GWB or VgV and VSVgV provisions. Procurement Procedures 53

56 GWB Art. 97 para. (5) stipulates that customers and businesses shall, as a rule, use electronic means in accordance with the applicable regulations on the award of public contracts to send, receive, forward and save data in an award procedure. According to VgV Arts. 9 to 11, these electronic means and their technical characteristics shall be generally available, non-discriminatory, and compatible with prevalent information and communications equipment and programs. They shall feature one uniform data exchange interface and must not restrict companies access to the award procedure. In addition, these means shall ensure data integrity, confidentiality, and authenticity. The use of electronic means is required not only for digital contract notices, but also for contract award documents, bidder s questions and replies to them, as well as for the digital submission of offers. All these guidelines will be implemented step by step. As of 18 April 2016, all announcements for contract opportunities in accordance with VgV and VSVgV have to be made digitally. Contract award documents shall be made available to bidders free of charge, without restrictions, completely and directly; companies must not be required to register. As of 18 April 2017 (FOBwEITISS) or 18 October 2018 (subordinate agencies), respectively, digital offers have to be accepted. According to VgV Art. 11 para. (3), the contracting authority is obliged to make available to companies all necessary information regarding 1. the electronic means used in an award procedure; 2. the technical parameters for the submission of requests to participate, offers and expressions of interest by electronic means, and 3. the encryption and time recording procedures used. The Bundeswehr makes use of the Al Vergabemanager software in conjunction with the e-tendering platform of the federal government. This is meant to ensure compliance with the new standards regarding public procurement law. Direct access to the e-tendering platform of the federal government is not required. Al Vergabemanager provides a connection to the federal e-tendering platform and supports legally compliant communication with companies. This allows for a seamless and fully electronic award procedure. 54 Procurement Procedures

57 7. EDA Procurement Procedures The European Defense Agency (EDA), currently consisting of 27 out of 28 European member states, was established in July The EDA was set up to create a common competitive European defense market. To achieve this aim, it conducts or supports cooperative European defense projects and supports research and technical development as well as the European defense technological base. The agency also awards contracts itself. Publications, further information on EDA and bidding procedures are available for viewing under Procurement Procedures 55

58 Section III THE CONTRACTS The wording of contracts is not subject to public procurement law, but to the so-called private law in the German Civil Code (BGB). Public procurement law only rarely has implications for contract terms or the execution of contracts. For the Bundeswehr as a customer, contract terms are subject to certain rules and regulations, such as for IT procurement and open-end contracts. The Bundeswehr also makes use of different options to support certain market participants. 56 Contracts

59 1. Contract Terms The drafting of contracts is based on the principle of freedom of contracts. There are no special legal provisions in private law governing the contents of contracts with contracting authorities with which the Bundeswehr would need to comply. Contracts 57

60 1.1 General terms of Contract When contracting, the procuring agencies are, however, encouraged to comply with the principles of cost effectiveness and economic viability laid down in the Federal Budget Code and follow uniform administrative guidelines in accordance with the principle of self-commitment of the administration. This ensures comparability of offers and prevents arbitrary unequal treatment in contracting. For this reason, there are usually a number of preprinted, standardized contract terms which are included in contracts on a case-by-case basis and which, as a rule, are already part of the contract award documents. Bidders /contractors general terms and conditions are not accepted. The general contract terms of the Bundeswehr are composed of general terms of contract: - VOL/B (General Terms of Contract for the Provision of Supplies and Services) additional terms of contract in the defense sector: - ZVB/BMVg (Additional Terms of Contract of the Federal Ministry of Defense Implementing VOL/B) supplementary terms of contract for non-it supplies/services: - ABBV (General Terms and Conditions for Procurement Contracts Placed by the Federal Ministry of Defense) - ABEI (General Terms and Conditions for Development Contracts with Industrial Firms) - ABFI (General Terms and Conditions for Research Con tracts with Industrial Firms) FOBwEITISS contract terms are available for viewing under (English) > Contract Award > Forms > Contract Terms 58 Contracts

61 1.2 General Terms of Contract for IT Supplies/Services Since 1972, different types of Special Terms of Contract for the Procurement of DP Services (BVB) have been introduced to specify requirements for public procurement of data processing equipment. The following are still applicable today: - BVB - Miete (rental) - BVB - Planung (planning) Meanwhile, new Supplementary terms of contract for the procurement of IT supplies/services (EVB-IT) have been developed to replace the BVB regulations: - EVB-IT Systemlieferung (system delivery) - EVB-IT System - EVB-IT Erstellung (creation) - EVB-IT Kauf (purchase) - EVB-IT Dienstleistung (service) - EVB-IT Überlassung Typ A (transfer contract, type A) - EVB-IT Überlassung Typ B (transfer contract, type B) - EVB-IT Instandhaltung (hardware maintenance) - EVB-IT Service - EVB-IT Pflege S (standard software maintenance) The contract terms are available for viewing under > IT-Beschaffung > EVB-IT und BVB (in German) contracts 59

62 1.3 Framework Contracts / Framework Agreements Open-end contracts are contracts between one or more customers and one or more contractors that specify the terms, such as prices, delivery deadlines, etc., for individual contracts to be placed within a specified timeframe. There is no special award procedure for openend contracts. Instead, any of the above-mentioned award procedures may be used for the conclusion of such contracts. Procuring goods through open-end contracts reduces the administrative workload. Open-end contracts are frequently used for repetitive procurements, e.g. the delivery of consumables or supplies such as POL and medicine, or services such as maintenance and repair. 60 Contracts

63 2. Quality Assurance Quality assurance of defense materiel comprises the following essential processes for business transactions with commercial contractors: - evaluation of contractor quality capability; - contractual agreement of contractor quality assurance requirements; - based on the NATO Allied Quality Assurance Publications (AQAP); - additional QA requirements on a statutory basis, if applicable; - contractual agreement of the con tracting authority s right to perform government quality assurance; i.a.w. VOL/B Art. 12, government quality assurance means inspection of supplies/services for compliance with the contractually agreed technical and associated organizational requirements; - performance of government quality assurance, as well as - quality inspections based on legal requirements. Contracts 61

64 3. Promotion and Encouragement 62 Contracts

65 3.1 Promotion an Encouragement of Small Medium-sized Enterprises It has always been a particular concern of the Bundeswehr to take small and medium-sized enterprises (SME) into account when placing public contracts. Wide involvement of these firms promotes competition and helps to put innovative products on the market. The majority of Bundeswehr contracts are awarded to SME. A large number of these firms are directly involved in the supply of consumables, maintenance and other services. Within the scope of the promotion of small and medium-sized enterprises, possible competitive disadvantages of small and medium-sized enterprises compared to big enterprises have to be compensated when contracts are awarded, for instance by breaking down supplies/ services into lots or by encouraging subcontracting for complex large-scale contracts. Contracts 63