70 tal-1996

L.N. 7t fill " "

FINANCIAL ADMINlSTRATlON AND AUDIT ACT

(C AP. 174)

Public Service (Procurement) Regulations, 1996

IN VIRTUE of the powers conferred by section 4 of lhe Financial

Administnllion and Audit Act, the Minister of Finance has made the

following regulations

=--

These regulations may be cited as the Public Service ~.'"

(Procurement) Regulations, 1996, and shall come into force on suc h

date as the Minister responsible for finance: may by noticc in theGazclte

appoint and different dates may be so appointed for different provisions

and different purposes of these regulations.

(Regulation 5(2)(a»

General Conditions or Contracts

The general conditions of contracts shall deal wi th

Contractor specifications required for different classes of contract;

The nature and form of guarantees required by Government;

111. The treatment of local taxes;

The treatment of foreign currency;

v. The rate to be used in any calculation of a discoun ted cash flow

calculations;

Payment procedure;

The retention amounts to be withheld and the system for their payment;

Arbitration arrangements;

ix . The nature of penalties to be imposed for non-compiiance and the

proccdure for their imposition;

x. The proper measuring of the performance. progress and execution of

Sub-contracting procedures;

Procedure on variation orders; and

QlIality assurance procedures.

2. These standard conditions and any amendments thereto shall be published in

the Governmenl Gazette before they come into force.

3. A full updated version of such standard conditions shall be published in the

Gazette during the first month of each year.

B

In these regulations. un less the C()ntcllt otherwise requires _ 1,*,,1"_'

"Director" means the Head of the OepanmeDI of Contracts;

" Minister" means the Minister responsible for finance:;

"Secretary" means the Pennancn! Secretary at the Ministry

responsible for finance;

"variations outside the limit of the tendercondiLions" means

a variation other than one for which provision is made in the relative

call for tenders.

(Regulation 5(2Xg))

Classification of Contractors

I . The procedure forthec1assification of contractors shall be regulated as follows

a. The Director shall publish the criteria on which the classification in each

sector is [0 be made;

b. The Director may , o n application. include or upgrade suppliers and

contractors after he ensures himself that they fit the published cdteria;

c. The Director may remove or downgrade a supplier and contractor either

o n application. or after facts indicating such an action become known to him , or

as a penalty for breach of the conditions of any contract previously awarded to the

supplier or contractor

Provided that in the case of a removal or downgrading other than on

application, the supplier and contractor concerned shall be infonned of the action

intended to be taken and shall be given two weeks within which to submit reasons

against such action . The decision of the Director shall be final .

2. Contractor and supplier classifications and any amendments thereto shall be

published in the Government Gazette before they come into force.

3. A full updated version of such contractor and supplier classifications shall be

published in the Gazette during the first month of each year.

These regulations apply to procurement by Government Applic:obilily.

departments and divisions

Provided that public cDr]Xlrations or other bodies (hereinafter

referred to as public organisations) may, in accordance with or under

their constituent law, be directed to have their procurement regulated

by these regulations, or that certain funds may be made available to

them by Government on condition that equipment, stores, works or

services to be procured thereby are to be made in accordance with these

regulations.

(Regulation 5(2) (k»

Proced ure for complaints

The procedure to be followed in making and detennination of complaints, and the

condi tions under which such complaints may be made shall be the following

1. 1lle decision of the Director at any stage of the adjudication process

shaH be made public at his depanment, prior to the award of the contract or prior

to proceeding to the next stage as the case may be.

2. Any tenderer who feels aggrieved by the decision may, within three

work.ing days of the publication of the decision, file a notice of objection. Such a

notice of objection shall only be valid if accompanied by a deposit of I % of the

estimated tender value. TIle deposit shall only be refunded if the objection is

upheld

Provided that in no case shall the depos it be less than Lm 100 or more than

Lm25.ooo.

3. 1be notice of objection shall be made public by the Director at his

department on the day followin g il~ filing.

4. Within three days of the publication of a notice of objection, any other

tenderer involved in the call for tenders may register an interest in the proceed-

ings. The registration of interest shall only be valid if accompanied by a deposit

amounting to the deposit paid under paragraph 2 hereof. This deposit shall only

be refunded if the tender is fin ally awarded to the tenderer filing a registration of

interest. The tenderer who had been indicated in the adjudication decision of the

Director as the one to whom the tender was to be awarded, shall be deemed to

have registered an interest but no deposi t nceds to be made by him.

5. The names of the tenderers who register an interest shall be made public

by the Director at his department on the first day after the time limit specified in

paragraph 4 hereof.

6 . (a) Within three working days afte r the publication of the list of ten-

derers who registered an interest, the te nderer filing the nQlice of objection

shall send to the Director a motivated letter of objection explaini ng the

points of thi s objection.

(b) 1be letter of objection and any accompanying documentation

shall be submilled in a number of copies that equals the number of tenderers

with a registered interest plus three .

(c) The Icuer of objection shall be made public at the Oepartmenl of

ContmclS and shall be cirrulalCd to all tenderers with • regislen:d interest.

7. (8) Within five days from the publicalion of the leiter of objection,

any tenderer who had registered an interest may send a motivated reply to

the leeter of objection .

The reply and any accompanying documentation shall be submit·

(b)

ted in a number of copies Ihal equals the number of tenderers with a n:gis-

(ere<! interest plus three.

(c) The reply shan be made publk: at the Oepanmeot of, Conll'*:.ts

and shall be circulated to all tenderen wilh a registered intctcst and to all

tenderers who have filed an objection.

8. The Director shall, within five days of the publication of the replies,

prepare a repon. analysing the letter of objection and the replies thereto. This

report shall be circulated to the tenderers who filed an objection and who have a

rcglstered interest as weD as to all the members of the Contracts Committee: in-

volved io the award of the particular tender.

9. The Oircctor shall, within five days after the distribution of his report.

cal) a public session of the Contracts Committee involved in the award of the

particular tender to deliberate his lepoft and to arrive at their final recommc:nda·

lion . The decision of the Director is final

Provided that during such public deliberation. the Contracts Committee.

through its chairman, shall be empowered to call witnesses. to administer oaths

and to engage non·Committee members to assist the Committee in the investiga-

tions;

Provided further that the power of me Director to accept or reject a majority

declsion of the Contracts Commiuee or to refer any matter to the Minister for his

decision shall still apply .

(I) These regulations set out the limits of the power of the 5«Ipe.

Director. heads of department and other officers to enter into contracts

on be half of the Government, and any contract entered into contrary to

the provisions thereof shall be rescindable at the request of the

Governmen t.

(2) 1bese regulations do not confer any right to any tenderer,

supplier or contractor beyond those pertaining under civil law .

(3) The Minister may, subject to such conditions and

limitations as he may deem proper, delegate, in writing, to the Secretary,

the Director or to any public officer (or, solely in the case of a public

corporation or body referred to in the proviso to regulation 3, an officer

of the respective public corporation or body) any of the powers reserved

to him under these regulations.

(4) The Minister may, in writing, dispense from any of the

provisions of these regulations and may order that any procedure therein

prescribed be not carried out, he may further in writing convaJidate any

thing done not in accordance with these regulations or any procedure

prescribed therein, or in writing direct that any procurement be carried

out otherwise than in accordance with these regulations .

S. (I) There shall be a Director of Contracts who shall be

responsible fOrlhe running of the Department of Contracts and generaJly

for the administration of the procurement procedures as laid down in

these regulations.

It shall be the function of the Director of Contracts -

(2)

(a) to establish the generaJ conditions of contract in relation

to matters listed in the First Schedule to these regulations and to

publish the same in accordance with the said schedule;

(b) to authorise deviations from standard specifications and

conditions (whether technical orotherwise) to be included in tender

documents;

(c) to ensure that tender conditions and specifications do

not give an l!ndue advantage or disadvantage to any particular

supplier;

(d) to vet and approve(with or without modifications) tender

documents, before the same are issued and published;

(e) to ensure that calls for tenders are adequately advertised

and that sufficient time is allowed for the submiss ion of tenders;

to publish in the Gazeue a notice of all awards of tenders,

(I)

including variations outside the limit of the tende r conditions,

with in four months after their award;

(g) with the concurrence of the General Contracts

Committee and in accordance with the rules set out in the Second

Schedule to these regulations, to draw up, in such sectors as may

be determined by him, graded list~ of qualified contractors to whom

contracts may be awarded in the said sectors;

(h) to establish and regulate the procedure to be followed

during meetings of the Contracts Commillees and departmental

boards, and during the issue and publication of calls for tenders,

receipt of offers, opening of bids, adjudication of tenders and

awards of contracts

(i) to monitor Government procurement requirements, and,

after appropriate calls for tenders, enter into period contracts as

necessary

(j) to consider and approve the appointment of contractors

for supplies, works or services for specific periods at approved

prices, rates and conditions;

(k) to determine complaints on the issue of tenders and

awards of contracts made by interested persons in accordance with

the Third Schedule to these regUlations, and to determine any

procedures for such complaints not otherwise provided for in the

said schedule,

to obtain information from Government departments or

(I)

other organisations to which these regulations apply on the award

of depanmentaJ contracts, variation orders, penalties (imposed or

remitted) and generally as he may deem necessary forthe carrying

out of his functions under these regulations

(m) to approve, where appropriate, as provided in the Fourth

Schedule to these regulations, variations outside the limit of the

tender conditions;

(n) to monitor the proper execution of contracts awarded

by him, and, on the advice of the General Contracts Committee, to

impose or remit, as appropriate, penalties due on such contracts;

"d

(0) to institute any proceedings that may be necessary in

relation to any contract awarded by him.

6, (1) There shall be a General Contracts Committee whose

members shall be appointed by the Prime Mi nister on such terms and

conditions as may be specified in their letter of appointment.

(2) The members of the General ConU'aC[SCommittee shall

be appointed for a fixed term of nol more Ihan three years, and may be

reappointed.

(3) A member of Ihe General ConU'aC1s Committee may

during his tenure of office be removed by Ihe Prime Minister where he

is satisfied Ihal Ihere has been a clear case of misbehaviour by the

member or inability of a member to perform his functions or where

such circumstances exist Ihat would disqualify such a member from

remain ing a member of the Contracts Committee.

(Regulation 5(2) (m»

Variation Orders

I . In all cases where approval for variation orders is required. it is to be sought

from the Director before a commitment is made by the department or publjc organisa-

tion with the contractor.

2. When req uesting such an approval, the department or public organisation

shal l present a document specifying the background to the cause of such a variation,

the effect on the total cost oCthe tender and any effect on the recurrent expenditure that

will ensue .

3. When granting or refusing such a request for variation, the Director shall

specify his view as to whether such a variation could have been avoided and the proce-

dure to be followed in the future by the department or public organisation 10 avoid a

recurrence.

4 . The Director is to keep a full record of variation requests, including the name

of the contractor involved and dctails of the documents specified in paragraphs 2 and

3 hereof.

(Regulation 8)

Members of the Contracts Committees

(a) The Committees shal l be composed o f the Director of Contracts, who shall

be, ex-officio, the Chairman of the Committees, and of four to ten members who ap"-

pear to the Prime Minister 10 have the relevant qualifications or experience.

(b)

The Prime Minister shall also appoint persons from among the staff at the

Department of Contracts to act as secretaries of the Committees as may be directed by

the Director. The secretaries shall nol be members of the Committees and may not

vote thereat.

(e) During the Chairman's absence or inability to act as Chairman , or during

any vacancy in the office of the Chairman, the Minister may appoint an officer from

among the most senior officers al the Department of Contracts 10 act as the Chairman

of the Committees, 10 exercise all powers and perform al l the functions of the Chair-

mm .

(d) A person shall be disqualified from being appointed to and from re mai ning

a member of a Commi ttee if he -

(i)

is a member of the House of Representatives; or

(ii) has such a financial or other interest as is likely to prejudice the dis-

charge of his fu nctions as a member o f the Contracts Committees.

(e) A membe r of a Committee may resign his office by letter addressed to the

Prime Minister.

(f) A member of any Committee who has any direct or indirect interest in any

contract dealt with by the Committee shall disc lose the nature of his interest at the first

meeting of the Committee after the relevant facts have come to his know ledge; such

disclosure shall be recorded in the minutes of that meeting of the Committee and the

member having an interest as aforesaid shall withdraw from any meetings at which

such contract is discussed.

8Z2

(1) Ikun hemm Kumi lat taI- Kuntratti Generali Ii jkollu 1-

membri tieghu Ii jinhatru mill-Prim Ministru b'dawk ii-patti u

kundizzjonijiet kif jislghu jigu spceifikati n-ittra tal-ham taghhom.

(2) Il-membri tal-Kumitat lal· KuntraUi Generali jinhatru

ghal imien Stabbililla' mhux iklar minn tliet soio , u jisighu jergghu

jigu mahtura.

(3) Membru tal-Kumitattal-Kuntratti Generalijisa' ,matul

iz·zmien Ii jkun qed jokkupa I.Uriga,jitnehl'la mill· Prim Ministnl jell

huwajkun sodisfallii kien hemm kai car ta' mgieba hazina minn dak

il·membru jew Ii dak il·membru Ide n inkapaci jwettaq il-funzjonijiet

tieghu jew meta jkunu jei;stu cirkostanzi bhal dawk Ii kic:iru kienu

jiskwalifikaw Iii dak il · membru milli jibqa' membru tal-Kumitat tal·

Kuntratti.

Meta l-Prim Ministrujistabbilixxi Ii l-eiami ta' offen;

(Regulation 9)

Functions of the Contracts Committees

A Contracts Committee shall

I. advise on all maners relating to public contracts, as well as on public

procurement of materials, works and services either on its own initiative or on

specifi c issues relating to its functions which may from time to time be referred

for its advice;

2. evaluate tenders submitted as well as reports and recommendations

made thereon by the respecti ve departments and public organisations and to

make definite reco mmendations for the award of tenders ensuring that the best

value for money at the lowest possible cost is attained . In this regard. due consid-

eration shall be given to -

i. the fi nal cost including fin ancing costs to Government or to the

public organisation, and

Ii. the impact of each offer on the recurrent expenditure of Govern-

ment or the public organisation;

3. repon any irregularities that may be brought to its notice or that may be

detected in the tendering process and make recommcndations thereon to the Min-

ister charged wi th responsibility for the department or public organisation con-

cerned;

4. deal with mauers which , according to the contract, have to be referred

to the Contracts Committee, and to hear and determine dispu tes between depart-

ments or public organisations, as the case may be , and Contractors. arising out of

public conlracts; and

5. formally investigate complaints concerning public contracts and pro-

curements and make recommendations thereon

In such cases the Chairman of the Contracts Committee shall be empowered

to call witnesses (who may be asked to confirm their testimony before a Commis-

sioner for Oaths) and 10 engage no n-Committee me mbers to assist in the investi-

gations.

8 823

( I ) Where the P rim e Mini ste r determines that Ihe

adj ud ication of tenders for Ihe award o f any panicular contract requires

special expenise. skills or other in put. he may appoint a Special Contrncls

Committee for the award of that contrlK'l.

(2) The members of a Special ConU'aCts Committee shall

be appointed for the duration ofthe adjudication process of the particular

call for tenders until a leller of acceptance of tender is issued or th~

Direclor declares tha t the award of the contract is not goi ng to be

proceeded with.

(3) Subjeclto Ihe above. the provisions of regu lation 6 shall

apply to members of a Special Contracts Committee as they apply to

members of the General Contracts Committee.

(Regulation Il(b»

Procurements Commlttefs

I. The Minister may authorise the sening up of Commiuees, to be known as

Procurements Committees. in respect of depattmentaltenders whose estimated value

exceeds Lm20,ooo.

2. Each Procurements Committee shall be composed of the Head of the

Department. or. in his absence, an officer appointed by the Minister from among the

most senior officials at the department effecting the purchase, who shall be, a-officio,

the Chairman of the Committee, and of nO( less than four members appoi nted by the

Minister. none of whom shall be performing duties at or members of the slaff of the

department effecting the purchase.

3. The provisioosof regulalions 6, 8(2), (3) and (4) and 14 and of the Fifth and

Sixth Schedules to these regulat ions shall apply mula/is mutandis 10 the setting up and

the fu nctions of each Procurements Committee, its Chairman and its members .

( I) The proviSions of the Fifth Schedule to these regulations

shall appl y in respect of th e members of the General Contracls

Committee and Special Contracts Committees.

(2) The meetings of the Committees shall be called by the

Chairman who shall preside over such meetings. Any three members

of the Contracts Comminee shall constilUte a quorum at a meeting

thereof.

(3) Decisions shall be taken by a sim ple majority of the

votes of the members present and voting. The Chairman shall have an

initial vote and. in the event of an equality of votes, a casting vote.

(4) During theopening of bids the meetings oftheContracts

Commillees shall be open to the public . The list of tenders received,

together with the respective offered prices, shall be given publicity by

the Director.

(Regulation 13)

Separate packages In lender offer

The Director of Contracts shall. on all tenders with an estimated value of over

Lm250,ooo or. al his discretion, on tenders of a lower value,

I. direct that one of the lender conditions provides that bid offers shall

only qualify for consideration provided they include in separate packages

Guaranlees requ ired by the tender, duly executed;

1. Adequate information and certifications regarding the tenderer;

"d

Terms of delivery and execution.

Technical specifications.

II.

Financial consideration including the price for schedule of the bills

111. of quantity, financing arrangements and terms of payment.

2. In the process of adjudicating the tender, the packages fOf all tenderers

shall be opened in public and in the sequence enumerated above. When, at any

stage. any tenderer fails to comply with the tender specifications, the remaining

packages in his tender offer are to be discanled unopened.

3. Any discarded tender is to be given publicity in the Department of

Contracts and the affected tenderer is to be infonned of the decision within two

working days of its publication. A review is to be effected by the Contracts

Committee involved in the adjudicating process of the relevant tender, before the

next stage of the adjudication is started.

4. A request for a review shal l be accompanied by a deposit of 0.5% of the

estimated tender value. This deposit shall only be refundable if the Director of

Contracts finds in the te nderer'S favour

Provided that the deposit shall in no case be less than Lm250 or more than

Lm25,ooo.

~", Ik fJepuJ ,.",II//tII»_icwI

IppoibbIikll mid·DipMi_ 10· J.I"""""""joni

K.uljo

K<UIi{id

MitbuCft n.I .. ....,...;jo IOl-Gvem - PriIwd .. tAotGow __ III!'rUttiIV 1'>< ..

TheContracts Committoessha11 have the function 10 assist l'wIttlonool

=:....

the Director in the execution of his duties in accordance with these

rcguJatiOflll. ln the discharge of their functions, the Contracts Committees

shall be regulated by the provisions of these regulations generally and

in particular by the provisions of the Sixth Schedule 10 these regulations.

Subject 10 the other provisions of these regUlations, the

procurement of all equipment, stores, works and services by Government

or any other body to which these regulations apply. shall be made by

contract after a call for tenders in accordance with these regu lations.

- -

It.

Except where the Minister otherwise directs, the

procedure for the procurement of equipment, stores, works or services

shall be the following

<a) (i) equipment. stores, works or services costing not

more than LmSOO may be procured depanrnentally either after

obtaining quotations or direct from the open market at the

discretion of the head of Department taking into consideration

the amount involved, the urgency attached to the procurement

and restrictions of choice and availability;

equipment, stores, works or services costing over

(ii)

LmSOO but not more than Lmi,OOO may be procured

depanmentally after obtaining quotations;

(iii) equipment. stores, works or services costing over

Lml.OOO but not more than Lm2 ,SOO may be procured

depanmentally after a cal l for tenders, or after obtaining

quotations,or from the open market after taking into account

the amount involved. the urgency anached 10 the procurement

and restrictions of choice and availability . as may be approved

by the Minister responsible for that depanment, or by the

Parliamentary Secretary, the Pennantn! Secretary or the Head

of Department as may be delegated by such Minister;

(iv) purchases of the same or closely similar material

in different lots under subparagraphs (i). (ii) and (iii) hereof

during a period of six months shall not exceed a total value of

LmIO,ooo

(b) equipment , stores, worlcs or services costing more than

Lm2.500 but nOl more than Lm20,ooo shall be procured after a

departmental call fortenders. Such tenders sha.ll be opened by three

senior officers of the department

Provided that the Minister, by wrinen direction, may allow

limits higher than Lm20.ooo in the case of particular departments

and may authorise, as and when he deems appropriate. the setti ng

up of Procurements Committees as provided for in the Seventh

Schedule to these regulations;

Provided funher that the Minister may al low variations,

penalties and remi ssions, in respect of suc h contracts, to be

approved by the Min ister charged with responsibility for that

department, who may delegate his authority to the Parliamentary

Secretary, the Permanent Secretary, or head of depanment.

Provided funher that the head of the department shall publish

in the Govemment Gazette all awards of such contracts, including

variations outside the limit of the tender conditions , within four

months after they are awarded;

(c) equi pment, stores, works or services costing more than

the limits set oul or established under paragraph (b) hereof shall

be procured after a public call for tenders issued by the Director.

(I ) Equipment,stores, works or services which the Director

may from time to time designate as com mon to various departments

may be procured by the Director through Period Contracts awarded by

him after a public call for tenders .

(2) The Director sha ll periodically notify Heads of

Department of the prices and conditions applicable for , and the procedure

to be followed in, the procurement of such equipment, stores, works or

services.

(3) Heads of Depanment shall obtain suc h equipment,

stores, works or services directly from the contractor in accordance

with such conditions and procedures notified by the Director in

accordance with paragraph (2) hereof.

Where in accordance with a call for tenders a bid consists of

separate packages, the procedures set oul in the Eighth Schedule to

these regulations shall be followed.

(1) Without prejudice to the provisions of the Interpretation

Act, and to any order or direclion given by the Minister -

(a) the Director may, at his di scre tion, accept or rejecl the

recommendations of the majority of members of the Contracts

Committee for the acceptance or rejeclion of any tender;

where -

(b)

the Director disagrees with any recommendation

(i)

of the majority of the members of a Contracts Committee; or

(ii) any recommendation of a Contracts Committee

differs from thai submitted by the department or other body

for whom the procurement is to be made,

the Director may refer the matter for the decision of the MinislCr

Provided that the Director shall always refer any maner in

which he disag~s with the majority of the members of a Special

Contracts Committee for the decision of the Ministcr;

(c)

the Director may, al his discretion, refer any matter for

the decision of the Minister.

(2) Any matter referred for the decision of the Ministershall

be so referred in writing and the decision of the Minister shall likewise

be communicated in writing.

IS.

(I)

The Director shall nO( later than three months after the A _ II.poIl.

end of each final'lCial year make and tnmsmit to the Minister a repon

dealing generally with the activities of the Comminees during the

financial year being reported upon, and including a su mmary repon o f

any irregu larities b roug ht to th ei r notice or detected and

recommendations made thereon, as well as details of any complaints

received and the results of every investigation carried out thereon .

(2) 1be Ministe r shall cause a copy of every suc h report 10

be laid-on lhe Table o f Ihe House of Represen tatives as soon as

practicable .

( I) Id-Direttur ghandu mhux iijed wd mi nn tliet xhurwara lUppon.

Im iem kull sena finanzjarja, jaghmel rappon u jghaddih lill-Ministru , II"" . . ..

He ma rapport iku n generalmenl jittratta dwar l-attivitajiet tal-Kumitati

malul di k is-sena finanzjarja Ii dwarhajkun qed isir ir-rapport , u Ii j kun

jinkludi rapport som marju dwar kull irregolaritA Ii jkunu j afu biha jew

Ii tigi skoperta u kull rakkomandazzjoni Ii ssi r dwarha, kifukoll dettalji

dwar kull i1mentli jkun tressaq u r-rirul tati ta' kull inve5tiga7..zjoni Ii

Ikun saret dwaro.

(2) II -Minislro ghandu j ara Ii titqieghed kemm jista' j kun

malaj r fuq il-Mejda tal-Karma td-Deputati kopja ta' kull rapport Ii jsir.

Regulations 10410 108 of the General Financial Regulations, Repeal.

1996, are hereby deleted.

L.N.4001I966.