THE EUROPEAN SPACE AGENCY - Basic Procurement Principles of ESA Dr. Karl Eisermann (IPL-PL) Head of the Launchers and HQ Procurement Division ...
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THE EUROPEAN SPACE AGENCY
Basic Procurement Principles of ESA
Dr. Karl Eisermann (IPL-PL)
Head of the Launchers and
HQ Procurement Division
ESA-HQ
September 2017
ESA UNCLASSIFIED - For Official Use
The European Space Agency
• The idea of an independent European Space Agency dates back to the early
1960’s; ESA was formed in 1975, replacing the satellite and launcher organisations ESRO
and ELDO;
• The ESA Convention entered into force in October 1980; ESA is an
Intergovernmental Organisation with its own legal personality;
• When procuring, ESA is only bound by its own set of rules and regulations and not by
the EU Directive on Public Procurement or those of an individual Member State or the EU;
• Procurement Policies are adopted by the ESA Council; internal policies are introduced by
the DG.
ESA UNCLASSIFIED - For Official Use
ESA facts and figures
• Over 50 years’ experience;
• 22 Member States;
• Eight sites/facilities in
Europe; about 2300 staff;
• 5.75 billion Euro budget
(2017);
• Over 80 satellites designed,
tested and operated in flight.
ESA UNCLASSIFIED - For Official Use
Member States ESA has 22 Member States: 20 states of the EU (AT, BE, CZ, DE, DK, EE, ES, FI, FR, IT, GR, HU, IE, LU, NL, PT, PL, RO, SE, UK) plus Norway and Switzerland. Seven other EU states have Cooperation Agreements with ESA: Bulgaria, Cyprus, Latvia, Lithuania, Malta and Slovakia. Discussions are ongoing with Croatia. Slovenia is an Associate Member. Canada takes part in some programmes under a long-standing Cooperation Agreement. ESA UNCLASSIFIED - For Official Use
ESA budget for 2017: 5.75 B€
ESA Activities and Programmes
Programmes implemented
CH: 3.8%, 145.1 M€ UK: 7.9%, 300.0 M€ for other institutional
SE: 1.9%, 72.3 M€ CA: 0.3%, 13.1 M€ partners
ES: 4.0%, 151.2 M€ SL: 0.1%, 3.4 M€
RO: 0.8%, 30.0 M€ Other: 5.6%, 209.8 M€
Income from the EU:
PT: 0.5%, 17.0 M€ AT: 1.2%, 47.1 M€ 86.1%, 1697.9 M€
PL: 0.9%, 34.6 M€ BE: 5.5%, 206.0 M€
Income from Eumetsat:
NO: 1.7%, 63.5 M€ CZ: 0.9%, 32.7 M€ 9.3%, 182.7 M€
NL: 1.9%, 72.0 M€ DK: 0.8%, 30.5 M€ Other income:
4.6%, 90.7 M€
LU: 0.6%, 22.3 M€ EE: 0.1%, 2.5 M€
FI: 0.5%, 19.4 M€
Total:
IT: 14.6%, 550.0 M€ 3.78 B€ DE: 22.7%, 858.4 M€
IE: 0.5%, 17.8 M€
Total:
HU: 0.2%, 6.2 M€ 1.97 B€
GR: 0.4%, 14.6 M€
FR: 22.7%, 855.9 M€
B€: Billion Euro M€: Million Euro
ESA UNCLASSIFIED - For Official Use
ESA budget for 2017: by domain
Navigation*
17.6%, 1,010.8 M€
Prodex
Launchers* 0.8%, 47.2 M€
18.9%, 1,088.4 M€
Space Science
8.9%, 513.1 M€
Basic Activities
B€: Billion Euro 4.1%, 234.8 M€
M€: Million Euro Budget 2017
5.75 B€
*includes programmes
implemented for other
institutional partners Associated with General Budget
3.9%, 222.3 M€
Human Spaceflight
& Robotic Exploration
11.0%, 633.0 M€
Earth Observation*
26.9%, 1,543.3 M€ Telecom & Integrated Applications*
5.6%, 319.0 M€
Technology Support*
European Cooperating 2.0%, 114.3 M€
States Agreements
Space Situational Awareness
0.1%, 5.5 M€
0.3%, 15.1 M€
ESA UNCLASSIFIED - For Official Use
ESA Programmes
All Member States participate (on a In addition, Member States choose
GNP basis) in activities relating to their level of participation in
space science and a common set of optional programmes.
programmes (mandatory
programmes). Optional
Mandatory • Human Spaceflight;
• General budget: future studies, • Telecommunications & Integrated
technological research, education, Applications;
common investments (facilities,
• Earth Observation ;
laboratories, basic infrastructure);
• Science: solar system science,
• Launchers;
astronomy and fundamental • Navigation;
physics. • Robotic Exploration;
• Space Situational Awareness.
ESA UNCLASSIFIED - For Official Use
ESA programmes
• The programmes are managed under the DG’s authority, in accordance
with ESA rules and regulations and with each programme’s
Implementing Rules;
• Major programmatic decisions are taken by the Participating States in
Programme Boards, which are expressly mandated by the Council:
JCB – Telecommunications;
PB-EO - Earth Observation;
PB-LAU – Launchers;
PB-HME - Human Space Flight, Microgravity and Exploration;
PB-NAV – Navigation;
PB-SSA – Space Situational Awareness;
IPC – Industrial Policy Committee (functions as PB for Technology Programmes).
ESA UNCLASSIFIED - For Official Use
ESA directors
Director General
Jan Woerner
PROGRAMME AREAS
Earth Observation Galileo & Telecomms Science Human Spaceflight Space
Navigation-related & Integrated & Robotic Transportation
Activities Applications Exploration
Josef Paul Magali Alvaro Giménez David Daniel
Aschbacher Verhoef Vaissiere Cañete Parker Neuenschwander
SPACE SPACE SCIENCE
APPLICATIONS & EXPLORATION
Technology, Operations Internal Services
SUPPORT AREAS
Industry
Engineering Procurement
& Quality & Legal Services
Franco Rolf Eric Morel Jean Max
Ongaro Densing De Westgaver Puech
TECHNICAL
ADMINISTRATION
SUPPORT
ESA UNCLASSIFIED - For Official Use
ESA’s electronic tendering systems (ESA’s view)
esa-star EMITS esa-star
Entity Tender Publish Receive Support
Reporting
Registration Preparation Information Information Evaluation
TEB & TEP IITT’s & ITT’s Receive External
Entity Registration Secrecy Forms
Nomination Publication Proposals Reporting
(Dashboard showing
DB Validation & Tender Package Expressions of Receive ongoing tender
Clarification Access to Offers
Update Preparation Interest actions)
Requests
Clarifications &
Access Rights Best Practices Clarifications
Receive Extensions Internal Reporting
Extension Management (Detailed status,
Two-Step Best Practices Requests configurable
Registration (Tenders published on behalf searches,
The three above TOB Report
Procedure
of third parties) reports &
functions, but for statistics)
Originally Available Function EMITS esa-star
News, Documents, “Best Practices”
Standards, etc. Offer Analysis
Originally Available Function EMITS EMITS
Restricted
Function added to EMITS through esa-star Competition ITT’s TEB Report
Function made available through esa-star Direct Negotiation
RFQ’s
ESA UNCLASSIFIED - For Official UseProcurement
The Principles
ESA Procurement Policy - I
• The Procurement Policy is approved by the Industrial Policy Committee;
• In principle, contracts are placed following open competition. The Agency also
implements geographical return, i.e., the amount it invests in Member States through
the placing of industrial contracts for space programmes and activities is more or less
equivalent to their financial contribution;
• These rules are given - or referred to - in the ITT package and are designed to achieve
the following objectives:
Technical quality & value for money;
Fairness and impartiality;
Industrial policy.
ESA UNCLASSIFIED - For Official UseThe ESA Procurement
Technical Policy for
Quality & Value - II Money
• With respect to technical quality, it should be underlined that ESA:
Is a technically-oriented organisation and strives to achieve technical excellence
by:
Setting detailed technical requirements;
Assessing the proposed technical approach in detail;
Deploying the most highly-qualified technical experts to perform the
assessment;
Monitoring activity with the same level of expertise;
Accepting deliverables against the abovementioned strict requirements.
When making the final recommendation the TEB considers “value for money”.
Thus, price is considered in the decision-making process for taking the award
decision.
ESA UNCLASSIFIED - For Official UseFairness and Impartiality
The ESA Procurement Policy - III
The Tender Evaluation Board (TEB)
• A TEB is appointed for all ITT’s and major RFQ’s;
• Composition:
Technical experts from concerned fields;
Legal/commercial expertise.
• In order to secure the Board’s independence and objectivity:
Its composition represents a balance of participants from
within and outside the initiating department;
All are appointed in their own capacity and do not report to
their hierarchy in performing TEB activities;
All TEB participants sign secrecy forms and a statement of
non-interest.
ESA UNCLASSIFIED - For Official UseFairness
The ESA and Impartiality
Procurement Policy–-TEB
IV Evaluation
Process
• The TEB reviews and approves the ITT package, seeking:
The quality and objectivity of the requirements;
The fairness of the competition.
• The TEB further:
Evaluates the proposals against the evaluation criteria published with
the ITT. No comparison between proposals is made. Only information
provided in the proposal itself is considered;
Ranks the proposals received by applying the weighting factors
established by the TEB prior to ITT issue;
Recommends a company for contract award. Depending on the
nature/size of the activity, the decision is taken by the responsible ESA
Directors, the Agency’s Adjudication Committee (AC) or the Industrial
Policy Committee (IPC).
ESA UNCLASSIFIED - For Official UseESA’s industrial policy- I
About 85% of ESA’s budget is spent on contracts with
European industry.
ESA’s industrial policy:
• Ensures that Member States get a fair return on their investment;
• Improves competitiveness of European industry;
• Maintains and develops space technology;
• Exploits the advantages of open competitive bidding, except where this would be
incompatible with objectives of the industrial policy;
• Encourages the development of an industrial structure appropriate to market
requirements, making use of the existing industrial potential of all Member States.
ESA UNCLASSIFIED - For Official UseESA’s industrial policy - II
• Special clauses for particular types of economic operators:
“C1”: Activities reserved to Non-Primes and SME’s;
“C2”: Activities subject to subcontracting clause in favour of Non-Primes and
SME’s;
“C3”: Activities restricted to SME’s and R&D organisations;
“C4”: Activities with sub-contracting clause to SME’s only.
• Special measures for under-returned countries (whenever needed).
ESA UNCLASSIFIED - For Official UseEquitable Work Distribution
• Code of Best Practices:
A set of procurement rules ensuring fairness in the selection of
subcontractors by primes in ESA’s major procurements.
• EMITS for external entities:
ITT’s issued by external entities (e.g., a prime contractor for a major
project) are published on EMITS to ensure full transparency and visibility.
• The ESA Industrial Ombudsman:
Mediates in disputes between industry in the frame of ESA project
procurements and technology development procurements.
ESA UNCLASSIFIED - For Official UseA few things to keep in mind - I
• Review EMITS IITT’s and ITT’s regularly;
• Do not hesitate to contact ESA if you have questions regarding planned
ITT’s (IITT’s): this is allowed until the actual ITT is issued;
• Pay special attention to the special clauses C1-C4 and also to
announcements made on EMITS under “Entities”;
• Communicate your interest, via EMITS, to participate in the
corresponding ITT’s;
• Contact potential partners identified via EMITS.
ESA UNCLASSIFIED - For Official UseA few things to keep in mind - II
• Try to acquire and maintain an up-to-date knowledge of ESA’s
programmes, activities, organisation and methods of operation;
• Award of ESA contracts requires:
High quality proposals;
The tenderer’s full attention, understanding and
responsiveness to all of the ITT requirements (not only technical
but also formal, administrative, legal, industrial policy, etc.).
• Request a briefing following an unsuccessful proposal submission: this will
help to improve the quality of subsequent proposals.
ESA UNCLASSIFIED - For Official UseBasic Principles of the General Clauses and
Conditions
Liability during execution of the contract (clause 18)
• A cross-waiver of liability has been introduced;
• Gross-negligence and wilful misconduct are excluded from the cross-waiver;
• The contractor is now only liable for damage to its own people and goods and therefore has
a good overview of the extent of its liability, irrespective of fault/negligence of the other
party;
• Deliverables are excluded from the cross-waiver; the contractor’s liability for those is
capped at the contract price;
• Customer furnished items and items made available are excluded from the cross-waiver;
the contractor’s liability is capped at the value agreed in the contract.
ESA UNCLASSIFIED - For Official UseBasic Principles of the General Clauses and Conditions Warranty Under the old GCC: • The warranty period was one year from delivery; • No distinction was made between flight and non-flight items; • No detail of the content of the warranty was given. Considerations: • Driven by EU law, the national legal systems of the ESA Member States changed their approach to the warranty in recent years. ESA sought to align its provisions with their approach. • Previously, ESA did the integration itself. Today, integration is part of the contractor’s tasks. The requirements of the warranty therefore differ from a situation whereby only individual parts are delivered. Thus, ESA sought to adapt its provisions to its business needs of today. ESA UNCLASSIFIED - For Official Use
Basic Principles of the General Clauses and
Conditions
Solution provided by the new GCC in clause 22:
• Distinction between flight and non-flight items;
• For all procurements:
• Deliverable flight items:
• At least one year from acceptance or until lift-off; whichever is
earlier.
• Deliverable non-flight items:
• At least one year from acceptance.
• Post-launch warranty is regulated in the contract on a case-by-case
basis.
ESA UNCLASSIFIED - For Official UseBasic Principles of the General Clauses
and Conditions
Import/Export Licences I (clause 15.3)
• Clause 15.3.1:
Prime contractor’s obligation: timely acquisition of all import/export licences and authorisations
relating to the deliverable items (results-based obligation).
• Clause 15.3.2:
Prime contractor’s obligation: timely conformance to the procedure (no obligation to acquire licenses):
• Contract performance dependent on non-ESA Member State source(s) agreed in the
contract;
• Unforeseeable change in export/import control legislation or application;
• Denial or revocation of export/import control licenses/authorisations for reasons other
than the contractor’s failure to comply with the conditions of the license/authorisation.
ESA UNCLASSIFIED - For Official UseBasic Principles of the General Clauses
and Conditions
Import/Export Licences II (clause 15.3)
• Non-acquisition of the license/authorisation in a case foreseen in clause 15.3.2 shall be
considered as Force Majeure and regulated as such under the GCC (every party bears its
own costs).
• Clause 15.3.5:
Mandatory flow-down to sub-contractors.
ESA UNCLASSIFIED - For Official UseBasic Principles of the General Clauses and
Conditions
Penalties (clause 17)
• The GCC foresee payment of a penalty for late delivery. In addition, the contract may
include a performance-related penalty scheme i.e., the contractor becomes liable to a
penalty if it does not fulfil certain performance parameters.
• The principle of an incentive scheme in connection with a penalty scheme has been
introduced.
ESA UNCLASSIFIED - For Official UseBasic Principles of the General Clauses and
Conditions
Force Majeure (clause 14)
• The GCC define what is to be understood as a Force Majeure event and describe
the procedure which needs to be followed by the parties in such an event.
• Consequences of Force Majeure:
The parties are excused from the performance of their obligations under
the contract from the time the Force Majeure event occurred, evidenced
as required in the GCC.
Each party bears its own cost incurred due to the Force Majeure event.
• The Agency reserves the right either to terminate the contract or re-negotiate its
terms with the contractor.
ESA UNCLASSIFIED - For Official UseBasic Principles of the General Clauses and
Conditions
Termination (clauses 32, 33)
• The Agency’s termination right for fault of the contractor is linked to performance
of the contract and is not linked to the programme in general;
• In the frame of a firm fixed price contract, the contractor keeps the amounts
already paid for achieved milestones, if any, except for advance payments;
• The overall liability of the contractor in case of termination for fault does not
exceed the contract price (except for gross negligence and wilful misconduct);
• The right of termination due to Force Majeure has been introduced.
ESA UNCLASSIFIED - For Official UseBasic Principles of the General Clauses and Conditions Intellectual property rights (IPR) regime: contractual licensing scheme (clause 41) Rule 1: IPR resulting from an ESA contract used for the Agency‘s Own Requirements are freely available to the Agency, Participating States and Persons and Bodies. Rule 2: IPR resulting from an ESA contract, which are used for a national public programme, are available under favourable conditions to Participating States and Persons and Bodies. Rule 3: IPR resulting from an ESA contract, which will be used for other purposes (i.e., commercially), is available under market conditions to any third party. The Contractor may refuse to give a licence, if the access and/or use by the third party is contrary to its legitimate commercial interest. ESA UNCLASSIFIED - For Official Use
Basic Principles of the General Clauses and
Conditions
Background IPR (clause 43)
• Background IP remains the property of the owning party;
• The Agency shall have access to background IP owned by the contractor for the Agency
project specified in the contract;
• In that case, the contractor shall grant the Agency an irrevocable, free, world wide licence
to enable the Agency to use and modify any product, application or result of the contract
for that project.
ESA UNCLASSIFIED - For Official UseBasic Principles of the General Clauses and
Conditions: Background IPR (clause 43)
ESA science programme
Contractor A Agency
Free of charge
for the project
specified in the
contract
ESA UNCLASSIFIED - For Official UseBasic Principles of the General Clauses and
Conditions: Background IPR (clause 43)
ESA science programme ESA manned space programme
To any third
Contractor A party: e.g.,
Contractor B
Market rate, if not
contrary to the
contractor’s legitimate
ESA UNCLASSIFIED - For Official Use commercial interestThank you very much Questions? for your attention! ESA UNCLASSIFIED - For Official Use
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