Where Industry and Security Intersect
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(a) The guiding principles in these procedures are:
(b) This document describes firstly the basic One-Step International Competitive Bidding (ICB) Procedure. However, over the years the character of the projects commonly-funded in the framework of the NATO Security Investment Progam has changed and an increasing proportion of the Progam now consists of relatively complex projects. For the procurement of these projects specific rules have been developed and agreed. These rules are incorporated in the Optional Preliminary Bidding Procedure (two-step) at Annex II and the three-step ICB Procedure described in Annex III. The applicability and detailed arrangements thereof can also be found in these Annexes.
(c) Should a host nation wish to deviate from these agreed procedures, it must obtain prior approval of the Infrastructure Committee.
(d) The procedures establish the responsibility and rights of host nations, firms, countries of origin and the Infrastructure Committee up to and including contract signature. Annex I to this document describes the action to be taken in case of a dispute.
(e) With the aim of avoiding misunderstandings and disputes, nations should bear in mind the following points:
(i) the purpose of these procedures is to meet only the Minimum Military Requirement as soon as possible, and at the least possible cost, and therefore the procurement process should minimize operational, technical and financial risks when seeking to fulfill stated requirements. Host nations are encouraged to look at “off-the-shelf” solutions first and should carefully consider the risk of research and development work. Discussion of these aspects should take place in the technical working groups before authorization in the Infrastructure Committee;
(ii) the greater the clarity of the “cahier des charges” the less the likelihood of a dispute, and host nations are encouraged, in drafting the “cahier des charges” for complex projects to reflect the performance specifications required rather than detailed technical specifications;
(iii) the host nation is invited to consult the bidder concerned, and if necessary, the International Staff and the appropriate Major NATO Command, if it is not certain whether a bid meets the requirements of the “cahier des charges”. It should be clear, however, that whilst consultation with bidders is desirable in the interest of clarity, no alterations of bids (including technical, financial and schedule changes) after closing date are permissible;(iv) when alterative solutions could be offered other than those foreseen by the “cahier des charges” and trade-offs could be made, consideration by the host nation should be given to application of the two- or three-step biding procedure;
(v) when carrying out an ICB exercise or when raising an ICB dispute, nations are invited to take into consideration the general recommendations made by Boards of Arbitration in previous ICB disputes.
For the purposes of this document, the following definitions will apply:
“CAHIER DES CHARGES”: bidding documents issued by a host nation
containing technical, administrative and contractual requirements/conditions;“CLASSIFIEDINFORMATION”: information which requires security protection;
“COMMITTEE”: the Infrastructure Committee;
“COMPLIANCE”: conformity with the “cahier des charges”;
“CONTRACTOR”: a firm of a participating country which has signed a contract with a host nation to perform a service manufacturer a product, or carry out works for NATO;
“COUNTRYOF ORIGIN” home country of a contractor or sub- : contractor
“DELEGATIONS”: delegations to NATO of participating countries;
“ELIGIBLE FIRM”: a firm for which the country of origin has given a “Declaration of Eligibility” as in paragraph 5(ii) (a);
“FIRM OF A PARTICIPATING COUNTRY”: firm legally constituted or chartered under the laws of, and geographically located in, or falling under the jurisdiction of, a participating country; the work cannot be physically undertaken in a non-participating country;
“HOST NATION”: a participating country, Major NATO Command or a NATO Agency which is responsible for implementing a Security Investment project;
“PARTICIPATING NATO COUNTRY”: a country which has undertaken to share the cost of the Security Investment project involved;
“PROCUREMENT AGENCY”: agency which conducts an ICB exercise or procurement on behalf of one or more host nations.
The security procedures and requirements for NATO classified Security Investment projects are described in the latest edition of C-M(55) 15 (Final), which sets out the general rules for the protection of NATO classified information. Classification of bidding documents should be kept at the lowest possible level compatible with the requirements of this document.
(a) In all cases where an ICB is prescribed, host nations must ensure that eligible firms of all participating countries are given the same opportunity and that the bids of all eligible competitors are treated in the same way.
(b) Consistent with the requirements of paragraph 1, host nations must avoid producing specifications biased toward a specific equipment.
(c) The host nation is free to issue ICB documents either in its own language or in one of the official NATO languages, but it is encouraged to use one of the official NATO languages. The bidders’ responses to the “cahier des charges” must be either in the official language(s) of the host nation or in one of the official NATO languages unless the choice of language were specifically determined by the host nation and stated in the “cahier des charges”.
(d) To stimulate competition, the Infrastructure Committee agreed in 1978 and confirmed in 1981, that host nations must provide for timely availability of names of potential bidders on common funded projects, as laid down in the procedure “Dissemination of information on invitations to tender”. The full text of this procedure is at Annex IV.
(i) A host nation must admit to the bidding any eligible firm of another participating country. Bidding instructions to firms and manufacturers shall state that firms from other than participating countries are excluded from acting as contractor, sub-contractor or manufacturer. The underlying rule here is that, unless otherwise decided by the Committee, all work and manufacture should be carried out in the participating countries. Unless the host nation has been authorised to proceed otherwise, bidding instructions to contractors and sub-contractors, should therefore, state the following:
(a) none of the work, including project design, labor and services, shall be performed other than by firms from and within participating countries;
(b) no materials or items of equipment down to and including identifiable sub-assemblies2 shall be manufactured or assembled by a firm other than from and within a participating country;
(ii)(a) subject to the provisions of paragraph 7, eligibility of firms is established by means of a “Declaration of Eligibility”. A specimen declaration is at Annex V. This is to be issued to a responsible authority of the host nation by the government of the potential contractor’s country of origin, or by another authority designated for this purpose. This “Declaration of Eligibility” will contain the full statutory name and address of that firm.3
(b) the country of origin must declare that, if responsible for awarding a contract for similar work, it would itself admit the firm as a competitor. This declaration signifies that the firm is technically, financially and professionally capable of undertaking a project of the scope envisaged in the invitation for bids (IFB).
The firm should have provided or be presently providing goods and services similar to those specified therein to other customers or can be expected to show to the host nation the capability of doing so through its response to the IFB in question, and has expressed an interest in responding to that IFB. Countries of origin should avoid including the names of firms which would not be likely to bid for the kid of work envisaged.
(c) if the contract will involve passing on of NATO classified information to firms or requires firms to have access to restricted areas of military installations, the declaration must, in addition, include the security classification of the firm which must be equal to or of a higher level than the requirement of the host nation.
(iii)
(a) countries of origin of firms are at liberty to make declarations either individually or collectively, but collective lists are preferable. Declarations should be supplied to the host nation through the diplomatic representative of the country of origin in the capital of the host country;4
(b) the fact that a firm is not covered by a “Declaration of Eligibility” or that such a declaration is incomplete does not immediately eliminate this firm. This case will be handled in accordance with paragraph 7 below.
1 Paragraph 5 relates throughout to declarations provided by countries of origin for specific NATO projects, and not to the index of eligible firms maintained by some host nations. Where these standing lists are provided the country of origin should show the firms in alphabetical order and state their respective specializations. The list should be given a serial number and any amendments to the list should also bear the serial. N.B. These lists do not count as a “Declaration of Eligibility” under the terms of paragraph 5 above.
2 Assembly: An item forming a portion of an equipment, that can be provisioned and replaced as an entity and which normally incorporates replaceable parts of groups of parts (MAS (TC) 30-AAP-6/1 (10th March 1986) Definitions Sub-Assembly: A portion of an assembly consisting of two or more parts that can be provisioned and replaced as an entity - this definition purposely excludes components and/or parts (as defined in ACodP-1), which are not subject to the provisions herein
Manufactured: Made on an industrial scale.
Assembled: Fit together parts of.
Made in: Form from parts in
3Whenever possible it should also show the section/branch responsible for handling the work, with the telephone number, telex number and the name of the individual concerned.
4 Declarations
of Eligibility shall normally be supplied as in 5 (iii) (a) but, if required,
a country of origin may determine that such declarations will be transmitted
from its NATO delegation via the NATO delegation of the host nation provided
advance notice is given to the host nation.