Works contracts are used to contract construction work of all kinds, including structural work, the installation of utilities and other civil engineering projects.

EU funds are normally provided as co-financing for local public works together with national financing. Major works may also be co-financed by one or several International Funding Institutions, such as the European Investment Bank (EIB), or the World Bank.

If the value of the work is more than Euro 5,000,000 then an International Open Tender is required. The tenderer is given 90 days after the publication notice for the submission of the proposals. For the works valued more than Euro 100,000,000 or for the works in very specific areas a Restricted International tender is possible. In this exceptional case, there should be 60 days between the Letter of Invitation and the deadline for submission.

For the works valued less than Euro 5,000,000 a Local Open Tender procedure is used. This kind of tender is published locally and on the Internet and there are 60 days between local publication and deadline of submission.

For works valued between Euro 5,000 and Euro 300,000 Simplified Procedures are used. No publication notice is made in this case. The tenderer consults with at least 3 potential contractors and evaluates minimum 3 compliant offers. For works valued less than Euro 5,000 a single tender procedure can be used.

Finally, as in the case of service and supply tenders, Negotiated Procedure can be used for works at any value in urgencies and unforeseeable cases such as additional works due to unforeseen circumstances (Max %50 of the original contract value), or the cancellation of tender procedure.

International Open tenders
The tendering and contracting procedures are basically similar to those used for supply contracts. There are, however, some significant additional differences between procedures for supply and works contracts:

• Bid bonds (c.3 per cent of contract value), which bind the tendering firm financially to honour its commitment if awarded the contract, are commonly used 
• Performance security (10 per cent of the contract price) 
• Minimum amount of third party insurance (0.5-2 per cent of contract price per accident) 
• Limit of retention money (5 per cent of contract price, in no case exceed 10 per cent) 
• Amount of advance (10-15 per cent of contract price) 
• Defects liability period (1 year) 
• Extended liability (1 year after expiry of the above)

The tender
In general, the tender documents contain

• The instructions to tenderers 
• Conditions of contract 
• Technical specifications
• Design documentation (drawings) 
• Bill of quantities 
• A questionnaire requesting general information about the tenderer, a financial statement, and technical qualifications with regard to personnel, equipment, work plan and experience.

Tender evaluation
An Evaluation Committee is established to evaluate the tenders in a fair and transparent way. A typical works tender Evaluation Committee may comprise, for example, a non-voting chairperson representing the Implementing Authority, a number of voting members representing the project beneficiary, a secretary, an observer from the Commission and, if necessary, advisers for the technical and financial evaluations.

Before starting the tender evaluation itself, the Committee meet for a preparatory session to discuss and agree on a “check list” for compliance with the formal and technical specifications.

The tender evaluation starts with the “tender opening session”, in which the bids are checked for compliance with the formal requirements of the tender. This is a formal, public process and representatives of the firms submitting a tender may attend, if they wish. However, the technical evaluation session is confidential and conducted in private.

Selection of tender’s winner
For works contracts, the economically most advantageous offer will be selected. As with supply contracts, tenders undergo first a technical evaluation and then a financial evaluation. Only tenders that satisfy the technical requirements are accepted for the financial evaluation.

The technical evaluation comprises an assessment of the technical qualifications and capability of the tenderer to carry out the works required. Works tenders vary enormously, but, to give an example, the following criteria may be used in the evaluation: the experience of management and key personnel, the experience of the firm in similar assignments, a properly prepared works schedule, a methodology and works programme, lists of proposed equipment and staff, and the quality assurance programme to be used. Only offers which achieve a pass mark in each category, and score a minimum of 65 per cent overall, will be admitted for the financial evaluation.

Under normal circumstances, the firm offering the lowest price for an offer which conforms with the technical specifications will be selected.