Procurement process

General information about the procurement process

1. Roles and responsibilities

• Buyers and the Financial Services and Advisory Office have distinct roles and responsibilities. It's crucial for buyers to understand and differentiate between their own duties and those of the Financial Services and Advisory Office.
• It’s important to differentiate between the procurement process and its preparation phase.

2. Document management

All tender-related documents must be saved in Reykjavík City's document management system and printed.
Public document preservation is legally mandated, and destruction is prohibited without special authorization, as per Act No. 77/2014

Buyer's responsibilities

Buyers must save all tender documents in Reykjavík City’s document management system.

SFR responsibilities

SFR is responsible for archiving all tender-related documents in the system.

Document Management Guidelines:

Preparing for procurement

3. Initiating procurement / needs assessment

• Before starting procurement, there must be a clear need for goods, services, or works. It's important to determine whether the goods, services, or works require a formal procurement process.
• The procurement process aims to ensure thorough, cost-effective, and responsible purchasing for Reykjavík City while guaranteeing the quality of goods, services, and works acquired.
• At the outset of procurement, buyers must outline the need in a requirements statement. The need should be defined independently of the expected procurement process.
• The needs assessment should explain the specific requirement for goods, works, or services.
• The needs assessment should not describe a specific product, work, or service. Describe the need for the product, work, or service.
• Define what is essential to meet the need versus what is preferable.
• Consider whether the product, service, or work is actually needed.
• þsfr can provide better guidance on procurement processes and contract approaches when the need is clearly defined.

4. Draft cost estimate

• A tender's cost estimate projects the total contract value.
• The estimated contract value should be calculated based on the total amount the buyer will pay, excluding VAT.
• The total amount should include all optional provisions and potential contract renewals clearly stated in the tender documents.
• Cost estimates are required for all tenders (except in special cases, such as dynamic purchasing systems where participants only submit membership applications).

Buyer's responsibilities

• The buyer is responsible for preparing the cost estimate.
• The initial cost estimate is prepared before drafting tender documents.
• The initial cost estimate determines the appropriate procurement process. It's essential to complete this before drafting tender documents, as the document type depends on the chosen process (e.g., price inquiry documents, tender documents, EEA tender documents).
• Buyers should email the initial cost estimate to SFR before starting work on tender documents.
• The buyer is required to submit only the total contract value, excluding VAT, to SFR. (A detailed cost breakdown is not required unless specifically requested by SFR).
• During the procurement preparation phase, the buyer should create a cost estimate for the planned purchase. The estimated contract value should account for the total amount payable by the buyer, excluding VAT. This includes supplies provided to the bidder, transportation costs, fees, and any other monetary contributions made by the buyer.
• This calculation should determine the potential maximum total amount of the planned contract, including all optional provisions and possible renewals and/or extensions. If goods, services, or works are to be purchased in stages, use the combined total value of all stages.

SFR responsibilities

• SFR provides guidance, if requested, on calculating the value of works contracts as per Article 26 of the Act on Public Procurement, , goods contracts as per Article 27, and service contracts as per Article 28 of the Act on Public Procurement.

5. Procurement process timelines

• Procurement process timelines vary on a case-by-case basis.
• A minimum time must be allowed for the tender submission period (from when documents are available on the tender website until bids are opened) in open tenders.
• For domestic open tenders, the submission period must be at least 10 days, while for EEA open tenders, it must be at least 30 days.
• The bid review and selection process typically takes between one day and six weeks.
• The process from when a matter is presented to the Procurement Council until a contract is finalized typically takes 14 to 20 days.
• As a guideline, the procurement process for domestic open tenders usually takes about 25-83 days, while for EEA open tenders, it ranges from 47-97 days.
• For price inquiries, the timeframe is considerably shorter, ranging from a few days to several weeks.

6. Initial meeting with SFR

Request to SFR

• All projects begin with the buyer submitting a request to SFR through Reykjavík City's intranet.
• Request to the Financial Services and Advisory Office

Kickoff meeting

• After submitting the request, the buyer invites all SFR specialists to a kickoff meeting.
• The buyer explains and discusses the project with SFR.
• At the end of the kickoff meeting, the buyer decides on the next steps.
• To maximize the effectiveness of the kickoff meeting, it's recommended that the buyer complete a needs analysis and a basic draft cost estimate beforehand.

SFR responsibilities

• SFR determines which specialist(s) will attend the kickoff meeting.
• SFR delivers a PowerPoint presentation to buyers, providing an overview of the procurement process.

7. Selecting the procurement procedure

The procurement procedure is defined by law or Reykjavík City's procurement rules.

• It's crucial to choose an appropriate procurement procedure based on the reference amounts.
• The selected procurement procedure is based on the final cost estimate.
• If the final cost estimate necessitates a different procurement procedure, the documents must be revised accordingly.

Buyer's responsibilities

• The buyer is responsible for choosing the procurement procedure.

SFR responsibilities

• SFR can assess and recommend the most suitable procurement procedure to the buyer. If multiple options are available, SFR explains the differences between these procedures.

Other

• It's advisable to always consult the Financial Services and Advisory Office when deciding on a procurement procedure.
• The Financial Services and Advisory Office's approval is required when selecting any procedure other than an open tender or price inquiry.
• It must be determined whether the procurement involves goods, services, or works. This classification can influence which procurement procedure is chosen.
• A market survey may be conducted before procurement begins to assist in planning and informing companies about upcoming acquisitions and requirements.

8. Preparation of tender documents

• Preparing tender documents involves several steps, which are outlined below.
• Buyers are permitted to conduct market surveys to prepare for procurement and inform companies about planned purchases and their requirements. For this purpose, buyers can seek advice from companies, independent experts, and/or other public entities.
• When conducting market surveys, Articles 45 and 46 of the Act on Public Procurement No. 120/2016 must be followed.

9. Preparation and finalization of tender documents

• Tender documents include all materials provided to bidders on Reykjavík City's procurement website. These include the tender description, bid book, attachments, etc.
• Tender documents also include any appendices provided to bidders after the initial documents are delivered.
• Upon completion of the procurement process, the tender documents become the contract between parties (buyer and sellers). After the tender process, no additional contract or requirements should be introduced. All requirements should be included in the tender documents.

Buyer's responsibilities

• The buyer is responsible for preparing and finalizing all tender documents.
• The buyer writes all text and structures the tender documents.
• The buyer clearly specifies to SFR what review is requested each time.
• The buyer should use the templates published on Reykjavík City's intranet.

SFR responsibilities

• SFR assists the buyer, if requested, with text layout, consistency, and structuring requirements in the tender documents.
• SFR guides the buyer on conducting the procurement process in compliance with laws and regulations.
• SFR provides comments and suggestions for changes to the tender documents if the buyer requests a review.
• SFR can provide the buyer with previous tender documents for reference, suitable for the intended tender.

Technical specifications

This section should describe the technological requirements. A well-prepared needs analysis should inform the development of technical specifications for tender documents.

Requirements list

Requirements must be categorized as qualification requirements, minimum requirements, or evaluation criteria.
Qualification requirements are set to assess eligible individuals or companies. Qualification requirements do not apply to goods.
Minimum requirements are all MUST requirements that the offered goods or services need to meet at a minimum.

Evaluation criteria

Bids and solutions can be evaluated based on factors other than price alone. Evaluation criteria are established to assign quality points.

• Evaluation criteria are used when the basis for selecting a bid is founded on the best price-quality ratio.
• Evaluation criteria address specific qualities that exceed or differ from minimum requirements.
• Evaluation criteria are structured to allow assessment and scoring of each criterion.
• Evaluation criteria should be objective rather than subjective whenever possible.
• Evaluation criteria are not used if the basis for bid selection is solely price.

Basis for bid selection / evaluation model

The basis for bid selection in tender documents relies on an evaluation model that can follow one of three approaches.

• Lowest price, lowest cost, or best price-quality ratio.
• When using an evaluation model based on the best price-quality ratio, the desired balance between price and quality must be determined.

Processing of personal data

Each tender must be individually assessed to determine if any personal data processing will occur as a result.
If personal data processing will occur, a data protection expert in the relevant field must be involved from the outset.

Payment and delivery terms

Applicable payment and delivery terms must be clearly defined. For example, payments can be tied to delivery, ensuring companies are paid only after completing a specific project or delivering a particular function or product.

Other

• The time required to prepare tender documents in the procurement process can vary considerably. This step can be a significant factor in the procurement timeline and is often the most time-consuming.
• SFR's standard processing time for each review of tender documents is 1-2 weeks. This timeframe may be shorter or longer, depending on circumstances.
• Factors affecting SFR's review time include the scope and quality of tender documents, as well as other workload.
• SFR advisors have extensive experience in problem-solving and helping buyers articulate their requirements. If you are unsure about how to proceed or whether something is permitted, don’t hesitate to call or schedule a meeting.
• SFR provides standardized templates for Reykjavík City.
• These templates are available on Reykjavík City's intranet and are updated whenever changes occur.
• It's crucial for buyers to familiarize themselves with all content in SFR templates.
• Non-highlighted text in the template is standardized and should not be altered without contacting SFR, such as by email or through a change proposal in the tender documents.
• Buyers must carefully review and further define highlighted sections in the template as needed. Buyers are encouraged to utilize SFR's comments in the template.
• Referencing similar previous tender documents can be helpful.
• Buyers should submit draft tender documents to SFR for review when they are as complete as possible.

10. Confirmed cost estimate

The final cost estimate calculation should be based on the time when the procurement notice is sent for public publication.

Buyer's responsibilities

• The buyer reviews the previous cost estimate (see item 4 in this guidance document) and prepares the final cost estimate.
• The buyer must submit the final cost estimate, excluding VAT, to the Procurement Office before the procurement process is advertised or price inquiry documents are distributed.
• The buyer is required to submit only the total contract value, excluding VAT, to the Financial Services and Advisory Office. (A detailed cost breakdown is not required unless specifically requested by SFR).

Other

• The revised cost estimate confirms whether the initially chosen procurement process is still appropriate or if a different process is needed.
• It may be necessary to specify which part of the cost estimate will be read aloud when bids are opened. This part must align with the format presented on the bid sheet.
• For example: Two vehicles will be leased under an operational lease for a three-month period. The estimated total contract value for the seller is: 360,000 kr. However, on the bid sheet, the price should be given for leasing one car for one month, which would be estimated at 60,000 kr.

11. Determining and publishing advertisements

Reykjavík City is required to advertise and publish tender documents according to predetermined rules.

• Advertisements must be published domestically and in the EEA area, if applicable.
• Advertisements are always published domestically on reykjavik.is/utbod and utbodsvefur.is.
• Advertisements are also published in the EEA area when the tender exceeds EEA thresholds.
• The buyer decides whether to advertise in newspapers as well.
• The required legal advertisements depend on the chosen procurement procedure.

Buyer's responsibilities

• The buyer sends SFR a brief descriptive text in Icelandic about the project.
• If the project is also advertised in the EEA area, a brief text in English should also be provided. Templates for EEA advertisements are available on the intranet.
• The buyer is responsible for ensuring the correct advertisements are published.

SFR responsibilities

• SFR prepares required advertisements and any additional notices as requested by the buyer.
• SFR sends advertisements to the appropriate parties for publication.
• SFR submits advertisements for publication on utbodsvefur.is and, when applicable, in newspapers and the EEA area. All advertisements are also published on reykjavik.is/utbod by SFR.

Other

For EEA tenders, an advertisement must be published in the EEA area. It may take up to five business days from the time an advertisement request is sent until it appears in the EEA area.

12. Submitting final tender documents to SFR

Buyer's responsibilities

• The buyer submits finalized tender documents to SFR in Word and Excel formats.
• The buyer clearly indicates to SFR that these are the final tender documents and requests their publication.
• Final tender documents must be ready for publication. This means they should not contain any proposed changes or comments.

Procurement process begins

13. Posting tender documents on the tender website

The buyer's final tender documents are published on Reykjavík City's tender website.

Buyer's responsibilities

• The buyer may inform potential bidders about the tender but is not required to do so.

SFR responsibilities

• SFR creates the tender and makes the documents available on the tender website.

14. Bidder inquiry deadline, addenda, and buyer response deadline

• Bidders can submit inquiries on Reykjavík City's tender website before the inquiry deadline.
• Addenda to tender documents, which may include responses to inquiries, changes to tender documents, or additional information, will be sent and published to tender document holders on Reykjavík City's tender website.
• There may be one or more addenda.
• SFR delivers the buyer's final addendum or addenda to bidders before the buyer's response deadline.

Buyer's responsibilities

• Buyers respond to inquiries, make changes to tender documents, or provide additional information in an addendum if necessary.
• An addendum is not required if no inquiries were received and no changes or additional information are needed.
• Buyers submit the final addendum to SFR by noon on the day of the buyer's response deadline.
• The buyer must not answer inquiries directly to potential bidders; all inquiries must go through the tender website with SFR as intermediary.

SFR responsibilities

• SFR receives inquiries through Reykjavík City's tender website.
• v provides the buyer with a draft addendum containing inquiries. Templates are available on the intranet.
• SFR delivers the buyer's final addendum to bidders on the tender website.

15. Tender opening

• Bids will be opened after the submission deadline expires.
• Bid opening takes place electronically on Reykjavík City's tender website.
• After opening, bids are stored in Hlaðan where they can be accessed.

Buyer's responsibilities

• The buyer may attend the bid opening but is not required to do so.

SFR responsibilities

• SFR handles the bid opening.
• SFR records minutes containing information from bidders' tender forms.
• SFR records the proposal opening and publishes information about the received proposals on Reykjavík City's website at https://reykjavik.is/en/tender-opening 

Other

• In a two-envelope system (where the evaluation model includes both quality and price), there are two bid openings.
• In a two-envelope system, price bids are opened only after the quality assessment is completed.
• In a two-envelope system, typically only bidders' names are read at the first opening, while total scores (quality and price points) are read at the second opening.

16. Bid review and evaluation

• After opening, bids are reviewed and evaluated.
• Bids are evaluated based on the evaluation model and requirements set in the tender documents.
• SFR sends bidders' tender documents to the buyer for review.

Buyer's responsibilities

• The buyer assesses bidders' qualifications other than financial and confirms in writing that the bidder has submitted the required documents and met the tender requirements.
• The buyer must request that SFR assess financial qualifications. The buyer must also request if other experts, such as data protection specialists, should assess qualifications if they don't plan to do it themselves.

SFR responsibilities

• The Financial Services and Advisory Office reviews bidders' finances and confirms in writing that the bidder has submitted the required documents and passed the financial review.
• The Financial Services and Advisory Office informs the buyer which parties meet the financial qualification requirements.

17. Buyer's decision on bid selection

After reviewing and evaluating bids, a decision is made on bid selection.

Buyer's responsibilities

• The buyer formally notifies SFR of the selected contractor(s) based on the most economically advantageous valid bid, as outlined in the tender documents.

18. Submission to the Procurement Council

The Procurement Council decides on bid selection based on the buyer's proposal if the estimated contract amount excluding VAT exceeds:

• 49 million ISK excluding VAT for construction works.
• 15.5 million ISK excluding VAT for goods or services purchases.

Submissions to the Procurement Council are not required for amounts below these thresholds.

Buyer's responsibilities

• The buyer prepares, signs, and emails a submission to the Procurement Council through SFR.
• Buyers can request a template for Procurement Council submissions from SFR.
• To be considered, submissions must reach SFR no later than two days before the council meeting, e.g., by 2 p.m. Tuesday for a Thursday meeting.

SFR responsibilities

• SFR forwards the buyer's submission to the Procurement Council.

19. Procurement Council meeting

Procurement Council meetings include council members, Financial Services and Advisory Office staff, and buyers.

• The Procurement Council typically meets weekly on Thursdays.
• Meetings may be less frequent around summer vacations, Easter, and Christmas.
• Meetings are not held on Thursdays that are public holidays.
• In certain cases, meetings may be scheduled on days other than Thursdays.

Issues involving amounts below those specified in item 18 of this document are not addressed at Procurement Council meetings.

Buyer's responsibilities

• When applicable, the buyer attends the Procurement Council meeting to justify their choice of contractor.

SFR responsibilities

• SFR invites the buyer to the Procurement Council meeting when necessary.
• SFR records the minutes of the Procurement Council meeting.

20. Bid acceptance notification

• After the buyer decides on a contractor and informs SFR, and following Procurement Council approval if required, bidders are notified of the result and chosen contractor via email.
• This notification does not constitute a contract.
• A standstill period follows. The contract is not established until a second email is sent to the bidder, as detailed in item 22 - Contract Establishment in these documents.
• The standstill period is 5 days for domestic tenders and 10 days for EEA tenders.

SFR responsibilities

• SFR emails the results to bidders (referred to as the first email).

21. Appeal deadline

All procurements above tender thresholds (excluding price inquiries and surveys) fall under the jurisdiction of the Public Procurement Complaints Commission. (This also applies to mini-competitions within framework agreements and closed tenders within dynamic purchasing systems.)

• Appeals must be submitted to the Public Procurement Complaints Commission within 20 days of when the appellant knew or should have known about the decision, action, or inaction they believe violates their rights.
• An appeal against a tender results in significant work for buyers and SFR, including data collection, presentation, and potential meetings.
• Appeals may result in costs for the buyer.
• The City Attorney's Office handles the defense against appeals on behalf of the buyer.

At the appellant's request, the Public Procurement Complaints Commission may temporarily suspend the procurement process until a final decision on the appeal is reached.

• The Public Procurement Complaints Commission can invalidate the buyer's decision in part or in full, declare a contract void, or impose other penalties.
• The Commission can order the buyer to tender certain procurements, re-advertise a tender, or remove specific illegal terms from the tender documents.
• The Commission can express its opinion on the defendant's liability for damages to the appellant.
• The Commission can decide that the defendant must pay the appellant's costs for bringing the appeal.

Buyer's responsibilities

• Respond to requests from SFR and City Attorney for data collection and related work regarding the appeal.

SFR responsibilities

• SFR provides all requested documents to the City Attorney's Office.

22. Contract establishment

After the ten-day standstill period (assuming no appeal to suspend the procurement process has been received), a second email is sent to the selected bidder(s).

• The second email confirms that a contract has been established based on the tender documents and the bidder’s offer.
• The bidder(s) become the seller(s) when the contract is established, as per the contract terms.
• Typically, a contract form is signed with the seller after the contract is established, according to the specific contract terms.

Buyer's responsibilities

Involvement in creating the contract form.

SFR responsibilities

• SFR sends the second email to the bidder(s).
• SFR handles the signing of the contract form with the seller.

Execution of contract

23. Contract execution - contract management

After the contract is established, buyers manage its execution, and SFR's formal involvement ends.

Buyer's responsibilities

• Directors and heads of individual offices and institutions are responsible for implementing contracts established through the procurement process.
• In case of contract breaches or disputes between the buyer and seller, it is advisable to seek guidance from the City Attorney.

SFR responsibilities

• SFR can provide opinions on contract term interpretations at the request of the buyer or City Attorney.

Role and responsibilities of the City Attorney

• The City Attorney assists buyers in case of disputes between the buyer and seller.

24. Monitoring contract terms

Effective oversight of contract implementation must be ensured once agreements are in place.

Buyer's responsibilities

• Department Directors and heads of individual offices and institutions are responsible for ensuring effective monitoring of contracts established through the procurement process.

25. Contract terms

• It is advisable to publish key contract information for those who will be using the agreement.
• This information may be published on the buyer's internal portal and, in some cases, on Reykjavík City's intranet.

Buyer's responsibilities

• The buyer will publish information for contract users in the format they deem most appropriate.

SFR responsibilities

• SFR will implement and publish information on Reykjavík City's intranet in certain instances.