SmartTender Lawyers

Every year, in the period of December-February, in addition to purchases of electricity and natural gas, customers announce a considerable number of open tenders and simplified purchases for food products. A significant part of them is the purchase of fruits and vegetables, which we will analyze today.

Since such purchases usually do not contain separate specific conditions for the participants themselves, and any individual entrepreneur or legal entity can become a supplier under the contract for the supply of such products, today we will discuss the list of documents and requirements that customers most often require in such auctions.

1. Confirmation of the participant's equipment, material and technical base, and technologies

Standard requirements are the availability of a warehouse and transport. To confirm the above, the following is usually required:

- vehicle registration certificate or lease/use/transportation/service agreement, etc. (in case of attraction);
- certificate of ownership/extract from the state register of property rights or lease/use agreement, etc. (if involved).

In addition, often the customer requires the following documents:

- decision on the state registration of the capacity of the market operator;
- documents confirming sanitization/disinfection (deratization, disinfestation) of vehicles and/or premises (relevant agreements and acts).

Of the more specific, but quite rarely, customers may require the following from participants:

- an act drawn up based on the results of the state control of the participant in the form of an audit of permanent procedures based on the principles of HACCP;
- an act drawn up based on the results of the participant's state control measure regarding compliance by market operators with hygienic requirements for handling food products (inspection of warehouses);
- an act of checking a vehicle drawn up as a result of a planned (unscheduled) state control measure (with information that this vehicle can provide appropriate conditions for the transportation of a food product);
- a copy of the Act (other confirmation) of the disinfection of the vehicle and the results of the study on the quality of disinfection and the quality of washing after disinfection (for the last treatment of the vehicle), issued by an accredited laboratory.

2. Confirmation that the participant has employees of appropriate qualifications with the necessary knowledge and experience

Among the requirements for employees, there may often be a condition for the presence of a driver (forwarder). At the same time, the most popular requirements for documents that must be provided as part of the proposal are:

- documents confirming labor relations or civil law contracts;
- medical books (one of the most common requirements);
- driver's license (if requirements for drivers are established);
- recently, there has been an increasing demand that the participant's employees (for example, drivers) must be vaccinated or have a negative PCR test.

3. The presence of documented experience in the implementation of a similar contract (contracts) on the subject of procurement

As a rule, customers do not set special requirements for confirmation of the execution of a similar contract. Usually, the conditions are limited to the number of such contracts and the definition of the concept of a similar contract in the understanding of the documentation (for example, that a contract for the supply of food products, or a similar item for the purchase, or according to the ДК code, will be considered similar). Since the Law “On Public Procurement” (hereinafter referred to as the Law) does not contain a definition of a similar contract, anyone can be a counterparty (customer) under such a contract, including any private legal entity and individual, including individual entrepreneurs.

I draw your attention to the fact that the establishment of separate requirements for a business entity under such an agreement (for example, that a similar agreement must be concluded exclusively with a state customer in the sense of Article 2 of the Law) is discrimination. It must be appealed at the stage of submitting proposals by writing requirements to the customer or filing a complaint with the appeal body (if it is an open tender).

The following documents are required to prove experience:

- copies of contracts with all annexes and additional agreements;
- feedback letters from customers;
- consignment notes/acts of acceptance and transfer.

4. Availability of financial capacity, confirmed by financial statements

This qualification criterion is not so common, but if established, the customer, as a rule, requires financial reporting (depending on the form of management) for the reporting period (calendar year). Sometimes it may be necessary to confirm the amount of annual income (revenue) not less than the expected cost of the purchase. According to the practice of the appeal body, setting the requirement to confirm the amount of annual income in the amount of 100% of the purchase amount is not considered discrimination.

To the attention of participants of individual entrepreneurs: if according to the documentation, the customer prescribed the provision of only such documents like balance sheet, financial results, and cash flow, I recommend that you provide as part of the proposal a letter of explanation about the failure to provide documents submitted by legal entities, regarding part 11 of Art. 26 of the Law, as well as the financial statements that you own.

5. Availability of documents confirming compliance with the required technical, qualitative, and quantitative characteristics of the subject of procurement

As a rule, the customer does not clearly define the type of document that needs to confirm the quality of products, or after the list of such documents adds at the end "etc.", which allows you to provide any document that can confirm customer requirements. The most common versions of such documents are:

- quality certificate;
- quality passport;
- manufacturer's declaration;
- expert report;
- expert opinion;
- certificate of Compliance;
- test reports;
- quarantine certificate.

I emphasize the title of the documents. One of the common mistakes is that participants do – not always carefully read the terms of the documentation, and, for example, when required to provide a quality passport, provide a quality certificate, which is not provided by the terms of the documentation and will be a valid reason for rejection.

For more specific or detailed documents, participants may be required to:

- protocol of laboratory tests on the quality of food products for the proposed product;
- expert opinion of the State Service of Ukraine on Food Safety and Consumer Protection;
- protocol of food testing of the state enterprise of standardization, metrology, and certification accredited by the National Accreditation Agency of Ukraine.

Also in the conditions of supporting documents, there may be separate requirements concerning kilograms of batches (for example, per batch not less than 100 kg), content/absence of certain substances in products (the content of pesticide residues, mass fraction of heavy metals, mycotoxins-patulin, and nitrates) or confirmation of the relevant DSTU.

In addition, sometimes in the tender documents, you may find requirements to confirm compliance with the authority that issued the above document. For example, a certificate of accreditation from the laboratory.

6. ISO certificates

One of the most common requirements for a participant is to have a certificate certifying that the food safety management system complies with DSTU ISO 22000:2019 (ISO 22000:2018, IDT) and/or DSTU ISO 22000:2007 (ISO 22000:2005, IDT ) "Food Safety Management Systems", etc.

In addition, very often you can meet the requirements for the provision of the following certificates:

- a certificate issued by an authorized organization for compliance with the quality management of the procurement participant by the requirements of DSTU ISO 9001:2015 (ISO 9001:2015, IDT) “Quality management systems. Requirements” or similar systems or newer versions of standards;
- a certificate issued by an authorized organization for compliance with the environmental management system of the procurement participant by the requirements of DSTU ISO 14001:2015 (ISO 14001:2015, IDT) “Environmental Management Systems. Requirements and instructions for use” or similar systems or newer versions of standards;
- a certificate issued by an authorized organization for compliance with the health and safety management system of the procurement participant by the requirements of DSTU ISO 45001:2019 (ISO 45001:2019, IDT) “Occupational health and safety management systems. Requirements and instructions for use” or similar systems or newer versions of standards.

Additionally, the customer may require reports on the results of the last audit in such certificates, an audit program, etc.

Looking ahead, I note that although certification in Ukraine is optional and voluntary, according to the appeal body, the establishment of the above requirements for ISO certificates is not discriminatory. If the customer has prescribed the above requirements, such certificates must be obtained. If such documents are not provided as part of the proposal or if a certificate explanation is provided instead, such participant will be subject to disqualification.

Unlike the purchases of other food products, such as dairy or meat products, the purchases of fruits and vegetables differ in that customers rarely require documents confirming the relationship with the manufacturer. There is logic in this since such a producer is not always known exactly to the participant, and secondly, 10-20 different vegetables and fruits can be purchased in the tender, and therefore it is problematic to obtain supporting documents from each producer.

What else is important to pay attention to?

In summary, I would also like to draw attention to three important things that participants may not forget while purchasing food:

1. Dating. Be sure to pay attention to the requirements for dating the required documents. This is especially true of documents confirming compliance with the necessary technical, qualitative and quantitative characteristics of the subject of procurement. For example, this could be a requirement that the document must be issued no earlier than the date of the call for bidding or a requirement that the validity of such a document must be equal to or greater than the delivery time of the products (for example, until the end of 2022).
2. Integral parts. One of the most common mistakes is not providing the document in full. Pay attention to whether there is a phrase in the supporting documentation such as "Appendices to the certificate are an integral part of it". In this case, it is imperative to provide all the sheets of such an application, even if there are 150 of them, otherwise not providing them will be a legitimate reason for rejection.
3. Invisible "letters-traps". Often in the purchases of fruits and vegetables, you can find letters that the customer (consciously or not at all) “throws” into the tender documentation in places where they should not be and can be easily missed. I recommend that after reading the documentation, each time you check for yourself if you missed anything, for example, by re-reading the next day, or by instructing a work colleague to re-read the documentation.

First of all, the main weapon and the key to success in your preparation for purchases is simple attentiveness. Good, slowly read the documentation and a detailed proposal will help you win the purchase and beat the competition.

And remember: it is always better to prevent disqualification than to hope for a positive appeal.

However, if you still need to appeal, you want to know the chances of filing a complaint with an appeal body or ordering a review/preparation of a tender offer, please contact SmartTender lawyers. The application can be left directly on the page of the selected tender or on this page.

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