PUBLIC PROCUREMENT CONTRACTS CODE

PUBLIC PROCUREMENT CONTRACTS CODE

With the participation of Dionysios KELESIDIS, Association for Purchasing in the Public Sector (APASP)Martin TRYBUS, Lecturer in Law, Deputy Director of the Public Procurement Research Group, University of Nottingham

PART ISCOPE AND BASIC PRINCIPLES Articles 1 to 4Article 1       I. - Public contracts are contracts for pecuniary interest concluded with public or private entities by the legal entitiesgoverned by public law referred to in Article 2 to meet their requirements in terms of works, supplies or services.       Regardless of their amount, public contracts respect the principles of freedom of access to public procurement,equal treatment of candidates and transparency of procedures. These principles ensure effective public procurementand proper use of public funds. They call for prior definition of the procuring entity's needs, compliance with thepublication and competition requirements and selection of the economically most advantageous tender. Theserequirements are implemented pursuant to the rules set out in the present Code.       II. - Public works contracts have as their object the carrying out of any construction or civil engineering works at therequest of a public entity acting as the Owner of the Project (maître de l'ouvrage).       Public supply contracts have as their object the purchase, leasing, rental or hire purchase of products or equipment.       Public contracts for services have as their object the provision of services.       A public contract in one of the three categories indicated above may incidentally include elements that belong toanother category. A public contract having both services and supplies as its object is to be considered as a contract forservices if the amount of the services exceeds that of the products to be supplied.

Article 2       I. - The provisions of the present Code apply to:       1 Contracts concluded by the State, its public bodies (établissements publics) other than those of an industrial andcommercial nature, the local authorities and their public bodies;       2 Contracts concluded by virtue of a power awarded by a public entity referred to in 1 of the present Article, subjectto any supplementary adjustments which might be necessary being obtained by a decree.       II. - Except as otherwise provided, the rules applicable to the State also apply to its public bodies to which theprovisions of the present Code apply. Likewise, except as otherwise provided, the rules applicable to the localauthorities also apply to their public bodies.

Article 3(Conseil d'Etat No. 264712, 265248, 265281, 265343 of 23 February 2005 ATMMP)(Decree No. 2005-601 of 27 May 2005 art. 1 Official Journal of 29 May 2005)       The provisions of the present code do not apply to:       1- Contracts concluded between a public body referred to in Article 2 and a co-contracting party over which it exertscontrol comparable to that which it exerts over its own departments and whose business is essentially carried out forthat body, provided that it applies the rules for awarding contracts laid down in the Present Code in order to meet its ownrequirements, even if that co-contracting party is not a public body referred to in Article 2;       2- Service contracts concluded between a public body referred to in Article 2 and another such public body or aperson referred to in Article 9 of Act No. 91-3 of 3 January 1991 relating to the transparency and lawfulness ofcontracting procedures which makes the awarding of certain contracts subject to rules of publication and opening tocompetition, if the co-contracting public or private body has the benefit of an exclusive right founded on a legal provisionwhich has the effect of reserving performance of a function for it subject to that provision being compatible with theTreaty establishing the European Community;       3- Contracts having as their object the acquisition or renting of land, existing buildings or other real property, orwhich relate to other rights over such property, regardless of the financial terms and conditions thereof; however,contracts for financial services concluded in relation to the purchase or rental contract, regardless of their form, comewithin the scope of the Code;       4- Contracts having as their object the acquisition, development, production or co-production of programmes bybroadcasting organisations and contracts relating to broadcasting times;       5- Contracts having as their object financial services relating to the issuance, purchase or sale of securities or otherfinancial instruments and transactions providing money or capital, or services provided by the central banks;       6- Purchases of services made within the context of research and development programmes which a public bodycontributes to without fully financing them or acquiring all the results;       7- Contracts, other than those awarded pursuant to the decree referred to in II of Article 4 of the present code,which call for secrecy or whose performance must be accompanied by specific security measures pursuant to theapplicable legislative or regulatory provisions or in order to protect the vital interests of the State;

Updated 03/31/2006 - Page 1/34

PUBLIC PROCUREMENT CONTRACTS CODE       8- Contracts awarded by virtue of the specific procedures of an international organisation or contracts concludedwith international organisations in order to obtain supplies, services or public works;       9- Contracts relating to supplies, public works or services concluded pursuant to an international agreement relatingto the stationing of troops;       10- Contracts relating to supplies, public works or services concluded pursuant to an international agreementbetween France and one or more other countries with a view to creating or exploiting a project or structure;       11- Contracts having as their object the acquisition of works of art, antiques and collector's items, as well ascontracts having as their object the acquisition of works of art whose nature and characteristics do not permitimplementation of publication and competition procedures.

Article 4       I. - Should it prove necessary in cases requiring application of the provisions of Part I of Ordinance No. 59-147 of 7January 1959 relating to the general organisation of defence, a special decree shall replace the provisions of the presentCode for contracts awarded by defence departments.       II. - A Conseil d'État Decree determines the specific circumstances in which certain contracts concerning defencerequirements are awarded.

PART IIGENERAL PROVISIONS Articles 5 to 19 CHAPTER I Determination of Requirements Article 5

Article 5       I. - The nature and scope of the requirements to be met are precisely determined by the public entity before any callfor competition or any negotiations not preceded by a call for competition take place. The exclusive objective of thecontract awarded by the public entity must be to meet those requirements.       II. - The competent authority determines the level at which the requirements for supplies and services are assessed.That choice shall not have the effect of exempting the contracts from the rules which normally apply to them by virtue ofthe present Code.

CHAPTER II Definition of Provisions Article 6

Article 6(Decree No. 2005-1008 of 24 august 2005 art. 1 Official Journal of 25 august 2005)       When the thresholds set in II, the first paragraph of III, and IV of Article 28 are reached, and for the contractsreferred to in the fourth paragraph of I of Article 30, the provisions which are the object of the contract are determined byreference to the officially approved standards or other standards applicable in France by virtue of internationalagreements, as provided for in Decree No. 84-74 of 26 January 1984 establishing the Standardisation Act.       The reference to standards shall not have the effect of creating unjustified impediments to the opening of publiccontracts to competition.

CHAPTER III Coordination, Group Purchasing and Central Purchasing Units Articles 7 to 10

Article 7       Within a public entity, departments which have their own budget may coordinate the awarding of their contracts. Acentral department is designated for that purpose.       The central department may award a contract within the framework of which other departments issue purchaseorders.       It may also conclude an agreement establishing the price of the provisions and a standard contract containing theapplicable administrative and technical instructions; each department then places its own contract under the terms andconditions laid down in the pricing agreement and the standard contract. The rules applicable to the award of standardcontracts and pricing agreements are those laid down for the award of contracts in Part III of the present Code.

Article 8       I. - Purchasing groups may be established:       1 By government departments and State-owned public bodies other than those of an industrial and commercialnature, or by such public bodies alone;       2 Or by local authorities, local public bodies, or local authorities and local public bodies;       3 Or collectively by the public bodies referred to in 1 and 2 above.       Private persons, national public bodies of an industrial and commercial nature and public interest groups mayparticipate in such groups provided that they apply the rules laid down in the present Code.       II. - A founding agreement is signed by the members of the group.       It defines the group's operational procedures.       It designates one of the group's members as its coordinator responsible for organising all the selection proceduresfor choosing one or more co-contractors in accordance with the rules laid down in the present Code.

Updated 03/31/2006 - Page 2/34

PUBLIC PROCUREMENT CONTRACTS CODE       In the agreement, each member of the group undertakes to sign a contract with the chosen co-contractor to coverits own requirements as determined beforehand.       III. - The following are members of the group's Tenders Committee:       1 For the persons referred to in 1 of I, the person in charge of the contract, as defined in Article 20 of the presentCode, or his representative, of each member of the group;       2 For the persons referred to in 2 of I, a representative of the Tenders Committee of each member of the group,elected from its members and being entitled to speak and vote. A substitute for each full member may be designated;       3 For the persons referred to in 3 and the last paragraph of I, a representative of each member of the groupdesignated in accordance with the rules specific to it.       The Tenders Committee is chaired by the coordinator's representative.       IV. - For the contracts of the groups referred to in 2 and 3 of I, the accountant of the group's coordinator and arepresentative of the Director General of Competition, Consumption and the Repression of Fraud may participate, withright of discussion only, in the meetings of the Tenders Committee, when they are invited to do so. Their observationsare recorded in the minutes.       For the contracts of the groups referred to in 1, 2 and 3 of I, the chairperson of the committee may designateindividuals competent in the subject matter of the call for tenders. These persons are invited to, and may participate in,the meetings of the Tenders Committee, with right of discussion only. The Tenders Committee may call upon theservices of agents of the public entity who are competent in the public procurement law.       V. - For the contracts of the groups referred to in 1 of I, the person in charge of the contract belonging to thecoordinating department chooses the co-contractor after seeking the advice of the Tenders Committee as prescribed forState public contracts in the present Code.       For the contracts of the groups referred to in 2 of I, the Tenders Committee chooses the co-contractor as prescribedfor the contracts of the local authorities by the present Code.       For the contracts of groups of public health bodies and public social and medical-social bodies, the person in chargeof the contract belonging to the coordinating body chooses the co-contractor after seeking the advice of the TendersCommittee as stipulated by the present Code.       For the contracts of the groups referred to in 3 of I having one or more members who are local authorities, theTenders Committee chooses the co-contractor as stipulated by the Present Code for the contracts of the localauthorities.       VI. - To the extent to which each member of the group is concerned with the contract, the person in charge of thecontract of each member signs the contract and ensures proper performance thereof.       VII. - The group's founding agreement may also make the coordinator responsible for:       - either signing and notifying the contract, while the person in charge of the contract of each member of the groupensures proper performance of the relevant part of the contract;       - or signing the contract, notifying it and implementing it on behalf of all the members of the group.       In both cases, the group's founding agreement may provide that the Tenders Committee shall be that of thecoordinator.

Article 9       A central purchasing unit is a public entity or a body governed by private law which meets the conditions laid downin c of Article 9 of Act No. 91-3 of 3 January 1991 "relating to the transparency and lawfulness of contracting proceduresand making the award of certain contracts subject to rules of publication and competition". Such units may:       a) Acquire goods or services with a view to selling them to public entities or private persons who meet theconditions indicated above;       b) Sign and notify contracts for public works, services or supplies which several public or private entities asdescribed above will be responsible for their performance;       c) Conclude agreements establishing the price of the provisions to be performed and standard contracts containingthe applicable administrative and technical instructions; each public or private entity then places its own contract underthe terms and conditions laid down in the pricing agreement and the standard contract;       d) Implement on behalf of the aforementioned entities the procedures for awarding their contracts and ensuring theproper performance thereof.

Article 10       Works, supplies or services can give rise to a global contract or a batched contract. In the event of several lotsbeing awarded to the same successful bidder, it is possible to conclude a single contract with that bidder which coversall of those lots.       The person in charge of the contract chooses between these two options on the basis of the economic, financial ortechnical advantages that they offer.       The bids are examined lot by lot. The bidders cannot submit variable bids based on the number of lots likely to beobtained.       For contracts relating to both the construction and the exploitation or maintenance of a work, if the public purchaserchooses to resort to a batched contract, the construction must be the subject of a separate lot. If he chooses to resort toa global contract, it must provide separate indication of the respective prices of the construction and the exploitation ormaintenance. The remuneration for the exploitation or maintenance services cannot under any circumstances contributetowards the payment for the construction.

Updated 03/31/2006 - Page 3/34

PUBLIC PROCUREMENT CONTRACTS CODE CHAPTER IV Batched contracts

CHAPTER V Standard Contract Documents Articles 11 to 14

Article 11       Contracts of an amount equal to or greater than the thresholds set in II, the first paragraph of III and IV of Article 28of the present Code are written contracts.       The tender document (acte d'engagement) and the conditions of contract (cahier des charges) are the contractdocuments.       The tender document is the document signed by a bidder for a public contract in which he presents his bid or hisproposal in compliance with the terms and conditions drafted by the public entity. The said tender document is thensigned by the public entity.       For Design and Construction Contracts (marchés de conception-réalisation) as described in Article 37 of the presentCode, the following are also contract documents:       1 The operational schedule, within the meaning of Article 2 of Act No. 85-704 of 12 July 1985 "relating to publicworks management and its relation to private project management".       2 The design studies submitted by the successful bidder.

Article 12       The contract documents must include:       1 The identities of the contracting parties;       2 Proof, through a reference to the order designating him, of the status of the person signing the contract on behalfof the State and, if applicable, the decision authorising the person in charge of the contract to award the contract;       3 A definition of the subject matter of the contract;       4 A reference to the articles and paragraphs of the present Code pursuant to which the contract is awarded;       5 An enumeration of the contract documents; these documents are presented in order of priority as decided by thecontracting parties. Failing any manifest error, the said order of priority shall prevail in the event of any contradiction inthe content of the documents;       6 The price or the price-calculation formula;       7 The contract's performance time or the projected dates for the start and completion of the performance;       8 The conditions of acceptance, delivery or admission of the provisions;       9 The terms of payment and, if the contract so provides, the deadlines for payment;       10 The conditions under which termination may occur;       11 The date of the contract's notification;       12 The designated public accountant;       13 The elements specific to split contracts, as determined in Articles 71 and 72 of the present Code.

Article 13       The conditions of the contract determine the contracts' performance conditions.       They comprise general documents and specific documents.       The general documents are:       1 The general administrative terms and conditions, which determine the administrative regulations applicable to acontract category;       2 The general technical terms and conditions, which determine the technical provisions applicable to all provisionsof a given type.       The said documents are approved by order of the Finance Minister and the other ministers concerned.       The person in charge of the contract decides whether to make reference to those documents.       The specific documents are:       1 The special administrative terms and conditions, which determine the administrative regulations specific to eachcontract;       2 The special administrative terms and conditions, which determine the technical regulations necessary to meet therequirements of each contract.        If the person in charge of the contract decides to make reference to the general documents, the specific documentsshall provide an indication of any Articles in the general documents from which they derogate.

Article 14       The definition of a contract's performance conditions provided in the conditions of contract may seek to promote theemployment of persons who are experiencing particular difficulty in securing a post, to combat unemployment or toprotect the environment.       Such performance conditions shall not have a discriminatory effect in regard to potential bidders.

CHAPTER VI Duration of the Contract Article 15

Article 15       Without prejudice to the provisions of Articles 35, 68 and 71 which specify the maximum duration for certain

Updated 03/31/2006 - Page 4/34

PUBLIC PROCUREMENT CONTRACTS CODEcontracts, the duration of a contract is determined on the basis of the nature of the provisions and the requirement forperiodic calls for tenders.       A contract may provide for one or more renewals, subject to its characteristics remaining unchanged and thetendering procedure having taken account of the overall duration of the contract, including its renewal period.       The number of renewals must be indicated in the contract. It is determined on the basis of the nature of theprovisions and the requirement for periodic calls for tenders. The person in charge of the contract issues a writtendecision concerning the renewal of the contract. The contractor cannot refuse to renew it unless otherwise stipulated inthe contract.

CHAPTER VII Contract Price Articles 16 to 18

Article 16       The prices of the provisions to which the contract relates are either unit prices applied to the quantities actuallydelivered or performed, or contract prices applied to all or part of the contract regardless of the quantities.       Incentive clauses linked to performance deadlines, the pursuit of a better quality of provisions and the reduction ofproduction costs may be inserted into the contracts.

Article 17       Without prejudice to the provisions of Article 18, a contract is concluded at a final price.       A contract is concluded at a firm price in cases in which such a price is unlikely to expose the contractor or thecontracting public entity to any major risk in the light of the reasonably foreseeable economic conditions during theperformance period. The firm price is subject to review as stipulated by decree.       A contract price is said to be flexible or reviewable when it may be altered to take account of financial variations incircumstances determined by the decree referred to in the previous paragraph. When a contract contains a pricevariation clause, it determines that clause's frequency of implementation.

Article 18       I. - Negotiated contracts may be concluded at provisional prices in the following exceptional cases:       1 When, for complex provisions or provisions which require new technology and are either of an extremely urgentnature or entail major technical risks, performance of the contract must commence at a time when it is not yet possibleto determine an initial final price;       2 When the results of a cost-price analysis relating to comparable provisions ordered from a previous contractor arenot yet known;       3 When the prices for the last stages of a stage-payment contract, as defined in Article 72 of the present Code,must be determined on the basis of the results, as yet unknown, of a cost-price analysis relating to the first stages,which were concluded at final prices;       4 When the final prices of comparable provisions which were the object of earlier contracts are called into questionby the prospective contractor or the person in charge of the contract, unless the latter has technical or accountinginformation which would enable new final prices to be negotiated.       II. - Contracts concluded at provisional prices stipulate:       1 The conditions under which the final price shall be determined, possibly subject to a ceiling price;       2 The date by which a supplementary agreement must be concluded to determine the final price;       3 The accounting rules the contractor must comply with;       4 The documentary and on-site checks that the administration reserves the right to carry out on the technical andaccounting information relating to the cost price.       III. - For public works referred to in Article 1 of Act No. 85-704 of 12 July 1985 "relating to public works managementand its relation to private project management", project management contracts are awarded at provisional pricespursuant to decree No. 93-1268 of 29 November 1993 relating to project management tasks entrusted to private-lawmanagers by the Owners of the Projects (maîtres d'ouvrages publics).

CHAPTER VIII Supplementary Agreements Article 19

Article 19       Failing any unforeseen technical constraints beyond the control of the parties, a supplementary agreement shall notdisrupt the basic financial arrangements of the contract or alter its purpose.

PART IIIAWARD OF CONTRACTS Articles 20 to 85 CHAPTER I Public Purchasing Structures Articles 20 to 25

Section 1 The Person in charge of the Contract Article 20

Article 20       The person in charge of the contract is responsible for implementing its award and performance procedures and

Updated 03/31/2006 - Page 5/34

PUBLIC PROCUREMENT CONTRACTS CODEalso signs the contract.       The person in charge of the contract may arrange for his functions to be performed by a representative, save for thechoice of the contractor and the signing of the contract.       The authority empowered to conclude contracts may designate other persons responsible for contracts in view ofthe choice made pursuant to II of Article 5. The delegations of authority or signing powers thus made specify thecategories and the amounts of the contracts for which they are granted.       The authority referred to in the previous paragraph is: the minister, for the central administrations, the decentraliseddepartments placed directly under his authority and the departments having national powers; the Prefect, for thedecentralised government departments placed under his authority.

Section 2 The Tenders Committee Articles 21 to 23

Article 21       One or more standing committees for tenders are established for the State and its public bodies. A specialcommittee may also be established for the award of a specific contract. The tenders' committees' composition andoperational particulars are determined:       1 For the central administrations of the State, the departments having national jurisdiction and the decentraliseddepartments not placed under the authority of the prefect, by the relevant minister;       2 For the decentralised government departments placed under the authority of the Prefect, by the Prefect;       3 For State-owned public bodies, by the rules specific to each body.       A representative of the Directorate General for Competition, Consumption and the Repression of Fraud is a memberof the committee with right of discussion only.

Article 22       I. - One or more standing committees for tenders are established for the local authorities and local public bodies. Aspecial committee may also be established for the award of a specific contract. Such tenders committees are composedof the following members:       a) In the case of a Region, the President of the Regional Council or his representative, as chairperson, and fivemembers of the Council elected by their peers via largest-remainder-method proportional representation.       In the case of the local authority of Corsica, the President of the Executive Council or his representative, aschairperson, and five members of the Corsican Assembly elected by their peers via largest-remainder-methodproportional representation;       b) In the case of a Département, the President of the General Council or his representative, as chairperson, and fivemembers of the Council elected by their peers via largest-remainder-method proportional representation;       c) In the case of a commune (municipality) of 3,500 or more inhabitants, the mayor or his representative, aschairperson, and five members of the Municipal Council elected by their peers via largest-remainder-methodproportional representation;       d) In the case of a commune (municipality) of fewer than 3,500 habitants, the mayor or his representative, aschairperson, and three members of the Municipal Council elected by their peers via largest-remainder-methodproportional representation;       e) In the case of a public body for intercommunal cooperation or an association of local authorities (syndicat mixte),the President of that body or of that association or his representative, as chairperson, and a number of members equalto that specified for the composition of the tenders committee of the local authority having the largest number ofinhabitants, elected by the deliberative assembly of the body or association. If that number cannot be achieved,however, the tenders committee is composed, at very least, of a chairperson and two members elected by thedeliberative assembly of the body or association;       f) In the case of any other local public body, the body's legal representative or his representative, as chairperson,and two to four members of the governing board, designated by that board.       In the case of public health bodies and public social and medical-social bodies, the number, the composition andthe organisational and operational arrangements of the Tenders Committee(s) are determined by the director of thebody after seeking the opinion of the board of directors.       In addition to the Director or his representative, as chairperson, each Committee must have at least one memberdesignated by the board of directors from among its members or from qualified individuals proposed by the director.Each Committee has an odd number of members.       II. - In all the cases enumerated above, a number of substitutes equal to the number of full members are elected onthe same basis. This rule does not apply to public bodies for intercommunal cooperation or associations of localauthorities (syndicats mixtes) whose governing board has fewer than five members. In the case of a public health bodyor a public social or medical-social body, a full member may be replaced either by a designated substitute or by asubstitute chosen from the general body of substitute representatives.       III. - For the local authorities referred to in a, b, c, d and e of I, the election of the members and the substitutes takesplace through the same list, without cross-voting or preferential voting. The number of names on the lists may be lowerthan the number of seats vacant for members and substitutes.       In the event of a tie, the seat is allocated to the list which has obtained the largest number of votes. If the lists inquestion have also obtained the same number of votes, the seat is allocated to the oldest of the candidates eligible forelection.

Updated 03/31/2006 - Page 6/34

PUBLIC PROCUREMENT CONTRACTS CODE       A full member of the Tenders Committee is replaced by the substitute who appears on the same list immediatelyafter the last full member elected from the said list. The substitute, having thus become a full member, is replaced by thecandidate who appears on the same list immediately after him.       The entire Tenders Committee is replaced when a list is unable to provide replacements for the full members towhich it is entitled as provided for in the previous paragraph.       IV. - The following may participate in the meetings of the Tenders Committee, with right of discussion only:       1 A representative of the technical department capable of overseeing execution of the works or carrying outcompliance monitoring when the regulations impose recourse to such a service or when the contract covers workssubsidised by the State;       2 Individuals designated by the chairperson of the committee on account of their competence in the subject matterof the call for tenders;       3 In the case of public health bodies and public social and medical-social bodies, a representative of theDepartmental Director of Social Affairs and Public Health, whose observations are recorded in the minutes.       V. - When they are invited to do so by the chairperson of the Tenders Committee, the public accountant and arepresentative of the Director General of Competition, Consumption and the Repression of Fraud may participate in themeetings of the Tenders Committee with right of discussion only. Their observations are recorded in the minutes.       VI. - The members referred to in I are entitled to speak and vote. In the event of a hung vote, the chairperson has acasting vote.       VII. - The Tenders Committee may call upon the services of agents of the public entity who are competent in publicprocurement law.

Article 23       A notice to attend the meetings of the committee referred to in Articles 8, 21 and 22 is sent to its members at leastfive full days before the date set for the meeting.       A quorum is achieved when more than half of the members entitled to speak and vote are present.       If this quorum is not achieved after the initial convening, the Tenders Committee is reconvened. It then validlydeliberates without a quorum requirement.       The Tenders Committee prepares minutes of its meetings. All Committee members may request that theirobservations be recorded in the minutes.

Section 3 The Competitive Dialogue Procedure Committee Article 24

Article 24       For the competitive dialogue procedure, the Committee is composed of the members of the Tenders Committeesupplemented by persons designated on account of their competence in the domain to which the competitive dialoguerelates. The said persons are designated by the person in charge of the contract. The number of such persons is equalto one third of the number of members of the Tenders Committee thus created. For contracts of local authorities, thosepersons have right of discussion only. For State public contracts, those persons are entitled to speak and vote.

Section 4 The Design-Contest Board Article 25

Article 25       All members of the design-contest board are independent of the design-contest participants.       For the State and its public bodies, the members of the design-contest board are designated as provided for inArticle 21.       For the local authorities, the members of the board are designated as prescribed in I, II and III of Article 22.       For the purchasing groups referred to in Article 8, the members of the board are the members of the TendersCommittee referred to in III of Article 8.       The person in charge of the contract may, moreover, designate as members of the board persons whoseparticipation he considers to be particularly relevant to the subject matter of the design contest procedure, but thenumber of such persons shall not exceed five.       Furthermore, when special qualifications or experience are required of the design-contest participants, at least onethird of the members of the board must have the same qualifications or the same experience. They are designated bythe person in charge of the contract.       All members of the board are entitled to speak and vote.       The public accountant and a representative of the Director General of Competition, Consumption and theRepression of Fraud are invited to participate in the State design contest boards. They may also participate in theboards of the local authorities when the Chairman of the board invites them to do so. They have right of discussion only.Their observations are recorded in the minutes if they so request.

CHAPTER II Definition of Procedures Articles 32 to 31

Article 26       Contracts are awarded on the basis of a call for tenders (appel d'offres).       They may also be awarded on the basis of a negotiated procedure in the cases envisaged in Articles 35 and 84, a

Updated 03/31/2006 - Page 7/34

PUBLIC PROCUREMENT CONTRACTS CODEcompetitive dialogue procedure in the cases envisaged in Article 36, the design and construction procedure in the casesenvisaged in Article 37, the design contest procedure in the cases envisaged in Article 38, theproject-definition-contracts procedure in the cases envisaged in Articles 73 and 74 or the special procedures envisagedin Articles 30, 31, 68 and 74.       Contracts can also be awarded on the basis of an adapted procedure when the estimated amount of therequirement is below the thresholds set in II, the first paragraph of III and IV of Article 28.

Article 27(Decree No. 2005-1737 of 30 December 2005 art. 1 Official Journal of 31 December 2005 effective 1 January 2006)       When it is dependent on a threshold, the choice of the applicable procedure is determined as follows, regardless thenumber of contractors consulted:       I. - For works, the total value of the works associated with a project involving one or more structures is taken intoaccount.        A works project exists when the contracting authority decides, within a limited period and with limited scope, toimplement a series of works characterised by their functional, technical or economic uniformity.       II. - For supplies and services, in order to evaluate the scale of the requirements to be compared with thethresholds, an estimation is made of the total value of the goods or services which may be considered to behomogeneous either on account of their specific particulars or because they constitute a functional unit.       The delimitation of a homogeneous category of supplies or services shall not have the effect of exempting contractsfrom the rules which are normally applicable to them by virtue of the present code.       For contracts having a term shorter than or equal to one year, the total value referred to above is that whichcorresponds to the requirements for one year.       III. - For contracts consisting of batches, the total value of the batches is used, estimated as indicated above. Theprocedure for the award of each batch is that which applies to the contract overall.       It is nevertheless possible to derogate from this rule and conclude contracts awarded pursuant to the adaptedprocedure referred to in I of Article 28 for batches of less than 80,000 euros net of VAT in the case of contracts forsupplies and services and for works contracts of a value below 5,270,000 euros net of VAT. For works contracts of avalue equal to or above 5,270,000 euros net of VAT, it is possible to conclude contracts awarded pursuant to anadapted procedure for batches below 1,000,000 euros net of VAT. In all cases, the cumulative value of such batchesshall not exceed 20% of the total contract value.       This derogation shall not apply to purchase-order contracts which do not indicate either a minimum or a maximumvalue. In the case of purchase-order contracts which indicate a minimum and a maximum value, the 20% applies to thecontract's minimum value.       NB: Decree 2005-1737 2005-12-30 art. 2: The provisions of Article 1 apply to contracts in respect of which aconsultation is envisaged or a public tender notice is sent for publication subsequent to the present decree's date ofentry into force.

Article 28(Decree No. 2004-1298 of 26 November 2004 art. 1 I Official Journal of 30 November 2004)(Decree No. 2005-1737 of 30 December 2005 art. 1 Official Journal of 31 December 2005 effective 1 January 2006)       I. - Contracts awarded pursuant to the adapted procedure are awarded subject to requirements of publication andopening to competition determined by the person in charge of the contract, commensurate with the object andparticulars thereof.       Such contracts are subject only to the rules laid down in Part I, Part II, with the exception of chapter 5, I, II, III, IV, VIand VII of Article 40 and Article 79 of the present Part, and also Parts IV to VI.       Contracts for works, supplies and services of a value below 4,000 euros net of VAT may nevertheless be placedwithout prior publicity or opening to competition.       II. - For contracts for supplies and services, the thresholds below which the adapted procedure is possible are135,000 euros net of VAT for the State and 210,000 euros net of VAT for the territorial authorities.       III. - For works contracts, the threshold below which the adapted procedure is possible is 210,000 euros net of VAT.       When the value thereof is between 210,000 euros net of VAT and 5,270,000 euros net of VAT, works contracts areawarded, at the discretion of the person in charge of the contract, via the invitation to tender procedure referred to inArticle 33, the negotiated contract with publication and opening to competition referred to in Article 35, or the competitivedialogue referred to in Article 36 of the present code.       IV. - For the supplies, services and works contracts of the network operators described in Article 82 of the presentcode, the threshold below which the adapted procedure is possible is 420,000 euros net of VAT.       V. - The contracts without prior formalities referred to in the General Code of the Territorial Authorities and thePublic Health Code are contracts of a value below the thresholds set in II, the first paragraph of III and in IV of thepresent article.       NB: Decree 2005-1737 2005-12-30 art. 2: The provisions of Article 1 apply to contracts in respect of which aconsultation is envisaged or a public tender notice is sent for publication subsequent to the present decree's date ofentry into force.

Article 29       The award of contracts for public services having as their object the provision of:       1. Maintenance and repair services;

Updated 03/31/2006 - Page 8/34

PUBLIC PROCUREMENT CONTRACTS CODE       2. Land transport services, including armoured-vehicle services and mail services;       3. Air transport services: transport of passengers and freight;       4. Mail transport services by land and by air;       5. Telecommunications services;       6. Financial services: insurance services, banking and investment services, without prejudice to the provisions of 5of Article 3 of the present Code;       7. Computing and related services;       8. Research and development services, without prejudice to the provisions of 6 of Article 3 of the present Code;       9. Accounting and auditing services;       10. Market research and public opinion polling services;       11. Management consultancy and related services;       12. Architectural services; engineering services and integrated engineering services; urban development andlandscape architecture services; services relating to scientific and technical consultancy; technical testing and analysisservices;       13. Advertising services;       14. Building cleaning services and property management services;       15. Publishing and printing services;       16. Road maintenance and refuse collection services, drainage services, and similar services,        is subject to the rules laid down in the present Part.

Article 30(Conseil d'Etat No. 264712, 265248, 265281, 265343 of 23 February 2005 ATMMP))(Decree No. 2005-1008 of 24 august 2005 art. 2 Official Journal of 25 august 2005)(Decree No. 2005-1737 of 30 December 2005 art. 1 Official Journal of 31 December 2005 effective 1 January 2006)       I. - Public service contracts of a value estimated at or above 4,000 euros net of VAT having as their object theprovision of services which are not referred to in Article 29 may be awarded through an adapted procedure freelydefined by the person in charge of the contract, as provided for in the present article.       The arrangements for publication and opening to competition are decided on the basis of the features of thecontract and, in particular, the value thereof, its purpose, the level of competition between the service providersconcerned and the circumstances in which it is awarded.       The person in charge of the contract may decide that it shall be awarded without publication and even withoutopening to competition if it appears that such formalities are, given the features of the contract, obviously unnecessaryor impossible to implement.       When the procedure described in the present article is implemented, the provisions of Article 6 only apply tocontracts of a value equal to or above 210,000 euros net of VAT and the public body is not required to apply theprovisions of chapter V of part II and chapters III to VI of part III. However, articles 43 to 45 and 51, and, for contracts ofa value equal to or above 210,000 euros net of VAT, articles 76, 78 and 80 are applicable.       Contracts of a value below 210,000 euros net of VAT are awarded by the person in charge of the contract. Abovethat threshold, State contracts are awarded by the person in charge of the contract after consulting the TendersCommittee, and the territorial authorities' contracts are awarded by the Tenders Committee.       When a public contract covers services referred to in Article 29 and other services, it is awarded pursuant to theprovisions of Article 29 if the value of the services indicated in that article exceeds the value of those that are not soindicated.       II. - Contracts relating to representation of a public body in regard to settlement of a dispute are subject only to theprovisions of I pursuant to the ethical principles applicable to the avocat's profession. Parts IV, V and VI of the presentcode do not apply to them.       NB: Decree 2005-1737 2005-12-30 art. 2: The provisions of Article 1 apply to contracts in respect of which aconsultation is envisaged or a public tender notice is sent for publication subsequent to the present decree's date ofentry into force.

Article 31       The conditions applicable to the award of contracts pertaining to works carried out pursuant to legislative orregulatory provisions relating to the obligation to decorate public buildings are stipulated by decree.

Section 1 Central Purchasing Units Article 32

Article 32       Public entities which use the services of a central purchasing unit are deemed to have complied with theirobligations in regard to the publication and competition rules only if the central purchasing unit applies to all of itspurchases the provisions of the present Code or of Act No. 91-3 of 3 January 1991 "relating to the transparency andlawfulness of the contracting procedures and making the award of certain contracts subject to rules of publication andcompetition".       Contracts awarded between public entities governed by the present Code and a central purchasing unit are subjectonly to the provisions of the present Article.

Section 2

Updated 03/31/2006 - Page 9/34

PUBLIC PROCUREMENT CONTRACTS CODE Call for Tenders Article 33

Article 33       The call for tenders is the procedure through which the public entity chooses the economically most advantageoustender, without negotiation, on the basis of objective criteria brought to the prospective bidders' attention beforehand.       The call for tenders may be open or restricted.       The call for tenders is said to be open when any bidder can submit a bid.       The call for tenders is said to be restricted when only selected candidates are allowed to submit a bid.       The person in charge of the contract is free to choose between the two types of call for tenders.       The contract is awarded by the person in charge of the contract after seeking the advice of the Tenders Committeefor the State, the public health bodies and the public social or medical-social bodies, or by the Tenders Committee forlocal authorities.

Section 3 Negotiated Procedures Articles 34 to 35

Article 34       A negotiated procedure is a procedure through which the public entity chooses the contractor after consultingcandidates and negotiating the conditions of the contract with one or more of them.       Negotiated contracts are awarded with or without prior publication to enable the submission of competing offers.Without prior publication, they are awarded either after being put to competition, or without having been put tocompetition.

Article 35(Decree No. 2005-1737 of 30 December 2005 art. 1 Official Journal of 31 December 2005 effective 1 January 2006)       I. - Negotiated contracts may be awarded only in the cases specified below:       1 Contracts which, after an invitation to tender, were not the subject of any bid or in respect of which the only bidsreceived were inadmissible or unacceptable within the meaning of Article 53. The initial conditions of the contract mustnot be amended. If the person in charge of the contract decides to negotiate only with the prospective bidders previouslyauthorised to submit a bid, he is exempted from implementing any further publication measures;       2 Service contracts, and in particular contracts covering the provision of intellectual-creative services such as worksdesign, where the services to be rendered are such that the contract specifications cannot be established beforehandwith sufficient accuracy to enable an invitation to tender to be used;       3 Works contracts which are concluded solely for research, testing, experimentation, refinement, design ordevelopment purposes without any immediate commercial aim;       4 In exceptional cases, where the nature of the services or the unknown factors that might affect their provisionmake it impossible to determine all the prices in advance;       5 Works contracts of a value between 210,000 euros net of VAT and 5,270,000 euros net of VAT.       II. - The following may be negotiated without prior publicity but with opening to competition:       1 Contracts whose great urgency resulting from circumstances which the person in charge of the contract could nothave foreseen is incompatible with the delivery times imposed by the tendering procedures, or negotiated contractspreceded by a tender notice and, in particular, contracts concluded to deal with extremely urgent situations arising froma technological or natural disaster;       2 Supply contracts which are concluded solely for research, testing, experimentation, refinement, design ordevelopment purposes without any immediate commercial aim.       III. - The following may be negotiated without prior publicity and without opening to competition:       1 Complementary contracts, provided that the initial contract was awarded after opening to competition, in thefollowing instances:       a) Complementary contracts performed by the initial contractor and intended either for the partial renewal ofsupplies or installations in common use, or for additional supplies or the extension of existing installations. Recourse tosuch contracts is possible only when a change of supplier would compel the public body to acquire different technicalequipment and cause incompatibility or excessive technical problems in use and maintenance. The term of suchcomplementary contracts shall not exceed three years. The total contract amount, including additional deliveries, shallnot equal or exceed the thresholds set in II of Article 28 unless the contract was initially awarded by invitation to tenderand was the subject of a tender notice published in the Official Journal of the European Union;       b) Complementary Service or works contracts relating to provisions which are not covered by the contract initiallyconcluded but have become necessary as a result of unforeseen circumstances, the rendering of the service or thecreation of the structure as described therein, provided that the award is made to the company which is providing thatservice or that structure and that the said complementary services or works cannot be technically or financiallyseparated from the principal contract without major adverse consequences for the public body.       The cumulative amount of the complementary contracts shall not exceed 50% of the value of the principal contract;       2 Service or works contracts having as their object the delivery of provisions similar to those covered by an earliercontract performed by the same contractor. The first contract must nevertheless have been awarded through aninvitation to tender. It must also have indicated the possibility of using the negotiated procedure for delivery of similarprovisions. Lastly, its opening to competition must have taken account of the total amount envisaged, including the newservices or works. The period during which new contracts may be concluded shall not exceed three years with effect

Updated 03/31/2006 - Page 10/34

PUBLIC PROCUREMENT CONTRACTS CODEfrom notification of the initial contract;       3 Service contracts which are awarded to one or more successful bidders in a tendering procedure. When there areseveral successful bidders, they are all invited to negotiate;       4 Contracts which, for technical or artistic reasons, or to protect exclusive rights, may only be entrusted to a specificcontractor.       NB: Decree 2005-1737 2005-12-30 art. 2: The provisions of Article 1 apply to contracts in respect of which aconsultation is envisaged or a public tender notice is sent for publication subsequent to the present decree's date ofentry into force.

Section 4 Other Procedures Articles 36 to 38

Subsection 1 The Competitive Dialogue Procedure Article 36

Article 36(Decree No. 2005-1737 of 30 December 2005 art. 1 Official Journal of 31 December 2005 effective 1 January 2006)       The public body may avail itself of the competitive dialogue procedure:       a) When it is unable to determine the technical means to meet its requirements, or,       b) When it is unable to establish a project's legal or financial particulars.       The conditions of the competitive dialogue procedure referred to above do not apply to works contracts of a valuebetween 210,000 euros net of VAT and 5,270,000 euros net of VAT.       For implementation of this procedure, the public body defines a functional program with verifiable results to achieveor which specifies the needs to be met. Each prospective bidder shall submit a proposal on the means of achievingthose results or meeting those needs.       The competitive dialogue procedure may cover both the definition of a project and its execution, save for thecreation of structures governed by the provisions of Act No. 85-704 of 12 July 1985 relating to the public contractingowner and its relations with the private project management.       NB: Decree 2005-1737 2005-12-30 art. 2: The provisions of Article 1 apply to contracts in respect of which aconsultation is envisaged or a public tender notice is sent for publication subsequent to the present decree's date ofentry into force.

Subsection 2 The Procedure Specific to Design and Construction Contracts Article 37

Article 37       Contracts which relate to both the establishment of a project and performance thereof, save for the execution of theworks governed by the provisions of Act No. 85-704 of 12 July 1985 "relating to public works management and itsrelations with private project management", are awarded pursuant to the design and construction contracts procedure.       Regardless of the contract value, this procedure can only be used if technical considerations make it necessary forthe contractor to be involved in the design of the work. The said considerations concern the intended use or thetechniques to be employed to create the work. The works to which this applies tend to entail a production process whichconditions their design and construction, or characteristics, such as very large dimensions or a particular level oftechnical difficulty, which make it necessary to call upon the companies' technical expertise and facilities.

Subsection 3 The Design Contest Article 38

Article 38       The design contest is the procedure through which the public entity, principally in the sphere of regionaldevelopment, town planning, architecture and engineering or data processing, selects a plan or draft plan, afteropenness to competition and having sought the opinion of the board referred to in Article 25, prior to awarding a contractto one of the winners of the design contest.       The design contest may be open or restricted.       The design contest regulations may make provision for the competitors to receive prizes.

CHAPTER III General Contracting Rules Articles 39 to 56

Section 1 Publication Requirements Articles 39 to 40

Article 39(Decree No. 2004-1298 of 26 November 2004 art. 1 II Official Journal of 30 November 2004)(Decree No. 2005-1737 of 30 December 2005 art. 1 Official Journal of 31 December 2005 effective 1 January 2006)       I. - From the threshold of 750,000 euros net of VAT for supplies and services and 5,270,000 euros net of VAT forworks, a prior information notice is sent to the Publications Office of the European Union for publication consistent withthe models approved by order of the Finance Minister.

Updated 03/31/2006 - Page 11/34

PUBLIC PROCUREMENT CONTRACTS CODE       The sending of this notice is compulsory only when the person in charge of the contract exercises the right toreduce the time limit for the receipt of tenders pursuant to Articles 57 II and 62 II.       II. - For contracts for supplies and services, this notice indicates the total estimated contract values per group ofsimilar products or per category of similar services which the person in charge of the contract envisages awarding duringthe following twelve months.       III. - For works contracts, the notice is sent after a decision is taken to implement a works schedule. The person incharge of the contract indicates the essential characteristics of the contracts envisaged to fulfil that schedule.       NB: Decree 2005-1737 2005-12-30 art. 2: The provisions of Article 1 apply to contracts in respect of which aconsultation is envisaged or a public tender notice is sent for publication subsequent to the present decree's date ofentry into force.

Article 40(Decree No. 2004-1298 of 26 November 2004 art. 1 III Official Journal of 30 November 2004)(Conseil d'Etat No. 264712, 265248, 265281, 265343 of 23 February 2005 ATMMP))(Decree No. 2005-1737 of 30 December 2005 art. 1 Official Journal of 31 December 2005 effective 1 January 2006)       I. - Apart from the cases referred to in the third paragraph of I of Article 28, Article 30 and II and III of Article 35,every contract must be preceded by sufficient publicity to enable effective opening to competition as defined below.       II. - For contracts of a value between 4,000 euros net of VAT and 90,000 euros net of VAT, the public body freelychooses the terms and conditions of publicity commensurate with the value and nature of the works, goods or servicesin question.       III. - For contracts for supplies and services of a value between 90,000 euros net of VAT and 135,000 euros net ofVAT for the State or 210,000 euros net of VAT for the territorial authorities, the public body is required to publish a publictender notice either in the Official Bulletin of Public Procurement Contract Announcements, or in a journal authorised topublish legal announcements. The public body also decides whether, in view of the nature or the value of the goods orservices in question, publication in a specialised journal of the economic sector concerned is called for to ensurepublicity consistent with the objectives referred to in Article 1 of the present code.       IV. - For works contracts of a value between 90,000 euros net of VAT and 5,270,000 euros net of VAT, the publicbody is required to publish a public tender notice either in the Official Bulletin of Public Procurement ContractAnnouncements, or in a journal authorised to publish legal announcements. The public body also decides whether, inview of the nature or the value of the goods or services in question, publication in a specialised journal of the economicsector concerned is called for to ensure publicity consistent with the objectives referred to in Article 1 of the presentcode.       V. - For contracts for supplies and services of an amount above 135,000 euros net of VAT for the State and 210,000euros net of VAT for the territorial authorities, and for works contracts of a value above 5,270,000 euros net of VAT, thepublic body is required to publish a public tender notice in the Official Bulletin of Public Procurement ContractAnnouncements and in the Official Journal of the European Union.       Notices shall not be published in the Official Bulletin of Public Procurement Contract Announcements until they havebeen sent to the Publications Office of the European Union; such notices shall not provide information other than thatwhich is sent to the aforementioned office.       VI. - The notices referred to in III, IV and V are drafted in accordance with the models approved by order of theFinance Minister. The notices intended for the Official Bulletin of Public Procurement Contract Announcements are sentby teleprocedure.       VII. - The Official Bulletin of Public Procurement Contract Announcements is required to publish the public notices ofinvitation to tender in accordance with the text sent by the person in charge of the contract within eleven days or, inurgent cases, six days, of the date of their receipt.       If the Official Journals Directorate is unable to publish the printed edition of the Official Bulletin of PublicProcurement Contract Announcements, it may confine itself, on a temporary basis, to publishing it in electronic form, inwhich case it shall immediately inform the subscribers to that bulletin's printed edition of the temporary interruption of itspublication.       VIII. - In the case of a limited invitation to tender, a limited design contest or a negotiated contract with priorpublicity, the person in charge of the contract may publish a single notice for a series of contracts which he intends toaward for provisions of the same kind during a maximum period of twelve months.       NB: Decree 2005-1737 2005-12-30 art. 2: The provisions of Article 1 apply to contracts in respect of which aconsultation is envisaged or a public tender notice is sent for publication subsequent to the present decree's date ofentry into force.

Section 2 Information for Prospective Bidders Articles 41 to 42

Article 41       The documents required for the prospective bidders' consultation are provided to them free of charge. The person incharge of the contract may nevertheless decide that the consultation documents that prospective bidders for a contractrequire shall be provided to them in return for payment of the reprographic costs.

Article 42       Contracts awarded after being put to competition are subject to tender regulations (règlement de la consultation).The references in those regulations are specified by order of the Finance Minister. The said regulations are optional if

Updated 03/31/2006 - Page 12/34

PUBLIC PROCUREMENT CONTRACTS CODEthe references which must appear therein appear in the contract notice.

Section 3 Public Tendering Conditions relating to the Fiscal and Social Status of PotentialBidders or with Respect to the Obligation to Employ Handicapped workers or regardingDifficulties of Companies

Articles 43 to 44-1

Article 43(Act No. 2005-102 of 11 February 2005 art. 29 1 Official Journal of 12 February 2005)       Pursuant to Article 39 of Act No. 54-404 of 10 April 1954 introducing a tax reform, persons who, as of 31 Decemberof the year preceding that in which the consultation process was initiated, had not submitted the tax and social-securityreturns for which they were responsible, or had not paid the taxes and contributions due by that date, are barred frombidding for public contracts.       However, persons who, as of 31 December of the year preceding that in which the consultation process wasinitiated, had not paid the various sums due by that date or provided guarantees, but who, between 31 December andthe date on which the consultation was initiated, had, in the absence of any execution measure instituted by the publicaccountant or the organisation tasked with recovery, either paid the said sums or provided guarantees that the publicaccountant or the aforementioned organisation considers adequate, are deemed to have put their affairs in order.       Natural persons who are de facto or de jure executives of a legal entity which does not meet the conditions laiddown in the preceding paragraphs may not be prospective bidders for a contract in their own right.       The list of taxes and contributions referred to above is determined by order of the Finance Minister and the Ministerof Employment.

Article 44(Act No. 2005-102 of 11 February 2005 art. 29 1 Official Journal of 12 February 2005)       Natural persons or legal entities in compulsory liquidation and natural persons who have been declared bankrupt,and persons subject to an equivalent procedure governed by a foreign legal system, are not eligible to bid for publiccontracts.       Natural persons or legal entities placed in receivership or subject to an equivalent procedure governed by a foreignlegal system must prove that they have been authorised to conduct their business throughout the foreseeable term ofthe contract.

Article 44-1(inserted by Act No. 2005-102 of 11 February 2005 art. 29 2 Official Journal of 12 February 2005)       Persons subject to the obligation stipulated in Article L. 323-1 of the Labour Code who did not make the declarationreferred to in Article L. 323-8-5 of that same code during the year preceding that in which the consultation process wasinitiated or, if they are liable therefor, have not paid the contribution referred to in Article L. 323-8-2 of that code, arebarred from bidding for public contracts.

Section 4 Submission of Applications Articles 45 to 47

Article 45(Act No. 2005-102 of 11 February 2005 art. 29 4 Official Journal of 12 February 2005)       The following information only shall be required in support of applications:       1 Information which facilitates evaluation of the prospective bidder's professional and technical capabilities andfinancial standing, and documents attesting to the powers conferred on the person authorised to commit the prospectivebidder and, where defence contracts are to be awarded, their nationality. Information concerning the prospectivebidders' know-how in regard to environmental protection and compliance with the employment obligation referred to inArticle L. 323-1 of the Labour Code may be required in connection with their professional capabilities.       In order to prove its professional and technical capabilities and financial standing, the prospective bidder mayrequest that the professional and technical capabilities and financial standing of one or more subcontractors also betaken into account. In which case, it must prove the capabilities and standing of the said subcontractor(s) and show thatthey are available to perform the contract.       A list of the said information and documents is compiled by order of the Finance Minister;       2 If the prospective bidder is in receivership, a copy of the judgement(s) rendered to that effect;       3 A sworn statement, duly dated and signed by the candidate, to the effect that:       a) It has met its obligations in terms of tax and contributions;       b) It has not been barred from tendering;       c) It has not, during the previous five years, been the subject of a judgement recorded in Bulletin No. 2 of thecriminal records office for offences referred to in Articles L. 324-9, L. 324-10, L. 341-6, L. 125-1 and L. 125-3 of theLabour Code.

Article 46       I. - The bidder to whom the contract is proposed to be awarded must also produce:       a) The documents referred to in Article R. 324-4 of the Labour Code;       b) The attestations and certificates issued by the relevant institutions and departments showing that he has met his

Updated 03/31/2006 - Page 13/34

PUBLIC PROCUREMENT CONTRACTS CODEtax and social-security obligations. An order from the relevant ministers determines the list of the said institutions anddepartments and the list of the taxes and social-security contributions which can give rise to the issuance of a certificate.       II. - In order to meet the obligations stipulated in b) of I of the present Article, bidders established in a State otherthan France must produce a certificate issued by the institutions and departments of the country concerned. If thatcountry does not issue such certificates, it may be replaced with a sworn statement, or, in States in which suchstatements do not exist, with a solemn declaration made by the person concerned before the relevant judicial oradministrative authority, a notary or a qualified professional body in that country.       III. - The contract can only be awarded to the selected bidder if he produces the certificates and attestationsindicated in I and II of the present Article within the time limit set by the person in charge of the contract.

Article 47       The contract stipulates the circumstances in which it is terminated, with the entire fault resting with the public entity'sco-contractor, in the event of there being any inaccuracy in the information indicated in 2, b) and c of 3 of Article 45 and Iof Article 46.

Section 5 Submission of Bids Articles 48 to 50

Article 48       The bids are presented in the form of the tender document as described in Article 11 and drawn up in a singleoriginal by the bidders.       The bids must be signed by the bidders submitting them or by their duly authorised representatives. No person shallrepresent more than one bidder for the same contract.

Article 49       The person in charge of the contract may demand that the bids be accompanied by samples of the supplies whichare the object of the contract as well as detailed specifications and cost estimates containing all the indications neededto assess the pricing proposals.       The said specifications and estimates have no contractual effect, except as otherwise provided in the contract.

Article 50       In the case of a call for tenders, except as otherwise expressly provided in the contract notice, the bidders maypresent a bid which includes variations from the specifications in the conditions of contract which the tender regulationsdo not categorise as minimum requirements to be complied with. The alternative bid must be proposed with the basicbid.

Section 6 Joint Applications or Bids Article 51

Article 51       I. - Companies may submit their application or bid as a joint and several group or a joint group, without prejudice tocompliance with the rules relating to free pricing and competition.       The group is joint when each participating contractor undertakes to deliver the provision(s) likely to be awarded tohim under the contract.       The group is joint and several when each participating contractor is bound in respect of the entire contract.       II. - In both types of group, one of the participating contractors, indicated in the tender document as therepresentative, represents all the members in relation to the person in charge of the contract and coordinates theprovisions of the group's members.       If the contract so provides, the joint group's representative is jointly and severally liable with each member of thegroup for its contractual obligations towards the public entity and performance of the contract.       III. - For a joint group, the tender document is a single document which indicates the volume and detailedapportionment of the provisions that each member of the group undertakes to deliver.       For a joint and several group, the tender document is a single document which indicates the total contract amountand all the provisions that the members of the group jointly and severally undertake to deliver.       IV. - The applications and bids are signed either by all the participating companies, or by the representative, if hecan show that he is duly empowered to represent those companies when the contract is awarded. No contractor shallrepresent more than one group for the same contract.       V. - The composition of a group cannot be changed between submission of the applications and submission of thebids.       VI. - A change from one type of group to the other cannot be required for the submission of the bid, but the groupmay be required to effect such a change when it is awarded the contract. In such cases, the form subsequently imposedis referred to in the tender regulations.       VII. - The tender regulations may forbid bidders from submitting several bids for a contract or for one of its lots byacting as both individual bidders and as members of one or more groups.

Section 7 Examination of Applications and Bids Articles 52 to 55

Subsection 1

Updated 03/31/2006 - Page 14/34

PUBLIC PROCUREMENT CONTRACTS CODE Selection Criteria for Applications Article 52

Article 52(Act No. 2005-102 of 11 February 2005 art. 29 3 Official Journal of 12 February 2005)       Before the applications are examined, if the person in charge of the contract notes that required documents aremissing or incomplete, he may decide to ask all the applicants concerned to produce or complete those documentswithin the same time limit, which shall not exceed ten days.       Applications which are inadmissible pursuant to Articles 43, 44, 44-1 and 47, which are not accompanied by thedocuments referred to in Article 45, without prejudice to the provisions of the preceding paragraph, or which do notprovide adequate technical and financial guarantees, are excluded.       If the number of applications admitted to an invitation to tender or a limited design contest exceeds that set for theapplicants initially authorised to submit a bid, the applications are selected on the basis of a ranking process which takesaccount of the guarantees and technical and financial expertise as well as the applicants' professional references.       The person in charge of the contract indicates in the public tender notice or, in the case of a procedure exemptedfrom the sending of such a notice, in the tender regulations, the criteria it will give preference to consistent with theobject of the contract.       Where a group is concerned, the professional and technical expertise and financial standing of its members isassessed overall. There is no requirement for each company to possess all the technical expertise required forperformance of the contract.

Subsection 2 Bid Selection Criteria and Ranking Articles 53 to 54

Article 53(Act No. 2005-32 of 18 January 2005 art. 58 Official Journal of 19 January 2005)       I. - Bids which are extraneous to the object of the contract are eliminated.       II. - To ensure that the bidder who submitted the most economically advantageous tender is awarded the contract,the public body relies on various criteria which vary in accordance with the object of the contract, including the operatingcosts, the bid's technical merit, its innovative nature, its environmental friendliness, its performance in terms ofoccupational integration of populations in difficulty, the time for completion, its aesthetic and functional features,after-sales service and technical support, the delivery time and date, and the price of the provisions.       Other criteria may be taken into account if the object of the contract so warrants.       If, given the object of the contract, the public body bases itself on a single criterion, that criterion must be the price.       The criteria are set out in the public tender notice or the tender regulations. The said criteria are either weighted orprioritised.       III. - The bids are ranked in decreasing order. The highest-ranking bid is selected.       If the selected bidder is unable to produce the certificates referred to in I and II of Article 46 within the time limit setby the person in charge of the contract, its bid is rejected. In such cases, the bidder's elimination is declared by theperson in charge of the contract, with no exemption for the territorial authorities and their public undertakings. Theperson in charge of the contract then makes the same request of the next most-highly-ranked bidder.       IV. - A bid cannot be rejected on the sole ground of its being based on technical specifications different from thestandards applicable in France if those specifications were established in reference to:       1 National standards in force in another European Union Member State transposing European standards or nationalor international ecological labels or their equivalents;       2 European technical approvals;       3 National standards in force in another European Union Member State pertaining to the design, calculation andproduction of works and the implementation of products.       V. - The public body must examine both basic and alternative bids before selecting a bid.

Article 54(Decree No. 2004-1298 of 26 November 2004 art. 1 IV Official Journal of 30 November 2004)(Act No. 2005-102 of 11 February 2005 art. 38 II Official Journal of 12 February 2005)       I. - In the event of identical prices or equivalent bids for a contract, a preferential right is granted to bids submittedby a workers' production cooperative, an agricultural producers' group, a craftsman, a craftsmen's cooperative society oran artists' cooperative society or an adapted company.       II. - When the contracts relate, wholly or partly, to works likely to be executed by craftsmen or craft companies ortrade cooperatives or workers' production cooperatives or adapted companies, the public contracting bodies must,before initiating the tendering process, define the public works, services or supplies which, within the limit of one quarterof the amount of those supplies, shall, in the event of equivalence of bids, be awarded prioritarily to any other bidders, tocraftsmen or to craftsmen's cooperative societies or workers' production cooperatives or adapted companies.       III. - When the contracts relate, wholly or partly, to works of an artistic nature and the prices are identical or the bidsare equivalent as envisaged in II, priority shall be given to artists or to artists' cooperative societies for up to one half ofthe value of those works.       IV. - Certain contracts or certain batches of a contract may be reserved for the protected workshops referred to inArticle L. 323-31 of the Labour Code or the vocational rehabilitation centres referred to in Article L. 344-2 of the SocialAction and Families Code. In such cases, the greater part of the contracts or batches is performed by handicapped

Updated 03/31/2006 - Page 15/34

PUBLIC PROCUREMENT CONTRACTS CODEpersons who, on account of the nature or seriousness of their handicap, cannot work under normal conditions. Thepublicity notice refers to the present provision.

Subsection 3 Abnormally Low Bids Article 55

Article 55       If it appears to the person in charge of the contract for the State, or for public health bodies or public social ormedical-social bodies, or to the Tenders Committee for the local authorities, that a bid for a contract is abnormally low,they may reject it by a reasoned decision after requesting whatever written clarification they considers appropriate andverifying the explanations provided.       Explanations relating, inter alia, to the following aspects may be taken into consideration:       a) The methods used to manufacture the products, the manner of providing the services, the constructionprocesses;       b) The exceptionally favourable nature of the conditions of implementation which the bidder enjoys;       c) The originality of the project.

Section 8 E-Tendering Article 56

Article 56       The tender regulations, the consultation letter, the conditions of contract, the documents and the additionalinformation may be made available to the companies by electronic means under conditions laid down by decree.Nevertheless, if the companies so request, these documents are sent to them by mail.       Except as otherwise provided in the contract notice, the applications and bids may also be sent to the public entityvia electronic mail as provided for by decree. With effect from 1 January 2005, no notice may prohibit this medium.Adecree determines the conditions under which electronic auctions may be organised for the purchase of commoditygoods.       The provisions of the present Code which refer to written documents shall not impede their replacement by anelectronic medium or electronic exchange.

CHAPTER IV Sequencing of the Various Procedures Articles 57 to 70

Section 1 The Call for Tenders Articles 57 to 64

Subsection 1 Open Tendering Articles 57 to 59

Article 57(Decree No. 2005-1737 of 30 December 2005 art. 1 Official Journal of 31 December 2005 effective 1 January 2006)       I. - A public tender notice is sent out pursuant to the provisions of Article 40.       II. - The time limit for receipt of tenders shall not be later than fifty-two days after dispatch of the tender notice. Withthe exception of the case referred to in b) below, this time limit cannot be reduced for reasons of urgency.       It may nevertheless be reduced to a minimum of twenty-two days:       a) When the prior information notice referred to in Article 39 has been published. However, it must have been sentfor publication fifty-two days at least, and twelve months at most, before the date of dispatch of the public tender noticeand must contain as much information as the public tender notice, subject to that information being available when theprior information notice is sent out;       b) For works contracts of a value between 210,000 euros net of VAT and 5,270,000 euros net of VAT. In the eventof an emergency which was not caused by the person in charge of the contract, the said time limit may be reduced tofifteen days.       When bids cannot be submitted until a visit has been made to the site(s) where the contract is to be performed orafter on-site consultation of documents additional to the conditions of contract has taken place, the delivery times areextended accordingly.       The conditions of contract and supplementary documents are sent within six days of receipt of the request for workscontracts or service contracts and within four days of receipt of the request for supply contracts.       When, on account of their volume, the conditions of contract and the supplementary documents cannot be deliveredwithin the time limits indicated above, the time limits are extended accordingly and indicated in the public tender notice.       Any further information concerning the conditions of contract is sent by the person in charge of the contract not laterthan six days before the deadline set for receipt of the bids.       III. - The applications are sent by any means which enables determination of the date and time of their receipt withtotal accuracy and ensures confidentiality. They must consist of an envelope containing the information relating to theapplication and an envelope containing the bid.       NB: Decree 2005-1737 2005-12-30 art. 2: The provisions of Article 1 apply to contracts in respect of which aconsultation is envisaged or a public tender notice is sent for publication subsequent to the present decree's date ofentry into force.

Updated 03/31/2006 - Page 16/34

PUBLIC PROCUREMENT CONTRACTS CODEArticle 58       I. - The envelopes are opened in private; the bidders cannot be present.       Only the envelopes received before the deadline set in the contract notice shall be opened.       II. - The person in charge of the contract opens the envelopes relating to the applications and records the contentsthereof.       On the basis of the information relating to the applications, the person in charge of the contract, having sought theadvice of the Tenders Committee for the State, for the public health bodies and the public social or medical-socialbodies, or the Tenders Committee for the local authorities, eliminates the applications which are inadmissible pursuantto the second paragraph of Article 52 through a decision taken before the envelopes containing the bids are opened.       The envelopes containing the bids of the eliminated bidders are returned to them unopened.       III. - The Tenders Committee then opens the envelopes containing the bids and records the contents thereof.       The person in charge of the contract, having sought the advice of the Tenders Committee for the State, for thepublic health bodies and the public social or medical-social bodies, or the Tenders Committee itself for the localauthorities, eliminates any bids which do not conform with the subject matter of the contract.

Article 59       I. - No negotiation shall take place with the bidders. The person in charge of the contract for the State, for the publichealth bodies and the public social or medical-social bodies, or the Tenders Committee for the local authorities, mayonly ask them to clarify or expand on the content of their bid.       II. - The person in charge of the contract, having sought the advice of the Tenders Committee for the State, for thepublic health bodies and the public social or medical-social bodies, or the Tenders Committee itself for the localauthorities, chooses the economically most advantageous tender pursuant to the criterion or the criteria indicated in thecontract notice or in the tender regulations.       With the selected bidder's agreement, the person in charge of the contract may make minor changes to componentsof the contract, provided that such changes do not alter major features thereof such as the financial particulars.       If none of the bids appears to be acceptable to him in regard to the criterion or the criteria referred to in the contractnotice or in the tender regulations, the person in charge of the contract, having sought the advice of the TendersCommittee for the State, for the public health bodies and the public social or medical-social bodies, or the TendersCommittee itself for the local authorities, may declare the call for tenders unsuccessful. The person in charge of thecontract informs all the bidders thereof.       The person in charge of the contract for the State, for the public health bodies and the public social ormedical-social bodies, or the Tenders Committee for the local authorities, may then decide to proceed either with a newcall for tenders, or, if the initial conditions of the contract remain unchanged, a negotiated contract pursuant to I of Article35.       The person in charge of the contract may decide not to proceed with the call for tenders at any time, if this is in thepublic interest.

Subsection 2 Limited Tendering Articles 60 to 64

Article 60(Decree No. 2005-1737 of 30 December 2005 art. 1 Official Journal of 31 December 2005 effective 1 January 2006)       I. - A public tender notice is issued as determined in Article 40. The said notice may impose a minimum number,which shall not be lower than 5, and a maximum number, of contenders authorised to submit a bid.       II. - The time limit for receipt of applications shall be at least thirty-seven days after dispatch of the public tendernotice.       The said time limit may nevertheless be reduced to a minimum of twenty-two days for works contracts of a valuebetween 210,000 euros net of VAT and 5,270,000 euros net of VAT.       In the event of urgency not attributable to the person in charge of the contract, these two time limits may be reducedto fifteen days.       III. - The applications are sent by any means which enables determination of the date and time of their receipt withtotal accuracy and ensures confidentiality.       NB: Decree 2005-1737 2005-12-30 art. 2: The provisions of Article 1 apply to contracts in respect of which aconsultation is envisaged or a public tender notice is sent for publication subsequent to the present decree's date ofentry into force.

Article 61       I. - The envelopes are opened in private; the bidders cannot be present.       Only the envelopes received before the time limit set in the contract notice shall be opened.       II. - The person in charge of the contract opens the envelope relating to the applications and records the contentsthereof.       On the basis of the information relating to the applications, the person in charge of the contract, having sought theadvice of the Tenders Committee for the State, for the public health bodies and the public social or medical-socialbodies, or the Tenders Committee for the local authorities, draws up a list of the candidates authorised to submit a bidpursuant to the second and third paragraphs of Article 52. The number of candidates authorised to submit a bid shall notbe less than 5, unless the number of candidates is insufficient.

Updated 03/31/2006 - Page 17/34

PUBLIC PROCUREMENT CONTRACTS CODEArticle 62(Decree No. 2005-1737 of 30 December 2005 art. 1 Official Journal of 31 December 2005 effective 1 January 2006)       I. - The person in charge of the contract simultaneously sends a printed tender letter to all the selected candidatesinviting them to submit a bid.       The said tender letter contains:       a) The deadline for receipt of the bids, the address to which they are to be sent and the instruction that they bewritten in the French language;       b) A reference to the public tender notice;       c) Where applicable, the address of the department from which the conditions of contract and the supplementarydocuments may be requested and the deadline for making such requests.       II. - The time limit for receipt of tenders shall be not less than forty days after dispatch of the tender letter.       It may nevertheless be reduced to a minimum of twenty-two days:       a) When the prior information notice referred to in Article 39 has been published. It must nevertheless have beenmade public fifty-two days at least, and twelve months at most, before the date of dispatch of the public tender noticeand must contain as much information as the public tender notice, subject to that information being available when theprior information notice is sent out;       b) For works contracts of a value between 210,000 euros net of VAT and 5,270,000 euros net of VAT.       In the event of urgency not attributable to the person in charge of the contract, the time limit for receipt of thetenders may be reduced to fifteen days.       When bids cannot be submitted until a visit has been made to the site(s) where the contract is to be performed orafter on-site consultation of documents additional to the conditions of contract has taken place, the delivery times areextended accordingly.       Any further information concerning the conditions of contract is sent by the person in charge of the contract not laterthan six days before the deadline set for receipt of the bids.       In the event of deadlines being reduced on account of urgency, such information is sent four days, at the latest,before the time limit set for receipt of bids.       III. - The bids are sent by any means which enables determination of the date and time of their receipt with totalaccuracy and ensures confidentiality.       NB: Decree 2005-1737 2005-12-30 art. 2: The provisions of Article 1 apply to contracts in respect of which aconsultation is envisaged or a public tender notice is sent for publication subsequent to the present decree's date ofentry into force.

Article 63       I. - The envelopes are opened in private; the bidders cannot be present.       Only the envelopes received before the deadline set in the contract notice shall be opened.       II. - The Tenders Committee then opens and records the bids.       III. - Having sought the advice of the Tenders Committee, the person in charge of the contract for the State, for thepublic health bodies and the public social or medical-social bodies, or the Tenders Committee itself for the localauthorities, eliminates any bids which do no conform with the subject matter of the contract.

Article 64       I. - No negotiation shall take place with the bidders. The person in charge of the contract for the State, for the publichealth bodies and the public social or medical-social bodies, or the Tenders Committee for the local authorities, mayonly ask them to clarify or expand on the content of their bid.       II. - Having sought the advice of the Tenders Committee, the person in charge of the contract for the State, for thepublic health bodies and the public social or medical-social bodies, or the Tenders Committee itself for the localauthorities, chooses the economically most advantageous tender pursuant to the criterion or the criteria indicated in thecontract notice or in the tender regulations.       With the selected company's agreement, the person in charge of the contract may make minor changes tocomponents of the contract, provided that such changes do not alter major features thereof such as the financialparticulars.        If none of the bids appears to be acceptable to him with regards to the criterion or the criteria referred to in thecontract notice or in the tender regulations, the person in charge of the contract, having sought the advice of theTenders Committee for the State, for the public health bodies and the public social or medical-social bodies, or theTenders Committee itself for the local authorities, may declare the call for tenders unsuccessful. The person in charge ofthe contract informs all the bidders thereof. He may decide to proceed either with a new call for tenders, or, if the initialconditions of the contract remain unchanged, a negotiated contract pursuant to I of Article 35.       The person in charge of the contract may decide not to proceed with the call for tenders at any time, if this is in thepublic interest.

Section 2 Negotiated Procedures Articles 65 to 66

Article 65(Decree No. 2005-1737 of 30 December 2005 art. 1 Official Journal of 31 December 2005 effective 1 January 2006)       When a public tender notice must be sent out, the time limit for receipt of applications shall be not later thanthirty-seven days after dispatch of the public tender notice.

Updated 03/31/2006 - Page 18/34

PUBLIC PROCUREMENT CONTRACTS CODE       The said time limit may, however, be reduced to a minimum of twenty-two days for works contracts of a valuebetween 210,000 euros net of VAT and 5,270,000 euros net of VAT.       In the event of urgency not attributable to the person in charge of the contract, these two time limits may be reducedto fifteen days.       The applications are sent by any means which enables determination of the date of their receipt with total accuracyand ensures confidentiality.       NB: Decree 2005-1737 2005-12-30 art. 2: The provisions of Article 1 apply to contracts in respect of which aconsultation is envisaged or a public tender notice is sent for publication subsequent to the present decree's date ofentry into force.

Article 66       The person in charge of the contract draws up a list of the candidates invited to negotiate.       He sends those candidates a consultation letter and, at the same time, if applicable, the consultation file (Dossier deconsultation).       The person in charge of the contract enters into negotiations with the candidates of his choice who have submitteda bid. The number of candidates admitted to negotiations shall not be less than three, unless the number of candidatesis insufficient.       The person in charge of the contract may terminate the procedure at any time, if this is in the public interest.       When the negotiations are concluded, the person in charge of the contract awards the contract after seeking theadvice of the Tenders Committee for the State and for the public health bodies and the public social or medical-socialbodies. For the local authorities, the contract is awarded by the Tenders Committee on the basis of a bid-rankingproposal made by the person in charge of the contract.

Section 3 Other Procedures Articles 67 to 70

Subsection 1 The Competitive Dialogue Procedure Articles 67 to 68

Article 67(Decree No. 2004-1298 of 26 November 2004 art. 1 V Official Journal of 30 November 2004)       I. - The competitive dialogue procedure is organised pursuant to the following provisions:       A public tender notice is published as provided for in Article 40.       The minimum period between dispatch of the publication notice and the deadline for receipt of applications isthirty-seven days.       The applications are sent by any means which enables determination of the date of their receipt with total accuracyand ensures confidentiality.       Having selected the contenders authorised to submit a proposal, the person in charge of the contract enters into adialogue with each of them. At least 3 contenders shall be invited to participate in the competitive dialogue unless thenumber of contenders does not permit this.       The object of that dialogue is the identification and definition of the means best suited to meeting the public body'srequirements on the basis of a functional plan it has already drawn up and, where relevant, a partially defined project.The person in charge of the contract may discuss all aspects of the contract with the selected contenders.       Each contender is interviewed in strictly equal conditions. The person in charge of the contract shall not giveinformation to certain contenders which might give them an advantage over others. He shall not reveal to the othercontenders solutions proposed, or confidential information provided, by a contender in the context of the discussionswithout that contender's agreement.       The person in charge of the contract shall maintain discussions with the contenders until such time as he is able toidentify the solution(s), having compared them if necessary, which are likely to meet the requirements stipulated in thecontract.       He may arrange for the discussions to take place in successive phases after which the only proposals retained arethose which best meet the criteria laid down in the public tender notice or the tender regulations. Recourse to thisprocedure must have been indicated in the public tender notice or the tender regulations, which shall also stipulate theconditions for its implementation.       II. - When he considers the discussions concluded, the person in charge of the contract shall inform the contenderswho have participated in all phases of the discussion thereof and shall finalise the conditions of contract.       He invites the contenders to submit their bid within a time limit of at least fifteen days. The bids shall include all theelements necessary for the award of the contract.       The person in charge of the contract may request clarifications or further details concerning the bids submitted bythe contenders. Such further details, clarifications or information shall nevertheless not have the effect of alteringfundamental elements of the bid or essential characteristics of the contract.       The person in charge of the contract submits a precise and detailed report to the Tenders Committee concerningthe progress and content of the discussions.       For the State and the public health undertakings and public social or medical-social undertakings, the award of thecontract is made known in a grounded decision of the person in charge of the contract taken after receiving abid-ranking proposal and an opinion from the Tenders Committee. The grounded decision of the person in charge of the

Updated 03/31/2006 - Page 19/34

PUBLIC PROCUREMENT CONTRACTS CODEcontract and the Tenders Committee's opinion are included in the report.       For the territorial authorities, the award of the contract is made known in a grounded decision of the TendersCommittee. That decision is included in the report.       III. - The tender regulations may provide for a bonus to be awarded to all the contenders or to those whoseproposals were the subject of the discussions or those whose bids were ranked highest.       The successful bidder's remuneration takes account of any bonus which may have been paid to it pursuant to theprevious paragraph.       The competitive dialogue procedure is not implemented if no bid is considered to be acceptable. The contendersare informed thereof.

Article 68       When contracts relating to communications operations are awarded pursuant to the competitive dialogue procedure,they may include one or more completion phases whose total amount is determined prior to the performance of thecontract. In such cases, they are awarded for a maximum period of three years. On completion of each phase, theperson in charge of the contract may, on the basis of the results obtained, and having sought the contractor's opinion,determine the new means to be implemented for the next phase, with a view to achieving the communicationsoperation's objectives.       If the desirability of completing the contract is likely to be called into question during its performance, its terms mustallow the public entity to discharge performance thereof at the end of one or more of its phases.

Subsection 2 The Procedure Specific to Design and Construction Contracts Article 69

Article 69       Design and Construction contracts are works contracts awarded pursuant to the following provisions:       A board composed of the members of the Tenders Committee referred to in Articles 21 and 22 is established andsupplemented by project managers designated by the person in charge of the contract. The said project managers mustbe independent of the bidders and the awarding authority and be competent with regards to the work to be designed andthe nature of the provisions to be obtained for its design. They represent at least one third of the board.       The board draws up an evaluation report on the applications, together with a reasoned opinion regarding the list ofthe candidates who should be selected. The person in charge of the contract finalises the list of candidates authorised todeliver design provisions and the documents required for the tendering process are sent to them, free of charge.       The authorised candidates deliver provisions on which the board, having interviewed them, expresses an opinion.The said design provisions include at least one brief preliminary design for a building element or a preliminary design foran infrastructure element, together with a definition of the work's technical performances.       The board draws up an evaluation report on the provisions and its discussions with the candidates and formulates areasoned opinion.       The person in charge of the contract may request clarifications or further details concerning the bids submitted bythe candidates. Such further details, clarifications or information shall nevertheless not have the effect of altering thefundamental elements of the bid or the essential characteristics of the contract.       Based on the board's opinion, the person in charge of the contract for the State and for the public health bodies andthe public social or medical-social bodies, or the Tenders Committee for the local authorities, awards the contract.        The tender regulations determine the amount of the prizes as well as the arrangements for reducing or withdrawingthe prizes of candidates whose bids, submitted before the discussion, were deemed by the board to be incomplete ornon-compliant with the tender regulations. The amount of the prize awarded to each candidate is equal to the estimatedprice of the design studies to be carried out as specified in the tender regulations, after application of a reduction equalto a maximum of 20%. The successful candidate's remuneration takes account of the prize he has received.

Subsection 3 The Design Contest Article 70

Article 70(Decree No. 2004-1298 of 26 November 2004 art. 1 VI Official Journal of 30 November 2004)       When an open design contest takes place, the applications sent by the contenders consist of a first envelopecontaining the information pertaining to their application, a second envelope containing the work requested and a thirdenvelope containing their price proposal for carrying out the contract.       When a limited design contest takes place, the contenders authorised to compete are invited to send their work anda separate envelope containing their price proposal for carrying out the contract.       The time limits for receipt of the applications and bids are the same as those for the invitation to tender asdetermined in Article 57 for open procedures and Articles 60 and 62 for limited procedures.       The person in charge of the contract opens the envelopes relating to the applications and records the contentthereof. The board examines the applications. It draws up a report and formulates a grounded opinion.       A list of the contenders authorised to compete is drawn up by the person in charge of the contract.       The person in charge of the contract records the works requested and prepares the board's work. The contenders'works are evaluated by the board, which verifies their compliance with the design contest regulations and proposes aranking therefor based on the criteria indicated in the public tender notice. The said evaluation is anonymous if theestimated value of the contract for services to be entered into with the successful bidder is equal to or above the

Updated 03/31/2006 - Page 20/34

PUBLIC PROCUREMENT CONTRACTS CODEthresholds set in II of Article 28.       The board draws up a report on the evaluation of the works and formulates a grounded opinion. The said report issigned by all the members of the board and sent to the person in charge of the contract. Anonymity is respected inregard to the board's opinion. The board may invite the contenders to answer questions in its report in order to clarifyany aspect of the project. Complete minutes of the dialogue between the board members and the contenders are drawnup and sent to the person in charge of the contract, who decides the winner(s) of the design contest after examining theenvelope containing the price.       The person in charge of the contract negotiates with all the winners. The contract deriving from the design contest isawarded to one of the winners by the person in charge of the contract for the State and for the public healthundertakings and the public social or medical-social undertakings or, for the territorial authorities, by the deliberativeassembly.       The person in charge of the contract allocates the bonuses to the contenders pursuant to the proposals made tohim by the board.

CHAPTER V Provisions Specific to Certain Contracts Articles 71 to 74

Section 1 Split contracts Articles 71 to 72

Article 71(Decree No. 2004-1298 of 26 November 2004 art. 1 VII Official Journal of 30 November 2004)       When, for economic, technical or financial reasons, the ordering rate or scope of the requirements to be met cannotbe completely finalised in the contract, the public body may award a split contract in the form of a purchase-ordercontract.       I. - The purchase-order contract determines the specifications and substance of the works, as well as the price or itsmethod of calculation; it determines the minimum and maximum in terms of value or quantity. The maximum valuecannot be more than four times the minimum value.       The contract is performed through the issuing of successive purchase orders, consistent with the requirements. Thepurchase order is the written document sent to the contractor by the person in charge of the contract; it specifies the works described in the contract in respect of which performance is required and determines the quantity thereof.       Purchase-order contracts are awarded for a term which may only exceed four years in exceptional and dulywarranted circumstances, primarily when the object of the contract so requires. The contract specifies the maximumterm for fulfilment of the purchase orders.       For occasional low-value requirements, the public body may have recourse to a supplier other than the contractor,provided that the cumulative amount of such purchases does not exceed 1% of the total contract value or the sum of10,000 euros net of VAT. Recourse to this option does not exempt the public body from respecting its commitment toplace orders amounting to the minimum contract value.       II. - As an exception duly explained in the presentation report, if the value of the requirements and the rate at whichthe purchase orders are to be issued cannot be determined by the public body in advance, a contract with no minimumor maximum may be concluded.       III. - In the cases provided for in I and II, for reasons duly justified on account of a single company being unable toprovide the totality of the provisions or the necessity of ensuring security of supply, contracts may be awarded to severalcontractors for batches relating to identical provisions, provided that the contract expressly determines thecircumstances in which purchase orders shall be awarded to the different contractors.       IV. - The public body may initiate a tendering procedure and conclude contracts for the same provisions, with nominimum or maximum, with several contractors whom it shall then invite to submit a competitive bid prior to the issuingof each purchase order, when such a procedure is made necessary by:       a) The high volatility of the products' prices;       b) The products' rapid obsolescence or;       c) The fact that the issuing of a purchase order has become necessary on account of an extremely urgent situationnot attributable to the contracting public body which is incompatible with the time taken to prepare a contract.       The tender regulations state that such contracts shall give rise to a further invitation to tender when the purchaseorders are allocated and indicate the maximum number of contractors to be selected. They indicate that, when thepurchase orders are issued, all the contractors shall be invited to tender on the basis of the initial conditions of contractand that the choice of successful bidder of the purchase order shall depend on the price and, if relevant, the time forcompletion. They state that the companies' replies may be sent by any means which enables determination of the dateand time of their receipt with total accuracy.       The further tendering process provided for in the previous paragraph takes place in a form and subject to time limitswhich are identical for all bidders and which ensure confidentiality of the replies. The content of each reply is recorded.       The person in charge of the contract or his representative chooses the purchase order's successful bidder.       In the circumstances envisaged in a) and b), the price might not be indicated in the contract, but the contract shallnevertheless contain all the elements required to determine it at the time of issuance of each purchase order.       V. - The public body may also initiate a tendering procedure and conclude contracts for the same provisions, with nominimum or maximum, with several contractors which it shall then invite to submit a competitive bid prior to the issuingof each purchase order, for products or materials having certain characteristics which can be specified only after a

Updated 03/31/2006 - Page 21/34

PUBLIC PROCUREMENT CONTRACTS CODEscientific or technological research assignment has been carried out.       In such cases, the initial conditions of contract indicate the technical characteristics likely to be specified after theresearch assignment has been carried out. When a further tendering process takes place, the person in charge of thecontract or his representative informs each of the contractors of the reasons why the specified technical characteristicsare required.       Moreover, the person in charge of the contract may refrain from inviting the selected contractors to tender prior tothe issuing of purchase orders in the following three instances:       a) For orders for products or materials of a value below or equal to 1,500 euros net of VAT which are intended tomeet occasional or low-value requirements when, for identical supplies, the sum of those individual purchase orders,evaluated over renewable twelve-month periods within the limit of the term of the contract, does not meet the thresholdfor supply contracts set in II of Article 28;       b) When no other product or material may be substituted for the product or material to be acquired within theframework of the scientific or technological research assignment and only one of the contractors is able to supply it;       c) For supplementary orders placed subsidiarily with the initial supplier, either for a partial renewal of supplies orstandard materials if a change of supplier would lead to the acquisition of supplies or materials based on a differenttechnique and result in incompatibility or technical difficulties in use and maintenance which are disproportionate to theobjective pursued and the advantages associated with a further tendering process, or for further orders pertaining tosuch supplies or materials.        The tender regulations stipulate that the issuing of the purchase orders shall not give rise to a further tenderingprocess. The conditions of contract specify the performance and control criteria for those provisions.

Article 72       When, for economic, technical or financial reasons, the ordering rate or scope of the requirements to be met cannotbe completely finalised in the contract, the public entity may award a split contract in the form of a conditionalstage-payment contract.       The conditional stage-payment contract has a firm phase and one or more conditional phases. The contract definesthe substance and the price, or its method of calculation, and the performance criteria for the provisions of each phase.The provisions of the firm phase must constitute a consistent whole; the same applies to the provisions of eachconditional phase, taking the provisions of all previous phases into account. The execution of each conditional phase issubject to a decision of the person in charge of the contract, made known to the contractor as determined in thecontract. When a conditional phase is confirmed belatedly or is not confirmed, the contractor may benefit, if the contractso provides and under the conditions laid down therein, from a tideover allowance or a non-execution allowance.

Section 2 Project Definition Contracts Article 73

Article 73       If the public entity is unable to specify the aims and performances the contract must meet, the basic techniques tobe used, and the human and material resources required, it may resort to project definition contracts.       The purpose of such contracts is to explore the possibilities and conditions for establishing a contract subsequently,if necessary through production of a model or demonstrator. They must also enable the price level of the provisions tobe estimated and calculated, as well as the different phases of the performance schedule.       Provisions supplied under several project definition contracts having the same purpose, concluded upon completionof a single procedure and executed simultaneously, may be awarded, without a further tendering process, to the supplierof the chosen solution. In such cases, the amount of the provisions to be compared with the thresholds takes account ofthe cost of the definition studies and the estimated amount of the fulfilment contract.       The person in charge of the contract for the State and for the public health bodies and the public social ormedical-social bodies, or the Tenders Committee for the local authorities, awards the contract.

Section 3 Project Management Contracts Article 74

Article 74       I. - The purpose of project management contracts for the creation of a structure or a town or country planningproject is the execution of one or more assignment elements defined by Article 7 of Act No. 85-704 of 12 July 1985"relating to public works management and its relation with private project management" and by Decree No. 93-1268 of29 November 1993 which contains its implementing provisions.       II. - Project management contracts are awarded pursuant to the design contest procedure under the conditions laiddown below. They may nevertheless be awarded pursuant to the adapted procedure described in I of Article 28 whentheir amount is below the thresholds set in II of Article 28.       The design contest referred to above is a restricted design contest organised as determined in Article 70.       Candidates who have submitted provisions receive a prize. The contract notice indicates the amount of the saidprize. The amount of the prize awarded to each candidate is equal to the estimated price of the studies to be carried outby the candidates as indicated in the contract notice and specified in the design contest regulations, after application ofa reduction equal to a maximum of 20%.       The remuneration payable under the project management contract takes account of the prize paid for the successfulcandidate's participation in the design contest.

Updated 03/31/2006 - Page 22/34

PUBLIC PROCUREMENT CONTRACTS CODE       For project management contracts of an amount equal to or greater than the thresholds set in II of Article 28, thepublic entity is not required to implement a project management design contest in the following instances:       a) For the awarding of a project management contract pertaining to the re-use or restoration of existing structures;       b) For the awarding of a project management contract pertaining to structures created for research, testing orexperiments;       c) For the awarding of a project management contract which does not entrust any design task to the contractor;       d) For the awarding of a project management contract pertaining to infrastructure works.       If the contracting public entity elects not to implement the design contest procedure, the procedure applicable iseither that of call for tenders with a Committee functioning as a board as described in Article 25, or, in the casesenvisaged in 2 or 4 of I of Article 35, the negotiated procedure described below.       The minimum period between dispatch of the contract notice and the deadline for receipt of applications isthirty-seven days. The said time limit may, however, be reduced to fifteen days in the event of urgency not attributable tothe public entity. The competitive assessment may be limited to an examination of the applicants' expertise, referencesand human and material resources.       The person in charge of the contract, having sought the opinion of a board as defined in Article 25, draws up a list ofapplicants authorised to negotiate, whose number shall not be less than three unless the number of applicants isinsufficient. The person in charge of the contract commences the negotiations. Upon completion of the negotiations, thecontract is awarded by the person in charge of the contract for the State, for the public health bodies and the publicsocial or medical-social bodies or, for the local authorities, by the deliberative assembly.       III. - When several project definition contracts having the same purpose have been concluded upon completion of asingle procedure and performed simultaneously, the person in charge of the contract for the State, for the public healthbodies and the public social or medical-social bodies, or the deliberative assembly for the local authorities, may entrustone or more project management contracts to the supplier(s) of the chosen solutions without a further tenderingprocess.

CHAPTER VI Completion of the Procedure Articles 75 to 80

Article 75       Any draft contract or draft supplementary agreement, excluding the contracts referred to in I of Article 28 andArticles 30 and 31, is the subject of a submission report from the person in charge of the contract, which:       1 Defines the nature and scope of the requirements to be met, as well as the estimated cost of the operation;       2 Sets out the general economics of the contract or the supplementary agreement, its scheduled progress, theenvisaged price and its provisional conditions of performance;       3 Explains the choice of the awarding method adopted and, if applicable, any recourse to an urgency deadline ornegotiated procedure;       4 Reports on the progress of the procedure followed and describes the negotiation process, if any;       5 Justifies the introduction, if any, of bid-selection criteria not covered by the provisions of the first paragraph of II ofArticle 53 and explains why the selected bid was chosen;       6 Indicates the names of the bidders who were not selected and the reasons why they were rejected;       7 States, with regards to supplies, whether the supplies originated in a European Union Member State or anothercountry which is a signatory to the Government Procurement Agreement (GPA) concluded within the framework of theWorld Trade Organization;       8 Indicates, if any, which portion of the contract the successful bidder intends to subcontract.       The said report is sent to the authorities responsible for supervising the contracts, together with the contract itself.

Article 76       Once it has made its choice concerning the applications or bids, the public entity informs all the other bidders of therejection of their applications or bids. At least ten days must elapse between the date on which the bidders whose bidswere selected are informed of the decision and the date on which the contract is signed.       The person in charge of the contract must also inform the bidders, as soon as possible, of the reasons which ledhim to refrain from awarding or notifying the contract or recommencing the procedure. At a written request of thebidders, the reply is given in writing.       The person in charge of the contract cannot provide information if its disclosure:       a) Would be contrary to the law;       b) Would be contrary to the public interest;       c) Would prejudice companies' legitimate commercial interests;       d) Could prejudice fair competition between companies.

Article 77       The person in charge of the contract shall, within fifteen days of receiving a written request for such information,write to any unsuccessful bidder and explain why their bid was rejected, and to any bidder whose bid was not rejectedpursuant to I of Article 53 in order to explain the relative characteristics and advantages of their bid and the selected bid,the amount of the contract awarded and the name of the successful bidder.

Article 78       After sending the documents necessary to effect his supervision to the representative of the State, in the case of the

Updated 03/31/2006 - Page 23/34

PUBLIC PROCUREMENT CONTRACTS CODElocal authorities, or receipt of those documents by the representative of the State in the case of the public health bodies,the contract is notified to the contractor by the person in charge of the contract.       Contracts having as their subject matter the legal representation of a public entity in connection with the resolutionof a dispute are not sent to the representative of the State.

Article 79       Public contracts must be notified before any performance commences.       Notification consists of the sending of the signed contract to the contractor by any means which enables the date tobe determined with complete accuracy. The date of notification is the date of receipt of the contract by the contractor.       The contract takes effect on that date.

Article 80(Decree No. 2005-1008 of 24 august 2005 art. 3 Official Journal of 25 august 2005)       For contracts of a value above the thresholds set in II, the first paragraph of III and IV of Article 28, and the fourthparagraph of I of Article 30, the person in charge of the contract sends a notice of award for publication within thirty daysof the contract's notification.       Notices of award are published in the journal in which the public tender notice appeared, under the terms andconditions set forth in Article 40 of the present code.       They are drafted in accordance with the models approved by order of the Finance Minister.       These provisions do not apply to either the contracts referred to in I of Article 28 and the fourth paragraph of I ofArticle 30 or to negotiated contracts awarded without prior publicity.       For the contracts referred to in Article 30, the person in charge of the contract sends a notice of award, but maydecide not to publish it. He sends the said notice to the Publications Office of the European Union, indicating whether itshould be published.

CHAPTER VII Provisions Specific to Contracts Awarded for the Purchase of Forms of Energywhich the Public Entity is Unable to Store

Article 81

Article 81       Contracts for the purchase of forms of energy which cannot be stored by the public entities may be awarded asindicated below:       a) The contract may be a purchase-order contract with no minimum or maximum having several contractors. Thecontract determines the nature and unit price of the supplies, or its method of calculation. It is performed through theissuing of successive purchase orders, according to the requirements.       The tender regulations indicate the circumstances in which the contract gives rise to competition among thecontractors prior to the issuance of each purchase order. The competition process relates to the unit price of the energysupplied.       The purchase orders specify the period during which the energy shall be supplied. The person in charge of thecontract is nevertheless not required to state in the purchase order the exact quantity of energy which must be suppliedto him during that period. The said quantity is verified upon expiry of the period referred to in the purchase order. Thetotal performance time of the purchase orders issued under such contracts cannot exceed the duration of the contract,and the maximum duration of the contract shall comply with the rules laid down in I of Article 71 of the present Code.       b) The contract might not be split. In which case, it determines the substance, nature and unit price of the energysupplied, or its method of calculation. The contract might not indicate the exact quantity of energy which must besupplied in fulfilment thereof. In this case, it is verified upon expiry of its duration.

CHAPTER VIII Provisions Specific to the Contracts of Utilities Operators Articles 82 to 85

Article 82       The public entities referred to in Article 2 of the present Code act as utilities operators when their business activityentails:       1. The provision or exploitation of fixed production, transport or distribution networks for electricity, gas or heat, orthe supply of such networks with electricity, gas or heat, when such networks are intended to provide a service to thepublic;       2. The provision or exploitation of fixed production, transport or distribution networks for drinking water, when suchnetworks are intended to provide a service to the public.       Contracts awarded by the same public entity having the following as their object also relate to the same businessactivity:       a) The evacuation or treatment of waste water;       b) Hydraulic engineering, irrigation or drainage projects, provided that at least 20% of the total water volumeproduced by such projects is intended for the drinking water network;       3. Exploring for the extraction of oil, gas, coal or other solid fuels;       4. The construction or exploitation of airports, seaports, inland ports or other transport terminals available to air, seaor inland waterways carriers;       5. The provision or exploitation of transport networks by means of railways, automatic systems, trams, trolley buses,

Updated 03/31/2006 - Page 24/34

PUBLIC PROCUREMENT CONTRACTS CODEbuses, coaches or ski-lifts intended for public use.

Article 83       The provisions of the present Code do not apply to:       1 Contracts covering the purchase of fuels intended for energy production, or the purchase of energy, by publicentities engaged in an activity referred to in 1 of Article 82;       2 Contracts covering the supply of water by water producers or distributors engaged in the activity referred to in 2 ofArticle 82;       3 Contracts awarded by the operators of bus or coach transport services when they are public entities subject to theCode and when other entities are able to provide that same service either generally or within a specific geographic area.

Article 84       Utilities operators may, after prior publication, award negotiated contracts for requirements directly linked to theirbusiness, regardless of the amount thereof.

Article 85       A bid which is abnormally low on account of a State aid being obtained can only be rejected if the bidder, havingbeen consulted, is unable to show that that aid was notified to the European Commission or was authorised by theCommission. In the event of such a rejection taking place, the person in charge of the contract shall inform the EuropeanCommission thereof.

PART IVPERFORMANCE OF THE CONTRACTS Articles 87 to 118 CHAPTER I Financial System Articles 87 to 111

Section 1 Payment, Advances, Instalments Articles 87 to 86

Article 86       The contracts give rise to payments in respect of advances or instalments, or definitive partial or final settlement, asstipulated in the present section.

Subsection 1 Advances Articles 87 to 88

Article 87       I. - A standard advance is granted to the contractor when the initial amount of the contract or of the stage exceeds50,000 Euros net of VAT.       In the case of a purchase-order contract having a minimum amount above 50,000 Euros net of VAT, the advance isgranted by a single payment on the basis of that minimum amount.       In the case of a purchase-order contract having no minimum or maximum, the advance is granted for eachpurchase order of an amount above 50,000 Euros net of VAT.       In the case of a global contract awarded pursuant to Articles 7 or 8 of the present Code under which eachdepartment or entity effects payment individually for the provisions it has ordered, it may be decided that the rulesgoverning the advance are those set forth in the provisions applicable to purchase-order contracts having no minimumor maximum.       The person in charge of the contract may make provision in the contract for payment of a standard advance incases in which this is not compulsory.       In all cases, the contractor may refuse payment of the standard advance.       II. - The amount of the standard advance is set, without prejudice to the provisions of Article 115, at 5% of the initialamount, inclusive of all taxes, of the contract or the stage if the duration of the contract or the stage is shorter than orequal to twelve months; if the duration is longer than twelve months, the standard advance is equal to 5% of a sumequal to twelve times the initial amount of the contract or the stage divided by the duration of the contract or the stageexpressed in months.        In the case of a purchase-order contract having a minimum amount above 50,000 Euros net of VAT, the amount ofthe advance is set, without prejudice to the provisions of Article 115, at 5% of the minimum amount if the duration of thecontract is shorter than or equal to twelve months; if the duration is longer than twelve months, the standard advance isequal to 5% of a sum equal to twelve times the minimum amount divided by the duration of the contract expressed inmonths.       In the case of a purchase-order contract having no minimum or maximum or having a minimum and a quantity-fixedmaximum, the amount of the advance for each purchase order of an amount above 50,000 Euros net of VAT is set,without prejudice to the provisions of Article 115, at 5% of the amount of the purchase order if the performance time forthat purchase order is shorter than or equal to twelve months; if the performance time is longer than twelve months, thestandard advance is equal to 5% of a sum equal to twelve times the amount of the purchase order divided by theperformance time for that purchase order expressed in months.       The amount of the standard advance shall not be affected by invoking a price variation clause.

Updated 03/31/2006 - Page 25/34

PUBLIC PROCUREMENT CONTRACTS CODE       III. - Payment of the standard advance, effected by a deduction from the sums subsequently due to the contractor,commences when the amount of the provisions provided under the contract or the stage reaches or exceeds 65% of theinitial amount of the contract or the stage.       In the case of a purchase-order contract having a minimum amount above 50,000 Euros net of VAT, payment of thestandard advance, effected by a deduction from the sums subsequently due to the contractor, commences when theamount of the provisions delivered under the contract reaches 65% of the initial contract amount.       In the case of a purchase-order contract having no minimum or maximum, payment of the standard advancegranted on each purchase order of an amount above 50,000 Euros net of VAT, effected by a deduction from the sumssubsequently due to the contractor by virtue of each purchase order concerned, commences when the amount of theprovisions delivered under the corresponding purchase order reaches 65% of that amount.       IV. - Payment must be completed when the amount of the provisions delivered reaches 80% of the initial amount,inclusive of all taxes, of the contract, the stage or the purchase order.

Article 88       An optional advance may be granted to the contractor instead of the standard advance.       The optional advance shall not exceed 30% of the initial amount, inclusive of all taxes, of the contract or the stage.       In the case of a purchase-order contract having a minimum amount, the advance shall not exceed 30% of thatminimum amount.       In the case of a purchase-order contract having no minimum or maximum, the advance shall not exceed 30% ofeach purchase order.       The optional advance may, however, be increased to a maximum of 60% of the amounts referred to above, subjectto the contractor providing an on demand-bond pursuant to the provisions of Article 104 of the present Code.       The amount and terms of payment of the optional advance are determined by the contract. They cannot be variedby a supplementary agreement.       The optional advance is paid at a rate determined by the contract via deductions from the sums due by way ofinstalments or definitive partial payments.       Payment of the optional advance must be completed when the amount of the provisions delivered reaches 80% ofthe amount, inclusive of all taxes, of the contract, the purchase order, the stage or, in the case of a purchase-ordercontract having a minimum amount, that minimum amount.

Subsection 2 Instalments Article 89

Article 89(Act No. 2005-102 of 11 February 2005 art. 38 II Official Journal of 12 February 2005)       Provisions which have given rise to partial performance of the contract confer entitlement to progress payments.       The amount of a progress payment shall not under any circumstances exceed the value of the provisions to which itrelates.       The payment frequency of progress payments is set at a maximum of three months. When the contractor is a smallor medium-sized enterprise, a workers' production cooperative, an agricultural producers' group, a craftsman, acraftsmen's cooperative society, an artists' cooperative society or an adapted company, the said maximum period isreduced to one month for works contracts. For contracts for supplies and services, it is reduced to one month at thecontractor's request.       Companies whose staff does not exceed 250 employees and whose average turnover during the past three yearshas not exceeded 40,000,000 euros are considered to be small or medium-sized enterprises. Companies in which acompany which is not an SME within the meaning of the present code holds an interest in the share capital above 33%are not considered to be SMEs.

Subsection 2 Definitive Partial Payment Article 90

Article 90       Definitive partial payment represents firm and irrevocable settlement corresponding to total performance of theprovisions pertaining to one or more lots, stages or purchase orders of a contract.

Subsection 4 Rules Governing Payments Articles 91 to 98

Article 91       Advances and instalments do not have definitive payment status; their beneficiary remains indebted until such timeas the contract is finally settled or, when the contract so provides, until definitive partial payment takes place.

Article 92       When the contract contains a price variation clause, the final value of the references used for application of thatclause must be taken, at the latest, on the date on which the provisions were delivered as provided for in the contract,or, if earlier, on the date of their actual delivery.       When the final value of the references is unknown on the date on which a instalment or definitive partial payment isdue, the public entity effects provisional settlement on the basis of the latest known references.

Updated 03/31/2006 - Page 26/34

PUBLIC PROCUREMENT CONTRACTS CODE       The payment calculated on the basis of the final reference values is made three months after the date on whichthose values were published, at the latest.       When the advances are paid by deduction from the sums due by virtue of a instalment or final payment, thededuction is made after application of the price variation clause to the initial amount of the progress payment or finalpayment.

Article 93       In the event of the total or partial termination of the contract, the contracting public entity may, without waiting fordefinitive settlement, and in response to a request, pay the contractor a maximum of 80% of any credit balance resultingfrom a provisional settlement.       Conversely, if the provisional settlement shows a credit balance in favour of the public entity, it may demandimmediate repayment of 80% of the amount of that balance from the contractor. The contractor may nevertheless begiven time to settle his debt; in this case, the contractor must provide the guarantee referred to in Article 102.

Article 94       The insertion of any deferred payment clause into a contract is prohibited.

Article 95       The elements of a contract executed by the contractor which give rise to payment of advances or instalments,definitive partial payments, or full and final settlement, must be substantiated in a document drawn up by the contractingpublic entity or verified and agreed by it.

Article 96       The total time limit for payment of a public contract shall not exceed 45 days. For public health bodies and thearmed forces' health bodies, however, that limit is 50 days.       Late payment gives the contractor or subcontractor automatic entitlement to arrears interest, without any otherformality, with effect from the day following expiry of the time limit.       A decree determines the present Article's implementing provisions.

Article 97       If the contract documents provide for a staged scheduling of the successive performance phases and the paymentsassociated therewith, no debt shall become due, and no arrears interest shall be applied, before the dates thusdetermined by the contract.

Article 98       If the contract is terminated and the parties are unable to reach an agreement regarding compensation within sixmonths of the date of termination, the public entity shall have a period of three months in which to determine the amountof the compensation due.       If no decision or contractual agreement is reached during the period of three months referred to in the previousparagraph, the contractor shall be entitled, as of right, to arrears interest calculated on the amount of the compensationfor termination still to be determined with effect from expiry of that period until the date on which the public entity'sdecision is made known or a contractual agreement is eventually concluded. The rate and calculation method of suchinterest are determined by joint order of the Finance Minister and the Budget Minister.

Section 2 Guarantees Articles 99 to 105

Subsection 1 Retention of Guarantee Articles 99 to 101

Article 99       When they provide for a guarantee period, the contracts may also make provision for a retention of an amount notexceeding 5% of the initial amount plus the amount of any additional contracts. The sole purpose of the retention is tocover reservations expressed upon acceptance of the public works, services or supplies, as well as any reservationsformulated during the guarantee period.

Article 100       The retention of guarantee may be replaced, if the contractor so wishes, by an on demand-bond or, if the twoparties have agreed thereon, by a personal and joint surety. The amount of the on demand-bond or personal and jointsurety shall not exceed that of the retention which they replace. Their purpose is identical to that of the retention ofguarantee that they replace.       The on demand-bond or the personal and joint surety is established on the basis of a model determined by order ofthe Finance Minister.       The institution providing its guarantee must be selected from among the third parties approved by the FinanceMinister or the Credit Institutions and Investment Companies Committee referred to in Article L. 612-1 of the Monetaryand Financial Code. When that institution is foreign, it must be selected from among the third parties approved in itscountry of origin.       The person in charge of the contract is free to accept or reject guarantee-providing institutions.       The said on demand-bond or surety must be wholly available, at the latest, on the date on which the contractor

Updated 03/31/2006 - Page 27/34

PUBLIC PROCUREMENT CONTRACTS CODEsubmits the payment request corresponding to the first instalment. If a supplementary contract exists, the amount mustbe increased accordingly.       In the event of the on demand-bond or surety not being available, or not being increased, within that time limit, theretention of guarantee corresponding to the instalment is deducted and the contractor forfeits his right to substitute an ondemand-bond or a surety therefor for the remainder of the contract's duration.

Article 101       The retention of guarantee is paid back, or the institutions that granted a surety or an on demand-bond arereleased, at the latest one month after expiry of the guarantee period.       However, if reservations have been notified, during the guarantee period, to the contractor or the institutions thatgranted a surety or an on demand-bond and are not lifted before that period expires, the securities are released withinone month, at the latest, of the date on which the reservations are lifted.       In such cases, the undertaking given by those institutions shall not cease until the contracting public entity issues arelease.       If repayment is delayed, arrears interest is paid pursuant to the terms set forth in the decree referred to in Article 96.

Subsection 2 Other Guarantees Articles 102 to 105

Article 102       In the event of a contract which does not provide for a retention being terminated and the contractor being giventime to pay back the public entity 80% of the amount of any credit balance showing in his favour, as provided for inArticle 93 of the present Code, the contractor must provide an on demand-bond or, if the two parties have agreedthereon, a personal and joint surety.

Article 103       The conditions of contract determine, as far as necessary, the other guarantees that may be requested fromcontractors for performance of a specific commitment.

Article 104       When the amount of the optional advance exceeds 30% of the contract amount, the contractor may only receivethat advance as provided for in Article 88 of the present Code if he has provided an on demand-bond which requires theguarantor institution to repay the amount of the agreed advance should this become necessary. Contractors governedby public law are nevertheless not required to provide such a guarantee.       When contracts are awarded for defence requirements, the requirement to provide such a guarantee may beforegone or varied by joint order of the Defence Minister and the Finance Minister.

Article 105       The local authorities may request provision of an on demand-bond or, if the two parties have agreed thereon, apersonal and joint surety, for all or part of the payment of a standard advance. In such cases, the advance cannot beordered until the bond or surety is arranged.       This provision does not apply to contractors governed by public law.

Section 3 Financing Articles 106 to 111

Subsection 1 Assignment or Pledging of Claims Deriving from the Contracts Articles 106 to 110

Article 106       I. - The person in charge of the contract sends the contractor a copy of the original of the contract bearing anindication, duly signed by him, to the effect that that document is issued in one sole original to enable the contractor toassign or pledge the claims deriving from the contract.       The beneficiary institution must send the sole original to the designated public accountant as proof of payment.       When the secrecy imposed in defence matters prevents transmission of the copy of the contract to the beneficiaryof an assignment or pledge, the authority the contractor dealt with issues a sole original to the latter which only containsthe wording which is compatible with the requirements of secrecy. The contractor may, for any other reason, requestthat the wording of the sole original be reduced to the indications required for assignment or pledging.       If changes are made as regards the designated public accountant's appointment or the contract's terms of payment,the contracting public entity shall annotate the copy to take account of those changes.       For any contract which provides for several designated public accountants, the person in charge of the contractshall provide one original for each public accountant and specify, in an indication placed on each such document, that itis intended to be delivered to the expressly designated public accountant to the exclusion of all others referred to in thecontract. Each document refers only to the portion of the total sum which the public accountant to whom it is delivered iscalled upon to pay.       Only the beneficiary of an assignment or pledge of a claim shall, having been notified thereof, receive the fullamount of the claim or portion of the claim which has been assigned or pledged to him.       In the event of an assignment or pledge of a claim being effected in favour of several beneficiaries, each of themshall individually receive the portion of the claim which has been allocated to them in the assignment or pledge as

Updated 03/31/2006 - Page 28/34

PUBLIC PROCUREMENT CONTRACTS CODEattested in the documents sent to the public accountant.       If subcontracting is provided for when the contract is awarded, the contractor indicates in the contract the natureand amount of the provisions which it envisages entrusting to subcontractors benefiting from direct payment as providedfor in Article 115 of the present Code. That amount is deducted from the contract amount to determine the maximumamount of the claim that the contractor is authorised to assign or pledge.       II. - In the case of an assignment or pledge effected pursuant to Articles L. 313-23 to L. 313-34 of the Monetary andFinancial Code, the notification referred to in Article L. 313-28 of that Code is sent to the public accountant designated inthe contract in the manner determined in the Conseil d'État decree referred to in Article L. 313-35. It must replicate thecompulsory elements of the advice note referred to in Article L. 313-23.       The release of the assignment or pledge of a claim takes effect on the second business day following that on whichthe public accountant receives the notification informing him thereof.

Article 107       The beneficiary of an assignment or pledge of a claim notifies the designated public accountant of the transmissionof all or a portion of its claim against the contractor as provided for in Article 106.       When such notification is effected, only the beneficiary of the transmission may receive the portion of the claimtransmitted.

Article 108       The beneficiaries of pledges or assignments of claims or transmissions may, during the performance of the contract,ask the competent authority to supply either a summary of the provisions delivered, supported by an evaluation which isnot binding on the public entity, or a detailed statement of the rights established in favour of the contractor; they mayalso request a statement of the advances and instalments paid. The person responsible for providing such information isdesignated in the contract.       Those same beneficiaries may ask the public accountant to provide a detailed statement of any objections he hasreceived in connection with the contract.       If they so request by registered mail, and prove their status, the person designated in the contract is required toinform them, at the same time as the contractor, of all changes made to the contract which affect the guarantee derivingfrom the pledge or the assignment.       They may not demand information other than that indicated above and cannot participate in performance of thecontract in any way.

Article 109       The rights of the beneficiaries of the pledges or transmissions referred to in Article 108 are ranked after thefollowing privileges:       - the privilege of court fees;       - the privilege pertaining to the payment of salaries and pay in lieu of holidays in the event of bankruptcy or judicialsettlement covered by Articles L. 143-10 and L. 143-11 of the Labour Code;       - the privilege in favour of public works contractors' staff and suppliers deriving from Article L. 143-6 of the LabourCode;       - the privileges conferred on the Trésor public by the laws in force;       - the privilege conferred on the owners of land occupied in connection with public works by the law of 29 December1892 relating to damage caused to private property by the execution of public works.

Article 110       The only suppliers likely to benefit from the privilege deriving from Article L. 143-6 of the Labour Code are thosewhom the contracting public entity has approved as provided for by decree.       The privilege only relates to supplies delivered subsequent to the date on which the application for approval wasdelivered to the competent authority.

Subsection 2 Involvement of the Crédit d'équipement des petites et moyennes entreprises Article 111

Article 111       With a view to facilitating the financing of public procurement, the Crédit d'équipement des petites et moyennesentreprises may make payments in the form of advances and liquidity credits in favour of contractors subject to theprovisions of the present Code or in favour of their subcontractors entitled to direct payment.       To that effect, it may obtain from the contracting public entity any document which proves the existence of thefinanced claim.       When the Crédit d'équipement des petites et moyennes entreprises informs the contracting public entity of itsintention to intervene in favour of the contractor, the paying officer informs it, upon request, at the same time and in thesame manner as the contractor, of any letter which suspends the deadlines for payment.

CHAPTER II Provisions Relating to Subcontracting Articles 112 to 117

Article 112       The contractor of a public works or public services contract may subcontract the performance of certain parts of its

Updated 03/31/2006 - Page 29/34

PUBLIC PROCUREMENT CONTRACTS CODEcontract if he has obtained the contracting public entity's approval for each subcontractor and the terms of his payment.

Article 113       When the contract is subcontracted, the contractor remains personally responsible for fulfilment of all obligationsresulting therefrom.

Article 114       Approval of each subcontractor and the terms of his payment must be requested in the following circumstances:       1. If the subcontracting request is made at the time of the bid or the proposal, the bidder must provide thecontracting public entity with a declaration that indicates:       a) The nature of the provisions in respect of which subcontracting is envisaged;       b) The name, company name or corporate name and address of the proposed subcontractor;       c) The provisional amount of the sums to be paid directly to the subcontractor;       d) The terms of payment set out in the draft subcontracting agreement and, if applicable, the price variation criteria;       e) If the public entity so requests, the subcontractor's professional expertise and financial standing.       He must also submit a declaration from the subcontractor indicating that the latter does not come within the scopeof any prohibition in regard to competing for public contracts.       Notification of the contract entails acceptance of the subcontractor and the terms of his payment.       2. If the request is made after the contract is concluded, the contractor delivers a special declaration containing theinformation referred to in 1 of the present Article to the contracting public entity and obtains a receipt therefor, orforwards the said declaration by registered mail.       The contractor must also establish that an assignment or pledge of claims deriving from the contract does notimpede direct payment of the subcontractor, as provided for in Article 116, by producing either the sole original of thecontract issued to him or an attestation or release from the beneficiary of the assignment or pledge of the claims.       3. If, subsequent to notification of the contract, the contractor envisages entrusting performance of provisions of anamount higher than that indicated in the contract to subcontractors having the benefit of direct payment, he must obtainan amendment to the sole original referred to in Article 106 of the present Code.       If that original has been transmitted in connection with an assignment or pledge of claims and cannot be returned,the contractor must prove either that the assignment or pledge of claims relating to the contract is of an amount suchthat it does not impede direct payment of the subcontracted part, or that the amount thereof has been reduced to makesuch payment possible.       Such proof is provided by an attestation from the beneficiary of the assignment or pledge of claims deriving from thecontract.       The contracting public entity cannot accept a subcontractor and approve the terms of his payment if the sole originalhas not been amended or if the proof referred to above has not been submitted to him.       Any change in the distribution of the provisions between the contractor and the directly paid subcontractors orbetween the subcontractors themselves also requires an amendment to the sole original or, where relevant, productionof an attestation or release from the assignee(s).       4. Failure on the part of the contracting public entity to reply within twenty-one days of receiving the documentsreferred to in 2 and 3 constitutes acceptance of the subcontractor and approval of the terms of his payment.       5. The acceptance of the subcontractor and approval of the terms of payment are recorded in the contract or in aspecial document signed by both parties.       The wording specifies:       - the nature of the subcontracted provisions;       - the name, company name or corporate name and address of the subcontractor;       - the provisional amount of the sums to be paid directly to the subcontractor;       - the arrangements for paying those sums.

Article 115       The provisions set forth in Articles 86 to 98 apply to the subcontractors referred to in Article 114 in conjunction withthe special provisions below:       1. When the amount of the subcontracting agreement is equal to or greater than 600 Euros inclusive of all taxes, thesubcontractor, who has been accepted and whose terms of payment have been approved by the person in charge of thecontract, is paid directly for the part of the contract which he performs.       However, for industrial contracts awarded by an authority structured under the Ministry of Defence, that is to say,inter alia, contracts covering prototype production, manufacture, assembly, testing, non-routine repairs or maintenanceand intellectual services, the subcontractors are only paid directly if the amount of their subcontracting agreement isequal to or greater than 10% of the total contract value.       2. The standard advance referred to in Article 87 is paid to subcontractors benefiting from direct payment at theirrequest.       The limit set in the first paragraph of Article 87 is determined by reference to the provisional total of the sums to bepaid as indicated in the contract or in the special document referred to in 5 of Article 114.       The standard advance is set at 5% of that amount within the limit of the provisions to be performed by thesubcontractor during the twelve months following the date of commencement of such performance.       The subcontractor's entitlement to the standard advance is valid from the date on which he commencesperformance of the provisions.

Updated 03/31/2006 - Page 30/34

PUBLIC PROCUREMENT CONTRACTS CODE       Payment of the said advance commences when the amount of the provisions delivered by the subcontractorreaches or exceeds 65% of the amount indicated in the special document. Payment must be completed when thepercentage reaches 80%.       If the contractor subcontracts a part of the contract subsequent to its conclusion, payment of the standard advanceto the subcontractor is contingent upon the return, if applicable, of the part of the standard advance paid to thecontractor by virtue of the subcontracted provisions.

Article 116       The subcontractor sends his payment request to the contractor.       The contractor forwards the said payment request, bearing its acceptance, to the person designated for thatpurpose in the contract.       The person designated in the contract informs the subcontractor of the date of receipt of the request for paymentsent by the contractor and indicates the sums in respect of which the latter has approved payment in his favour.       The paying officer arranges payment of the sums due to the subcontractor.       In the event of the contractor having neither responded to the subcontractor's request for payment with a reasonedrefusal within fifteen days of its receipt nor having forwarded that request to the person designated in the contract, thesubcontractor shall send his request for payment directly to the person designated in the contract by registered mail orshall deliver it to him against a receipt which is duly dated and entered in a register kept for that purpose.       The person designated in the contract immediately gives notice on the contractor by registered mail to prove to himwithin fifteen days of receipt of that notice that he has issued a reasoned refusal against his subcontractor. As soon ashe receives the confirmation of receipt, he informs the subcontractor of the date of service of that notice.       Upon expiry of the period referred to in the previous paragraph, if the contractor is unable to produce such proof, theperson designated in the contract shall pay the sums due to the subcontractors as provided for in Article 96.

Article 117       An authorised subcontractor whose terms of payment have been approved may assign or pledge all or part of hisclaim up to the limit of the amount of the provisions in respect of which he is to be paid directly.       The copy of the original of the contract referred to in Article 106 or, if applicable, the special document referred to inArticle 114 designating a subcontractor approved for direct payment, must be sent to each subcontractor benefiting fromdirect payment.

CHAPTER III Supplementary Performance Article 118

Article 118       When the amount of the provisions delivered reaches the amount determined in the contract, ongoing performanceof the provisions is dependent upon conclusion of a supplementary contract or, if the contract so provides, a decision toproceed taken by the person in charge of the contract.       Decisions to proceed and supplementary contracts must meet the conditions laid down in Article 19 of the presentCode.

PART VPROVISIONS RELATING TO SUPERVISION Articles 119 to 130 SOLE CHAPTER Supervision of the Contracts Articles 119 to 130

Section 1 The Interdepartmental Investigation Mission on Public Contracts and Public ServiceDelegations

Articles 119 to 124

Article 119       The members of the Interdepartmental Investigation Mission instituted by Article 1 of Act No. 91-3 of 3 January1991 "relating to the transparency and lawfulness of contracting procedures and making the award of certain contractssubject to rules of publication and competition", are appointed for a renewable period of four years.       The secretariat of the Interdepartmental Investigation Mission is administered by the Ministry of Finance's LegalAffairs Department.       The head of the Interdepartmental Mission organises and directs the Mission's work. To that end, he appointsinvestigators tasked with assignments from among the Mission's members.

Article 120       An inquiry relating to a contract which, wholly or partly, is of a secret nature pertaining to national defence can onlybe entrusted to an investigator with prior authorisation to have knowledge of information protected by the laws relating todefence secrets.

Article 121       The inquiries and inspections conducted by the Mission member(s) tasked with an investigation pursuant to Article 2of the aforementioned Act of 3 January 1991 are the subject of a report which states the nature of the verifications orinspections carried out, and its date and place. The report is signed by the investigator and the person under

Updated 03/31/2006 - Page 31/34

PUBLIC PROCUREMENT CONTRACTS CODEinvestigation. In the event of a refusal to sign, this is noted in the report.

Article 122       The legal representative of the local authority, the public body or the local semi-public company to which the inquiryrelates shall have a period of fifteen days with effect of receipt of the report drawn up by the Interdepartmental Mission inwhich to make any observations. When that period has expired, the report may be sent to the Prefect and to theauthority which requested the inquiry.       The inquiry report is sent to the administrative authorities which requested the inquiry, to the Prime Minister and, ifappropriate, to the Public Prosecutor, pursuant to the provisions of Article 40 of the Code of Criminal Procedure.       Even after its report has been sent, the Interdepartmental Investigation Mission may be consulted by the variouscompetent administrative authorities concerning further action on any question relating to possible use of the informationin the report and the file enclosed therewith.

Article 123       An inquiry conducted by the Interdepartmental Investigation Mission instituted by Article 1 of the aforementioned Actof 3 January 1991 is carried out without prejudice to the existing inspection procedures and shall not encroach upon themanagement functions or the provision of services.

Article 124       The head of the Mission draws up an annual activity report in which he presents the results obtained, the difficultiesencountered during the inquiries and the points with regards to which the most frequent or most serious irregularitieshave been recorded. He proposes measures intended to remedy or limit them. He produces an assessment of thesituation compared with the previous year. The said report is sent to the Prime Minister, the Minister of Justice and theFinance Minister.

Section 2 Cost-Price Monitoring of Public Contracts Awarded by the State Articles 125 to 129

Article 125       Pursuant to Article 54 of the 1963 Finance Act (No. 63-156 of 23 February 1963), in the cases indicated below, thecontractors supply to the contracting department, if it so requests, full information concerning the technical andaccounting elements of the cost price (coût de revient) of the provisions which are the subject matter of the contract.       The said contractors are obliged to allow and to facilitate any documentary or on-site verification of the accuracy ofsuch information by the agents of the administration referred to in Article 128.       The obligations referred to above apply to contracts for works, supplies or studies for which the specialisedtechniques, the small number of bidders possessing the requisite expertise, reasons of secrecy or extreme urgencymake it impractical to call for competitive tenders or to do so effectively.       The persons subject to the provisions of the previous paragraphs may be required to present their balance sheets,their profit and loss accounts and their management accounts or, failing that, any documents which facilitatedetermination of the cost prices.

Article 126       A reference to the obligations imposed by Article 125 is included in the wording of contracts subject to scrutiny.       The contractual document which makes reference to the obligations imposed by Article 125 determines thepenalties applicable if a company subject to those obligations refuses to submit documents, provides false information orotherwise impedes verification.

Article 127       The decision to verify the cost price pursuant to Article 125 is taken by the authority which signed the contractsubject to scrutiny.

Article 128       The agents or categories of agents of the State authorised to carry out documentary or on-site verification pursuantto Article 125 are designated by order of the minister to whom they are accountable.       Agents of the public bodies and other entities on the list referred to in I of Article 54 of the 1963 Finance Act (No.63-156 of 23 February 1963) who are called upon to carry out the said verifications are designated by name by order ofthe minister in charge.       Agents authorised pursuant to the provisions of the two previous paragraphs may be made available to anyministerial department to carry out verifications on its behalf.

Article 129       All officials or agents who, for whatever reason, have knowledge of information concerning companies gatheredpursuant to Article 125 are bound by professional secrecy and, where applicable, the rules relating to the protection ofsecrecy in relation to defence.       Such information shall not be used for purposes other than verification of the cost price of the contract underscrutiny or any other similar contract.

Section 3 Other Monitoring Procedures of Public Contracts Awarded by the State Article 130

Updated 03/31/2006 - Page 32/34

PUBLIC PROCUREMENT CONTRACTS CODEArticle 130       In addition to controls instituted by the general texts pertaining to State expenditure and by the present Part,contracts, supplementary contracts and decisions to proceed are subject to controls determined by each minister.

PART VIMISCELLANEOUS PROVISIONS Articles 131 to 138 CHAPTER I Settlement of Disputes Articles 131 to 132

Section 1 Advisory Board on Out-of-Court Settlement of Disputes Article 131

Article 131       Public entities and contractors may have recourse to consultative committees for the out-of-court settlement ofdisputes relating to contracts under conditions determined by decree.       The role of such committees is to investigate elements of law or fact with a view to finding an amicable andequitable solution.       Referring a dispute to a consultative committee for out-of-court settlement interrupts the various limitation periods.       Referral to a committee suspends the time limit for legal actions, where applicable, until a decision is taken by theperson in charge of the contract after seeking the committee's opinion.       The composition, organisation and operational procedures of the consultative committees, including the specificpowers of their chairpersons, are determined by decree.

Section 1 Arbitration Article 132

Article 132       Pursuant to Article 69 of the Act of 17 April 1906 determining the general income and expenditure budget for the1906 financial year, the State, the local authorities or the local public bodies may have recourse to arbitration, asprovided for in Book IV of the New Code of Civil Procedure, in order to settle their expenditure for works and supplies.       For the State, such arbitration must be authorised by a decree issued on the basis of a report from the relevantminister and the Finance Minister.

CHAPTER II Advisory Bodies Articles 133 to 135

Section 1 Committee for Public Contracts awarded by the State Article 133

Article 133(Decree No. 2004-1298 of 26 November 2004 art. 1 VIII Official Journal of 30 November 2004)       A committee for government contracts provides assistance to ministers and other persons responsible for preparingor awarding such contracts. The said committee's composition, organisation and operational procedures are determinedby decree.

Section 2 The Technical Committee for Contracts Article 134

Article 134       A Technical Committee for Contracts, responsible to the Finance Minister, examines and approves the drafttechnical requirements for public contracts. The missions, composition, organisation and operational procedures of theTechnical Committee for Contracts are determined by order of the Finance Minister.

Section 3 Permanent Study Groups for Contracts Article 135

Article 135       Through orders issued jointly with the minister principally concerned, the Finance Minister may create PermanentStudy Groups for Contracts to prepare technical recommendations pertaining to certain categories of contracts. Themissions, composition, organisation and operational procedures of the Permanent Study Groups for Contracts aredetermined by order of the Finance Minister.

CHAPTER III Information on Contracts Articles 136 to 138

Section 1 The Economic Observatory for Public Procurement Article 136

Article 136

Updated 03/31/2006 - Page 33/34

PUBLIC PROCUREMENT CONTRACTS CODE       An Economic Observatory for Public Procurement, responsible to the Finance Minister, collects and analyses datarelating to the economic aspects of public procurement. The missions, composition, organisation and operationalprocedures of the Economic Observatory for Public Procurement are determined by order of the Finance Minister.

Section 2 The Economic Inventory of Contracts Articles 137 to 138

Article 137       Each year, the Ministry of Finance carries out an Economic Inventory of Contracts awarded by the State, nationalpublic bodies other than those of an industrial and commercial nature, the local authorities and their public bodies, andinstitutions, companies, bodies and semi-public companies subject to the State's economic and financial scrutiny.        This economic inventory may be supplemented by inquiries conducted within the bodies referred to in Article 31 ofOrdinance No. 58-896 of 23 September 1958 relating to general provisions of a financial nature. In such cases, theprovisions of Act No. 51-711 of 7 June 1951 relating to obligations, coordination and secrecy in regard to statistics areapplicable.       The said economic inventory is carried out within the administrative and financial departments authorised either toaward contracts or to pay the amounts due by virtue of those contracts.

Article 138       During the first quarter of each year, the public entity publishes a list of the contracts concluded during the previousyear, as well as the names of the contractors. The said list is drawn up as determined by order of the Finance Minister.

Updated 03/31/2006 - Page 34/34