Resolution of the Council of Ministers no. 74/2006, of 12 of June
Published in D.R. number 113 (Series I-B) of 12 June 2006
Presidência do Conselho de Ministros (Presidency of the Council of Ministers)
The establishment and implementation of a mobile communications infrastructure that enables an interconnection between the different entities responsible for emergencies and security is a fundamental instrument for the policy of quality, reliability and security of communications, meeting the need to ensure the best and most efficient use of financial resources and the optimization of the radio spectrum.
Through Resolutions of the Council of Ministers nos. 26/2002 of 5 February and 56/2003, of 8 April, the conditions for the establishment of the Sistema Integrado das Redes de Emergência e Segurança de Portugal (Integrated System for Portugal's Security and Emergency Networks), hereinafter referred to as SIRESP, were laid down, designed as a single national network, based on shared digital trunking technology, enabling the centralization of leadership and coordination of several security forces and services in case of emergency.
The particularly complex and specific nature of the SIRESP contracts in view of the public interest at stake, which involves fundamental interests of the Portuguese State, advises the adoption of an exceptional procedure for concluding the respective contracts, under point i) of paragraph 1 and paragraph 2 of article 77 of Decree-Law no. 197/99 of 8 June.
On the other hand, given the subject-matter of the procedure and the features of the contract to be concluded, the procedure was outlined taking into consideration Decree-Law no. 86/2003 of 26 April, the statutory instrument that defines the rules applicable to public-private partnerships.
Pursuant to this statutory instrument and following the appointment of the members of the commission responsible for monitoring the project and delivering the respective favourable opinions, under the provisions of the mentioned Decree-Law no. 86/2003 of 26 April, approval was granted to the conditions for launching the partnership, including the respective procedure programme and specifications, pursuant to the joint order no. 734/2003, of 9 July, published in the Diário da República, II Series, no. 173, of 29 July 2003.
Since the mentioned resolutions were published, the SIRESP has been understood, and still is, as a priority project for the Government. Engaging the SIRESP enables the provision of telecommunications services, based on digital trunking technology, supporting voice, data and image transmission, both through closed groups of users and through the communication with other groups.
The SIRESP, by ensuring high-quality mobile communications to operators of the security and emergency areas, as well as the possibility of an inter-communication between all involved parties, presents very important advantages relatively to the current situation, both for the regular operation of these services and well as for catastrophe situations. The underlying technology corresponds to the option adopted in most western countries in this field. Other digital technologies do not fully ensure the needs of security and emergency; likewise, there are no comparable experiences of its use for this purpose in Europe.
Countries not provided with national networks have regional or local networks or single service networks. The option for a national network integrating several or all services corresponds to the best option, and has been taken by several western countries such as Austria, Germany and the United Kingdom.
The usefulness of a single network was duly pointed out in the COTEC report entitled ''Benchmarking of prevention and response systems for forest fires''.
The tender procedure was opened, and through the joint order no. 219/2005 of 23 February, published in the Diário da República, II Series, no. 48, of 9 March 2005, the Ministers for Internal Administration and for Finance and for the Public Administration, integrated at the time in the management government, approved the substantiated report with the summary of negotiations, prepared by the evaluation committee, and the contract was awarded.
Having been challenged the conditions under which the procedure was launched and the contract was awarded, the Minister of State and for Internal Administration of the XVII Constitutional Government, by order of 30 March 2005, decided to request: i) of the Inspectorate-General for Finance, its opinion on the financial appropriateness of the proposed solution; ii) of the Instituto de Telecomunicações (Telecommunications Institute) and of ICP-ANACOM, their opinion on the technical appropriateness of the proposed solution and specifications; and iii) of the Advising Committee of the Public Prosecutor's Office, the legal assessment of the procedure.
Through opinion no. 36/2005, voted on 28 April 2005, the Advising Committee of the Public Prosecutor's Office concluded that the procedure did not show, up to awarding the contract, any defects that could result in the invalidity of acts practised so far, and that could still be challenged in court. The mentioned opinion, however, concluded that the award was invalid, as it was deemed that the authors of such act, members of a management government, in office after the resignation had been presented, were not competent to perform such act. Given the contents of this opinion, the Minister of State and for Internal Administration, on 4 May 2005, issued an order of approval of the opinion, and consequently, issued a joint order with the Minister of State and for Finance, in which joint order no. 219/2005 was declared null and void.
From the opinions of the Telecommunications Institute, dated 2 May 2005, and ICP-ANACOM, dated 6 May 2005, complemented by the opinion put forward by Luís Manuel de Jesus Sousa Correia on 10 May 2005, it follows that there seem to be no relevant defects of a technical nature in the preparation of specifications and in the adjustment of the technical solution proposed by the tendered to the assumptions of specifications.
Finally, the Inspectorate-General for Finance issued an opinion that raised several objections, especially concerning the credibility of the value of the comparable public cost considered, the appropriateness of the internal rate of return (IRR) of the shareholder and the impossibility of determining the added value to the State, concluding that the proposed partnership did not produce any benefits for the State, being also highlighted that, as the multi-annual budget framework had not been ensured as yet, it would not be possible to conclude the contract. The same opinion referred, however, that «where the legal and technical sides show benefits that compensate for the verified economic-financial uncertainties, the procedure may be resumed, and shortcomings found […] must be addressed. »
The declaration of nullity of the contract award provided competent members of the Government the power and duty to make a decision on what further action to take. Given the contents of the opinion of the Inspectorate-General for Finance, it was deemed that the contract should not be awarded in the same way as during the negotiation stage.
Nevertheless, considering the importance of the SIRESP project to the public interest and, likewise, the contents of the technical opinions and the conclusion that the procedure was legally valid up to the moment of the respective award, it was deemed that it would be convenient to reopen the procedure and the negotiation stage, in order to assess the possibility of obtaining from the tendering consortia a recasting of the respective tender, so that the interests of the State were fully represented and, namely, that the defects mentioned in the opinion of the Inspectorate-General for Finance were addressed.
Thus, through order no. 16205/2005 of 12 July, published in the Diário da República, II Series, no. 142 of 26 July 2005, the Minister of State and for Internal Administration determined: i) the reopening of negotiations on the engagement of the SIRESP with the tendering consortia; ii) the reorganization of the evaluation committee, responsible for the renegotiations with the tendering consortia,- this Committee, under Decree-Law no. 86/2003, integrated representatives of the Minister of State and for Internal Administration and the Minister of State and for Finance; iii) the subsequent assessment of the result of the definitive negotiation, and iv) the conclusion of negotiations up to 15 October 2005.
The referred negotiations were concluded on 15 October 2005 with the presentation of a proposal recast by the tenderer.
A financial consultant of the State was requested to assess the referred proposal and to update the comparable public cost. The consultant concluded that, from a financial point of view, the proposal recast (on the basis of the base case audited on 14 October 2005) presented a reduction relatively to the proposal of January 2005 of around 14.5% (corresponding to 49,4 million euros - a reduction from 340,7 million euros to 291,3 million euros) in the net present value of payments to the State. This proposal, thus recast, corresponds to a significant difference by 16.6% against the comparable public cost.
The proposal resulting from the renegotiation was also subject to an opinion from the Inspectorate-General for Finance, dated 2 December 2005, the favourable conclusion from this institution being highlighted, as it referred that the economic-financial terms and conditions of the recast proposal represent an unmistaken progress compared to the proposal of January 2005, and that the new proposal ''produces benefits for the State''.
A technical report on the renegotiation process prepared by the technical consultant of the State, date October 2005, was also obtained. It concludes that the solution proposed is appropriate for the needs of the State against other possible alternatives and assesses the benefits of awarding the renegotiated proposal.
In view of these conclusions, the session mentioned in point 27.8 of the procedure programme took place on 10 March, a minute having drawn up to render formal the contents of agreements reached in the renegotiation, attaching, as provided for in that standard, a copy of the contract minute and respective annexes and of all minutes of contracts or instrumental agreements depending on it, duly initialled by representatives of the evaluation committee and of the tendering consortia. To the mentioned minute were also attached commitment letters of the members of the consortia and their funding providers, as well as a copy of the base case, subject only to subsequent adjustments provided for therein.
It should be referred that the base case dated 1 March 2006, and included in a CD-ROM initialled by the common representative of the group and by the president of the evaluation committee corresponds to the above-mentioned base case audited on 14 October 2005, the only alteration concerning the introduction of a mechanism called ''Adjustment accounts'' and the reduction of margins applicable to senior debts. These alterations allowed an additional reduction of the net present value of payments to the State, the difference being of 16.9%, against the comparable public cost.
The financial consultant and the legal adviser of the State were also requested to produce reports on the contents of the final proposal, on the compliance thereof with specifications and with the legal regime applicable to public-private partnerships, and also on the formal validity of the procedure following the declaration of invalidity of the first award.
The final proposal was also subject to a new opinion from the Inspectorate-General for Finance, dated 14 March 2006, this institution having stated a favourable view, in similar terms to the above-mentioned opinion issued on 2 December.
Lastly, the Minister of State and for Internal Administration and the Minister of State and for Finance were presented, for approval purposes, the report of the evaluation committee, that summarises the most important aspects of the procedure and that presents the result of renegotiations, pursuant to point 28 of the procedure programme.
As regards technical aspects, the report of the evaluation committee stated that the proposal does not present any alterations that modified the essential features of the SIRESP, such as it is established in the specifications.
As regards financial aspects, the report of the evaluation committee highlights the significant reduction of the net present value of the payments to the State relatively to the proposal of January 2005 - under the referred terms.
That report considered also the compliance of proposal with paragraph 1 of article 6 and with article 7 of Decree-Law no. 86/2003, to the extent that: i) the targets of the partnership, as stated in the strategic study that preceded the launch of the partnership and in the joint order that determined it, were achieved; ii) the award of the SIRESP produces benefits for the public partner and remuneration prospects for private partners; iii) applicable rules are complied with; iv) the public interest is not compromised by excessively expensive or unpredictable compensation rules; v) arrangements are in hand for obtaining an economically competitive business result; and vi) an appropriate share of risks has been provided for, having also been verified entries mentioned in points c) to g) of paragraph 10 of article 8 thereof.
The report of the evaluation committee proposes that the contract is awarded to the proposal submitted by the consortia composed by the companies Motorola, Inc., PT Ventures, SGPS, SA, SLN - Sociedade Lusa de Negócios, SGPS, SA, DATACOMP - Sistemas de Informática, SA, and ESEGUR - Empresa de Segurança, SA, in the scope of the tender for the conclusion of a management contract for the design, project, supply, installation, construction, management and maintenance of the SIRESP, an award which is subject to the conditions established in the mentioned report.
The evaluation committee, author of the mentioned report, is comprised by individuals appointed by the Minister of State and for Internal Administration and the Minister of State and for Finance. The requirements established in article 9 of Decree-Law no. 86/2003, as regards the composition of the evaluation committee, have been complied with.
The Council of Ministers is not required by law and by the procedure programme to perform the awarding act, however it is entirely justified to do so, and this does not determine the infringement of any procedural requirement.
In fact, the engagement if the SIRESP determines that the successful tenderer provides telecommunications services to a body integrated in the Ministry for Internal Administration, the ''managing body'', which undertakes the responsibility for payments due to the successful tenderer under the terms of the contract to be concluded, and, on its turn, shall provide to several entities, whether or not integrated in the Public Administration, the use by those entities and their collaborators, agents or personnel, of services supported on the SIRESP network. Those entities, pursuant to the resolutions of the Council of Ministers that determined the launch of the SIRESP, shall bear the costs involved in the use of services provided.
The project costs imply, as from 2007, a considerable increase of public expenditure, based mainly on the Ministry for Internal Administration, which comprises around 70% of users of the State sector.
This increase of public expenditure may be reduced if the integration as users of municipalities and private companies takes place, as it may be in the interest of these entities to be provided with emergency telecommunications services and to be connected, in an emergency situation, to civil protection authorities.
The joint order of the Minister of State and for Internal Administration and the Minister of State and for Finance referred to in paragraph 1 of article 11 of Decree-Law no. 86/2003 has already been issued. This order provides that the award decision be taken by the Council of Ministers, on account of its relevance, which is deemed to be in full agreement with applicable rules.
Together with the present resolution, the Council of Ministers authorizes also the costs resulting from the contract to be concluded with the successful tenderer, according to the multi-annual financial programme established by the joint administrative rule concerning the extension of expenditure signed by the Minister of State and for Internal Administration and the Minister of State and for Finance, according to paragraph 1 of article 22 of Decree-Law no. 197/99 of 8 June.
Pursuant to point 29.1 of the procedure programme approved by joint order no 734/2003 of 29 July, to paragraph 1 of article 11 of Decree-Law no. 86/2003 of 26 April, and to point e) of paragraph 1 of article 17 of Decree-Law no. 197/99 of 8 June, and under point g) of article 199 and point g) of paragraph 1 of article 200 of the Constitution, the Council of Ministers hereby resolves:
1 - To authorize the expenditure involved in acquiring services concerning the design, project, supply, installation, construction, management and maintenance of the SIRESP, amounting to (euro) 485455000, VAT at the rate in force included, an expenditure to be spread over a 15-year period of time, beginning in 2007.
2 - To award the contract to the consortia composed by the companies Motorola, Inc.; PT Ventures, SGPS, SA, SLN - Sociedade Lusa de Negócios, SGPS, SA, DATACOMP - Sistemas de Informática, SA, and ESEGUR - Empresa de Segurança, SA, in the scope of a public tender for the contract of acquisition of services referred to in the preceding paragraph, in the terms and for the purposes comprised in the report of the evaluation committee of 5 May 2006.
The Presidency of the Council of Ministers, 18 May 2006. The Prime-Minister, José Sócrates Carvalho Pinto de Sousa.
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