GOVERNMENT OF THE REPUBLIC OF LITHUANIA

(1)of the Law on Public Procurement of the Republic of Lithuania, the Government of the Republic of Lithuania has resolved: to approve the Procurement Procedure for goods, services and works related to a state secret (attached hereto). Prime Minister Algirdas Brazauskas Minister of National Defence Linas Linkevičius APPROVED by the Resolution of the Government of the Republic of Lithuania No 927 23 July 2001 PROCUREMENT PROCEDURE FOR GOODS, SERVICES AND WORKS RELATED TO A STATE SECRET I. GENERAL PROVISIONS 1. This Procedure shall regulate the procurement of goods, services and works related to state secrets specified in the Law on State and Official Secrets of the Republic of Lithuania (Official Gazette No 105-3019, 1999) by the companies, bodies, organisations (hereinafter referred to as the contracting authority) that are sources of secrets. 2. In accordance with this Procurement Procedure, the procurement shall be effected when all information about the procured goods, services and works or part of it, and when it is impossible to separate it from the totality of the procurement, is related to a state secret and this information has been included into the detailed list of the contracting authority that is a source of the secret of classified information with the mark “Top Secret”, “Secret” or “Confidential”. 3. Procurement value for the purpose of this Procurement Procedure shall be indicated net of the VAT. The procurement value shall be calculated and goods, services and works shall be identified (individualised, separated from those identical) following the procedure established by the Government of the Republic of Lithuania and by the Public Procurement Office under the Government of the Republic of Lithuania. 4. International procurement of goods, services and works related to a state secret shall be performed in accordance with this Procurement Procedure (except for paragraphs 12.7, 12.8, 16, 17, 18.5, 20, 21, 22, 25), as well as the provisions of international agreements of the Republic of Lithuania on the protection of classified information and the provisions of other legal acts regulating the protection of information comprising a state secret. II. EFFECTING OF PROCUREMENT RELATED TO A STATE SECRET The contracting authority may procure: 5.1. by closed tender. A closed tender (hereinafter referred to as the tender) shall be the method of procurement when the contracting authority invites no less than three or all possible suppliers (contractors) to submit tenders; 5.2. from a single procurement source, only following the provisions laid down in paragraph 6 of this Procurement Procedure. 6. The contracting authority, while effecting the procurement from a single supplier (contractor), may negotiate as to the tender content, the price and contract terms. Such procurement shall be possible, if: 6.1. the value of goods or services within the financial year does not exceed LTL 150 000, while the value of works - LTL 300 000; 6.2. only a specific supplier (contractor) can supply goods, provide services or perform works or a supplier (contractor) enjoys exclusive rights to produce goods, provide services or perform works and there is any other alternative; 6.3. there is an urgent need to obtain goods, services or works due to special events or circumstances that could not have been foreseen; 6.4. targeted goods have been produced for pure research, experimental, scientific investigation or technical development purposes; 6.5. the contracting authority, following a former contract, has acquired from any supplier (contractor) goods, services or works and has determined that it is appropriate to buy additionally from the same supplier in order to co-ordinate them technically with the goods that have been already acquired, services that have been provided or works that have been performed and if the former procurement has been effective and if prices of goods, services or works and other terms do not change essentially, and alternative procurement due to technical incompatibility would be unacceptable; 6.6. due to circumstances that could not have been foreseen, it turns out that additional works or services are needed that have not been included into the contract, however without which it is impossible to complete the started works or the provision of services. Such a contract shall be concluded only with such a supplier (contractor) with whom the original contract has been concluded, while the price of the contract and any other additional concluded contracts shall not exceed 50 % of the original price specified in the contract; 6.7. the tender has not taken place since the suppliers (contractors) who participated in procurement procedures, have not acquired security clearance certificates or their employees have not been authorised to work with and become familiarised with information comprising a state secret; 6.8. additional procurement is closely linked with the same state secret and, from the security point of view, it is not possible to involve new suppliers (contractors) into procurement procedures. 7. If the procurement value of goods or services within a financial year exceeds LTL 3 million, while the value of works – LTL 5 million, the procurement from the single supplier (contractor) shall be possible under at least one of the terms laid down in paragraphs 6.2. - 6.8 of this Procurement Procedure and upon the consent of the Government of the Republic of Lithuania. This provision shall also apply in cases when the procurement is made from a single supplier (contractor) under terms provided for in paragraph 6.6. of this Procedure and the value of initial and additional procurement of services and goods exceeds LTL 3 million, and of works – LTL 5 million. 8. Procurement under terms specified in paragraphs 6.5, 6.6 and 6.8 of this Procurement Procedure shall be effected for no longer than 3 years. Procurements effected longer than for 3 years shall be carried out only upon the consent of the Government of the Republic of Lithuania. 9. In order to organise and to effect procurement, the contracting authority shall set up a standing or ad hoc procurement commission (hereinafter referred to as the Commission), shall set up its tasks and shall authorise it to carry out the above tasks. The contracting authority shall approve the rules of procedure of the Commission. The Commission shall be established by the decision of the head of the contracting authority and shall consist of no less than 3 persons. The Commission shall act in the name of the contracting authority following the authorisation granted by this decision. While appointing the Commission members, due consideration shall be given for their economic, technical, legal educational background or any other degree or experience in the organisation and in conducting procurement. Commission members must possess authorisations to work and to become familiarised with the information comprising a state secret and must sign up the impartiality declaration. 10. The Commission shall commence its activities upon the receipt of written tasks to organise and to conduct the procurement and the conclusion from the standing Specialised Expert Commission (hereinafter referred to as the SEC) established by the contracting authority to the effect that the procurement object (goods, services, works) and the information about it constitute a state secret. The conclusion provided by the SEC shall indicate what amount of information about the procurement object constitutes a state secret and what information shall not be provided to potential suppliers (contractors) during the selection procedure. 11. The Commission, while carrying out procurement procedures by tender and taking into consideration the nature of the procurement, its complexity, the end-use of the procurement and the status of the market, shall select, by its decision, suppliers (contractors) for whom it shall submit invitations to participate in selection procedures (not fewer than for 3 or for all potential suppliers). 12. The Commission, having selected any of the procurement methods laid down in paragraph 5 of this Procurement Procedure, must identify whether the potential supplier (contractor) is reliable, competent and able to fulfil procurement terms. In carrying out this task, the Commission shall have the right to request that a supplier (contractor) submit: 12.1. documentation certifying the legal status of a supplier (contractor); 12.2. records from reports or other documentation about the total turnover of a supplier (contractor) related to the procurement object within the latest 3 years or within the time period from the date of the registration of a supplier (contractor) (if a supplier (contractor) has been carrying out the activities for less than 3 years); 12.3. information about the principal product supply, the works performed or the services rendered by indicating buyers (except for buyers who have conducted the procurement in accordance with this Procurement Procedure) and the former contracts within the latest 3 years or the time period from the date of the registration of a supplier (contractor) (if a supplier (contractor) has been carrying out he activities for less than 3 years); 12.4. documentation certifying that the goods supplied, the works performed or the services rendered are of good quality and meet essential technical and other requirements; 12.5. samples of goods supplied by a supplier, descriptions of works performed and services rendered; 12.6 information about the financial status of a supplier (contractor) (certificates about the solvency, taxes paid or liabilities, etc.); 12.7. data about the authorised representative (representatives) of a supplier (contractor) responsible for the submitting of a supplier’s (contractor’

1. s)tender to the contracting authority and information about it (necessary in order to issue an authorisation to work and to become familiarised with the information comprising a state secret); 12.8. a written commitment to adequately protect classified information supplied to the person (persons) specified in paragraph 12.7 of this Procurement Procedure; 12.9. any other information required by the Commission. 13. An invitation to participate in the selection procedure shall include the following information: 13.1. name of the contracting authority, the address, telephone (fax) numbers; 13.2. the reference that the procurement will be effected in accordance with this Procurement Procedure and the information received will be protected and used exclusively for the implementation of procurement procedures; 13.3. a general description of the procurement object (the information should be provided that does not constitute a state secret); 13.4. the list of documentation and data required in accordance with paragraph 12 of this Procurement Procedure; 13.5. venue and location where a supplier (contractor) has to submit information. 14. The Commission, having drawn a conclusion that the data supplied by a supplier (contractor) are inaccurate or not extensive, shall set up a time period to eliminate the inaccuracies. If a supplier (contractor) does not eliminate them within the specified time period, the procurement Commission shall not invite this supplier (contractor) to participate in further procurement procedures and shall notify him in writing thereof. The Commission may also request a supplier (contractor) additional documentation or information related to the fulfilment of requirements laid down in paragraph 12 of this Procurement Procedure. 15. In cases when the procurement documentation comprehensively describing the procurement object (hereinafter referred to as comprehensive procurement documentation) may be prepared without disclosing information comprising a state secret, the Commission, while inviting suppliers (contractors) to participate in the selection procedure, submit to them additionally comprehensive procurement documentation. 16. On the basis of the documentation and information submitted by suppliers (contractors), the Commission, having assessed the selection results, shall request the relevant source of secrets issue work authorisations or authorisations to become familiarised with information comprising a state secret for persons indicated in paragraph 12.7 of this Procurement Procedure and shall notify in writing the selected suppliers (contractors) thereof. When authorisations to those persons are not issued, the Commission shall request the appropriate supplier (contractor) to substitute those employees by others. 17. The Commission shall notify in writing where and till what time persons indicated in paragraph 12.7 of this Procurement Procedure, who have been issued work authorisations and authorisations to become familiarised with information comprising a state secret, may receive comprehensive procurement documentation. 18. Comprehensive procurement documentation shall include: 18.1. a detailed description of wanted goods, services or works (technical and other requirements shall be presented and the reference what information shall constitute a state secret); 18.2. assessment criteria of tenders, their relative meanings; 18.3. the language in which the tenders shall be submitted, timetables for tender submission, the venue, time and methods; 18.4. terms of a procurement contract; 18.5. the request to submit the list of a supplier’s (contractor’
2. s)employees (who will be fulfilling the terms of the contract concluded) and who should be issued work authorisations and authorisations to become familiarised with information comprising a state secret. 19. In cases when the method of procurement from a single supplier (contractor) is chosen, the Commission shall indicate thereof in the comprehensive procurement documentation and shall request the submission of information specified in paragraphs 18.1, 18.3, 18.4 and 18.5 of this Procurement Procedure. 20. Having identified a supplier (contractor), who meets the provided requirements the best, the Commission shall request that the appropriate source of secrets should issue work authorisations and authorisations to become familiarised with information comprising a state secret for persons specified in paragraph 18.5 of this Procurement Procedure. If authorisations are issued not to all employees of a supplier (contractor) to implement procurement terms, the Commission, within the time period set by itself, shall request a supplier (contractor) to substitute employees that have not been issued authorisations by other persons. 21. When employees of a supplier (contractor), meeting the provided requirements the best and who are necessary for the proper implementation of procurement terms, receive authorisations, the Commission shall suggest to this supplier (contractor) to apply to the Department of State Security, the Ministry of National Defence or the Ministry of the Interior to the effect that the above mentioned institutions issue the security clearance certificate of the company. 22. Work authorisations and authorisations to become familiarised with information comprising a state secret to persons and security clearance certificates to companies specified in paragraphs 12.7 and 18.5 of this Procurement Procedure shall be issued in accordance with the procedure established by the Government of the Republic of Lithuania not later than within 60 calendar days as of from the date when the data about those persons are received. 23. The Commission, in accordance with paragraph 5 of this Procurement Procedure, having chosen specific supplier (contractor), may negotiate with him a more advantageous price and other procurement terms. 24. The Commission shall notify in writing a finally selected supplier (contractor) that he is offered to conclude a procurement contract and till what time he should come to conclude a procurement contract. 25. A procurement contract of goods or services may be concluded only with a supplier (contractor) that has received security clearance certificate of the company in accordance with the established procedure. In concluding a procurement contract of goods, requirements of paragraphs 21 and 22 as to the security clearance certificate of the company shall not apply. 26. If a supplier (contractor), who has been offered to conclude the contract, refuses in writing to conclude it or does not arrive to conclude the contract till the time specified by the contracting authority, it shall be considered that he has refused to conclude the contract. In such a case, the contracting authority shall offer a supplier (contractor) whose tender is the first on the list approved by the Commission, following a supplier’s (contractor’
3. s)tender who has refused to conclude the contract, to enter into a contract. 27. Procedures for the examination of tenders and other documentation related to procurement from suppliers (contractors) in accordance with this Procurement Procedure, their evaluation and comparison, shall be performed by the Commission without the presence of suppliers (contractors) that have submitted tenders. 28. The contracting authority may at any time terminate all procurement procedures carried out in accordance with this Procurement Procedure or may not invite an individual supplier (contractor) to participate in further procurement procedures, if, at the time of procurement, circumstances giving ground to doubt the reliability of a supplier (contractor) or his employees are revealed. 29. By applying tender procedures, the procurement shall be deemed to have taken place regardless of the number of tenders of final suppliers (contractors) that the Commission has received. III. FINAL PROVISIONS 30. Same requirements for the protection of classified information as those imposed on the contracting authority shall apply to a supplier (contractor) with whom the contracting authority has concluded a procurement contract. 31. A procurement contract shall include a commitment of a supplier (contractor) to institute and provide protection to state secrets imparted on him in accordance with the procedure established by legal acts regulating the protection of state secrets. 32. Having fulfilled procurement terms or having terminated a procurement contract before time, a supplier (contractor) shall pass to the contracting authority documentation related to the procurement that include information comprising a state secret. 33. The contracting authority shall control the protection of state secrets imparted on it, and shall provide methodological assistance in issues related to the protection of state secrets. 34. Decisions of the Commission may be appealed in accordance with the procedure established by laws.