Background
First Point Assessment Limited (FPAL) was established by the UK oil & gas industry in 1996 as a way of streamlining the tender process. This streamlining is achieved in two ways. Firstly, FPAL has a number of features such as Supplier Registration, Performance Feedback, Capability Profiling and Verify that serve as a central hub of supplier information and remove the need for duplicate requests for information (RFI). Secondly, as a response to the EU Utilities Directive 2004/17/EC which calls for transparency, objectivity, competition and non-discrimination in the way that EU oil and gas exploration and production companies select their suppliers, FPAL is regarded as Qualification System under EU procurement rules.
When Does The Utilities Directive Apply?
The Directive applies to oil & gas exploration companies in certain states*of the European Union for contracts over the threshold values. With effect from 1st January 2010 the following levels apply; €387,000 for supply & service contracts and €4,845,000 in the case of works contracts.
FPAL as a Qualification System under the Utilities Directive
To meet the stated aims of transparency, objectivity, competition and non-discrimination, the Utilities Directive requires a ‘call for competition’ to be made by publishing a notice in the Official Journal of the European Union. This can be in the form of an individual notice for each contract. To avoid the delays and inefficiencies that this process can cause, an alternative ‘call for competition’ can be made in the form of Qualification System Notice. FPAL places a Qualification System Notice in the Official Journal, at least every 6 months, which advises potential suppliers that they should register and ‘qualify’ with FPAL if they wish to be considered for contracts over the threshold values with the purchasing organisations who subscribe to FPAL. An important feature of this convenient arrangement is that purchasing companies who choose to adopt this procedure may only select suppliers who have ‘qualified’ by virtue of registering with FPAL.
Summary
Launched in 1996, FPAL is now used as a Qualification System and/or Supplier Management System by over eighty European oil & gas exploration companies and their main contractors as a convenient method of compliance with the Utilities Directive. The benefits of the FPAL system are that it provides any company in the European Union with:
*Where an oil & gas exploration company is operating in the UK it does not have to apply the Utilities Directive with effect from March 2010. This is the result of a decision of 29 March 2010 by the European Commission that the conditions of open competition and free access to markets apply in the UK in relation to the oil and gas sector. The Netherlands is similarly exempt following a decision taken in 2009 by the European Commission.
The position of oil & gas exploration companies operating in other states of the European Union (e.g. Ireland) will not be affected by this decision.
This update provides only a very brief summary of what is a complex legal situation. FPAL is a service provided by Achilles Information Ltd to the European oil & gas industry. Achilles operates a number of similar supplier databases for other industry sectors such as Utilities, Rail, Construction & Public Sector throughout the world. Glenn Fletcher (Head of EU Legislation Services, Achilles Information Ltd) can provide a more detailed description of EU compliance on request.