CERN and the UK’s industrial return

CERN calculates a return coefficient for each member state to provide an overview of the return on investment each member state is receiving. The return coefficient is the ratio between a member state’s percentage share of the value of all contracts and that member state’s percentage contribution to the CERN budget over the same period. Return coefficients for supply and service contracts are calculated separately because service contracts are for work that takes place on the CERN site. The UK is well-balanced for service contracts and poorly balanced for supply contracts. As the UK is poorly balanced for supply contracts, this has an impact on the selection of companies for tender and allows UK companies to make use of the alignment rule.

It is important to note that, when a firm submits a tender offering supplies originating from several member states, or when several firms jointly submit a bid, the bid is treated as that from a poorly-balanced member state provided that the value of supplies originating in one or more poorly-balanced member state is not less than 60% of the total amount of the contract.

CERN’s definition of country of origin is as follows for:

• Supplies – the country of origin is the country of manufacture or last major transformation (including sub-assemblies and components)
• Services – the country of origin is the country in which the contractor is established.

If you are unsure what the origin of your products is, or to discuss the last major transformation of supply contracts, email the team.

For supply contracts over 100,000 CHF, the alignment rule may apply. As the UK is poorly balanced for supplies, this is applicable to UK companies. If the lowest bid is from a company from a poorly balanced member state, the contract will be awarded to that company. However, if the lowest bid is from a company from a well-balanced member state, CERN will enter negotiations with the next two lowest bidders if they are from poorly-balanced member states and within 20% of the lowest bid. The lower of the two bidders from the poorly-balanced member state is given the opportunity to align their price to the price given by the lowest bidder. If this company agrees and meets all the requirements, the contract will be awarded to the company from the poorly-balanced member state. If it disagrees, the second-lowest bidder will be given the opportunity to align. If they also disagree, the contract will be awarded to the lowest bidder from the well-balanced member state. Full details are available on the CERN procurement website.