Irregularities eliminate competition – Despite new Law on public procurements, bidders still have troubles with tender terms

In the period January-September 2013, the public procurements values totaled RSD 178 billion which is 25, 6 billion less compared to the same period in 2012. Since the new Law became effective in April 1, 2013, EUR 220 mil less was spent for public procurements, according to the data which the Directorate for public procurements published.

However, businessmen whose business largely depends on public procurements point out that savings resulted from low prices on tenders.

Low tender prices are not the only trouble spot bidders encounter. There are also irregularities in public calls and tender documentation.

Short deadlines

Public procurement instructions and terms contain majority of irregularities. Very short deadlines for procurements are a common thing. It is not a rare case that a call for bids is announced on Friday with a deadline until Monday. There were also the cases when a tender was released after 3 p.m. and the deadlines was tomorrow by 10 a.m.

Deadlines for offers submission are governed by Paragraphs 94 – 101 of the Law on public procurements. The Law does not govern deadlines shorter than eight days as of the day of announcement and it refers to public procurements of small values (from RSD 400.000 to 3.000.000), Dragan Dobrasinovic, president of Toplica-based center for democracy and human rights says for eKapija.

As Predrag Jovanovic, director of the Directorate for public procurements says for eKapija, minimal legal deadline for offer submission is not determined only for negotiation procedure only without releasing a call for offers submission (It. 36) but in that case deadlines must be appropriate with respect to time essential for preparation of an acceptable offer.

- If values of these procurements, individually or at the annual level, total RSD 400.000 or more, we are speaking about actions opposite of the Law on public procurements which seriously violates postulates of public procurements – Jovanovic says and adds that for procurements whose annual value totals below RSD 400.000, no deadlines have been defined but there is an obligation of running it in line with the postulates of public procurements.

Tender subdivision

It happens that a procuring entity subdivides tender, thus making a procurement of smaller value which is not subject to the Law on public procurements.

According to the Law on public procurements, as Predrag Jovanovic says, there were tender subdivisions into a number of procurements of small value because it was not obligatory to announce these procurements on the Public procurements portal.

Unjustifiable public procurement subdivision and then to procurements with the value less than RSD 400.000 is not allowed and the inspection is carried out by the Directorate for public procurements, the Republic commission for protection of rights in public procurements procedures, Governmental auditing institution and budget inspection, each institution in its own field of work and in line with responsibilities.

(Photo: Ivana Vuksa)

Internal names

Experience shows that when releasing a tender, regularities with respect to technical specifications also emerge. Therefore, for the subject of a public procurement, internal names are used as well as copying equipment features of a producer which automatically excludes other producers and to some extent reveals who the winner will be, our collocutors agree.

- It is only about the practice whose exclusive objective favors specific bidder and eliminates competition. Bidders who encounter these cases have an option, in line with the legislation, to initiate proceedings before the Republic commission for protection of rights. The problem is that in majority of cases, bidders avoid this legal mechanism, first of all to avoid a conflict with the procuring entity, led with the idea that it is better not to bother the ones who decide and wait for the next tenders where they will win. Of course, other legally authorized entities can initiate proceedings before the Commission – the Directorate for public procurements, ombudsman, DRI –Dobrasinovic says.

Predrag Jovanovic agrees that if a brand, a type or an origin of a product is stated, it is a discrimination of other bidders which could offer equivalent products. Every bidder can submit a request for protection of rights, first of all to a procuring entity in order to point out at discrimination.

Additional terms

As Dobrasinovic says, most common problems refer to additional terms for bidders to participate in public procurement, which are not in a logical connection to the subject of a public procurement. These are additional financial, human resources and technical capacities which are not proportional to the value and the subject of a public procurement.

It happens that a procuring entity asks for illogical references as well as unnecessary permits and certificates and bidders complain about a high value for the purchase of tender documentation and indefinite moment of bids opening.

The first person of the Directorate for public procurements pointed out that “there were definitely set up of tenders and violations of the law but we saw significantly more responsible behavior than in the past”.

The Program Manager of Transparency Serbia, Nemanja Nenadic, said that after new Law on public procurements became effective, a progress has been made but that competition at tenders is still insufficient. He added that there is room for further public procurements system development because Transparency of Serbia saw that not all legal provisions are obeyed and competition is still insufficient.

The Directorate for public procurements says that the number of bidders per tender increased. In Q3 2013, the intensity of competition increased to an average of 2, 9 offers per signed contract compared to 2,6 in 2012.

What dissatisfied bidder can do?

If he thinks there are irregularities in competition terms, a bidder can submit a request for protection of rights of bidders for calling in question of tender documentation and a call for bids to the Republic commission within 7 days before offers submission deadline expires latest, and for procurements of small value within three days before the deadline expires.

Apart from that, a bidder has an option to submit a request for protection of bidders’ rights of to disclaim a procuring entity’s decision within 10 days as of the reception of a procuring entity’s decision and 5 days for small value procurement.

Irina Milosevic