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Procurement of ID blank templates worth half a billion lei, launched as an emergency procedure by the Public Services Agency
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Procurement of ID blank templates worth half a billion lei, launched as an emergency procedure by the Public Services Agency

 

The vacation season is often a very “fertile” one for questionable procurements. Right before the vacation season, some authorities suddenly decide to initiate very high value public procurement procedures, clearly violating legal provisions.

A few days before Easter, on 26 April 2021, the Public Services Agency made radical adjustments to its public procurement plan for 2021, completing it with a new item, related to purchase of personalization technology blank templates for identity documents, with an estimated value of 525,625,570 lei, excluding VAT. The decision, signed electronically on 27 April by ASP director, Vladislav Zara, was published on the ASP website.

Three days later, the Public Services Agency initiated the procurement procedure No. ocds-b3wdp1-MD-1619699719304 for blank templates with personalization technology for identity documents in the national system of passports, driving licenses and registration certificates. The estimated value of the procurement is 498,356,856.92 lei, excluding VAT.

Thus, the authority ignored the legal provisions regarding the procedure for publishing the notice of intent and the notice of participation. According to the provisions of art. 28 of the Law 131/2015, “(1) The contracting authority is obliged to publish in the Public Procurement Bulletin a notice of intent for planned public procurements. The contracting authority has the obligation to include in the notice at least the information contained in Annex No. 3 and, if necessary, other information deemed useful by it”. Moreover, taking into account the estimated value of over 90 million lei provided in art. 2 para. (3) of the Law 131/2015, the contracting authority was obliged to publish the notice in the Official Journal of the European Union, according to para. (2) of the same article “(2) In case of public procurement provided in art. 2, para. (3), the notice of intent shall also be published in the Official Journal of the European Union”. The deadline for publishing the notice of intent is 30 days from the date of approval of the contracting authority’s own budget.

Following the publication of the notice of intent, the contracting authority was obliged to publish the notice of participation, both in the Public Procurement Bulletin and in the Official Journal of the European Union, according to provisions of art. 29 of the Law 131/2015 “(1) The contracting authority is obliged to publish in the Public Procurement Bulletin and on the website of the Public Procurement Agency the participation notice in all cases provided by this law, according to the procurement procedure applied. (2) In case of public procurement in which the value of the contract to be awarded, estimated according to provisions of art. 4, is equal to or higher than the thresholds provided in art. 2, para. (3), the participation notice shall also be sent in electronic form for publication in the Official Journal of the European Union”.

Regarding publication of the participation notice in the Official Journal of the European Union, the contracting authority mentioned in the contract notice published in the MTender system that this requirement is not applicable, although no clear reasons for this are provided.

 

The award documentation seems to be conceived in such a way as to limit competition in favour of an extremely small circle of economic operators, able to meet the established requirements. The possible distortion of competition arises from the following circumstances:

  1. Procurement procedure is not divided into lots

 

Although the value of the procurement is close to half a billion lei, it consists of a single lot. The contracting authority does not justify in any way the decision not to divide the procurement procedure into lots, which contradicts the provisions of art. 39 of the Law 131/2015, which states that “(2) For the purposes of par. (1), the contracting authority shall determine the subject matter of each lot on a quantitative basis, adapting the size of individual contracts to better suit the capacity of small and medium-sized enterprises, or on a qualitative basis, according to the different trades and specializations involved, to adapt the content of individual contracts so that it is closer to the specialized sectors of small and medium-sized enterprises, or in accordance with the various subsequent phases of the project. (3) If the award of the contract is not done by lots, the contracting authority has the obligation to justify the decision not to award the contract by lots”.

In this way, the number of economic operators that could participate in the procurement procedure with a bid of half a billion lei is significantly limited. The division of the procurement into lots would have offered to a larger number of economic operators the possibility to submit bids in this procedure, in proportion to the value of the contract they have the capacity to perform.

  

  1. Turnover limiting the competition

One of the requirements in the participation notice is the cumulative turnover of 525 million lei for the period of the last 3 years in the field of activity related to the procurement object. Thus, an economic operator is eligible provided it had an average turnover of 175 million lei annually during the last 3 years.

 

In order to enable several economic operators to participate in the tender, the contracting authority was to divide the tender into lots. In this way, a larger number of economic operators could submit bids for smaller lots.

 

 

  1. Bid guarantee

According to the tender notice, the bid guarantee must be issued by a commercial bank in the banking system of the Republic of Moldova, which is a restrictive requirement for non-resident economic operators. They have the possibility to transfer the amount of 1% of the bid value, which would represent approximately 5 million lei, to the account of the contracting authority. However, we assume that some economic operators would avoid this option.

  1. No performance guarantee is required

In contrast to the burden of a considerable bank guarantee for such a procurement procedure, the contracting authority did not make the performance guarantee a mandatory requirement. Although the award documentation contains a performance guarantee form, this is not in fact an eligibility requirement, nor is its amount established. The lack of this requirement can be an indication of auction fraud. Thus, after the authority distorts the competition and designates the bid of a potentially favoured economic operator as winner, it no longer requires submission of a good performance guarantee. In this way, the contracting authority undertakes the risk that it will not be able to sanction the seller if such seller fails to properly perform own contractual obligations.

The haste with which the procurement was included in the procurement plan and launched just before the Easter holidays, in violation of legal provisions, but also the limiting conditions listed above, denotes the possible rigging of the public tender in favour of a particular economic operator. Counterfeit procurement is one of the main causes for poor execution, at a surcharge, of public procurement contracts.