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Suspicions of fraud or how Chisinau Mayor’s Office selected between two non-compliant bids
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Suspicions of fraud or how Chisinau Mayor’s Office selected between two non-compliant bids

Author: Diaconu Olga

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As I wrote in one of the previous articles, the National Agency for Settlement of Complaints (NASC) issued an order on annulment of the decision of the Chisinau Mayor’s Office to award the procurement contract for 100 buses to MAZ company by its Decision No. 03D-340-21 of 03.06.2021. NASC found that from the attached technical documents it appears that MAZ company did not meet the requirement that the buses must have a minimum 100 people capacity.

In fact, the very requirement of a minimum capacity of 100 passengers is quite vaguely stated in the award documentation. Although the buses are required to be equipped with an accessibility platform for people with reduced mobility, from the award documentation, it is not clear whether the calculation of 100 passengers should comprise one passenger with reduced mobility, in a wheelchair. During the session of 19.05.2021 on examining the Isuzu appeal on the first award decision, the representatives of the Chisinau Mayor’s Office stated that a passenger in a wheelchair must be included in the calculation of 100 passengers. From the decision issued after examining the appeal, it is not clear whether NASC accepted as valid the explanations of the representatives of the Chisinau Mayor’s Office. Respectively, it is also unclear whether the findings regarding non-compliance of the considered bid refers to the capacity of 100 passengers which would or would not include a passenger with reduced mobility in a wheelchair.

After cancellation of the decision to award the procurement contract to OOO “MAZ”, Chisinau Mayor’s Office re-evaluated the bids and awarded the procurement contract to “Anadolu Isuzu Otomotiv Sanayi vs Ticaret Anonim Sirketi”.

The economic operator MAZ, which had been designated as initial winner, filed an appeal. It was rejected by the NASC, without examining the reasons provided. NASC appreciated that the MAZ bid has already been found to be non-compliant and the company no longer had any chance to win the procurement contract anyway. Thus, evaluation of the claim would make no sense. Through this decision, NASC gave green light to the Chisinau Mayor’s Office to conclude the Contract for the purchase of 100 buses with Isuzu.

However, we wondered whether other bids submitted under the same procurement procedure meet the capacity requirement of at least 100 passengers and what would have occurred if NASC had examined the complaints submitted after designation of the economic operator Isuzu as winner. We compared the MAZ and Isuzu bids in terms of the reasons behind stating non-compliance of the MAZ bid.

Non-compliance of the MAZ bid

NASC found that MAZ failed to include the type of passenger compartment related to the bus model stated in Form F4.1, and did not attach the technical documents, brochures, technical specification of the manufacturer related to the “combination” from which the exact weight of the bus results with all related equipment required by the contracting authority and which would show the total passenger boarding capacity, etc. while eventual non-compliance related to the total passenger capacity, as argued by the Chisinau Mayor’s Office, cannot be considered an insignificant deviation within the meaning of art. 69 para. (5) of the Law No. 131/2015, insofar as these deviations cannot be removed without affecting the essence of the respective bid.

According to the arguments presented by the Isuzu representatives, the capacity of the MAZ buses would be only 96.66 passengers. These calculations are based on the following data:

  • Maximum allowable weight – 18,000 kg;
  • Weight of the empty bus, 11,125.9 kg (according to the SORT test report 1, 2 and 3), plus the weight of the 300 litres’ full tank (252 kg) and the weight of the air conditioner (approximately 225 kg)
  • Average weight of a passenger – 68 kg, according to European regulations.

Isuzu representatives have deducted from the 18,000 kg maximum permissible weight of a MAZ bus according to the submitted certificates, the weight of the empty bus, 11 125.9 kg (according to the SORT test report 1, 2 and 3), plus the weight of a full 300 litre (252 kg) and the weight of the air conditioner (approximately 225 kg). About 6,573.5 kg would remain available for passengers to be transported by bus. By dividing the difference of 6,573.5 kg to the average body weight of 68 kg, according to European regulations, a value of 96.66 passengers is obtained that could be transported by bus (6,573.5 kg ÷ 68 = 96.66).

Non-compliance of the Isuzu bid

The compliance of the Isuzu offer was not examined by NASC, although the award decision was challenged by the MAZ and Temsa economic operators. Nor does the contracting authority appear to have examined the Isuzu bid from the perspective of the same criteria which led to the non-compliance of the MAZ bid.

We requested from the National Agency for Settlement of Complaints the text of the appeals made by MAZ and Temsa on the decision to award the contract for procurement of 100 buses to the Isuzu economic operator. NASC provided us with the appeals.

In the appeal of the economic operator MAZ we identified calculations similar to the above, which refer to the bid submitted by Isuzu and which show, in the opinion of MAZ representatives, non-compliance of the Isuzu bid for exactly the same reasons that led to the disqualification of the MAZ bid.

According to the representatives of the MAZ economic operator the capacity of Isuzu buses would be 93 people if a passenger with reduced mobility is not included, and only 90 passengers, if a passenger with reduced mobility in a wheelchair is included.

These conclusions were reached by MAZ representative on the basis of the following calculations extracted from the text of the appeal:

The appellant claimed that the maximum permissible weight of a MAZ bus would be 17,900 kg, as resulting from the technical specifications submitted by Isuzu in form F4.1, “Maximum permissible technical weight is 17,900 kg (“Weights (kg)Gross Vehicle Weight = 17,900 kg”). The Isuzu representative also refers to the Citiport User Manual submitted by Isuzu at previous bus tender: “Front axle capacity – 6,300 kg, Rear axle – 11,600 kg” (in Romanian: “Capacitatea axei din față – 6 300 kg, capacitatea axei din spate – 11 600 kg”).  In total 6,300 kg + 11,600 kg = 17,900 kg. Thus, Citiport buses have a maximum permissible weight with load of 17,900 kg.

Based on the abovementioned data, the MAZ representatives applied the following formulas for calculating bus capacity:

[Maximum permissible weight – weight of the bus in equipped condition (including driver, fuel tank and all optional equipment)] / 68 (conventional weight of a passenger) = total No. of passengers.

Thus, the total number of passengers in case of the bus bided by Isuzu (without monitors and without the centralized lubrication system) is:

(17,900 kg – 11,532.3 kg) / 68 kg = 93.64 (93 passengers).

If a passenger in a wheelchair is also included, then the formula is as follows:

[Maximum permissible weight – weight of the bus in equipped condition (with driver, fuel tank and all optional equipment) – weight of one wheelchair passenger with the wheelchair, 250 kg] / 68 (conventional weight of one passenger) + 1 (wheelchair passenger) = total No. of passengers.

(17,900 kg – 11,532.3 kg – 250 kg) / 68 kg + 1 = 90.96 (90 passengers)”

It is obvious from the conformity certificate attached by the economic operator Isuzu to its bid that the maximum permissible weight is 18,700 kg. However, on the one hand, the document entitled Certificate of Conformity is not a certificate issued by an accredited authority to that effect, but it is issued by the Isuzu quality control manager and it is also marked ‘SAMPLE’, Therefore, it could not be taken into account when evaluating the bid.

 

On the other hand, in the MAZ appeal, reference is made to the provisions of paragraph 5 of Government Decision No. 1073/2007 on approval of the Regulation for authorization, control and performance on public roads of transports with weights and / or sizes exceeding allowed limits, according to which, the maximum weight limit allowed on national roads in the Republic of Moldova for 2-axle vehicles (which also include buses from the MAZ and Isuzu bids) is 18 tons. Thus, the maximum permissible weight for buses, used to calculate the maximum passenger capacity, may not exceed the 18 tons limit, given that they are to run on public roads of the Republic of Moldova, even if the technical specifications were to allow for a higher permissible weight. 

Although we do not state that we fully agree with the explanations and calculations made by MAZ representatives, we conclude that Chisinau Mayor’s Office had not undertaken the necessary due diligence to evaluate the bids, initially designating MAZ bid as winner and then the Isuzu bid, both of which were noncomplying. Failure to evaluate the Isuzu bid for the same reasons for which the MAZ bid was rejected is an indicator of risk and of favouring a non-compliant bid.

NASC Decision No. 03D-416-21 of 24.06.2021 

On 24.06.2021, the National Agency for Settlement of Complaints issued a decision rejecting the appeals of MAZ and Temsa on the results of the procurement procedure as being of no interest in the procurement procedure of 100 buses by the Chisinau Mayor’s Office. Under this decision, the Mayor’s Office had been given green light to conclude the procurement contract with the economic operator Isuzu. NASC motivated its rejection decision by the fact that these economic operators “lost interest in obtaining the contract following the finding of their bids’ non-conformity as a consequence of the abovementioned decisions of the National Agency for Settlement of Complaints. In that regard, it should be noted that their bids can no longer obtain acceptable bids status and, respectively, the appellants have no real chance of being awarded the public procurement contract as a result of the contested procedure.  From this also results the denial of their right to claim damage which have been incurred or may have been incurred”.

NASC also found that by regulating the interest in obtaining a public procurement contract, the legislator also establishes the limits of competence of the National Agency for Settlement of Complaints. Towards the end, it also adds that the claim for remedial measures in form of annulment of a public procurement procedure could be treated as a sanction for possible infringements admitted by the contracting authority, but that such measures should be applied separately, independently of the complaint settlement procedure, the latter being subject to control by institutions empowered with such responsibilities.

Although NASC provides a sufficiently reasonable explanation for the decision to reject the appeals as uninteresting, it can set a dangerous precedent, facilitating attempts by public procurement fraudsters. Hypothetically, such an approach could encourage some contracting authorities to adopt the following tactics to award contracts to favoured economic operators:

  1. The contracting authority designates as winner a bid from an economic operator which is not favoured. It is simpler if the bid also contains some irregularities.
  2. The preferred economic operator appeals the result of the procurement procedure. If there are some deviations in the first bid, it is easier to get it cancelled.
  3. NASC cancels the award decision, if non-conformities are found.
  4. The contracting authority designates the bid of the preferred economic operator as winner.
  5. The economic operator whose bid was initially declared as winner loses the right to appeal the repeated award decision, regardless of the seriousness of the violations in the bid of the preferred economic operator.

Thus, we reach the situation whereby some economic operators whose bids contain irregularities, are deprived of the right to claim irregularities in bids of other economic operators. This situation could be equalled to the lack of the right to an effective remedy and implicitly to the detriment of the public interest. Worse, NASC’s refusal to examine the appeals of economic operators whose bids were found to be non-compliant affects the public interest. Thus, contracting authorities end up purchasing non-compliant or poor quality goods, services or works at higher prices. At this stage, as other functional mechanisms to detect and sanction possible violations are lacking, there is no way to stop such abuses. The only solution would be to appeal to the court, but the court would probably issue a decision long after the execution of the contract.

Previous cases in which NASC was a key factor in favouring some bidders

Going back to the NASC decision No. 03D-416-21 of 24.06.2021 on procurement of buses, we remind that it is not the for first time when NASC becomes that key factor that determined conclusion of a bus procurement contract by the Chisinau Mayor’s Office with the economic operator Isuzu, also during an election campaign period.

An article on the tender for procurement of 31 buses, held in 2019, shows that in that case, ME “Urban Bus Park” signed the contract for procurement of 31 buses for Chisinau, only 2 days after the filing of an appeal. Thus, Law 131 on public procurement was violated, which stipulates that the contracting authority has no right to conclude a public procurement contract until a final decision on the appeal is issued by the National Agency for Settlement of Complaints.

After submission of the respective appeal, in strange circumstances, on the NASC website, the sections “Filing appeals” and “Appeals under examinationbecome non-functional. Thus, the information about the appeal filed by S.C. BMC Truck & Bus S.A. has become unavailable, and the archived web page information about the respective appeal has been deleted. The mentioned fields remained non-functional for more than two weeks, without the users of the page being informed in any way by NASC about the reasons and the period of unavailability of data regarding submitted appeals and approved decisions.

In this way, all the conditions were ensured for the interim mayor of Chisinau, Ruslan Codreanu, to declare on 20 February 2019, for newsmaker.md, that the tender was not appealed by anyone, all legal deadlines for signing the contract being observed.

Infringements in that procurement procedure are also highlighted in another article on the revizia site.

 

 

During a press conference in December 2020, we explained why we believe the procurement of the 100 buses by the Chisinau Mayor’s Office to be inappropriate. One of the reasons would be the fact that the buses were purchased under a loan from Moldova Agroindbank, and the interest rate has not been made public, although the burden of repaying the loan is laid on the citizens. Another reason would be that, producing such a large number of buses, they will all fail at the same rate and at about the same time. In this respect, it would be advisable to purchase buses gradually, in smaller batches, from the contracting authority’s savings, and not from loans. On the other hand, some experts believe that there are more environmentally friendly solutions than buying 100 diesel buses.