Dash to beat new Czech public tender rules

Politics & Policy|Companies
Kateřina Menzelová | 10.04.2012

Several tender issuers simply entered blank formulas with no details about the tenders. What was important for them was the date of issue and they will apparently fill in the details later.As Czech Position has reported previously, the limitation of the number of bidders on the basis of certain criteria is basically uncontrollable because the issuers of tenders refuse to officially record the references of the finalists. Bidders who are excluded from the process are thus unable to ascertain whether those firms which were selected really did fulfill the conditions, or whether figures were fabricated. Such circumstances render it impossible to challenge elimination from a tender.

But back to what took place in the days leading up to April 1. The database of public tenders issued contains a number of other interesting cases. Several tender issuers simply entered blank formulas with no details about the tenders. What was important for them was the date of issue and they will apparently fill in the details later. According to MMR spokeswoman Jabůrková, the old version of the law on public tenders does not dictate that all details must be announced on the day a tender is issued.

“The fact that on the day of the launch of the tender process an issuer didn’t issue the complete documentation required for the legality of the tender process does not mean that the issuer acted in breach of the law on public tenders. At the same time, it cannot be ruled out that several issuers really did announce tender processes [prior to April 1] on purpose and are unable to legally continue with the tender process within the legal timeframe,” Jabůrková said, adding that it is the responsibility of the Antimonopoly Office (ÚOOHS) to assess whether public tenders are conducted in compliance with the law.

The long-anticipated amended law on public tenders is undoubtedly a step in the right direction — gone are the practices of using lotteries and dubious, uncontrollable criteria to select finalists. Yet while the room for manipulation and corruption has been reduced, certain cunning Czechs will find loopholes.

Even following the amendments the law still enables issuing bodies to demand that bidders fulfill a basically unlimited range of technical conditions, including technical references, qualifications and equipment. Under the new rules, a referential contract may not exceed the estimated value of the tender in question by more than 50 percent. However, there is nothing to prevent the issuer from demanding that the reference project contains technical features unrelated to the tender in question, meaning that the practice illustrated by the qualification conditions for the tender to construct the new building at the hospital in MladáBoleslav can continue.

School laboratory

At the time of publication of this article, not a single tender had been issued under the new version of the law“We often face a whole bundle of features and conditions required for reference projects,” Dan Ťok, general director of Skanska, Czech Republic, told Czech Position. As an example he mentions a tender for the construction of a cycle path for which potential bidders were required to have previously built a cycle path of at least 10 kilometers in length and costing a minimum of Kč 30 million.

“I also recall that a reference was demanded for the installation of a laboratory — but only in an educational institution. Those who had installed a laboratory in a research institute were ruled out,” Ťok said.

Since April 1, on the public tender portal only information about tenders announced prior to the end of March, thus subject to the old version of the public procurement law, has been added. At the time of publication of this article, not a single tender had been issued under the new version of the law. Thus we will have to wait to see what cunning and innovative methods tender issuers will come up with to circumvent the tighter regulations. “In any case, it is and will be entertaining,” Ťok commented. 

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The government is hopefully making good progress

As a small business owner, it was impossible for me to submit bids for public tenders for even the smallest of tenders because of ludicrous requirements under the old regime as the ones stated in the article. The most frequent requirement is for balance sheets to be in the hundreds of millions of koruna just to supply anti-virus software licenses.

 

This was obviously done in order to exclude 99% of bidders. I think the author is correct in saying that there are armies of lawyers across the country trying to find loopholes in the new regulations to continue restricting potential bidders. It should be indeed interesting to see how future bid requirements are structured.

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