AIS Recommendations for interventions related to the Public Procurement Sector

AIS has carried out several activities under the Improvement of the Integrity of Public Contractors Project, aiming at creating an impact through two components of the project: i. strengthening civic actors, media, and non-governmental organisations ii. Public pressure for improving Public Procurement legislation and practice in the country

Regarding the second component, AIS became officially part of the working table with the Albanian Government in drafting the new Public Procurement Law. Our organization presented its findings and proposals regarding problems of legislation on public procurement, and mainly the integrity of public contractors at this working table (government; agencies; parliament; international assistance bodies). Also, AIS has proposed that the Government should develop a public procurement strategy, and is already working on proposing the priorities that such strategy should have, such as improved digitalisation of e-Procurement and the practices of scanning competitors through short listing in the process of public procurement.

Please find some of AIS Recommendations for interventions related to the public procurement sector Here.

Case Study – Public Procurement Big Contracting

Another activity of our project Improve Integrity of Public Contractors was the preparation of two case studies for two large public contracts and procurements. The objects of the first one is the Concessionary Agreement for the financing, design, renovation, supply, reorganization and functioning of the PPP concessionary for providing laboratory services to hospitals, regional and municipal ones. The second case study refers to the procedure for Buying uniforms for the State Police for several years.

The first procedure is a procedure conducted in 2017 and finalized with a contract being awarded only in 2019. The selection was done through an open tender and a consortium of several companies was selected as the winner, [1]with these companies established a concessionary company later[2]. The procedure was followed by wide debate about the selection of the winning operator, as one of the companies of the winning consortium was registered in a country under the shell regime. The local authorities did not demonstrate any efforts to make any verifications of the integrity of this company or to check for potential conflicts of interest of its owner(s).

The case study developed as part of the project identified some wrong procedures that had already been opposed by the Government-contracted Consultant. Upon review of this case study, it was found that:

1) The Contracting Authority – the Ministry of Health, did not meet one of the essential conditions provided by the Law and Regulations on concessions/PPPs, namely: The legal obligation of comparing the PPP Model with the Public procurement to prove the cost effectiveness of the PPP project compared to the Public procurement, which would allow for the development of this Project;

2) The Contracting Authority has not published any reference for the financial analysis based on technical, quantitative, or statistical elements for the laboratory services as the basis for calculating the value of the Project in the amount of 13,005,966,000 lekë, without VAT;

3) The Implementation of the Laboratory Project for almost the entire Territory of the Republic of Albania carries an edit risk for the Public party, because in case of failure, this could lead to collapse of the Public laboratory system, which would be a health catastrophe;

4) The Contracting Authority has failed to deliver on its commitment to reduce the social impact of the project.

5) The Winner of the Project is selected in contradiction with the legal framework on concession/PPPs, the criteria published by The Contracting Authority, and without taking into consideration the Opinion of the IFC international expert;

6) The contract does not provide for one of the main insurances for projects of this nature, such as “Insurance of Professional Liability”.

Find the Case Study HERE (Albanian) and Here ( English)

The case of central purchases represents the highest value tender held so far by the Central Purchasing Authority. This tender is held on behalf of the State Police Directorate. The procedure selected for contracting in this case is a particular procedure rarely used, given its limits regarding the high monetary values. What is interesting is that this tender is being held at the same time the project is implemented. This case was selected given the problems already evident with the type of procedure followed[3], already excluding interested operators from competing by selecting them through the limited procedure

Find the Case Study – Here ( Albanian)

[1] http://openprocurement.al/sq/hconcession/view/id/6

[2] http://opencorporates.al/sq/nuis/L91923002T

[3] http://openprocurement.al/sq/agency/view/id/344

Purchases for Covid-19 Situation, the Albanian Government applies Secrete Contracts, bypassing Participation and Transparency

AIS, an organization promoting Open Data Albania, observes with concern that the Albanian Government has decided, in an anti-constitutional manner, illegally, and without any legitimate need, to consider Secret Contracting and Procedures for purchasing during the emergency created by Covid-19.

 

  • Through two Decisions of Council of Ministers (DCM), namely: DCM No. 203, dated 26.02.2020 “On procedures to be used for signing Contracts dictated by the State Essential Interest” and amendments made by DCM No. 242, dated 22.03.2020 “On some amendments to Decision No. 203”, the Council of Ministers considers procedures and contracting related to Covid-19 as equal to Secret Contracting LINK.
  • This DCM is in contradiction with the Constitution. Article 118, paragraph 2 of the Constitution of the Republic of Albania provides that “The Law shall authorize the issuance of secondary legislation, assign a competent body, issues to be regulated, as well as the principles on the basis of which such legislation is issued”. Article 6 of the Public Procurement Law (which the Council of Ministers refers to in issuing this DCM) does not authorize the issuance of any Special Normative Acts for secret contracts, contracts requiring special safeguards, or contracts dictated by the state essential interest. DCM No. 203 does not contain any definition of the situation, circumstances, or cases when “state esential interest” are applicable, but leaves it under the case-by-case discretion of the contracting authorities; In other words, the term “state essential interest” is not legally regulated, and it remains an abstract concept, which is not defined, and which is left up to the subjective decision of the authorities, increasing thus the risk of arbitrariness.
  • The above-mentioned Decisions of the Council of Ministers lead to situations, where clients are selected without any published calls for expression of interest, which makes it impossible to identify and look for efficient operators. In this time of crisis, the possibilities for supplies are limited and characterized by dynamic changes. Many are applying innovative forms, in order to enable as fast tracing and identification of the leading suppliers as possible, ensuring supplies in the current situation. Governments cannot trace these suppliers by communicating with one client only, leaving no room for presentation and participation. This approach violates every Principle of Participation and Competition.
  • The Government has made an unjustified intervention, as long as the Albanian Legislation (Law No. 9643/2016) regulates already the Negotiation Procedure and Limited Procedure quite well, which could already provide for fast, efficient, and useful purchases, without any need for secret operations. These two procedures, already provided for by the national Legislation, do guarantee the possibility for supplies in situations of emergencies and disasters, guaranteeing Proportionality.
  • On the other hand, all the elements of a contract, such as the scope of purchase; process; characteristics and specifications of goods or services to be purchased, would not be subject to any Publication; Transparency; and Accountability for purposes of Ensuring Trust and Public Oversight, given that they are going to be secret.
  • Violation of the Principle of Open and Transparent Governance. The Albanian Government is avoiding the principle of Open Government, and this happens at a time when the Reformed Legislation in the Area of Contracting in several European countries, and not only, requires all contracts made in cases of emergency to be fully published as open data. This is to recall that since 2009, Albania is part of the Open Government Partnership, taking a special commitment in the context of Procurement Sector, not yet fulfilled.
  • Classification of these contracts (procedures) as secret because of the essential interest of the state falls against even the Normative Act of the Government on Announcement of Situation of Natural Disaster itself, an act which contains no provisions restricting the Constitutional Right to Information (Article 23 of the Constitution).

 

Our organization considers these acts of the Government as anti-constitutional, illegal, unjustified, and in contradiction with the basic principle of good governance, i.e. Accountability and Transparency. Direct Negotiation (Article 33 of the Procurement Law) and the Request according to the Limited Procedure (Article 31 of the Procurement Law) are sufficient to guarantee fast, efficient, and intelligent Contracting and Procurement, and proportional to the Essential Interests of the People of a State.

 

AIS joins the Open Contracting Partnership Recommendations for Governance, recommendations for Purchases in the situations created by Covid-19, for Fast, Smart and Transparent Purchases (Open) https://www.open-contracting.org/what-is-open-contracting/covid19/