AIS/OpenData files Lawsuit with the Constitutional Court Challenging Law 97.2019, claiming its section on Procurement Reconstruction Program violates Economic Freedom, potentially leaving room for inequality, clientelism, and corruption

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AIS organization, known as Open Data Albania, has filed a lawsuit with the Constitutional Court, demanding partial abrogation of a Normative Act, which has the power of the law, namely Act no. 9, dated 16.12.2019 “On coping with the consequences of natural disasters”, approved by the Assembly of Albania by law no. 97, dated 18.12.2019, specifically the repeal of Chapter VI, Public Procurement Procedures, Articles 40 – 44, and Article 4, point 7 and point 9.

This Normative Act, which has the power of law, in the opinion and reasoning of our Organization, in its section on Procurement for coping with the consequences of natural disaster after the Earthquake of November 26th, 2019, violates the constitutional right of freedom of economic activity, provided in Article 11 of the Constitution.

Violating the Freedom of Economic Activity, it leaves room for inequality, clientelism, preferential contracting, favoritism, and Corruption to the detriment of Public Funds.

This Normative Act has established by Law the Type of Procedure, Deadlines for Participation, Deadlines for Appeal and Evaluation, bypassing the National Legislation on Public Procurement and restricting the right to competition and equality.

The interested parties in this Lawsuit include the Assembly and the Council of Ministers.

Some of the elements, where Act no. 9, which has the power of law, discriminates against economic freedom and public interest for efficient use of Public Money:

  • It sets a Procedure where Competition is Not Guaranteed. Act no. 9 opts for an Accelerated Procedure and gives the Government the right to determine by Decision of Council of Ministers no. 199, dated 04.03.2020 a Restricted Procurement Procedure (two-stage procedure). This does not guarantee bidding, undermines the competition of operators, removes the process from the electronic system, and takes it to the second stage of negotiation at the table where the risk of clientelism is high. The Accelerated Procedure applies to a specific sector, where the number of operating operators is low. In this case, it is mainly construction works which are being procured (apartments and educational facilities) in this manner. The nature of this procurement in the context of the Albanian market of companies operating in the field of construction is very favorable and Accelerated and Restricted Procedures are not necessary.
  • Restrictive deadlines for Submission of Documentation by economic operators, in the part of the Law that we seek to repeal. The deadline of only 10 days has drastically limited competition, as it is almost impossible to prepare a large set of documents and technical Bill of Quantities for a period of 10 days.
  • Foreign Businesses are discriminated against. The 10-day deadline also excludes “de facto” offers from foreign operators. It is worth mentioning here that a foreign operator has the obligation to submit official documentation with an apostille stamp.
  • The non-serious deadline of only 2 days for Complaining against the criteria of the procurement procedure, set by the Normative Act no. 9, is extremely restrictive for economic operators, who may claim unlawfulness of the qualification criteria. We clarify the fact that it is precisely the qualification criteria that create premises/incentives or make it impossible for operators to participate in a procurement procedure.
  • On the other hand, the 3-day deadline for complaints to be handled by the Public Procurement Commission is completely non-objective. Law no. 9643 sets a deadline of 15 days for handling complaints, while Law no. 162/2020, sets a deadline of 30 days.
  • Here too, the Legislator has shortened the deadlines for the evaluation of bids by 5 days. Considering that procurement procedures conducted based on normative act no. 9 are mainly procedures above the upper monetary threshold, and have a volume of documentation, it is clear that the 10-day deadline for bid evaluation puts in serious difficulty the quality of evaluation and the possibility of objective verification of all documentation submitted by bidders.
  • Even in the value of contract insurance which is provided at 5% higher in the Normative Act compared to Law no. 9643 and law no. 162/2020, there is a step back and discrimination against economic operators that compete and sign accelerated procedures versus economic operators that compete or are selected winners in regular procurement procedures.

AIS files its lawsuit claiming suspension and abrogation of this Normative Act, which has the power of law, specifically concerning its part on Procurement, because its consequences affect the interests of the state, society, and individuals.

The contracting authorities would have no consequences from such suspension and repeal requested of the Constitutional Court (Suspension and Repeal), as the Reconstruction Fund can be still tendered through Law no. 162/2020 “On public procurement”, entered into force on 31 March 2021, as an organic law that fully regulates the field of public procurement, drafted in line with the directives of the EU legislation on procurement, which provides solutions for any situations, whether emergency or regular situations, that a contracting authority might face.

The organization has monitored All Contracts Related to the Post-Earthquake Reconstruction Program of November 26th, 2019. So far, 33.14 billion Lekë have been tendered for 337 contracts with 192 Unions of Operators. Click to get acquainted with the list of contracts and contractors.

AIS, known as Open Data Albania, is registered as a legal entity – non-profit organization – by decision of Tirana Judicial District Court no. 3048, dated 28.03.2011.

The organization is implementing Projects related to Expenditures, Procurement, Public Contracting, Good Governance and Anti-Corruption Issues, some of which are as follows:

  • OpenData, Access and Transparency for Sectors Exposed to Corruption and at Risk of Corruption.
  • OpenContractingAlbania Risk Assessment & RedFlag
  • Public Contracts in States of Natural Disasters, Strengthening Independent Monitoring Mechanisms

AIS has established database systems for tendering and Contracting as Open Procurement Albania http://openprocurement.al/, contract monitoring system State Reconstruction Program http://openprocurement.al/en/tender/rindertimi
Risk assessment system (automatically) in tendering http://openprocurement.al/en/index/redflag
Database for monitoring Public Expenditure and Integrity of Elected and High Level Appointed Public Officials http://spending.data.al/

The lawsuit filed in the Constitutional Court can be found on the website of Followthemoney.Al