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 object 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 a 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 a 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”.

 

Please find the Study Case here: Sq and En

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

Please find the Study Case Here.

[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