MATERIALS FOR ORTHOPEDIC AIDS - SPECIAL HOSPITAL FOR REHABILITATION AND ORTHOPEDIC PROSTHETICS (2017)
During 2017, the Special Hospital for Rehabilitation and Orthopedic Prosthetics tried to conduct a public procurement procedure for parts and materials for the production of orthopedic aids, which, however, was annulled in its entirety by the Republic Commission due to restriction of competition.
Namely, in the specific case, with small number of potential bidders (since these medical devices can be offered only by bidders listed in the appropriate registers with the permission of the competent authorities), the contracting authority shaped the procurement procedure as a whole and thus enabled participation only to those bidders who meet the requirements for all required parts and materials.
This fact was pointed out by the interested party, first through a request for additional clarifications of the tender documentation, and then by submitting a request for protection of rights, stating that the design of the procurement as a whole violated the principle of competition: since it failed to divide the procurement subject into lots, the contracting authority enabled only two bidders (more precisely: one) to present their offers. As he explained, by checking the website of the Agency for Medicines and Medical Devices (ALIMS), it can be easily determined that only two bidders are registered for trade in prosthetic materials for the upper extremities, of which only one has the required electronic hands and accessories, while there are a number of bidders for lower extremities’ prosthetic parts. He also pointed out that the trade in articles for the production of orthopedic aids is not the subject of registration with ALIMS, but that it is a matter of materials that can be offered by companies engaged in the trade of knitwear, which is why these positions must be separated into lots which would enable greater competition.
In its response to the interested party, the contracting authority disputed all allegations of the request for protection of rights, but at the same time it denied itself, stating that its market research and previous experience showed that there were at least 2 bidders that could offer the upper extremities parts, along with at least 6 of them for the lower extremities?! It was also pointed out that potential bidders could offer goods from other producers, or that they could prepare a joint offer, so that the principle of ensuring competition was not violated. In that way, the contracting authority actually admitted that in this particular case, only two bidders were able to submit a bid.
Namely, the Law on Public Procurement prescribes that the same person cannot participate in several joint bids. This means that one member of a group of bidders within a joint bid can appear only within one joint bid: so in this particular case of a single subject public procurement, due to this rule a maximum of 2 bidders can theoretically appear, because there are just as many bidders offering components for the upper extremities.
With regard to articles for the production of orthopedic aids, the contracting authority stated that they couldn’t be considered knitwear-like goods, and that these were products intended for specific production in the field of prosthetics, without responding to the essence of the allegations, i.e. the remark that these materials are not subject to the mandatory registration with ALIMS, unlike other materials and parts that are the subject of public procurement. And precisely because they are not subject to the mandatory registration, allocating these materials to a separate lot would enable the widest possible competition. But when the procurement is designed as a whole even for these positions that are not subject to registration, only two potential bidders can appear (the same ones who can appear as bidders for prosthetic parts for both upper and lower extremities). For the same reasons, the contracting authority violated the principle of equality of bidders, since it unjustifiably discriminated against them by requesting permits and registrations, which are not necessary for their usual activities for which they could submit a bid.
A similar position was taken by the Republic Commission, which is why it annulled this public procurement procedure in its entirety.
Finally, it should be pointed out that the interested party in its request for protection of rights unjustifiably demonstrated that the client also violated the principle of competition by insisting that the prosthetic parts be made of a certain material (aluminum), as well as have certain durability (that they can assist patients up to 150 kg). This is an example of permissible discrimination, so the contracting authority managed to clearly explain such requirements and connect them with the vital and health needs of patients to whom these orthopedic parts are installed. The Republic Commission had a similar attitude, assessing the applicant’s allegations in this part as unfounded.
When deciding whether to shape public procurement as a whole or by lots, we believe that contracting authorities must take into account their objective and demonstrable needs, and then assess whether they are better met by shaping public procurement as a whole or by lots, and especially in situations such as in this case, where due to the existence of special permits and registrations competition is already strongly limited by the imperative rules of some other regulations.
As demonstrated, although it is a question of the possibility and free will of the procuring entity, avoiding or failing to shape public procurement by lots, in certain cases and circumstances can lead to strong restriction of competition resulting in violation of one of the basic public procurement principles.