NON-SANITARY LANDFILL CLEANING AND REMOVAL SERVICES (2018)
The subject of this case study is the procedure of public procurement of services for cleaning and removal of illegal landfills scattered around the municipality, which was conducted by the City of Pancevo in 2018, i.e. irregularities observed during the implementation of this procedure.
Namely, the tender documentation for the public procurement procedure in question was not in accordance with the Law on Public Procurement (LPP) since it prevented the bidders to prepare an acceptable bid. The tender documentation did not contain the locations where the services should be provided, the surface area of those locations, nor the approximate quantities of services to be procured, although this information was undoubtedly known to the contracting authority and there was no reason not to publish it. Moreover, the contracting authority illegally conditioned the bidders requesting them to visit the locations where the services in question were to be provided in order to gain the information they needed to prepare an acceptable bid. Therefore, the contracting authority not only failed to state in the tender documentation data and information relevant to the preparation of the bid, but by requiring a mandatory site visit he put potential bidders in an unequal position exposing them to unnecessary costs, especially given the different distance of their companies from the location that should have been visited.
It is unclear why the contracting authority did not specify at least the approximate quantities of services to be procured, especially since it undoubtedly had to know all the necessary parameters – locations where the services were to be provided, surface area of the landfills and kilometres travelled when transporting waste to sanitary disposal areas. This is additionally confirmed by the fact that the contracting authority stated in the tender documentation the approximate quantities of waste that needed to be removed (155,000 cubic meters).
Thus, the bidders could offer only unit prices for the items that were the subject of the procurement, and the contracting authority selected the “most favourable” bid by applying the criteria of the most economically advantageous tender, determining the number of weights for each element of the criteria on the basis of the sum of unit prices for individual items of the subject of procurement.
In such a situation, however, the bidder could estimate (or know) that the need to perform certain services will be lower during the term of the contract and to offer a significantly lower unit prices for these services compared to other bidders; at the same time, for some other services for which he estimates (or knows) that in the same period will be performed more frequently he could offer higher unit prices than those of other bidders. In that case, although his offered unit price is the lowest, his offer in the end, after the final realization of the contract, would not be the most favourable. Therefore, in the case when the quantities (at least approximate) of the subject of procurement are not determined and when the sum of unit prices is used as a criterion (or element of the criterion) for the selection of the most favourable bid, the bids are incomparable. Consequently, this practice enables numerous abuses and illegal agreements in public procurement and is contrary to the principles of efficiency and economy of the procedure, principle of transparency, as well as the principle of equality of bidders.
Finally, in addition to the observed illegalities, in this PP procedure the tender documentation contained contradictory additional conditions regarding business and personnel capacity, so that it was not possible to determine which type of waste will be treated during the contract (non-hazardous and / or hazardous waste), which could have led to the selected bidder not having the legally defined permits required to perform the contract.
Having in mind all the previously observed irregularities and contradictions, it is completely clear why there was no competition in the procedure in question, i.e. why only one bid was submitted. However, it is very surprising that in this particular case, none of the potential bidders made the request for the protection of rights that would challenge the tender documentation and at least try to eliminate the mentioned irregularities and contradictions. There are two possible reasons for this: 1) in this area there are illegal agreements between economic entities regarding market sharing or 2) having in mind the uneven and in some cases highly questionable practice of the Republic Commission for Protection of Rights in Public Procurement Procedures, economic entities have completely lost confidence in this independent body. Unfortunately, none of the two answers offered provide reason for optimism.