RECONSTRUCTION AND CONSTRUCTION OF THE BULK AND GENERAL CARGO TERMINAL OF THE PORT OF SMEDEREVO (2020/2021)
The subject of this case study is the international open procurement procedure conducted in accordance with the PRAG rules of 15 July 2019 (Procurement and Grants for EU external actions – A Practical Guide / EU PRAG /) and the European Investment Bank’s Procurement Guide. This procurement represents an exception to the application of the Public Procurement Law, given that it is financed with funds from the European Investment Bank loan. Although it was not applied to the procurement procedure itself, the Public Procurement Law (PPL) was to be applied to the procedure of protection of rights, in accordance with the Agreement on Financing Serbian Inland Waterway Infrastructure between the Republic of Serbia and the European Investment Bank (hereinafter: Financial Agreement). The public procurement procedure in question was conducted by the Ministry of Construction, Transport, and Infrastructure, and the contract was awarded to a group of bidders consisting of AZVIRT Limited Liability Company Azerbaijan, Sinohydro Corporation Limited China and Aqua Mont service d.o.o. Serbia at a price of Eur 47,913,796.51.
The procurement in question is an example of the most serious violation of one of the basic principles of public procurement – the principle of transparency. Namely, after being informed about the outcome of the procedure and the reasons why his bid was not selected, one of the participants in the procedure asked the contracting authority to review the procedure documentation and the selected bid, referring to Article 149 of the Public Procurement Law. However, the contracting authority rejected the request of this bidder, explaining that he had no right to request access to the documentation nor to refer to the provisions of the PPL, since the PPL in this case applies only to the procedure of protection of rights that begins only with the submission of requests for protection. On the other hand, according to the contracting authority, the PRAG rules and the EIB Procurement Guide do not know the possibility of reviewing the procedure documentation. According to this interpretation, a bidder who has not been awarded a contract can only ask for an explanation why its bid was not selected! This argumentation of the contracting authority was fully accepted by the Republic Commission, who rejected the request for protection of rights that this bidder subsequently stated.
The Republic Commission fully accepted the argumentation of the contracting authority and rejected the request for protection of rights that this bidder subsequently stated.
Regardless of the rules or law that should have been applied in this specific case regarding the review of the procedure documentation, the contracting authority was certainly obliged to provide the interested participants with access to the documentation.
Although (unlike the PPL) the PRAG rules and the EIB Procurement Guide do not explicitly stipulate the obligation of the contracting authority to provide participants in the procedure with access to the procedure documentation, this obligation stems primarily from the principle of transparency of the procedure, one of the basic principles on which all public procurement procedures are based. In addition, the obligation of the contracting authority to provide review of the procedure documentation and the selected bid arises from the clauses contained by these rules, which provide for the bidder’s right to any information about the procedure, except those considered confidential. After all, Directive 2007/66 /EC on legal remedies in public procurement also stipulates the obligation to provide interested tenderers with the necessary information when informing them about the award decision, thus enabling them to initiate effective legal protection. And all this is possible, among other things, by providing insight into the procedure documentation.
In such important and valuable infrastructure projects (the value of the contract with the selected bidder is almost 48 million euros), it is especially dangerous to declare the selected bid confidential and not allow other participants to see the public procurement procedure documentation. This way the spending of huge funds obtained through the loan which will be paid off by the citizens of Serbia, has been left out of control for the umpteenth time, and legal protection under the PPL in international public procurement procedures has proved to be meaningless.