In July 2020, the Republic Health Insurance Fund conducted a negotiated procedure without prior publication with an estimated value of over 1.5 billion dinars in order to procure medical and sanitary supplies, although there were no legally prescribed conditions for that. Namely, the Fund tried to justify the extreme urgency of this procurement with the epidemiological situation in the country, the significantly increased consumption of sanitary and medical supplies due to the increased number of patients infected with SARS-CoV-2 virus, even though the subject of a number of lots had nothing to do with the treatment of those patients, nor was it in the protocol for their treatment.

Due to the extreme urgency, the negotiated procedure is applied only in cases when it is necessary to procure certain goods in order to protect life and health (e.g. during epidemics) and without any delay, immediately. Due to the extraordinary circumstances in which it is implemented and in which the priority is to save the life or health of people, or the environment, all procedural procurement requirements that could in any way jeopardize the stated priority are eliminated in this type of procedure. Therefore, the negotiated procedure due to urgency is the least transparent public procurement procedure in which competition is usually limited, which is why it should be conducted exceptionally and only in cases where saving lives and health is really a matter of time.

In this particular case, the situation caused by the coronavirus epidemic in the country at that time was serious, but the big question is whether it was serious to the extent that justified the urgent procurement of supplies within all 37 lots. It certainly did not require an urgent supply of items that had nothing to do with treating Covid patients and were not included in their treatment protocol, such as a set for laparoscopic surgery (used to examine organs inside the abdomen), linear and circular staplers (surgical suture instruments used in abdominal and rectal surgery), surgical compresses, non-sterile covers for operating tables, endoscopic video capsules (used to record the colon and stomach), etc. In view of all of the above, under the auspices of a non-transparent negotiated procedure without prior publication, the contracting authority apparently tried to procure certain items of large estimated value (close to 200 million dinars without VAT), although the conditions prescribed by the Public Procurement Law were not met (providing basic living conditions in cases of natural disasters or technical-technological accidents whose consequences endanger the safety, health and lives of people, material goods or the environment).

In addition to the fact that the conditions for initiating the negotiated procedure due to urgency were not met, in this particular case competition was completely excluded. Bids for all 37 lots were submitted by 8 bidders, so that only one bid was submitted for each lot (except for one). At the same time, the bids for 32 out of 37 lots were identical to the estimated value of those lots, while only for three lots a slightly lower price was offered than the estimated value. For the remaining two parties, the bidder offered a price higher than the estimated value, and these offers were chosen as such.[1]

As stated, the negotiated procedure due to urgency is in itself one of the least transparent public procurement procedures, in which due to the need for urgent action competition is always limited. This does not mean, however, that the contracting authority should not try to ensure competition to the extent possible in the given circumstances. Moreover, the Public Procurement Law stipulates that public procurement must not be designed with the intention of avoiding the application of this law or avoiding the application of the appropriate type of public procurement procedure or with the intention of unjustifiably placing certain economic entities in a more favorable or unfavorable position. In this particular case, however, there was no competition at all and it is quite certain that either the bidders agreed in advance who would submit a bid for which lot or, more likely, that the contracting authority excluded competition in advance by inviting only eight specific bidders for 37 parties under the pretext of the alleged urgency.

Also, having in mind that in the present procedure a framework agreement of great value (mainly for the supplies not related to the treatment of Covid patients) was awarded to a company owned by a relative of the Vice-President of the Government Provincial and Provincial Secretary for Healthcare Zoran Gojkovic, a question of the potential conflict of interest is particularly interesting. As in previous similar situations, the competent body that was supposed to answer this question, the Agency for the Prevention of Corruption, responded only after persistent media coverage of the case, stating that a procedure was initiated against Zoran Gojković for prior verification of eligibility for initiating proceedings for violation of the provisions of the Law on Prevention of Corruption. If the Agency had reacted in a timely and self-initiated manner and published its position on the issue of the conflict of interests of the current provincial secretary, we believe that attention would have been focused much earlier and more on what should be most important in this case – the public procurement procedure itself, whether there were reasons for applying the negotiated procedure, whether the budget was damaged, whether the competition was limited, etc. Thus, with a belated reaction, but also by initiating a procedure without ever informing the public about its outcome, the Agency only contributed to various speculations in the public and distraction from what should have been the main issue in this case.[2]

By the way, only a month after the end of the procedure, the Republic Health Insurance Fund suspended the implementation of the concluded framework agreements because, as stated in the response to the media, in the meantime health institutions that had requests for urgent procurement managed to procure needed supplies from other sources, i.e. donations, but also because the epidemiologically worsened situation began to calm down.

This epilogue is just a confirmation that in the specific case there were no conditions for conducting this type of negotiated procedure, and that the procedure in question was conducted illegally. Also, this example shows us that the independent media and the public, in spite of everything, represent an important corrective to the illegal actions of the authorities, especially in a situation when the competent bodies with the role of monitoring and preventing such actions are obviously not doing their job.

[1] Pursuant to Article 144, paragraph 2 of the Public Procurement Law, the contracting authority may (but does not have to) reject as an unacceptable bid exceeding the amount of the estimated value of the subject of public procurement or available funds.

[2] The issue of conflict of interest in public procurement was also addressed by the non-governmental organization Transparency Serbia in its text “Public procurement from the company of the minister’s husband – is there a conflict of interest and what is the main issue”, available at https://www.transparentnost.org.rs/index.php/sr/aktivnosti-2/pod-lupom/11429-javne-nabavke-od-firme-ministarkinog-supruga-ima-li-sukoba-interesa-i-sta-je-glavno-pitanje