Favouring certain bidders and the readiness of contracting authorities to violate the law in an effort to award a contract to those bidders is one of the biggest problems in the public procurement system in Serbia. Such behaviour of the contracting authorities makes the essence of public procurement meaningless, and the damage from this practice is mostly suffered by the public interest, the budget and, ultimately, the citizens of Serbia.

The public procurement that is the subject of this case study is another in a series of examples of inefficient and illegally conducted procedures in which the contracting authority openly favoured a certain bidder – a group of bidders “Tahal group BV”, Novi Sad branch, “Tahal consulting engineers ltd”, Israel, with subcontractors “Hidrozavod DTD ad” Novi Sad, “Ehting d.o.o.” Belgrade and “4WATERS d.o.o.” Belgrade (hereinafter: the selected bidder). Namely, in the present procedure, the contracting authority, despite the orders of the Republic Commission given in the decisions granting the requests for protection of rights, as much as three times awarded the contract to the selected bidder, assessing as unacceptable the bid of the group of bidders AG-UNS, Arhitektonsko-građevinski institut d.o.o. Novi Sad, “Via factum d.o.o.”, Biograd na moru, “Hidroing d.o.o.”, Osijek, IPZ “Uniprojekt terra d.o.o.”, Zagreb and “Inobačka d.o.o.”, Novi Sad (hereinafter: the applicant). After the Republic Commission adopted the request for protection of rights for the third time, the contracting authority suspended the procedure because, allegedly, the contracting authority’s need for this public procurement ceased.

It is important to point out that the estimated value of the public procurement amounted to 191,666,600.00 dinars without VAT, and that it was one of the two most expensive public procurements that the Ministry of Environmental Protection had planned for 2019. According to the decision to initiate the procedure, the mentioned funds were allocated for the preparation of project-technical documentation for 14 municipalities with unsanitary landfills (dumps). At the same time, the bid of the selected bidder amounted to 188,731,040.00 dinars without VAT, while the bid of the applicant was twice cheaper and amounted to 91,250,000.00 dinars without VAT.

Using a large difference in the offered price of the applicant and the selected bidder, and in an effort to award the contract to the selected bidder, the contracting authority rejected the applicant’s offer on two occasions, qualifying it as unusually low. Despite the orders of the Republic Commission, the applicant’s explanation of the offered price and the evidence that it does not deviate from the market comparable price was persistently refused by the contracting authority who defended its position with extremely questionable arguments. Thus, in the third decision on awarding the contract, and in order to justify the estimated value of the public procurement, i.e. to indicate that the applicant’s offered price is unusually low, he stated, among other things, that “during the procurement planning a detailed market research was conducted based on which the contracting authority collected sufficient information on all real costs that are an integral part of the calculation, in the Republic of Serbia, the Adria region and the European Union ”, without providing more precise data on these surveys. However, when the applicant through a request for access to information of public importance (and after the intervention of the Commissioner for Information of Public Importance on the complaint of the applicant) obtained from the contracting authority a document containing data on alleged market research (“Rationale for individual procurement” from 15.01 .2019), it was determined that the amount of 191,666,600.00 dinars without VAT actually represented the estimated value for the preparation of project-technical documentation for as many as 57 municipalities with unsanitary landfills, and not 14 municipalities where the contracting authority intended to spend the entire allotted amount by persistently choosing a favoured group of bidders (which quite conveniently offered an amount almost identical to the estimated value for 57 municipalities for 14 municipalities). Moreover, if the estimated value of the public procurement in question for 14 municipalities had been correctly determined, the applicant’s bid would have been almost twice as high as that value, and by no means unusually low, while the bid of the selected bidder would have been almost four times higher!

After this document was disclosed and after the Republic Commission – having in mind its content – granted the request for protection of rights for the third time, the contracting authority, as already mentioned, suspended the procedure because due to unplanned events caused by the COVID 19 pandemic and by the state of emergency, the need for the subject procurement ceased.

Having in mind all the above, several questions arise. First of all, how did the need of the contracting authority for the subject procurement suddenly stop, especially in a situation when environmental protection is a huge problem in Serbia, and the opening of Chapter 27, which refers to ecology, is not even in sight? Also, how is it that the circumstances caused by the corona virus did not prevent the contracting authority from conducting some other public procurement procedures during the state of emergency? And perhaps most importantly, have the competent authorities determined whether this was an unintentional error or an illegal agreement between the contracting authority and a group of bidders? Because, if the applicant had not been persistent in challenging the decisions of the contracting authority, almost four times more public money would have been spent on the preparation of project documentation for the rehabilitation of unsanitary landfills for 14 municipalities than really needed (over one million euros).

As long as the competent authorities apply the law selectively (or do not apply it at all) in order to sanction prohibited behaviour in the sphere of public funds spending, there will be no fear of abuse of authority. Professionalization in the field of public procurement among contracting authorities and at the same time awareness of the need for socially responsible behaviour would surely lead to a reduction in corruption in public procurement procedures.