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Sunday, February 17, 2013

Slovaks go for "trust me" procurement

This may be a case of the tail wagging the dog. The central European Union bureaucrats have dictated certain conditions (on a variety of matters, not just procurement) before member States are able to take advantage of the large European market and largesse of the European bureaucracy. It's not so unusual. The World Bank, International Monetary Fund, and other organizations require certain procurement strictures be in place before lending to governments. The question then becomes whether the strictures are mere structures, tolerated but not lived in.

This story also reminds me how there was a reflexive procurement adjustment in the US when it offered a "take the money and run" deal not so long ago. We saw a rush to change procurement rules around the USA, to enact "stream-lined" or "fast-track" rules meant simply to get the money out in response to the US government's ARRA stimulus funding. The devil is always in the details, and too often saintly principles are made to give way to filthy lucre.

Procurement rules changed in swift vote
ACTING in a sudden rush in mid February, the Slovak parliament – in which the governing Smer party holds an overwhelming majority – revised the country’s public procurement rules. The amendment, which cleared parliament less than 48 hours after ministers approved its wording, hit a raw nerve with opposition parties and political ethics watchdogs, who said the haste with which the changes were pushed through was unjustified and meant that proper debate was avoided.

The author of the revision, the Interior Ministry, claimed that the move was necessary to boost Slovakia’s ability to draw every possible euro from EU funds allocated up to the end of 2013. Interior Minister and senior Smer figure Robert Kaliňák insisted that the revision to the law on procurement will enable Slovakia to draw EU funds allocated for the current programming period, which ends in December this year, more effectively. While he was not able to specify how much more money would be drawn with the help of the revision he added that “in general, we’re talking €500 million at the moment”, the TASR newswire reported. “If there is such an enormous amount of money at our disposal, we’re obliged to do our utmost to make it available for the state,” Kaliňák said, as quoted by TASR.

The government argues that the so-called small fast-tracked revision will ease the administrative burden in the procurement process. The legislation introduces penalties such as a three-year ban on participation in tenders if any cheating is detected during the process of proving that all the conditions were met, according to the SITA newswire.

Under the current rules, an objection to a tender by any bidder can lead to suspension of the whole procurement process. According to Garajová, the revision will help to speed up the process for public procurers by boosting legal certainty through the institute of so-called ‘ex-ante control’ and by shortening the time taken by concentrating appeals procedures. Under the new rules, the tender process will be completed before any appeal is considered. The Office for Public Procurement (ÚVO) will then consider any appeals, after which a contract can be signed. But in a controversial further change, the ÚVO can decide that even contracts subject to appeal can be signed if they are in “the public interest”.

Critics have questioned how “the public interest” will be defined, the Sme daily reported.

Peter Kunder of Fair-Play Alliance, a political ethics watchdog, said that the proposed changes really would limit the processes which currently result in delays in signing contracts, “yet we have doubts about whether this is in line with European law”. He suggested that the revision guidelines [of the EU] do not count on ex-ante control, which makes it impossible for bidders to object to discriminatory criteria later on.

Among other changes, the ÚVO, which Kaliňák argues has long been understaffed, will be enlarged by 39 staff. He said that resources and personnel will be re-allocated from other ministries, SITA reported. Gabriel Šípoš, the head of Transparency International Slovensko, another political ethics watchdog, said that the reduction in administration, more effective appeals procedure and increase in capacity at the ÚVO should help to speed up procurement processes. But he also sees the main risks of the revision as lying in its implementation.

“Will experts be hired for the ÚVO?” Šípoš asked. “Will the procurers who now have much freer hands be better controlled or less politically determined when deciding on tenders?”

The government’s revision means there is more chance that an honest procurer will get better value for money than is the case now, “but at the same time it also increases the risk that cronyism will put down roots more easily”, Šípoš said, adding that “the quality of procurement will thus depend even more on the political culture and standards of the ruling power”.

Garajová said that concerns about the amendment opening up space for corruption are unjustified. The changes that are being proposed do not interfere in the selection of bidders or the course of the competition in a way that would create room for anything other then legal decisions, Garajová told The Slovak Spectator.
While we're in that part of the world, see too this article on new developments in Romanian procurement:
New rules for public procurement in Romania
It comes with a caveat:
"It remains to be seen how these amendments will be implemented in practice and how quickly the competent surveillance authorities or the contracting authorities will be able to comply with these new requirements."

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