Are the public procurements in Serbia synonyms for fraud and corruptions or are they a regulated system that has brought, in the last nine years, a half a millions in saving to the tax payers?
Looking from the outside, it is a system regulated by law and by 10 sub-legal regulations in which, in relation to the planned expenses, 10 percent of the tax payer’s money is saved.
When you take a closer look it is, unfortunately, a system through which almost a fourth of 2.7 billion Euros flows into private and party funds, which was the volume of procurements in 2010.
More than 80000 public procurements are yearly carried out in Serbia, and that number is getting smaller every year, but the worth of the procurements is getting bigger, and according to the estimation of the Public Procurement Office, the reason for the disproportion is the “enlargement of the procurements”.
The procured merchandise, proceedings and services in 2010 were paid eight per cent less than planned in the budgets of ministries, municipalities, towns, public companies and all other public money spenders which have an obligation to announce public procurements. Theoretically speaking, 22 billion dinars were saved, but nobody checked how much were the planned expenses “blown up”. As like no one checked was the procured, even though it was cheap, really needed.
The modalities and ways of fixing: The least capabilities one needs for fixing low cost procurements. According to one the sources of Novi magazin (a successful bidder used to giving out a “percentage”), the fixing of low cost procurements is “kid’s play” and the percentage of the bribe (taken into account that the deal is easily closed) is usually more than 10 per cent of the gross worth.
The low cost procurements are the ones that are up to 30 000 Euros (the limit is defined every year by the Budget Law).The procedure requires three companies to place a bid, and the client can, but doesn’t have to, announce the call at the public procurement website.
The bidders are not obliged to provide an extensive documentation (which is usually mandatory for the participation in an open procedure) , but only a statement that they are fulfilling all the legal condition for participating.
You can see that the procurement is fixed when three interconnected companies, or three companies that are in agreement, send three offers. In practice one can spot, with bidders that are not cautious, arranged bids by the fact that they are received 10 minutes apart from each other, because they were brought in by the same guy, or by the fact that the prices are circled out.
If the participants are careful they will not “pump up” two subsidiary offers, but they will instead be around 20 per cent higher than the winning offer. Finally, small procurements are small indeed, but with them a total of 34 billion dinars of public money was spent in 2010.
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The technical term eliminate the competition at the very start – the above mentioned human, technical and financial resources – will comply with what is at the disposal of “our” bidder. Also the finely tuned criteria, conditions and deadlines will give him an advantage during the scoring.
Finally, “the insider” will be able to offer a favorable offer if he knows, before everything is said and done, how big the real costs would be and what actually needs to be done from the conditions that were given in the documentation.
But, it often happens that the costs are lower than they were evaluated because a lot of the technical details will have to be only formally fulfilled, and with that “our” bidder will, beside everything else, have the best offer, under the estimated value from the procurement plan, but at the same time a lot higher than the real costs.
And the difference – from five to ten per cent of the gross value – goes to the president of the tender committee; he pays off the technical people that helped out and a portion is given to the manager that recommended the bidder.
All that if the procurement was really needed and meaningful.