Some ministries evade the obligation to initiate a public procurement procedure for airline tickets for official travels, even though they spend more than 5,000 euros annually on them. As a result, they directly and non-transparently transfer the money to travel agencies through direct agreements.
In 2022, the Ministry of Science and Technological Development allocated more than 11,000 euros for airline tickets without signing a contract, as required by the Law on Public Procurement. A similar situation was noted the previous year at the Ministry of Ecology, Spatial Planning, and Urbanism, which, without a procurement contract, paid the same agency 7,516 euros for airline tickets and accommodation based on four invoices in just one month.
The Law on Public Procurement allows for the possibility of a direct agreement or direct procurement, which can be concluded for amounts up to 5,000 euros, excluding VAT. As of January 2023, the amended law stipulates that this method can be implemented if the annual procurement value for the same purpose is up to 8,000 euros. Simple procurement of goods, services, and works through the direct selection of a specific supplier, with the acceptance of a proforma invoice/invoice, fiscal receipt, or contract, is not mandatory to conduct through the Montenegrin Electronic Public Procurement System (CEJN).
Invoices provided upon request for free access to information to the Institute Alternative indicate that some ministries have violated the Law on Public Procurement, and also divided the subject of public procurement of airline tickets, disregarding the annual procurement value estimation.
Although millions of euros are allocated annually for airfare costs at the level of the government, those procurement are not often the focus of special inspection controls by the Public Procurement Inspection and the State Audit Institution (SAI).
Procurement without tenders justifying with cyber attacks
In 2022, the Ministry of Science and Technological Development allocated more than 11,000 euros for airline tickets for official travel through direct negotiations with agencies, which later invoiced the expenses.
During October, November, and December 2022, the Ministry paid 6,759.76 euros to a tourist agency based on invoices, although it was obliged to conduct the procedure through the electronic system of public procurement. In response to the draft of the research, this Ministry explained that in the last quarter of that year, they continued the realisation of official trips in the same manner as in the June-September period. They also claim to have carried out only necessary trips, in a highly rational and economical manner.
The Ministry admits that they did not have a signed contract for the procurement of organising official trips in 2022. They claim that the reasons for not signing the contract are multiple – a cyber attack on the information infrastructure of the state administration in August of the previous year, budget rebalancing dates, as well as the fact that they were established only in May 2022, with a “very small amount allocated for official travel”.
In this Ministry, they claim to have individually requested bids for airline tickets and accommodation from several travel agencies for each trip, asserting that they selected the most cost-effective offers. However, they are not obligated to document this process, so we must take their word for it. Despite the Ministry’s claims, the report on direct simple procurement for this year indicates that only one bid was received for these procurement.
Similarly, the Ministry of Ecology, Spatial Planning, and Urbanism did not have a procurement contract for airline tickets in 2021. Through direct negotiation, this ministry spent 41,700 euros without VAT on airline tickets and hotel accommodation in 2021. In December 2021 alone, they paid 7,516 euros to one travel agency for airline tickets and accommodation, based on four invoices. By doing so, they violated the Law on Public Procurement, as they were required to conduct the procurement through the Montenegrin Electronic Public Procurement System (CEJN) before traveling. The inspection found that the Ministry of Ecology, Spatial Planning, and Urbanism committed a serious violation by dividing the subject of the public procurement, but no violation proceedings were initiated due to the passage of time.
“Upon reviewing the documentation and the Montenegrin Electronic Public Procurement System (CEJN), it was determined that for the mentioned services in 2021, no procurement procedure was conducted, and no contract was concluded. Instead, the services were realised through the direct acceptance of invoices, contrary to Article 27, paragraph 2 and Article 27, paragraph 3, and a violation of Article 211… However, due to the passage of time, no violation proceedings will be initiated,” stated the public procurement inspection resolution, initiated upon the initiative of the Institute Alternative.
According to the Law on Public Procurement, fines for this violation for legal entities range from 5,000 to 20,000 euros.
The Ministry of Ecology, Spatial Planning, and Urbanism confirmed that in 2021, during Minister Ratko Mitrović’s tenure, they did not have any contracts concluded based on which they invoiced the costs of airline tickets.
Through direct agreements, 90,000 euros were spent
Most ministries purchased airline tickets for official travel using the mechanism of direct agreements. Out of the 12 analysed ministries, eight procured airline tickets using this method instead of conducting the service through a simple procurement or framework agreement. Both procedures involve publishing calls on the CEJN website, allowing all eligible agencies to participate as bidders through a transparent procedure, and providing avenues for complaints if dissatisfied with the outcome.
During 2022, eight ministries spent over 90,000 euros through direct agreements on airline tickets.
The Ministry of Economic Development procured airline tickets from eight different agencies in the past year, totaling 43,000 euros, which is more than half of the total amount (85,147.45 euros) allocated for simple procurement below 5,000 euros.
The Ministry of Ecology, Spatial Planning, and Urbanism spent 15,000 euros on airline tickets, while the Ministry of Science and Technological Development spent close to 11,000 euros with three agencies. According to invoices, the Ministry of Labor and Social Welfare spent 10,000 euros, while the Ministry of Human and Minority Rights spent over 7,000 euros, and the Ministry of Foreign Affairs spent 5,000 euros.
Fines for dividing procurement subjects
During 2022, the Inspection for Public Procurement determined that in 11 cases, the subject of public procurement was divided to avoid the application of the Public Procurement Law and the issuance of an open procedure.
According to responses from the Administration for Inspection Affairs (AIA), 366 simple public procurement were inspected, including the division of the procurement subject to bypass transparent procedures. Twenty-three irregularities were found, nearly half of which involved the division of the procurement subject. As a result of these irregularities, the inspection imposed 18 fines totaling 25,050 euros and filed nine requests to initiate misdemeanor proceedings.
In the previous year, 361 simple procurement were inspected, and 36 irregularities were identified, 12 of which related to the division of the procurement subject. AIA stated that they imposed 32 fines by issuing misdemeanor orders totaling 52,800 euros.
This inspection also monitored the procurement of airline tickets, primarily focusing on the fact that contracting authorities do not keep records according to procurement subject descriptions due to the large number of procurement subjects and variations. It was observed that some government bodies procure airline tickets and hotel accommodation, while others only purchase airline tickets, and some seek services from travel agencies for official trips, and so on.
This investigative article was produced within the Project “Procurement under spotlight – Making Watchdogs Work!”, with the support of the Embassy of the Kingdom of the Netherlands in Serbia and Montenegro within the MATRA Rule of Law program. Project aims to empower and motivate watchdogs to combat corruption and undue influence in public procurement.