The shortage of paper and toner for printers was just part of the problem that plagued numerous state agencies last year due to the cancellation of centralised public procurements. Appeals processes delayed some centralised procurements by up to eight months.
Centralised public procurements are conducted by the State Property Administration for the entire public administration, through which institutions procure office furniture, fuel, vehicles, and insurance.
In 2023, a total of nine centralised public procurement procedures were annulled, leaving some agencies without paper and toner for months and delaying the procurement of new and used official vehicles, invoices, and forms. Most of these tenders were then reissued and successfully completed, with contracts signed with suppliers, while some procedures are still ongoing in the Administrative Court. Six of the nine tenders were related to the procurement of office furniture and materials, while three were for the procurement of new and used vehicles.
Tenders were annulled for various reasons, including complaints about improperly prepared statements, incorrect and missing offers, exclusion of tender participants, and withdrawals. Notably, the State Property Administration, in four tenders related to the procurement of office materials through framework agreements, required bidders to prove compliance with conditions, which led to the annulment of these tenders.
Offices Without Supplies, Suppliers “Warring” with Complaints
According to data from the Montenegrin Electronic Public Procurement System (CeJN), four out of nine tenders were canceled due to submitted complaints, all of which were filed by the company “Kastex.” These four tenders were announced in early April 2023 for the procurement of paper, printer toners, forms, covers, and orders for state departments. The tender values ranged from 32.870 to 310.220 euros. In each of these procurements, the company “Stratus” was initially selected as the most favourable bidder, after which “Kastex” submitted complaints. The State Property Administration deemed these complaints unfounded, but the competent Commission for the Protection of Rights in Public Procurement Procedures upheld them, leading to the cancellation of the tenders. Consequently, state bodies waited eight months for paper, five months for toners, and four months for orders and covers.
In each complaint, “Kastex” also claimed that they were required to prove their eligibility for bidding again, despite having a framework agreement with the Administration. Framework agreements for these procurements are signed by one or more purchasers with one or more bidders, establishing the conditions for concluding procurement contracts for a specific period, price, and quantity, with a maximum duration of four years.
“If the framework agreement is concluded with multiple bidders, contracts based on that agreement are concluded: 1) according to the terms of the framework agreement, without re-bidding, if all the necessary conditions for executing works, providing services, or delivering goods, as well as the eligibility conditions specified in the tender documentation, have been established by the agreement,” states Article 69, paragraph 1, of the Public Procurement Law.
The largest among the April procurements was for paper and paper products, valued at 310.220 euros. After one amendment to the tender documentation, “Stratus” was selected as the most favourable bidder, but “Kastex” filed a complaint. The Commission upheld the complaint because the signatories of the framework agreement were required to prove their eligibility for bidding again, leading to the cancellation of the process on July 25. A new tender was announced in the meantime on June 19, with “Kastex” now complaining that “Stratus” offered a price more than 30 percent lower than theirs. This objection was partially upheld, as the reasonableness of the unrealistically low offer was not verified, resulting in a repetition of the process on September 29. “Stratus” was again selected as the most favourable bidder, but this time, “Kastex’s” complaint was rejected as unfounded in late November. The contract worth 310.220 euros was signed with “Stratus” on December 18, and “Kastex” initiated proceedings before the Administrative Court to challenge the legality of the rejected complaint. In this case, state bodies waited more than eight months for the paper procurement.
In addition to this, another tender announced on April 4 was worth 210.120 euros for the procurement of toners and cartridges for printers. After two amendments to the tender documentation, “Stratus” was selected as the most favourable bidder on April 28, while “Kastex’s” offer was rejected as incorrect. “Kastex” filed a complaint on May 9, claiming that the process was conducted unlawfully and that their offer was unjustifiably and illegally rejected. They also pointed out that, among other things, the opening of bids was not conducted properly, nor were the records, that a non-existent bid was selected, that the decision was illegal, and that the rules of procedure were violated, and that they should not have had to prove their eligibility due to the framework agreement.
The Commission for the Protection of Rights in Public Procurement Procedures upheld the complaint after a month and stated that the process was unlawful because the signatories of the framework agreement were required to prove their eligibility for bidding again, leading to the cancellation of the tender on July 25. After the complaint was upheld, a new process of the same value was initiated on June 19, going through multiple amendments and clarifications, and by late August, “Kastex’s” offer was selected as the most favourable. The contract with this company worth 210.120 euros was signed on September 19, and three annexes were later signed. For this tender, public administration waited at least five months last year for the procurement of basic printer supplies.
A nearly identical case was recorded with the third tender announced in April, which also concerned printer toners and was valued at 194.660 euros. After two amendments to the documentation, “Stratus” was selected as the most favourable bidder on April 28, to which “Kastex” filed a complaint, leading to the cancellation of the tender on July 25. A new one was announced on June 19, underwent several amendments and additions, after which “Stratus” was again selected as the most favourable bidder in late August. “Kastex” filed a complaint claiming that “Stratus” did not deliver the toners prescribed by the tender, which the State Property Administration disputed, stating that they could be used in printers. The Commission partially upheld the complaint because the Administration did not fully establish the factual situation of the offer, resulting in a repetition of the process. In mid-October, “Stratus” was again selected as the most favourable bidder, but “Kastex” filed another complaint after ten days, related to the consistency of the toner names mentioned in the offer. The Commission partially upheld the complaint, noting that the Administration again failed to fully establish the factual situation, resulting in another repetition of the process. Then, in late November, “Kastex” was selected as the most favourable bidder, but now “Stratus” filed a complaint also related to technical specifications. This complaint was partially upheld, and the process was repeated. The selection of the bidder in this case also ended up in the Administrative Court, as “Stratus” initiated proceedings before that institution in March 2024, causing this procurement to last a year.
The last of the April tenders was worth 32.870 euros, for the procurement of orders, receipts, invoices, covers, etc. After one amendment to the documentation, “Stratus” was selected as the most favourable bidder, while “Kastex” filed a complaint in early May. Again, the issue was that the signatories of the framework agreement were required to prove their eligibility for bidding, which the Commission upheld, leading to the official cancellation of the tender on July 25. A new tender of the same amount began on June 19, with “Kastex” giving the most favourable offer in late August. The contract worth 32.870 euros was signed with that company on September 19, along with two subsequent annexes.
Buyers Need Training
For the purposes of this research, the State Property Administration stated that filing complaints, extending decision deadlines, and canceling centralised public procurement lead to difficulties in the functioning and regular operations of state bodies, which need these goods and services. They explained that these problems are overcome through active communication, i.e., meetings with public buyers, unifying technical specifications, and better market research. They emphasised that in order to avoid these problems in the future, buyers need to take a more active role in training for centralised public procurement organised by the Directorate for Public Procurement Policy.
“Weak communication with state bodies when submitting technical specifications within the deadline, submitting technical specifications containing errors in characteristics, represent the main reason why bidders file complaints. Planning the needs for items of centralised public procurement estimated at significantly less than the actual needs results in the re-initiation of the procurement process for certain state bodies. Non-alignment of technical specifications between state bodies for the same procurement item…,” they stated as shortcomings of the current centralised public procurement system.
When asked about the problems caused by the cancellation of office supplies procurements, the Administration stated that most state bodies experienced difficulties in operation due to a lack of paper and paper products, as well as a shortage of printer toners. They pointed out that contracts were eventually signed, while decisions for two tenders are still before the Administrative Court.
Administration for Inspection Affairs Waited Six Months for Vehicles
In mid-May 2023, a tender was announced for the needs of the Administration for Inspection Affairs (UIP) worth 86.190 euros for the lease of 40 used vehicles. In early July, the company “Auto Čačak” was selected as the most favourable bidder, but later submitted a letter withdrawing from the tender due to a technical error in their offer. This process was canceled on July 6 and re-announced five days later, but its value was reduced to 61.570 euros. “Auto Čačak” submitted an offer at the end of that month but was excluded from the process because the required statement was not signed, leading to the cancellation of the process on July 27. The value was reduced again, and the new procurement was now worth 24.620 euros, starting in mid-September. “Auto Čačak” again submitted the most favourable offer in late October, and the contract worth 24.620 euros for the lease of 40 vehicles was signed at the end of that month.
In a comment for this research, the Administration stated that the estimated value of the procurement decreased with each new initiation of the process because the lease period was until the end of 2023. They emphasised that they consider the current procurement system inefficient due to the inability to conclude contracts for a longer period, which prevents state bodies from carrying out their activities efficiently and according to plan.
“The fact that the original Regulation on the Centralisation of Public Procurement of Goods and Services at the end of 2017 entailed the execution of 12 procurement procedures for goods and services, after which the Regulation on Amendments and Supplements to the Regulation on the Manner of Planning and Execution of Centralised Public Procurement was adopted at the end of 2022, which now entails the execution of seven procurement procedures for goods and services, namely the procurement of computer devices and equipment, communication equipment, mobile phone services, landline phone services, as well as electronic communication services – the internet, which have been returned to the organisational units,” stated the UIP.
In addition to the vehicles for this Administration, the tender announced at the beginning of November, aimed at procuring one car each for the Ministries of Culture and Media and Ministry of Human and Minority Rights, the Institute for Hydrometeorology and Seismology, and the Directorate for the Protection of Cultural Heritage, was also annulled. This was a repeated procedure valued at 75.470 euros, and the tender was canceled due to a lack of bids, while one bid was rejected because it was improperly prepared.
Shortages in Chairs and Vehicles
The list of canceled tenders also includes one for the procurement of 60 office chairs for the Ministry of Foreign Affairs, announced in mid-December 2023. This tender, valued at 10.740 euros, was annulled after a few days because no valid bids were received. One bidder failed to submit a statement on the required form, while the other did not provide proof that their offer met the necessary standards.
In mid-December, a tender was announced for the procurement of one vehicle for the needs of the Ministry of the Interior, valued at 20.650 euros. This procurement underwent one change in documentation but was canceled on December 25th due to the absence of bids. As of mid-May 2024, these two tenders have not been reissued.
Among the more valuable tenders in 2023 is the one from mid-June, announced for the procurement of tables, cabinets, and chairs, valued at 164.230 euros. It underwent a documentation change but was annulled on July 18th because the statements from bidders ‘Grand design’ and ‘Was design’ were improperly prepared, i.e., not submitted on the required form. A new tender began on July 31st, and in mid-September, the offer from ‘Was design’ was selected as the most favourable, with a contract worth 158.870 euros signed at the end of October.
Last year, two tenders were successfully completed on the first announcement. The first, valued at 24.990 euros, was for the procurement of tables and chairs for the Statistical Office (Monstat) and was announced on October 9th. The company ‘Was design’ was selected in mid-October due to the most favourable offer, and a contract worth 23.200 euros was signed on October 30th. The tender was completed within about twenty days. In addition to this, the procurement of office furniture, specifically three counters for the Ministry of Justice, valued at 24.990 euros, was also successfully completed. This tender was announced on November 29th, with subsequent amendments to the request. ‘Was design’ was selected as the most favourable bidder, with the condition that the company submits an original or copy of the participation proof. The company complied, and a contract worth 16.840 euros was signed on December 29th. Two bids were rejected in this tender, one because the bidder offered a price 30% lower than the others and failed to clarify within the legal deadline, and the other because the bidder comprised two companies that did not submit a statement on compliance with the conditions and absence of conflict of interest.”
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.
