ACF Contests Pernik Regional Prosecution Decision Not to Investigate Municipal Procurement Procedure
The Anti-Corruption Fund Foundation (ACF) has contested the decision of the Regional Prosecutor’s Office Pernik not to initiate proceedings into the decision to award a bridge rehabilitation contract to the relative of a municipal official.
The contract for the reconstruction and rehabilitation of a bridge over the Struma River was worth BGN 368,982 (VAT included). It was awarded to Via Intelego Ltd, a company managed by Ivo Gadzhov, first cousin of the deputy mayor for construction in Pernik Municipality, Vladislav Karailiev.
According to public procurement legislation in force at the time of the tender, Via Intelego could not have taken part in the bidding since its manager is related to an official within the awarding authority. The same restriction was specifically mentioned in the procurement procedure documents. When submitting their offer, each participant had to declare they were not related to any executives at the awarding authority.
“The failure of our attempts to obtain from Pernik Municipality a copy of the declaration filed by Via Intelego made us wonder whether Gadzhov had declared he had no connections with any relevant officials, effectively filing documents with false information as part of his tender bid,” said Boyko Stankushev, director, ACF.
Alternatively, Gadzhov could have failed to submit the declaration and the tender committee could have omitted to mention in the protocols whether a declaration had been filed or not. According to the relevant legislation, participants who fail to submit such declarations should be disqualified.
On 23 April 2019, ACF filed a report with the public prosecution in Pernik, as well as the Public Financial inspection Agency (PFIA). A report about possible conflict of interest was also filed with the Commission for Counteracting Corruption and the Forfeiture of Illegally Acquired Property (CCCFIAP).
Four moths later, Gergana Malinovska, prosecutor at the Regional Prosecutor’s Office – Pernik, decided not to investigate the case, citing written statements by Gadzhov, declaring that at the time the bid documents were being prepared he had focused on two issues – whether his company had the capacity to deal with he project and how to provide the best possible technical offer.
Apparently, Gadzhov had signed the other documents in the bid file without giving them much consideration since this part was not of great significance to him and since bidders had been given the option of correcting mistakes and/or omissions, following the submition of their offers.
ACF questions the prosecutor’s decision to quote Gadzhov’s statements as an explanation of the decision not to open proceedings.
“As the person in charge of the company, Gadzhov should have been aware of all documents required to participate in a public procurement procedure. In addition, providing false information to a public institution is a crime,” said Stankushev.
The prosecution’s decision was also based on the argument that the Public Procurement Act was revoked a day after the Pernik procedure had been opened.
“This is another argument which raises questions and contradicts not only the legislative framework, but also court practice and the approach adopted by the Commission for Protection of Competition,” said Stankushev. “With regards to the laws pertinent to the public procurement in Pernik, what matters is the date when the procedure was initiated.”
ACF has contested the regional prosecution’s decision in front of the District Prosecutors’ Office – Pernik. We look forward to their timely reaction, in addition to pending actions by CAFIAP and PFIA.
With regards to PFIA, on 13 June 2019, the agency informed ACF of its readiness to carry out a financial inspection in Pernik Municipality once it had the available administrative capacity. In addition to a thorough examination of all tender documents, ACF has also requested that the agency reviews why Via Intelego was not asked to pay penalties for construction delays. The contract stipulated that the rehabilitation works should be completed in no more than 194 days. However, the project was completed in 287 days – a delay of 93 days.
“Municipalities rely on public funds and should take all necessary precautions to guarantee that these funds are spent efficiently. Cases such as the one in Pernik raise the question whether the municipal administration acted with the highest degree of responsibility,” said Stankushev. “This is why ACF has informed the media about this case and has filed reports with three public institutions which we expect will handle the matter responsibly and in a manner that protects the interests of the citizens of Pernik,” said Stankushev.