THE FORESTRY BUILDING ABOVE THE “SEDEMTE EZERA” CHALET IS BEING LET OUT FOR HUNTING TOURISM VIA COMPETITION OF THE MINISTRY OF AGRICULTURE
03/04/2018
ACF NOTIFIED THE COMMISSION ON COUNTERACTING CORRUPTION AND THE FORFEITURE OF ILLEGALLY ACQUIRED ASSETS /BULGARIAN ABBREVIATION: KPKONPI/ IN VIEW OF CONDUCTING AN INSPECTION FOR ASCERTAINING A PROPERTY ILLEGALLY OBTAINED BY THE MAYOR OF PAZARDZHIK, BULGARIA
20/04/2018

A SIGNAL OF THE ANTI-CORRUPTION FUND /ACF/ REGARDING SUSPECTED IRREGULARITIES IN PUBLIC CONTRACTS OF THE MINISTRY OF INTERIOR /MOI/

Topic:

Public contracts

Status:

Signal addressed to the Public Financial Inspection Agency /PFIA/ and the National Audit Office

Stage:

Inspection in view of competence

The ACF legal team found data regarding an inflated price, manipulative implementation period and guarantees, an attempt for restricting the competition, and affiliated individuals present among the candidate suppliers of anti-shock helmets. The signal is addressed to the Public Financial Inspection Agency /PFIA/ and the National Audit Office.

Based on the risk assessment made with regard to procedures for assigning public contracts, and the granted access to MOI information concerning the awarding of those contracts, the juridical team of ACF has analyzed the following signed contracts, whose contractor is “PANOV” PLC, and whose employer – the head of the “Property and Social Activities Management” (PSAM) Directorate of MOI:

Public contract no. 5785оп-39-5785опд-78 dated 13 December 2016, and public contract no. 5785оп-17-5785опд-82 dated 13 September 2017.

– The first contract concerns the delivery of anti-shock helmets with visors – 460 pieces, price: 429,640 BGN without VAT, implementation period: 45 days. The implementation of this contract was delayed by 128 days, due to which the contractor paid a penalty amounting to 32,995.84 BGN.

– The second contract is about the delivery of anti-shock helmets with visors – 330 pieces, price: 296,670 BGN without VAT, implementation period: 12 days. The contract was fulfilled in time.

Based on the analysis of the documentation associated with the procedures carried out for these public contracts, it has been found that they refer to identical items and technical specifications of the anti-shock equipment, which is subject to delivery. The 2 procedures differ mainly with regard to the quantity of the requested equipment (anti-shock helmets with visors).

According to the information available, the offered unit cost for an anti-shock helmet, per the 2016 contract, is 934 BGN without VAT, and, per the 2017 contract – 899 BGN without VAT.

The expert analysis of the free market prices of this specialized equipment having similar technical specification indicates that its prices do not exceed 150-200 USD for a single piece of the highest class of models of anti-shock helmets with visors, and, for the purpose of comparing, the most common models offered cost considerably less than 100 USD per piece.

The data regarding the substantial multifold increase in the price give us grounds to suspect that a biased assessment of the market environment for the particular product is demonstrated upon determining the estimated prices for these public contracts.

Some additional suspicions with regard to the conducting of the 2 procedures have been aroused by the fact that, according to the data available in the Commercial Register, the contractor “PANOV” PLC operates in an entirely different line of business compared to that of the public contract.

Furthermore, the analysis of the ACF legal team has found out that the contractor substantially delayed the implementation of the first contract (that of 2016) – the contract stipulated 45 days, and the delay took 128 days, i.e. the contract term was exceeded almost thrice.

At the same time, given the proven inaccurate implementation, the same company was awarded also the next public contract (in 2017) within the same field of activity, but with an exceptionally short term for fulfilling the delivery – just 12 days. The very admittance of such an exceptionally short term may imply, in essence, an attempt for restricting the competition, and, on the other hand, it gives an extra priority in determining the contractor.

How was the capacity of the contracting company assessed, given the proven poor implementation of the previous contract, ACF asks.

There are some other suspected manipulations as well. A substantial difference between the 2 contracts, without any grounding, is the difference in the duration of the warranty of the delivered goods. Per the first contract (that of 2016) the duration of the warranty is 2 years from the date the take-over protocol is signed (Art. 11 of the contract), and in the 2017 contract the duration of the warranty is 10 years, i.e. 5 times longer for the same product (with the same technical specification). The maximum possible warranty, according to the requirements of the procedure, led to the fact that the participant “PANOV” PLC won the maximum number of points upon the evaluation of the submitted offer.

In addition, it is worth checking if any affiliated individuals took part in the 2016 procedure, pursuant to the norm of Art. 101, Par. 11 of the Law on Public Contracts /LPC/ (“affiliated persons cannot be independent candidates or participants in one and the same procedure”), and Par. 1, items 13 and 14 of the Additional Provisions of the Law on the Public Offer of Securities, because a candidate and the legal entity “Kar Stroy” PLC participated in the procedure. As the Commercial Register shows, Angel Panayotov Panov was a manager of the above company until 26 February 2016. He was also a sole owner of the company till 6 June 2016 – just 2 months before the decision about the opening of the public contract procedure.

Based on the above, the ACF legal team considers there are a number of suspected irregularities, which affect the public finances and the public interest, and has addressed a signal to the competent organs – the National Audit Office and PFIA, pursuant to Art. 238 and the following one, LPC (updated: 2016), Art. 8, Par. 1, item 2, and Par. 4 and 5 of the Law on State Financial Inspection. In case any officials are found guilty or not, and if any sanctions are imposed, ACF will notify the public of the reaction and the work of the institutions.


Criminal Procedure Code of Bulgaria

Cooperation by the public
Article 204: Pre-trial bodies shall widely use the assistance of the public in order to discover the criminal offence and to elucidate the circumstances of the case.

Obligation of the citizens and officials to notify
Article 205: (1) Where they come to know about a perpetrated publicly actionable criminal offence the citizens shall be publicly obligated to notify forthwith a body of pre-trial proceedings or another state body. (2) Where they come to know about a perpetrated publicly actionable criminal offence the officials must notify forthwith the body of pre-trial proceedings and take the necessary measures for the preservation of the general setup and data about the crime.