Public procurement in Laktaši: There is always work for tender favourites

Foto: Srna

The city of Laktaši favours the construction company “Gradip” from Prnjavor through unusual manipulations in the process of public procurement, along with adjusted tender conditions and speculation by estimating the total value of the contract.

Written by: Miljan Kovač

A group of bidders, led by this company, received a job worth seven million marks to build a high school centre in that city, although the offer they submitted was 1.3 million marks more than the estimated value of the contract.

“Gradip” is often the only bidder in public procurement of the local community, so it was also in the case of the extension of the elementary school in Klašnice, at the beginning of last year, when the price of the work increased by over 300,000 marks on the basis of additional works, while the tender conditions were such that any competition to this bidder was excluded in advance.

The situation was completely different in the case of the reconstruction of the town square, because in that case competition appeared. However, even that did not prevent the favoured bidder from getting another lucrative job.

Halfway

On the first day of August last year, the mayor of Laktaši, Miroslav Bojić, cancelled the public procurement procedure for the “Reconstruction of the square of fallen soldiers and the pedestrian zone in Karađorđeva street” in Laktaši.

As the reason for the annulment, the mayor’s decision states that the prices of all acceptable offers received by the public procurement commission are “significantly higher than the funds provided for this public procurement”.

Photo: Nezavisne

Three bids were received, of which only two were considered acceptable, while the bid submitted by a group of bidders led by the company “GIFA Consulting” from Banjaluka was deemed unacceptable because this bidder did not properly submit the required documentation on successfully executed contracts.

Of the remaining two offers, the lowest was the one submitted by “Gradip” from Prnjavor and it amounted to 659,204.32 marks without VAT. The total value of the contract without VAT was estimated at 427,350.50 marks.

After the bids were cancelled due to excessively high prices, a new public procurement procedure was initiated. The notification was already published on August 9.

After all, Article 69 of the Law on Public Procurement stipulates that the contracting authority cancels the public procurement procedure if it turns out that “the prices of all acceptable offers are significantly higher than the secured funds for the procurement in question”.

However, in this case, the contracting authority decided to meet the bidders.

Thus, in the repeated public procurement procedure, the total value of the contract without VAT was increased by almost 70 thousand marks, so this time it amounted to 495,726.58 KM.

This time, “Gradip” corrected the price of the offer by lowering it by approximately 64 thousand marks, to a total of 594,792.92 marks.

Obviously, the city of Laktaši and this bidder “found themselves halfway”, so “GIFA Consulting”, which also appeared in the repeated public procurement procedure, but this time with complete documentation, did not have much of a chance.

What can’t be done on the square, can be done on the school

The fact that he reduced the offer price does not mean that “Gradip” remained at a loss in business with the city of Laktaši.

On the contrary, he soon got a much more lucrative job in this city.

The construction of the high school centre in Laktaši was entrusted to a group of bidders led by “Gradip”. In fact, they were the only ones to submit an offer for this public procurement worth 6,410,705.38 marks excluding VAT, so due to the lack of competition, there was no doubt as to who would get this lucrative job.

However, unlike the reconstruction of the square, in this case, the city administration in Laktaši was not so “petty” about the price of the works.

Although they estimated the total value of the contract without VAT at 5,128,206 marks, they did not make a problem with the fact that the only bidder for this job requested almost 1.3 million marks more in funds.

The total value of the works for the construction of the high school centre in Laktaši was estimated at 5,128,206 marks without VAT. This is stated in the procurement notice, published on September 7, 2022.

The deadline for taking over the tender documentation is September 22. The same day is specified as the deadline for receiving bids, and their opening is scheduled for the same day.

Although the decision on the selection of the most favourable bidder was made only on October 14, everything was already known a long time ago.

Thus, the foundation stone laying ceremony already took place on October 1. The day before the general elections in Bosnia and Herzegovina.

The ceremony was also attended by Milorad Dodik, then a member of the Presidency of Bosnia and Herzegovina and a candidate for the presidency of Republika Srpska.

On this occasion, it was also said that the works will be carried out by the company “Gradip” from Prnjavor and that the value of the work is 6.99 million marks.

Of that amount, as stated, the Government of Republika Srpska provided six million, and the rest of the funds will be provided by the city of Laktaši.

Regardless of the fact that only one bidder applied for the tender, publishing who won the job before the public procurement procedure is completed is inadmissible. At least that’s what experts in public procurement procedures claim.

“Even though it is about one bidder, the procedure was not completed, an appeal could have followed or some irregularity could have been established, due to which he could not get the job, which is why the publication of the results of the public procurement before the procedure has been completed is inadmissible”, according to Slobodan Golubović, editor of the “Pratimo tendere” portal.

In his opinion, the fact that only one interested bidder applied for such a lucrative job, even though we know that there are several construction companies in the area, is unexpected, to say the least.

It’s easier without competition

A group of bidders led by “Gradip” won a lucrative job from the city of Laktaš at the beginning of last year. No one but this group was interested in the tender for the extension of the elementary school in the village of Klašnice. Although the total value of the contract was estimated at 1,188,889.09 KM, the only offer of 1,658,525.27 KM was accepted.

So, in this case, the procurement was not cancelled, even though the price of the only and lowest offer is almost 470 thousand marks higher than the estimated value.

It is even more interesting why only one bidder came forward for such a lucrative job. The answer lies in the conditions specified in the tender documentation, which do not leave much room for possible competition.

In order to participate at all in the procedure of this public procurement, the potential bidder, among other things, had to have 6 mixer trucks for transporting concrete, 2 auto-pumps for concrete, a base for the production of precast-reinforced-concrete structures, but also a concrete base that is no further away than a two-hour drive. So, quite enough for the mixer with concrete to reach the construction site from Prnjavor to Klašnice.

At the same time, the bidder is also required to have gained experience in the previous five years in the “implementation of a contract whose character and complexity is the same or similar to that related to the proposed contract, and whose value is not lower than the total estimated value”.

“Setting technical conditions for bidders in this way is the most common example of narrowing the space for competition. There is no expert evidence as to whether 4, 5 or 6 mixer trucks are needed for a job like this. On what basis was it determined that 6 trucks are needed and that the same work could not be done by a company with 5 mixer trucks. It is the same with determining the distance of the concrete base from the construction site”, says one of the experts in this field. Looking at the records of public procurement, it is clear that in this area, with these conditions, “Gradip” could not have any competition, that is, the conditions were specified in such a way that competition was eliminated from the start.

On the contrary, it turned out that the school in Klašnice also needed additional unforeseen work, so “Gradip” at the beginning of September last year received additional work on the extension of this school, worth almost 300 thousand marks. The deal was concluded according to the principle of direct negotiation, so “Gradip” was once again left without competition.

Impuls