Public procurements suffer very much from corruption and dubious schemes and therefore, its legal regulation is a very important aspect. Disadvantages of the previous legislation created the conditions for the realization of a sufficient number of money laundering schemes, which significantly affected the state budget, and the new law comes, apparently, to change this situation.
A new act of legislation about the public procurement №131 was passed on July 3, 2015 and will come into force on May 1, 2016, except for certain items set out in the transitional and final acts. It was adopted in order to implement the European directives on public procurement, replacing the law №96 from 13.04.2007. The contracts of public procurement, which were concluded before the new law coming into force will be finalized on the previous legal rules.
On March 18 the Journalistic Investigations Center has organized a meeting on the topic: «What changes the new public procurement law brings to the system?» The meeting participants discussed the major innovations of law number 131 and its advantages.
Among the most important innovations of the law were noticed: the inclusion of the representatives of civil society in the working groups; increased attention to conflicts of interest; a new structure for dealing with complaints; the method of selecting the best offers; improving the procurement thresholds, etc.
The process of the meeting can be viewed here:
The new structure for dealing with complaints
The new public procurement law provides the creation of a new administrative body - the Agency for Considering Appeals , which will be responsible for dealing with complaints about the process of the organization of public procurement. However, its independence is dubious, said the public procurement experts, because the agency will be subordinate to the Ministry of Finance: « European directives stipulate that such agencies should be completely independent», said Serghei Merzhan, an expert in the field of public procurement, quoted by anticoruptie.md. By the time of law coming into force on May, the agency is to work, but it hasn’t been created yet.
Previous complaints were considered by the Agency for Public Procurement, that takes decisions on this matter.
Participation of the civil society
The participation of the civil society in public procurement procedures is considered one of the most important provisions of the new law. In spite of the fact that it is obligatory, there are certain restrictions for it. Thus, in order to participate in the procurement procedure, the reprezentative must submit a written request two days before the application deadline, and the representatives of civil society may not exceed one third of the total commission, if there are no intern rules in the company.
The representatives of civil society have a consult vote and the right to a different opinion. Anyway, the participation of civil society is a useful administration fact, not found in the last law.
Increasing the thresholds for procurement
By the moment the limits of public procurement were more than 40 thousand lei for goods and services and 50 thousand lei for the works, estimated value, excluding VAT. The new law demonstrates the increase of respectively 80 thousand lei for goods and services and 100 thousand lei for the works. According to the head of the Association for Efficient and Responsible Governance, Olesya Stamate: «It will simplify the work of contractors who will not have to register the contracts in the Agency for public procurement of goods, services or works with a small cost».
Also, there have been lowered the thresholds to public procurement contracts whose estimated value exceed 2.5 million lei for goods and services and 99 million lei for the works, in the new version these thresholds will make 2,3 mln lei and 90 mln lei respectively.
The new procurement law contains three annexes that weren’t in the previous act. One of applications (№ 3) contains information that should be included in the announcements of public procurement and in the notice of the granting of the contract.
The meeting participants noted that transparency has the better effect on the stage of the granting of the contract and in the control of its implementation.
The head of the Association for Efficient and Responsible Governance, Olesya Stamate announced at the meeting that would like to see in the new law a more clearly representation of the right to receive information on procurement. «Besides the 10 instances which we monitor, only three gave us access to the information, the other seven have absolutely refused to provide even partial information about procurement contracts. This fact is quite a big obstacle in establishing the transparency of procurement procedures».
Monitoring of procurement
Both the laws 96 and 131 don’t contain a chapter, which would regulate the method of monitoring procurement contracts. Monitoring is mentioned superficial as the primary responsibility of the Agency for Public Procurement and working groups. Perhaps this question will be considered within the mechanism for implementation the law, but it remains to be seen.
The public procurement law controls less the execution of the contract and more financial and budget matters, as well as the quality of construction and so on. That’s why the Court of Accounts has proposed the introduction of a separate chapter «Monitoring the implementation of the contract» still in the past law, but it wasn’t included.
The participants of the meeting noted that the new law contains loopholes. In their view, the new law doesn’t provide the regulation of procurement by state-owned enterprises and enterprises with a registered state capital, although the ultimate beneficiary is the taxpayer. They also noted that the act of law will come into force without the use of mechanisms that are still working out.
Another disadvantage is that the new law doesn’t control the case when companies with the same manager of founder participate in the procurement procedures. That is about the disloyal competition and the proposal to change the situation was made by the General Prosecutor's Office and the Customs Service still to the past law. But this problem is not resolved in both old and new laws.