ARACO Demands Legal Loopholes Removed To Prevent Rigged Tenders

Alina Toma Vereha

The Romanian Association of Construction Entrepreneurs (ARACO) has acknowledged the decision of the ruling coalition leaders to give a team of PSD and PD-L ministers until 18 May to make proposals to amend the Public Procurement Law on the matter of awarding European-financed construction contracts. "Considering that our business association has constantly requested amendments to the legal framework on this subject, which are still not finalized, we have made a new set of remarks and proposals to amend Emergency Ordinance of the Government no. 34/1996, which we have sent to the leaders of both ruling parties and the ministries involved in the effort to amend and harmonize with the European Public Procurement Law," ARACO wrote in a press release to BURSA.

The contractors are demanding the removal of any legal loopholes allowing tenders for public procurement to be rigged. They believe that the contracting authorities have too much freedom to create tender books the way they want and thus "fix" tenders and cause chaos in the bidding process. In some cases, tenders were won by bidders who bade up to 40% of the estimated value and committed to impossible deadlines. "The provisions of Art. 202 and 203 of the Emergency Ordinance of the Government no 34/2006 are insufficient to counter dumping prices and must be reviewed," ARACO stated in the set of measures proposed to the Government.

Under these circumstances, ARACO is requesting the Government to reinstate the minimum undervaluation threshold in order to improve the quality of the works and ensure the correct calculation and update of the estimated value of the investments. It is also necessary to update the provisions on the EUR-RON exchange rate, which should be the official rate of the National Bank seven days before the publication of the invitation to tender, so that the estimated value of the investment should be as accurate as possible. Additionally, the value of similar works needs to be correlated to the value of the works up for tender.

In case of an international tender, no discrimination should be made against the participation of Romanian companies in the capacity of general contractor. The pre-selection documentation must nominate all subcontractors, irrespective of the weight of their subcontract in order to ensure transparency as to their technical and professional capacities, as well as their financial status.

In order to align to European practice on public procurement contracts, ARACO recommends the use of FIDIC-type contracts for works. A prior step would be to harmonize the provisions of the Joint Order of the Ministry of Finance, the Ministry for Development and the Ministry for Transportation, which endorses the FIDIC-type contractual provisions for works, with the Romanian legal framework on public procurement.

If the "best economic bid" criterion is applied, similar experience and the technical and professional capacities of the bidders should have the highest weight in the calculation algorithm for scoring. The "lowest price" criterion does not ensure the quality of the works.

Regarding the execution timeframe, ARACO requests that tender books should mandatorily specify a minimum and a maximum and that bidders proposing an absurd execution timeframe (impossible to achieve from a technical point of view) should be disqualified. ARACO exemplified this request with the Turcinesti tender. The execution timeframe should be imposed in the tender book on all bidders, without being weighted to the loss of other criteria.