There have been repeated discussions among business representatives and the public that neither the new public procurement law nor the new Prozorro electronic procurement system have instilled hope in entrepreneurs in various market segments for fair and transparent bidding. The participation of bona fide businessmen in procurement, as before, is accompanied by a number of schemes aimed at assisting customers in ensuring the victory of the "right" participant.
After receiving a large number of requests, the public organization "Rule of Law" began intensively analyzing public procurement of public transport in various regions of Ukraine.
Previously, the public organization "Rule of Law" wrote about corruption schemes in the procurement of public transport for large Ukrainian cities - https://verhovenstvo.com/view/10865.
It's also worth noting that discriminatory conditions in the Odessa tender for five new trolleybuses resulted in the city losing approximately 9 million hryvnias. The police have opened a pre-trial investigation into this matter—https://verhovenstvo.com/view/11107.
A similar situation could arise in Sumy. On July 29, 2016, the Sumy municipal enterprise "Electroavtotrans" announced an auction on the Prozorro system for the purchase of seven new trolleybuses. The expected price of the trolleybuses is UAH 36,127,000, or UAH 5,161,000 per unit. While bids have not yet been received, based on observations of similar tenders in other regions of the country, it is likely that the same trolleybus manufacturers will participate: NTP STG Engineering LLC, Subsidiary Enterprise Automobile Assembly Plant No. 1 of the Public Joint Stock Company Bogdan Motors Automobile Company, and Electrontrans LLC, a joint Ukrainian-German venture.
An analysis of the tender documentation itself revealed discriminatory terms against those bidders whose trolleybus production and sales had only recently been established. Specifically, the customer requires bidders to provide copies of similar contracts for the period 2014-2016, as well as copies of expense and tax invoices for the same period, to prove their trolleybus supply experience. Why specifically for these years, and not for 2010-2013? Given the economic crisis, even established electric transport manufacturers cannot boast of annual sales of their products, let alone very new ones.
For example, NTP STG Engineering LLC, whose trolleybuses are comparable in quality to other tender participants, is offering them at a price of 3 to 3,5 million hryvnias, which is 1,5 to 2 million hryvnias lower than other potential bidders. However, due to the political and economic crisis, the company only recently regained its footing and established full-scale production, and it lacks fully executed supply contracts, despite successfully competing even in the global urban transportation market. Therefore, NTP STG Engineering LLC, a potential bidder, will no longer be able to fully participate in this auction, and taxpayers in Sumy, like those in Odesa, will have to overpay for each trolleybus by approximately 1,5 to 2 million hryvnias.
It's worth noting that of all the named potential participants, only Subsidiary Enterprise "Automotive Assembly Plant No. 1" of Public Joint Stock Company "Bogdan Motors Automobile Company" has been delivering trolleybuses annually through the Kyiv tender since 2008. Moreover, this company is offering its trolleybuses at a price starting from UAH 5,000,000.00, almost the planned expected price of the procurement item, even taking into account the UAH 50,000.00 price reduction increment. Thus, it's not hard to guess who will "shine" in the tender, while the rest will be eliminated due to "unsuitability." Furthermore, the auction was initially announced for the purchase of nine trolleybuses, averaging UAH 4,014,000.00, but was cancelled because fewer than two bids were submitted.
To be fair, it should be noted that the Law of Ukraine "On Public Procurement" allows the customer to establish qualification criteria such as the availability of equipment and material and technical resources, the availability of appropriately qualified employees with the necessary knowledge and experience, and, finally, documented experience in performing similar contracts. However, the law does not obligate the customer to establish absolutely all of these qualification criteria, including documented experience in performing similar contracts.
Whether to include any of the above-mentioned qualification criteria in the tender documentation depends primarily on the specific situation. For example, a company's ability to manufacture and supply high-quality trolleybuses is primarily confirmed by the availability of the necessary materials and equipment, the availability of appropriately qualified workers, and the certification of the trolleybuses it produces.
In order to verify the above facts, as well as to eliminate discriminatory conditions from the tender documentation, the public organization "Rule of Law" contacted law enforcement and regulatory authorities of the Sumy region.
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