Legal misconduct

Indicator reflects the number of misconducts detected by the Office for the Protection of Competition (OPC), which is the authorized body for reviewing the legality of public procurement practices of contracting entities. A contract is penalized only if a serious misconduct was detected.

Legality of public procurement is a fundamental prerequisite for best practice. Contracting authority may never become efficient and effective while committing misconduct that can be challenged, resulting in possible tendering procedure cancellation. It is the OPC that reviews the legality of tendering procedures, most commonly based on a bidder's complaint. If a serious misconduct on contracting authority's part is detected (especially defective tender specifications or improper approach towards bidders), such contract does not comply with best practice principles. In 2013 the OPC initiated 668 administrative proceedings with the total of 2873 reviewed contracts (OPC Annual Report 2013). Following most frequent cases of misconduct were identified:

  • Establishing non-transparent and discriminatory tender criteria
  • Ambiguous definition of evaluation method and disproportionate qualification requirements
  • Violations in the assessment and evaluation of bids (i.e. lack of transparency in the report on the assessment and evaluation, particularly insufficient description of the evaluation method and performance of evaluation, incorrect procedure in the assessment of an extremely low bid price)
  • Incorrect determination of the estimated value of the public contract and the associated incorrect choice of the type of award procedure
  • Use of the negotiated procedure without publication not having met the conditions for its use
  • Incorrect assessment of the fulfilment of the conditions for the cancellation of an award procedure

by the contracting authority

Such serious misconduct clearly fails to comply both with the law and the best practice principles.

We manually browse through all OPC rulings related to the evaluated contracting authorities in the reference period. We focus on those where misconduct has been proven and may be considered as serious according to the methodology below.

Only final rulings of the OPC are considered in the indicator evaluation - e.g. if the first-instance decision ruled the misconduct as proven, but then the ruling was changed in the contracting authority's favour in the second-instance decision, only the latter is taken into account. Should the OPC proceeding still be pending then the last published ruling is taken into account. Likewise in case of judicial review of the OPC ruling - only the last ruling of the court is considered (not previous rulings of either the court or the OPC).

Definition of pertinence to the reference period proves sometimes difficult. Contract notice publication date is mostly regarded as the decisive point. Some cases are treated differently however, due to specific circumstances (e.g. OPC proceeding includes several different contracts, misconduct was committed in course of the award procedure etc.). The OPC reviews various degrees of misconduct - but Legal misconduct subindicator only reflects the serious cases according to the following criteria:

  • A case is considered serious, if OPC's ruling actually intervened in the ongoing tendering procedure (by cancelling the whole procedure or its parts: e.g. decision to debar a bidder, tender evaluation, contract award).
  • If the OPC reviewed a case where the tendering procedure already finished with the conclusion of a contract, misconduct is regarded as serious only if it was directly related to the course of the tendering procedure or to the tender specifications. This typically involves discriminatory bidder requirements, too vague definition of qualification criteria or tender specifications, mutually incomparable tenders.
  • Misconduct related to the contracting authority's processing of objections against its actions is not considered as serious, due to its little or no direct influence on the course and the result of the tendering procedure; even if such misconduct is still an administrative offense, penalized with a fine
  • In some cases the OPC ruled misconduct as proven in the first-instance decision and the contracting authority subsequently filed an appeal against it. Before the appeal procedure was concluded however the contracting authority cancelled the tendering procedure (or remedied deficiencies in compliance with the OPC's first-instance decision) which deemed the whole administrative procedure terminated as devoid of purpose. Such case is still evaluated as misconduct, as it can be stated that by its actions the contracting authority acknowledged its shortcomings, despite filing an appeal.

Indicator for an individual contract is assigned the value of 1 if OPC's ruling proved a case of misconduct and the value of 0 if not. Aggregate value for all contracts of a respective contracting authority is then computed as follows:

$$z_7 = 1 - \Bigg(\frac{number\:of\:serious\:misconduct\:cases}{number\:of\:contracts}\Bigg)^{1/4}$$

Number of serious misconduct cases is a number of successful objections to the OPC against the contracting authority's actions, where the OPC proved serious misconduct in tendering procedure execution falling within our reference period. Number of contracts is the total number of contract award notices. Application of the overall fourth root enhances the effect of successful objections on the indicator value.

The OPC reviews just a fraction of public procurement procedures (initiated by a complainant's proposal in most cases, number of ex officio reviews is minimal) - it is most likely that a number of unreviewed contracts would also prove defective. A contracting authority proven guilty of misconduct therefore does not necessarily perform worse procurement than an unreviewed one.

Indicator may punish authorities that despite believing in their inculpability recognized the OPC's ruling rather than challenged it. They cancelled or adjusted the respective tendering procedure - mostly because of time or the petty nature of the alleged misconduct. In the same manner a contracting authority is still penalized if the dispute over the verdict is yet not concluded (by second-instance decision or in court).

  • Proper documentation: documentation of the whole tendering procedure is essential as well as providing explanation when necessary, including justifications of qualification or evaluation criteria and of the evaluation procedure - especially when using qualitative evaluation criteria.
  • Bidder communication: Objections to the OPC are usually filed by one of the bidders. In order to minimize the possibility of such objection, contracting authority needs to act in a way that does not give rise to any possible suspicion of unfair practices. This mainly involves provision of additional information (and subsequent possible tenders deadline extension) and information on contract award procedure.
  • Looking for references: when in doubt over some particular detail of the procurement process, it is necessary to look for similar referential contracts and legal cases. Most of the problems tackled by the contracting authorities have been already dealt with at some time or another. Methodology of the Ministry of Regional Development or OPC's Collection of decisions is also recommendable as an useful information source.
  • Do not overly rely on procurement administrators: According to a study conducted at Charles University they are prone to making mistakes as much as contracting authorities themselves. That is not of course the general rule - but the contracting authority should bear in mind that employing services of a procurement administrator does not automatically guarantee a flawless tendering procedure.
  • en/pochybeni_dle_uohs.txt
  • Poslední úprava: 2016/09/06 10:41
  • autor: Jan Soudek