Monopolization, integration of political and economic elites: almost no chance for procurement system be sacred

Monopolization, integration of political and economic elites: almost no chance for procurement system be sacred

The new RA Law on Public Procurement and the e­-system introduced since January 1, this year will enable the public procurement more transparent and will not allow spending unnecessary millions from the state budget on public procurement.  This was recently approved by the responsible entities of the Ministry of Finance.  By the new system, the public can control the whole process, even to know which participant is associated with whom.  However, the procurement experts are skeptical about this allegation by the Finance Ministry.  Procurement expert Artak Manukian, for example, notes on his Facebook page that only 9 percent of procurement is conducted electronically.

The expert cites the data of 2015.  As mentioned by the Program Coordinator of “Transparency International” Anti-corruption Center, Varuzhan Hoktanyan, a single-source procurement contains high corruption risks, “For example, we see a large number of single-source procurement cases where 1-2 bidders in average participate in the competition.  If there is monopolization, integration of political and economic elites in the country, then it is less likely that the procurement system in these countries is a collection of sacred people, and the customers and executors are sacred, and there is no impact on the system.”  According to Mr. Hoktanyan, the responsible entities of ARMEPS e-procurement system of the Ministry of Finance, first of all, must show starting from the first planning phase of the procurement until the completion protocol on the execution of the agreement, to what extent all these data are reliable, how complete they are and only after then you can evaluate it.

According to him, this whole system should be viewed in totality.  Varuzhan Hoktanyan reminded, as an example, what happened to the procurements made by the Finance Ministry for the Dilijan Educational Center, costing millions to the state budget, “How it was designed, how it was decided to purchase such expensive items and so on.  In other words, first comes reliable data, this is number one.  Secondly, who said that these data are not adjusted in compliance to the procurement to the customer and the company sitting somewhere in a restaurant?  The conversations in a restaurant or kebab eateries are not seen in these data.”  Mr. Hoktanyan does not understand the interrelationship level. For example, is mother-in-law, or a friend, manager of the department of the Ministry, head of the department an interrelated person?

The expert said that for example in Macedonia, the level of interrelationship for solving this problem is brought down to 7, so to speak, interrelated people is considered up to 7 “generation”.  “We have close friends, the surrounding will help, once the neighbor will help.  In other words, there is corruption in any procurement.  Single-source procurement itself is a corruption risk.  On the other hand, I do not understand why an SNCO school must procure educational service, why it is shown in the form of procurement, or let’s say, natural monopolies.  Here, the corruption could be in another place, for example, why there should be one electricity network, why there should not be different networks, why there should not be more telecommunication companies or the water supply is provided by one company.

These are other questions but, in some cases, single-source procurement is carried out by non-objective grounds and conducted as urgent.  We are now passing to a small number tenders or the agreement that this one will win the tender, the other one in the next tender. How to disclose this?  You can switch to e-system as much as you want.”  Varuzhan Hoktanyan said there is a “brilliant procurement system” establish in Ukraine with the active involvement of civil society which is called a “ProZorro”, “Ukrainians are already introducing 7 thousand standards into the “ProZorro” to try to disclose the deals which I mentioned.  In other words, a statistics which shows how many times this company has won the tender, in what periodicity and so on.”

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