Neither the law on public procurement nor the public interest prevented the Mayor of Jezero from entrusting the construction of a kindergarten in that place to a company from Bihać with strong political and tycoon connections at the very top of the Republika Srpska government. In return, this small municipality gets the most expensive kindergarten in the region, and the citizens are left without at least 70 thousand marks, which could have been saved in the budget if only the public procurement procedure had been carried out in accordance with the law.
The group of bidders made up of three companies, two of which are owned by Jasmin Alagić and his wife, the sister of Hamdija Lipovača, a political strongman and former prime minister of the Una-Sana Canton, had no competition in this tender, because their friends in the municipal government of Jezero made a good effort to eliminate it.
How full of irregularities this public procurement procedure is, is best illustrated by the fact that the contract award notice has not yet been published on the public procurement portal, even though the mayor of the municipality, Snežana Ružičić, signed the contract with Jasmin Alagić on May 27 last year.
Photo: opstinajezero.org/ Snežana Ružičić and Jasmin Alagić (signing of the Contract on the construction of the kindergarten)
There is always money for the favourites
In the notice on the public procurement of works on the construction of a kindergarten in Jezero, which was published on January 13, 2022, it is stated that the total value of the works is estimated at 432,197.81 marks.
Two bidders responded to the tender. The group of bidders from Bihać, consisting of the companies “Gaus”, “Domoinvest” and THM, requested 497,906.84 marks for this job.
A significantly lower offer was submitted by a group of bidders, led by the company “Zidart” from Mrkonjić-Grad. This offer, which amounted to 430,190.02 KM, was rejected due to formal deficiencies. At least that’s what was stated in the transcript of the commission for public procurement of the municipality of Jezero.
As the commission concluded, the problem was, among other things, that on the back of the envelope, as the sender bidder, “Zidart” doo Bjelajce 12 a Mrkonjić-Grad was written, while after opening the envelope it was determined that it was an offer from a group of bidders, in which in addition to “Zidart”, there are also “Mig elektro” from Mrkonjić-Grad and “Termo-Vent” from Kotor-Varoš.
Although there was a legally prescribed possibility for the bidder to be asked to remove formal deficiencies within three days, this was not done, so this offer was rejected.
The commission further stated that the price of the only remaining offer is significantly higher than the estimated value of the contract and the provided funds.
The mayor of the municipality was therefore suggested to either accept this offer, if it is possible to provide the missing funds, or cancel the public procurement procedure.
However, the Law on Public Procurement in Article 69 clearly stipulates that the contracting authority is obliged to cancel the public procurement procedure in the event that the prices of “all acceptable bids are significantly higher than the secured funds for the procurement in question”.
In the case of the construction of a kindergarten in Jezero, the only acceptable offer is this one, which, according to the commission’s conclusion, is significantly higher than the estimated value of the works.
It apparently did not occur to the head of Jezero to act in accordance with the law and thus save at least 70 thousand marks of public funds. She awarded the job to the highest bidder.
It’s (not) worth complaining
The director of “Zidart” Damir Milić says that they gave up on the appeal, although he says that he is sure that they were harmed in this public procurement procedure.
We entered the complaint procedure, but in the end, we gave up, since we also deal with housing construction and have a lot of work, so we estimated that it was not necessary for us, and it required a lot of time and effort, even though we knew that we could have won this procedure, which is what our lawyer also told us”, says Milić.
He also confirmed that the contracting authority did not, in accordance with the law, give them three days to correct formal deficiencies.
It should be noted that the entire procedure of this public procurement was completed months before the adoption of the latest amendments to the law on public procurement, and the amended legal provisions applicable to it.
Slobodan Golubović, editor of the portal “Pratimo tenders”, is of the opinion that form is often manipulated at the expense of substance in public procurement procedures.
“Often, more attention is paid to whether the bidder called himself one way or another on the envelope than what the actual content of the envelope is. They took advantage of the bidder’s mistake to eliminate him”, Golubović believes.
In the meantime, the Government of RS has adopted a decision by which additional funds will be provided to the municipality of Jezero for the construction of a kindergarten.
However, if, in accordance with the law, the public procurement procedure had been annulled, that is, if the bidder who submitted the lower bid had been enabled to correct formal deficiencies in the manner required by law, there would have been no need for additional funds.
Tender corrections without notice
After all, the first obstacle to possible competition was set at the very start of this public procurement.
Not long after the initiation of this public procurement procedure, already on January 17, there was a complaint from one of the bidders who took over the tender documentation, due to which the public procurement procedure was suspended.
The conclusion on the suspension of the public procurement procedure was made on January 21. The conclusion states, among other things, that “the deadlines for the submission of bids are postponed until further notice, until the end of the appeal procedure”.
The decision also states that part of the tender documentation is changed accordingly. The decision was published on the website of the municipality of Jezero. However, the correction notice was never published on the website of the Public Procurement Agency, even though it was a legal obligation.
It is a complaint about the tender documentation sent to the contracting authority by one of the bidders, who took over the tender documentation. The company “FCT” doo from Banja Luka complained that as a condition for participation in the tender, proof of the execution of at least one contract with a minimum value of 435,000 marks was requested. In the appeal, it was stated that in accordance with the law, the requested value must not be greater than the total estimated value of the public procurement for which this condition is requested.
On January 25, the head of the municipality issued a decision approving this appeal, which was published on the municipality’s website on the same day, but not on the public procurement portal.
This is another example of a violation of the principle of transparency in public procurement. The public procurement experts we contacted believe that there is a possibility that due to the non-publication of correction notices on the Public Procurement Portal, the space for possible competition has been narrowed. In simpler terms, there is a possibility that some bidders gave up, because they were not informed in time about the change of conditions in the tender documentation.
Bidder “Domoinvest” from Bihać also complained about the tender documentation. However, on January 24, the BiH Appeals Office rejected this appeal. The reason for rejection was that the appellant did not pay the fee for initiating the appeal procedure in the amount of 5,000 marks.
However, it was only on March 2 that the mayor made a decision to continue the public procurement procedure.
On that day, a correction to the notice on public procurement was published on the Public Procurement Portal, by extending the deadline for submission of bids until March 14.
The information about changes to the tender conditions was not published even then.
Article 36 of the Law on Public Procurement, which was in force during this procedure, clearly stipulates the contracting authority’s obligation to publish on the public procurement portal. It is even specified that all notices “can be additionally published by the contracting authority in other publications or on another website, provided that these notices may not be published before the day of their publication on the public procurement portal”.
With the amendments to the law adopted in September last year, the deadline for publication was reduced to 30 days from the conclusion of the contract on public procurement.
The path to the favoured companies of Jasmin Alagić and his wife to a new lucrative business is thus wide open, without the possibility of competition.
Nevertheless, this is a bidder with a very powerful patronage thanks to family and business ties, which were once dealt with by the competent prosecutor’s offices in the Una-Sana Canton. Special focus was placed on the deals that Alagić concluded with the then-mayor of Bihac, Hamdi Lipovač. After his political career went “downhill”, Lipovača himself decided to devote himself more to business. On the official website of the company “Integral inženjering” from Laktaš, he is listed as the director of the representative office of this company in Bihać. It is unnecessary to say anything about Integral’s ties with the RS leadership.
In any case, the very cost of building a kindergarten with a capacity of twenty-five children is questionable. Compared to the prices at which much larger kindergartens were built throughout the RS, it is clear that this is an overpriced project. The experts from the construction sector whom we contacted also warned about this, noting that the municipality provided land for the kindergarten in Jezero that it already owns, which should make the price significantly lower considering the size of the building.