First and foremost, it concerns the wording in the procurement documentation, which states that electrical work should be carried out by contractors with national certification and whether foreign contractors – none of whom are reported to have actually bid for the tender – understood that their own national equivalent certification could have been a sufficient equivalent.
Most of the € 1.35 million in support to build Delta House, a digital technology, analysis and business ideas complex that can accommodate around 3,000 people, has been funded by EU funds. This corresponds to only 10 percent of the EU money granted for this purpose, and the obligation to repay comes from the Estonian Ministry of Finance rather than from the European Commission, although it had previously expressed concerns about the procedures.
Kaur Siruli, head of the finance ministry’s financial control department, says that both domestic and foreign parties who have an interest in procurement must be treated equally, in other words, there cannot be any procurement condition requirements that only Estonian companies meet can .
Siruli said, “In this case we found that unfortunately a domestic requirement was overlooked. The bidders had to have certified Estonian electricians.”
In particular, the paperwork should be an Estonian Class A competence certificate for electricians, the ministry said, which could exclude companies from outside Estonia from participating.
The problem could have been solved by adding two words after the domestic certification requirement: “or equivalent [to the Estonian certificate]”Said Siruli.
“That’s the stupidest thing about it,” he said.
“As a reminder to all contracting authorities, if you are purchasing internationally, just in case you should have the words” or equivalent “next to all requirements and standards.
University rejects claims
The university does not agree with these results.
Tuuli Ilula, head of procurement, said the university only wanted an electrical contractor who had all the necessary skills and qualifications and that the electrical safety law required a Class A certificate, although a foreign equivalent would have been acceptable.
Participants in the procurement process, regardless of where they are from, should familiarize themselves with Estonian regulations if they are to do the work here, she said.
“In fact, we expect all participants in the public procurement process to learn both the basic procurement documents and Estonian legislation so that later construction work can be carried out in accordance with Estonian laws and requirements.”
The university also says that even if the procurement terms were incorrect, they should not be asked for a refund. The university added that the alleged violation had no significant impact on the results of the tender. No foreign companies applied and, even if they did, it would have been unlikely that they would have undercut a local supplier.
Kaur Siruli from the Treasury Department said the phrase should be included in the procurement documents.
“Having to guess it from somewhere is not something that bidders should do for the tender,” he said.
This is also a requirement of the European Commission, he said. If the expression “equivalent” is not used, the commissions say that foreign companies could be excluded and that five percent of government support should be repaid and ten percent of European money withheld.
The Commission applied its rules strictly and had previously encountered such arguments (that potential tenders should figure out the “equivalent” requirement for themselves), Siruli continued.
Delta House’s procurement process schedule
In the summer of 2017, the University of Tartu started its procurement process for a new IT center on the banks of the Emajõgi River.
The building cost almost € 24 million to build, of which € 13.5 million came from the EU.
The Archimedes Foundation, the national agency of the European Union’s education, youth and sport program, reportedly found that there could be irregularities in the procurement process in autumn 2018 when 25 percent of payments of EU funds to the university began withheld, Tuuli Ilula said, adding that the university had made its statements and found that the procurement had been carried out in accordance with the law, so payments have been restored.
The Estonian construction companies Rand, Tuulberg and Ehiutustrust have completed the work by January 2020. This was around the time the building contract was being examined by auditors from the Ministry of Finance, which resulted in the payment of EUR 1.5 million.
The reimbursement can also be made from the state treasury
The fact that the university has to reimburse the 1.5 million euros does not necessarily mean that the university has to provide this money itself, the finance ministry continued.
The State Support Services Center (RTK), which is in charge of distributing the EU funds and under the auspices of the Treasury Department, has until the end of March to make a decision, although preliminary information shows that the center does indeed meet the auditors’ conclusions agrees The university has violated legal requirements. Reclaiming the money may be unconstitutional as the procurement process began before January 2018 when the European Commission began to apply its requirements more strictly.
While Treasury Department’s Kaur Siruli says that argument probably doesn’t include water either, and that what the university has done is against the government procurement policy, he said the university may have received the $ 1.5 million from the Can withdraw the state budget.
This would require a decision by the Ministry of Education and Research in this case, Siruli said.
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