According to the Antimonopoly Office the amendments to the Act on Public Procurement weaken the fight against cartels

16.02.2015
The Antimonopoly Office of the Slovak Republic (“AMO SR”) raised more substantive comments within the interministry comment procedure relating to the new Act on Public Procurement. One of the AMO SR priorities is revealing cartels in public procurements that not only distort market environment but also seriously damage public finances. To achieve that the fight against cartels in public procurement is efficient and also the sanctions for undertakings for such conduct are effective, it is necessary to reflect these facts also in Act on Public Procurement. AMO SR considers the submitted draft of the Act on Public Procurement as retreat from the current effective system of revealing and sanctioning of cartels in public procurement which has proved to be correct and was inspiring for other European countries.

 
Firstly, AMO SR requires maintaining the obligation to exclude from public procurement those undertakings which have participated in public procurement cartel, since the drafted Act amends this obligation to facultative one. Such restriction should relate not only to parties to public procurement but also to their subcontractors which would prevent the excluded undertakings from evading through subcontractors.

 
Another comment relates to interconnection of leniency programme pursuant to the Act on Protection of Competition and exclusion of undertakings from public procurement for cartel participation. Leniency programme is effective tool for fight against cartels where the cartel participant informs AMO SR on cartel details in exchange for immunity or reduction of fine. According to present Act on Public Procurement the undertaking participating in leniency programme was not automatically excluded from public procurements. Since AMO SR praxis proves that the benefit of non-excluding the undertakings from public procurements is a significant motivation for undertakings that considers using leniency programme, AMO SR proposes to maintain the present adjustment as part of cartel revealing and sanctioning.

 
From its praxis AMO SR knows that companies being property or personally related (for example various entities within one economic group) very often acts as competitors in public procurement and thus they appear to compete with each other. AMO SR proposes to introduce a system which would prevent from the participation of interconnected persons in public procurement.

 
Since the intensity of competition is higher if the number of participating SMEs is higher, AMO proposes to reduce the required turnover of parties to public procurement up to the level of the estimated contract value. It would enable also smaller undertakings to take part in tenders and they may introduce price alternative and innovations in comparison with large established suppliers.

 
As novelties, AMO SR proposes to introduce the obligation of applicants to specify the person who completed their bid, what should contribute to higher transparency of environment and impediment of coordination among undertakings. Another AMO SR´s novelty is the possibility to terminate the contract which has been concluded as a result of cartel in public procurement, as well as 30% price reduction in case of cartel revealing.
 
 
AMO SR believes that the proposed comments would be accepted and the fight against cartel in public procurement will be not weakened.
   
 
Full wording of AMO SR comments is available at (only Slovak version):
https://lt.justice.gov.sk/Material/MaterialReview.aspx?instEID=58&matEID=7943&drCommentDocFREID=-1&rOverviewAction=PreviewAll&langEID=1
Last update:13.03.2015