113 Million Drowned in Jordán Lake

Vydáno 22. 05. 2012

In June 2011 TIC filed a motion through its legal counsel to the Office for the Protection of Competition regarding irregular tender procedures in an above-threshold public contract for construction work in the Jordán Lake renovation project in Tábor. 

In April 2011 the City of Tábor announced a public contract for renovation of the Jordán Lake in Tábor with price as the only evaluation criteria. Nine bids were submitted. The lowest bid was CZK 258 million and the highest bid was CZK 379 million. After disqualification of four bids that did not fulfil the tendering terms, the City as the contracting entity eliminated the lowest bid of CZK 258 million with the justification that the bid was abnormally low. The contract was awarded to an association of the following companies: DAICH spol. s.r.o., Metrostav a.s. and Zvánovec a.s., which submitted a bid of CZK 372 million. The tenderer whose bid was eliminated as abnormally low appealed to the Office for the Protection of Competition, which decided that the City of Tábor as the contracting entity of the public contract had not complied with the procedure stipulated by law and which thus annulled the City’s actions. 

A new contract award procedure took place and the lowest bid of CZK 258 million was again disqualified and the bid of CZK 372 million again won. In the opinion of TIC, the tender procedure was illegal as the position on the abnormally low bid price was submitted by a person without the legal authorization to do so, whereas the results of this position has a decisive impact on the decision making process of the jury, which recommended elimination of the lowest bid.

In the opinion of TIC, this public contract shows signs of irregular and illegal proceedings in best bid selection and also indicates wasteful use of public resources by the representatives of the City of Tábor. TIC appealed to the mayor of the City of Tábor, asking him to withhold from signing the contract with the winning tenderer until after the Office for the Protection of Competition had made its decision. European Union subsidies that would be saved from the lake renovation work could surely be used to fund other projects.

However, the Office for the Protection of Competition disagreed with TIC’s opinion and on the day of 25 July, 2011 the Office sent TIC’s legal counsel a memo stating that it did not find any legal violation in the given contract award procedure. Unfortunately, as TIC lacks the opportunity to take the entire matter to administrative court, it can only state its opinion that this is yet another case of authorized wasteful use of public resources.

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