The Ministry of Internal Affairs Asked Permission to Purchase Equipment Worth Over Half a Million Euros without Organizing a Public Procurement Procedure

The Ministry of Internal Affairs Asked Permission to Purchase Equipment Worth Over Half a Million Euros without Organizing a Public Procurement Procedure
02 August 2020 | 15:33

Pavel Voicu, the Minister of Internal Affairs asked Prime Minister Ion Chicu, who lead the Exceptional Situations Commission, for the right to purchase radio terminals worth over half a million euros (11.5 million lei) from a single source, without a public procurement procedure. 

Previously, the public procurements carried out by the General Police Inspectorate for purchasing Tetra standard radio terminal were canceled several times, as the technical specifications from the bid were favoring only one producer and company. 

By the time a response came from the Exceptional Situations Commission, one of the auctions announced by the General Police Inspectorate had ended 

At the beginning of April 2020, the Ministry of Internal Affairs sent an inquiry to the Prime Minister Chicu, who leads the Exceptional Situations Commission, demanding the permission to purchase 600 Tetra standard radio terminal worth approximately half a million euros (11,5 million lei) by using the negotiation procedure, without prior publishing of the public procurement ad, directly with the system producer. 

The Argument of the Minister of Internal Affairs

In the letter, obtained by ZdG, addressed to the Prime Minister Chicu, Voicu mentions that „emergency circumstances require efficient, secure and clearly defined communication means and the efficiency of the specialized public order and safety services is directly dependent on communication systems that ensure that necessary and sufficiently detailed information is provided, in order to make the best decisions during a crisis.”

Voicu specifies in the inquiry that starting with 2020, in Moldova, with the European Union (EU) support, the implementation of the PPDR (Public protection and disaster relief) in TETRA (terrestrial trunked radio) standard was launched, based on the Motorola producer platform, which ensured the coverage of the Romanian border zone as well as partially in Chisinau. According to the objectives of the 2017–2019 National Action Plan for the RM-EU Association Agreement implementation, as well as the 2016-2020 Police Development Strategy, the project „ Ensuring a reliable and efficient communications system for operational purposes within the Police”, which includes upgrading the existent infrastructure from the Romanian border zone as well as extending the coverage for the entire territory of Moldova. 

The minister mentioned the project is in its final implementation stage, an approximately 80 percent national coverage having been achieved. „Declaring the emergency state, including the application of quarantine measures, generated an enhanced need to ensure secure and efficient communication means among all authorities involved in the process of managing the emergency state. Currently, the TETRA system is being used by all units of the Ministry of Internal Affairs, the National Pre-hospital Medical Emergency Assistance Centre as well as by the 112 service,” is specified in the inquiry. 

The Minister Asked for VAT Deduction

In the inquiry, Voicu also wrote that „provided that we have moved on to the „4th emergency state management scenario” new measures need to be applied by the authorities responsible for the scenario implementation, which emphasizes, even more, the importance to ensure efficient communication.

At the national level, although a TETRA standard communication system coverage is ensured, we note an insufficient supply of radio terminals that would allow the communication with and managing the forces and resources involved in the process”. The minister also mentions that the Ministry of Internal Affairs has and is using approximately 2,300 radio terminal units, however, for a sufficient supply there is a need for another approximately 7,000 radio stations, each worth around 700 euros (15,000 lei). 

 „It is important to mention that for 2020, total budget financial resources of around 300,000 euros (5.79 million lei) were planned and allocated for purchasing 340 radio terminals for the General Police Inspectorate and another 120,000 euros (2.4 million lei) for purchasing 100 radio terminals for the General Carabinieri Inspectorate. Provided the analysis carried out, we note that the necessary financial resources of approximately 150,000 euros (3 million lei) can be redirected to the Informational Technologies Service, subordinated to the Ministry of Internal Affairs, for purchasing additionally 150 radio terminals. Moreover, the purchase of the TETRA standard radio terminals will take place from the existent resources, based on the financial allocations planned and approved for 2020”, says Voicu. 

„Therefore, provided the importance and the urgent need to ensure efficient communication capacities in the current crisis, we respectfully ask for the Government approval to examine during the Exceptional Situations Commission meeting the possibility to apply a centralized procurement process for purchasing 600 TETRA standard radio terminals for over half a million euros (11.5 million lei), by derogations from the provisions at art.2 par. (3) letter a) from the Law nr.131/2015 on public procurement, and apply instead of the negotiation procedure without the prior notice publication, with the system producer. Also, in order the save budget allocations, we find it relevant to examine the possibility to apply the VAT deduction for the respective public procurement procedure”, required Pavel Voicu in the inquiry addressed to the prime minister. 

Although this was not mentioned in the inquiry for the prime-minister Ion Chicu, in case of a positive response, the Ministry of Internal Affairs planned to purchase the equipment from the „S&T IT Services” company, the former „Bass-Systems” company that previously had already delivered such equipment. 

The Procurements for This Equipment Were Constantly Cancelled Due to Claims on Irregularities

However, what the minister of Internal Affairs did not mention in the document was that, actually, the largest part of this procurement was attempted to be carried out in September 2019. At that point, the General Police Inspectorate launched a tender for purchasing TETRA standard radio terminals worth around 300,000 euros (5.79 million lei). Only one economic agent applied – „S&T Mold”, which, in fact, has the same founders as the company „Bass-Systems”. This is the same company that was previously winning such tenders. 

The procedure was contested, based on the fact that the technical specifications were supposedly favouring a single economic agent, the same one that had previously delivered such equipment. „Fors Computer”, the company that contested the procedure results was arguing that „the equipment mentioned in the procurement clearly favoured one single producer, specifically Motorola Solutions”, distributed in Moldova by „Bass-Systems”. „All the required equipment, the TETRA standard radio terminal, the TETRA standard portable radio units (hidden/discreet), the TETRA mobile radio terminals, the TETRA fixed radio terminals, in the way they were described in their original technical specifications, had individualised technical specifications that had unique features produced solely by a single company, Motorola Solutions”,  was specified in the claim. 

In November 2019, the National Agency for Settlements of Claims Obliged the National Police Inspectorate to Remove All Constraints for Other Producers from the Technical Specifications 

The company also appealed to the contracting authority for clarifications. „By examining these amendments, it was established that the contracting authority introduced partial changes or ignored solicitations. As well, they introduced additional requirements that are in favour of the same provider, „Motorola Solutions”. For example the existence of an authorised centre, all provided terminals to be compatible with the services available for the operations TETRA system infrastructure in Moldova. An authorised Motorola Solutions service centre for the maintenance of the TETRA standard radio equipment is exclusively represented in Moldova by a single company. 

For controlling the compatibility of the equipment proposed, the contracting authority must provide the detailed specifications of the existing TETRA system infrastructure, which was not done. Moreover, it needs to be explicitly declared that the needed equipment, in the case of compatibility with the existent infrastructure, must not be provided by the same producer (as Motorola Solutions)”, was mentioned in the claim. 

On November 6, 2019, the National Agency for Settlement of Claims admitted the claim submitted by the company „Fors Computer” and obliged the General Police Inspectorate to „eliminate the constraints for other producers from the technical specifications”. 

 „The Agency acknowledges that when establishing the necessary assets, including their technical characteristics, the contracting authority must take into account the provisions of the law… according to which, one of the principles for regulating public procurements stands in ensuring competition, which means ensuring that the conditions of the competition are set up in a way so that any qualified economic operator that has an offer qualifying for the needs of the contracting authority can participate in the public procurement procedure and has an equal possibility to win the tender. Provided the above-mentioned principle, the contracting authority must create a competitive environment and establish the requirements of the tender in a way that it would not unjustifiably limit the participation of other economic operators, including by exact indication of assets functionality”, concluded the representatives of the National Agency for Settlement of Claims. 

The Second Bid Cancelled

Therefore, the tender was cancelled and in November 2019, the General Police Inspectorates announced a new tender, this time with updated technical specifications and open for more producers/providers. Two companies submitted their files: „Fors Computer” and „Bass-Systems”. Both companies offered total prices below around 250,000 euros (5 million lei) (4,76 million lei), although, only two months earlier, the price offered by „S&T Mold” was around 300,000 euros (5.79 million lei), approximately 50,000 euros (1 million lei) more. 

Although the company „Fors Computers” was declared the winner of the tender by the working group, its offer being a few hundred lei less, this tender also did not have a final winner. 

On December 10, 2019, the company „Bass-Systems” submitted a claim on the tender results mentioning that the working group declared as winner a company that submitted an insignificantly lower amount in its financial proposal, which means that the contracting authority evaluated the offers only from a financial stance, without going into details on the entire content of the offers, taking into account the technical aspects, the delivery deadlines, the justification acts and „the acts and documentations indicated by „Fors Computer” are superficial, inopportune and impertinent and cannot serve as base for demonstrating their full technical capacities or the possibility to provide in due time and to corresponding standards the TETRA standard portable radio terminals”. 

The General Police Inspectorate supported the legality of the tender. „The contracting authority want to inform that after the technical examination carried out by the specialists from the Informational technology Services of the Ministry of Internal Affairs and, according to the technical specifications, the offer provided by the company „Fors Computer” is fully in line with the necessary requirements”, mentioned the institution. 

On January 13, 2020, the National Agency for Settlement of Claims decided to accept the claim submitted by „Bass-Systems”. After rejecting more requirements in what concerns the technical aspects of the offer, the National Agency for Settlement of Claims established that the offer submitted by „Fors Computer” indicated deadline for delivering the equipment that was not corresponding to the one solicited by the General Police Inspectorate. 

„After examining, in light of the claims submitted, the documents of the economic operator that was declared the winner of the tender, the Agency concluded that the company „Fors Computer” presented the form „Price specifications”, according to which they propose the delivery of the goods, particularly referring here to the radio terminals, during a period of time of „up to 25 days”, which does not correspond to the requirements. The General Police Inspectorate indicated, in this regard, a specific date, which should have been respected by the providers (December 20, 2019)”, concluded the National Agency for Settlement of Claims. 

The General Police Inspectorate re-launched the tender on March 2, 2020, which was, again, cancelled. On March 20, 2020, the General Police Inspectorate announced again the tender. On April 6, 2020, the General Carabinieri Inspectorate announced a similar tender, for 2 million lei. 

Contacted by ZdG, Alina Zbancă, the adviser of the minister of Internal Affairs, specified for ZdG that the solicited tender was not yet carried out and that there is no decision from the Exceptional Situations Commission in this regard. She mentioned that the Ministry of Internal Affairs solicited such a derogation from the Commission because „it is necessary we are equipped with these terminals, especially in case of exceptional situations and in this period of emergency state”, emphasizing that, during these times „this equipment was necessary and there weren’t enough to cover the entire country”. 

When asked why a public tender open to more economic agents is not wanted, Zbanca mentioned that such tenders were already carried out, but they were contested by an economic agent „that also participated in them.  And, instead of having the police decide what are the necessary details and parameters, it so turns out that it was the economic agent who made this decision, because the law allows for this to happen”, thus, this procedure was taking a long time and there were constantly claims submitted on its results.  „We are not favouring anyone, we had a specific requirement, a necessity… the necessity is clearly stipulated, the technical parameters as well, all the details. Someone from the outside cannot tell us what we need, when we know exactly what that is”, Zbanca pointed out. 

The adviser of the minister of Internal Affairs also stated that „it is wanted that this equipment is for the entire system”, because, until now the tenders were being carried out „per units and we were later finding gaps, delayed processes and different equipment”. 

She claims there was a will to initiate a single procedure and to supply to the necessary levels all the units with the equipment „that are suitable and recommended for the Tetra system. Until now, what was happening in this regard wasn’t known. Now, the specialists want to clear everything out. There is no hidden agenda, maybe only the interest of certain economic agents that also generated this topic in the press”, mentions Alina Zbanca. 

A new tender, close to finalising. Both companies involved have won 

In the meantime, without a response from the Exceptional Situations Commission, the tender announced by the General Police Inspectorate on March 20 was finalised. The procurement of TETRA standard radio equipment was divided into 4 lots and only two companies submitted offers: „Fors Computer” and „S&T IT Services”, the former „Bass-Systems”. 

According to the information on the mtender.gov.md website, „Fors Computer” provided the best offer for purchasing the TETRA Mobile radio terminals. 

The company „S&T IT Services” presented the best offers for purchasing the fixed and portable TETRA radios. 

For the TETRA hidden radio terminals only the company „S&T IT Services” submitted an offer. 

The offers of the companies only slightly different, at times with differences of only 100 lei. The total value of the purchase is approximately 4,62 million lei. 

„Bass-Systems” Became „S&T IT Services”

During the past few years the state institutions purchased TETRA mobile terminals worth tens of millions of lei from a single provider – „BASS-Systems”. In the meantime, involved in a criminal investigation on Vladimir Plahotniuc, the company changed its name and is now „S&T IT Services”. Previously, 51% of the statutory capital of the „Bass-Systems” company was sold. The share was overtaken by the Austrian company „S&T AG”, one of the most important IT solutions and services providers from Central and Eastern Europe. The value of the transaction was 5,74 million euros. The other 49% of the company capital belongs to the citizen of Romania, Onisim Popescu, who is also the official administrator of the company with the new name: „S&T IT Services”. 

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