In 52% of public procurement cases, the authorities award the contract to the economic operator submitting the lowest price offer. These are the data from the study “Deficiencies of the public procurement system. Abnormally low bids in works procurement procedures”, prepared by expert Vadim Turcan at the request of the National Confederation of Employers of the Republic of Moldova. The document was presented in the framework of the working group ,,Rеduсеrеa oсupation informalе and the phenomenon ,,wages in pliс”, of the Economic Council to the Prime Minister of RM.

The authors of the study argue that after winning the procurement contract with the lowest price, the economic agent is put in the position to modify the procurement contract because the costs in the contract do not correspond to reality. Or it resorts to carrying out work of very low quality. And this leads to a situation where the construction does not even manage to be completed, because it already requires repair, said Pavel CABA – President of CONDRUMAT Federation, the Employers’ Federation of Builders in the RM.

According to the same study, the lowest price offer, at least in the construction sector, which wins the public tender, contributes to the informal payment of workers’ wages on the construction site. This is because the bidder – the economic agent – includes in the offer a wage of only about 40% of the real one, but, say representatives of the construction sector, no worker will come to the site with such a remuneration. Experts assumed that the rest of the money could be paid “in an envelope”.

The experts propose to amend the public procurement law to remedy these and other sensitive points. Among other things, it is proposed that for public procurement of services involving intellectual activities, the best value for money award criterion should be used exclusively, and not the lowest price as at present. The study’s recommendations will be submitted to the authorities for consideration when drafting amendments to the law, which are currently in the process, Finance Ministry representatives announced at the meeting.

The results of the study and their recommendations can be found here.

The Secretariat of the Economic Council to the Prime Minister is supported by the European Bank for Reconstruction and Development, funded by the UK Government’s Good Governance Fund, and the International Finance Corporation’s Investment Climate Reform Project funded by the Government of Sweden’s International Development Agency.

The Secretariat of the Economic Council to the Prime Minister is supported by the European Bank for Reconstruction and Development, funded by the UK Government’s Good Governance Fund.