(Podgorica, 28 November 2011) – Today MANS filed with the Special State Prosecutor for Organized Crime and Corruption, Đurđina Ivanović, another criminal complaint for the abuse of office in the public procurement process relating to the reconstruction of the Mojkovac tailings dump.
The criminal complaint was filed against the director of the Public Works Directorate, Žarko Živković, and the director of the Podgorica-based firm Bemax, Veselin Kovačević, as well as the director of “The Company for Construction Supervision and Laboratory Testing” (CCSLT), Rajko Vuksanović. They are alleged to have abused their office and their power within the market to grossly violate the Public Procurement Law (particularly the stipulations relating to conflicts of interests between participants in a tender).
According to the data available to MANS, CCSLT was simultaneously contracted by the Public Works Directorate to supervise Bemax’s work at the tailings dump, while also acting as a sub-contractor on the same project. Everyone involved was well aware that this was a textbook case of a conflict of interest but took no remedial measures (in spite of the fact that the Public Procurement Law requires such a course of action).
The Public Works Directorate, in mid-April of last year, launched a tender for the expert supervision of works on the Mojkovac tailings dump (a contract valued at some 40,000 euros). The winning bid was the one submitted by CCSLT, which offered a price of 31,824 euros for completing the task. The winner was confirmed in the “Decision Awarding the Contract” that was adopted by the Public Works Directorate in early June 2010.
Meanwhile, Bemax concluded a subcontracting agreement with CCSLT worth some 11.8-thousand euros. The preamble to the contract states that the CCSLT will be engaged as a subcontractor that will control materials and soil tests, as well as certify materials and completed works.
With this move Bemax essentially placed on its payroll a company that the Public Works Directorate had selected to supervise Bemax’s performance.
It is worth recalling that Bemax won the tender for the sanitation of the Mojkovac tailings dump after a controversial retroactive decision by the Public Procurement Control Commission (PPCC) that eliminated all competing bids. Bemax won the tender in spite of ranking third in the initial evaluation and placing an offer that was 140,000 euros more expensive than the one submitted by the top-ranked bidder.
The Public Works Directorate has never highlighted the obvious conflict of interest between the choice of a supervisor for the project, the firm responsible for the project and its subcontractors. Thus the contract with Bemax was concluded on the basis of a bid that clearly indicates that one of Bemax’s subcontractors was precisely the company selected to carry out supervision of the entire project.
According to Article 14 of the Public Procurement Law – defining the nature of a conflict of interest – all participants in this project are required to report the existence of such conflicts. The directors of Bemax and CCSLT failed to do so, as did the Public Works Directorate. This textbook case of a conflict of interest also escaped the attention of the PPCC (whose actions had enabled Bemax to land the contract in the first place).
We believe that this method of granting contracts within Montenegro’s public procurement system, to which the PPCC remains blind, is absolutely unacceptable. Deals struck under such circumstances will eventually require the greater involvement of the Montenegrin police and prosecution.
MANS takes this opportunity to once again call on all companies and entrepreneurs with information on similar cases concerning violations of the public procurement laws to contact us.
