Public Procurement Monitoring July 2017

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2 Public Procurement Monitoring July 2017

3 Public Procurement Monitoring Conditions affecting negatively the competition in public procurement, Construction Sector Public Procurement Trends Construction sector Comparative Analysis General overview contract awarding criteria and selection criteria. Findings and conclusions of the public procurement notices monitoring. 3

4 Public Procurement Notices (number and value) July 2017 Public procurement notices for July 2017 amount to 213 with announced estimate value of BGN 1743 million. Procurement notices with announced estimate value in 2017 are 213 or 100,0 % of the total number of procurement notices of a value of BGN 1743 million. July In July 2017 there are no registered procurement notices with no value announced.

5 Public Procurement Notices (number and value) July 2017 by segments Civil Engineering Infrastructure. 52 procurement notices in July 2017 for this segment, representing 24,4 % of the total number of procurement notices with an announced estimate value of BGN 1638 million or 94,0 % of the total value announced in the construction sector. Building Construction as a segment of the construction industry represents 16,0% (or 34 procurement notices) of the total number of procurement notices in July 2017 with total announced estimate value of BGN 15 million, representing 0,9% of the total value announced in the construction sector. Power Engineering Infrastructure 47 public procurement notices in this segment representing 22,1 % of the total number of the procurement notices in July 2017 with announced estimate value of BGN 40 million or 2,3 % the total announced value in the sector.

6 Public Procurement Notices (number and value), July 2017, by segments of the construction sector Public procurement notices in the Water Supply and Sewage segment are 22 or 10,3 % of the total number of public procurement notices with announced estimate value of BGN 43 million or 2,4 % of the total announced estimate value. Design and Supervision. The public procurement notices in this segment are 58 or 27,2% of the total number of public procurement notices in July 2017 with a total estimate value of BGN 7 million. This is a share of 0,4 % of the total announced estimate value of the public procurement notices in the reported period.

7 Public procurement notices by type of construction, July 2017, /number/. Water Supply and Sewage Infrastructure; 10,3% Civil Engineering Infrastructure; 24,4% Design and Supervision; 27,2% Power Engineering Infrastructure; 22,1% Building Construction; 16,0%

8 Public procurement notices by type of construction, July 2017, value. Civil Engineering Infrastructure Power Engineering Infrastructure Building Construction Design and Supervision Water Supply and Sewage Infrastructure

9 Public procurement notices in the Civil Engineering Infrastructure sector in percentage by types of activities for July Civil Engineering Infrastructure. 52 procurement notices in July 2017 in this segment representing 24,4 % of the total number of procurement notices with an announced estimate value of BGN 1638 million or 94,0 % of the total announced value in the construction sector. Building, reconstruction and repair of road and railroad infrastructure in July 2017 represent 75,0 % of the total number of procurement notices for the Civil Engineering Infrastructure sector. Cleaning and correction of riverbeds, drainage and increase of rivers throughput, rehabilitation and maintenance of ports in July 2017 There are no public procurement notices in this segment. Cultural monuments and archaeological sites in July No public procurement notices in this section of the Civil Engineering Infrastructure sector. Landfills for household and construction waste in July Represent 1,9% of the public procurement notices in the Civil Engineering Infrastructure sector..

10 Public procurement notices in the Civil Engineering Infrastructure sector in percentage by types of activities July 2017 Earthworks, removal of upper soil layer in July 2017 represent 7,7 % of the public procurement notices in this section of the Civil Engineering Infrastructure sector. New construction and renovation of parks, children s playgrounds, stadiums and recreational areas in July 2017 represent 15,4 % of the total number of procurement notices for this type of activity in the Civil Engineering Infrastructure sector. Winter maintenance and cleaning of the road network in July 2017 no procurement notices in this segment of Civil Engineering Infrastructure sector.

11 Procurement Notices for over BGN 5 million in July Public Procurement contracting authority National Company "Railway Infrastructure" (NRIC) - Modernization of the railway section Elin Pelin - Kostenets with estimated price - BGN million. Under Operational Programme Transport and Transport Infrastructure. 2. Public Procurement contracting authority NRIC - Modernization of the railway section Kostenets Septemvri with estimated price - BGN 361 million under the the Connecting Europe Facility 3. Public Procurement contracting authority Road Infrastructure Agency (RIA) major repair of five sites at estimated value of BGN 78 million. 4. Public Procurement contracting authority RIA - construction of five sites at estimated value of BGN 75 million. Under the Regions in Growth Programme 5. Public Procurement contracting authority RIA construction of two lots at an estimated value of BGN 22 million Under the Regions in Growth Programme

12 Procurement Notices for over BGN 5 million in July Public Procurement contracting authority Municipality of Burgas - construction, repair and maintenance of municipal roads on the territory of the municipality of Burgas at an estimated value of BGN 19 million. 7. Public Procurement contracting authority RIA - Construction and assembly works at five sites - Momchilgrad, Krumovgrad and Ivaylovgrad - with an estimated value of BGN 18 million. 8. Public Procurement contracting authority Municipality of Vratsa - Renovation and modernization of the pedestrian zone in the central part of the town of Vratsa under the "Regions in Growth" Program at an estimated value of BGN 6 million.

13 Public Procurement Notices in the Water Supply and Sewage Infrastructure in percentage by types of activities July 2017 Public procurement notices in the Water Supply and Sewage Sector are 22 or 10,3 % of the total number of public procurement notices with an announced estimate value of BGN 43 million or 2,4 % of the total announced estimate value. New construction and repair of wastewater and effluent treatment plants in July 2017 represent 4,5 % of the public procurement notices in this section of the segment. New construction and repair of pump stations in July 2017 there are no public procurement notices in this segment of the Water Supply and Sewage sector for the reported period. Construction and reconstruction of water supply and sewage installations in July The share of this types of works is 86,5 % of the public procurement notices in this segment. Sewage collectors rehabilitation in July Represent 4,5% of the procurement notices for this type of works in this segment of the Water Supply and Sewage sector. Construction of sediment trap and tanks - represent 4,5% of the procurement notices for this type of works in the segment in July Water Cycle Project no procurement notices for this type of works in this segment of the Water Supply and Sewage sector in July Drilling Works no procurement notices for this type of works in this segment of the Water Supply and Sewage sector in July 2017.

14 Procurement Notices for over BGN 5 million in July Public Procurement contracting authority Municipality of Elhovo - Design and construction of the WWTP Elhovo at an estimated value of BGN 15 million under Operational Program "Environment". 2. Public Procurement contracting authority Sofiyska Voda AD - Maintenance of sewage networks and construction of new ones - at estimated value BGN 14 million.

15 Public Procurement Notices in the Building Construction Sector in percentage by types of activities July 2017 Building Construction as a segment of the construction industry represents 16,0 % (or 34 procurement notices) of the total number of procurement notices in July 2017 with total announced estimate value of BGN 15 million, representing 0,9 % of the total announced value in the construction sector. New construction holds a share of 20,5 % of the public procurement notices in this Building Construction segment in July Reconstruction, repair works and other construction works, restoration and conservation in building construction represent 79,5 % of the procurement notices in the Building Construction segment in July 2017.

16 Procurement Notices for over BGN 1 million in July Public Procurement contracting authority Supreme Judicial Council /SJC/ - възложител Висш съдебен съвет /ВСС / construction and assembly works for the judicial authorities. At estimated value BGN 3 million. 2. Public Procurement contracting authority Regional Court Slivnitsa construction of a new building - Slivnitsa court hall with an estimated value of BGN 2.5 million. 3. Public Procurement contracting authority Municipality of Dimitrovgrad - reconstruction and modernization of the vegetable market of Dimitrovgrad municipality with estimated value of BGN 1.5 million.. 4. Public Procurement contracting authority Municipality of Petrich construction and assembly works for covered agricultural market in the town of Petrich at an estimated value of BGN 1 million.

17 Public Procurement Notices in the Power Engineering Infrastructure Sector by types of activities July 2017 Power Engineering Infrastructure 47 public procurement notices in this sector representing 22,1 % of the total number of procurement notices in July 2017 with an announced estimate value of BGN 40 million or 2,3 % of the total announced value in the sector. Energy efficiency measures - represent 78,7 % of the procurement notices in July 2017 in the Power Engineering Infrastructure segment. Repair, reconstruction and assembly works hold a share of 12,8 % of the total number of procurement notices in the Power Engineering Infrastructure segment in July New construction in July 2017 represents 8,5 % of the public procurement notices in the Power Engineering Infrastructure segment. Canceled contracts in July 2017 none.

18 Procurement Notices for over BGN 2 million in July Public Procurement contracting authority Municipality of Vratsa. Reconstruction, repair and implementation of energy efficiency measures in administrative buildings under the Regions in Growth Program with estimated value of BGN 3 million. 2. Public Procurement contracting authority Municipality of Vratsa Energy Efficiency in Multifamily Residential Buildings, Vratsa, with estimated value of 3 million under the Operational Program Regions in Growth 3. Public Procurement contracting authority Municipality of Blagoevgrad. Implementation of energy efficiency measures in Blagoevgrad municipal administration buildings under the Regions in Growth Program with a value of BGN 3 million. 4. Public Procurement contracting authority Sofia Municipality District Poduyane. Renovation for energy efficiency of multifamily residential buildings under the National Energy Efficiency Program, amounting to BGN 2 million. 5. Public Procurement contracting authority Municipality of Elena. Renovation for energy efficiency of multifamily residential buildings on the territory of Elena Municipality under the National Energy Efficiency Program, amounting to BGN 2 million.

19 Public Procurement Notices in June 2017 in the Design and Construction Supervision Sector Design and supervision. The procurement notices in this segment are 58 or 27,2 % of the total number of procurement notices in July 2017 with a total announced estimate value of BGN 7 million. This is a share of 0,4 % of the total announced value of public contracts for the reported period. The distribution is as follows : Providing expertise and technical services, consultations, technical assistance represents 5,1 % of this type of works in the total number of procurement notices in the Design and Supervision segment in July Design, Feasibility study, Investment project development and designer s supervision a share of 46,6 % of the total number of procurement notices in the Design and Supervision segment in July Conformity assessment, construction supervision, investment control and preparation of passports for sites a share of 37,9 % of the total number of procurement notices for the Design and Supervision segment in July Energy efficiency audits, indicates a share of 10,4 % of the public procurement notices for this type of works in the Design and Supervision segment in July 2017.

20 Procurement Notices for over BGN 1 million in July Public Procurement contracting authority - Pleven Municipality - Selection of designer for conformity assessment and construction supervision for site energy water cycle Pleven - Dolna Mitropolia amounting to BGN 1.3 million under OP Environment. 2. Public Procurement contracting authority _Sofia Municipality. Selection of a consultant for exercising construction supervision in the amount of BGN 1 million. Under the Operational Program Regions in Growth

21 Share of public procurement notices according to the criterion Source of Financing, July 2017 /number/ according to PPA data OP Regions in Growth 27 OPTTI 1 EMEPA 5 Budget 171 Financial Mechanism of the European Economic Area none Rural Development Programme 3 OP Environment 3 EU Solidarity Fund none Norwegian financial mechanism - none National Trust Eco Fund. 3 OPHRD none

22 Trend in Public Procurement according to the criterion Source of funding /number /. Operational Programme INTEREG Greece - Bulgaria Operational Programme INTEREG Romania - Bulgaria European Refugee Fund Programme no procurement notices. Connecting Europe Mechanism - 1. Bulgarian-Swiss Cooperation Programme - none. Asylum, Migration and Integration Fund 1. Beautiful Bulgaria Project 1. Good Governance Operational Programme none. Grant Agreement with the Executive Agency "Innovation and Networks none. Internal Security Fund - none

23 Public Procurement Monitoring July 2017 according to criterion Contracting Authority Public procurement notices for July 2017 announced by municipalities amount to 166 or 78,0 % of the total number of procurement notices Utilities and public sector in July or 2,8 % of the total number of procurement notices. Hospitals and educational institutions - 4 public procurement notices in July 2017 or 1,9 % of the total number of procurement notices. Ministries and agencies - 37 or 17,3 % of the total number of procurement notices in July 2017 Other public procurement notices in July 2017 none

24 Public Procurement Notices according to the criterion Contracting Authority, number, July 2017 Source: Public Procurement Agency Hospitals and educational institutions; 1,9% Ministries and agencies; 17,3% Other; 0 Utilities and public sector; 2,8% Municipalities; 78,0% 24

25 Public Procurement Notices Contract Awarding Procedure July 2017 Open procedure 69 public procurement notices or 32,4% of the total number of procurement notices. Open project competition 1 public procurement notice or 0,5%. Restricted procedure - no public procurement notices. Procedure without publication of contract notice - no public procurement notices. 25

26 Public Procurement Notices Negotiation Procedure July 2017 Direct negotiation 6 public procurement notices or 2,8 %. Negotiation without prior notice 25 or 11,7 % of the total number of procurement notices. Public competition procurement notices or 52,1 % Negotiation without prior call - none Negotiation with prior call - 1 or 0,5% 26

27 Public procurement notices July 2017 Type of procedure July 0,5% 0,5% open procedure 52,1% 32,4% 2,8% direct negotiation negotiation without prior notice public competition negotiation with prior call 11,7% open project competition

28 Public Procurement Notices according to criterion : Value, July 2017 Calculations are based on Public Procurement Agency s data No value announced; 0 Announced estimate value ; 100,0% 28

29 Public contract awarding criterion July 2017 Calculations based on PPA data Most economically advantageous tender No criteria /for awarding contracts/ For a total of 128 procurement notices in July 2017 the Contracting Authority has selected the criterion Most economically advantageous tender or 60,1 % of the total 213 procurement notices. 85 procurement notices have no evaluation criteria or 39,9% of the total 213 procurement notices. 29

30 Public Procurement Notices by Type of Funding July 2017 State Budget ; 165 State Budget Operational Programmes Operational Programmes; 48

31 ISO SO 9001:2008 (Quality Certificates Management Systems) : ISO 14001:2004 (Environmental Management Systems) OHSAS 18001:2007 (Occupational Health and Safety Management Systems) SA 8000:2008 (International Social Responsibility Standard). ISO 27001:2005 (Information Security Management Systems) IEC 17020:2005 (Requirements for the accreditation and operation of bodies performing inspections)i SO 17025:2005 General requirements for the competence to carry out tests and/or calibrations, including sampling; ISO :2012 specifies the requirements for qualification testing of welders for fusion welding of steels. ISO International standard containing requirements for a Quality Management System. ISO 17024:2003 for qualified personnel in the field of metals. In July 2017 the following certificates are required in the public procurement notices : ISO 9001 : 2008, this certificate is required for 42,7 % of the procurement notices. ISO 14001:2004, this certificate is required for 28,6 % of the procurement notices. OHSAS18001:2007, this certificate is required for 5,6 % of the procurement notices. SA 8000 : none ISO 27001:2005 none IEC 17020:2005 0,2 % ISO 17025:2005 no requirements ISO :2012 0,2% ISO no requirements ISO :2003 no requirements ISO none ** The percentage is calculated based on the procurement notices excluding those for supervision and procedures without publication of a contract notice.

32 PUBLIC PROCUREMENT MONITORING CONDITIONS AFFECTING NEGATIVELY THE COMPETITION IN PUBLIC PROCUREMENT CONSTRUCTION SECTOR The findings of the Group of Experts at the BCC performing monitoring Conditions, affecting negatively the systems of procurement contract awarding in Bulgaria are as follows: The analysis for July 2017 indicates that breaches, weaknesses and restrictive criteria resulting in subjective decisions and setting of restricting barriers were found in 5 public procurement notices. The trend is toward a decrease in the number of breaches by 8 compared to the previous month. Civil Engineering Infrastructure and Water Supply & Sewage 1 registered case of conditions affecting negatively the competition in public procurement in July 2017, or a decrease in the levels of breaches by 3 compared to the previous month. Building Construction - 2 registered cases of conditions affecting negatively the competition in public procurement or maintaining the same levels of breaches as in the previous month. Power Engineering Infrastructure - 2 registered unconformities in the public procurement notices in July 2017; The trend is toward a decrease in the levels of breaches by 5 compared to the previous month. Design and construction supervision - there are no registered unconformities in July 2017 in the public procurement notices or maintaining the same levels as in the previous month..

33 Violations in Public Procurement Notices by Segments of the Construction Sector, July 2017 Design and supervision Power engineering infrastructure Civil engineering infrastructure and water supply and sewage Building construction Building construction Civil engineering infrastructure and water supply and sewage Power engineering infrastructure Violations Design and supervision

34 Distribution of breaches by Type of Contracting Authority July ,5 3 2,5 2 1,5 1 0,5 0 Municipalities OP "Regions in Growth" Ministries and Agencies Hospitals and Schools

35 Public Procurement Monitoring Conditions affecting negatively the competition in public procurement Construction Sector Public Procurement Contracting authority Municipality of Ardino Assignment: Construction of sewers in the town of Ardino Quote : The Contracting Authority has submitted bills of quantities. Comment: No technical design was prepared.

36 Public Procurement Monitoring Conditions affecting negatively the competition in public procurement Construction Sector Public Procurement contracting authority Hospitals and Schools - Multiprofile Hospital for Active Treatment MBAL "Dr. Tota Venkova Assignment: Emergency repair of roof over the southern facade of the hospital building of MBAL "Dr. Tota Venkova AD Gabrovo. Quote: Persons to whom the call was sent: "Georgi Simeonov 2016" EOOD, Gabrovo, 26, Baba Zara Str. Comment: "Georgi Simeonov 2016" EOOD, Gabrovo is not registered in the Central Professional Builders Register and MBAL "Dr. Tota Venkova AD Gabrovo is of high category. No requirement for registration with the BCC. Violation under Art. 157, paragraph 2 of the TDA and Article 3 of the Bulgarian Chamber of Builders Act.

37 Public Procurement Monitoring Conditions affecting negatively the competition in public procurement Construction Sector Public Procurement Municipality Contracting authority Tervel Assignment: Completion of a rough construction of a secondary building to a mosque in the town of Tervel Quote: There is no approved investment project Comment: There is no approved investment project.

38 Public Procurement Monitoring Conditions affecting negatively the competition in public procurement Construction Sector Public Procurement contracting authority Municipality of Vratsa. Assignment: Engineering works (design, performance of construction and assembly works and designer supervision) in connection with the implementation of the National Energy Efficiency Program for Multifamily Residential Buildings in the Municipality of Vratsa for site: Multi-family residential building with administrative address: Vratsa, 140 Hristo Botev Blvd., bl. May 1st ". Quote: III.1.3) Technical and professional capacity. Required minimal level(s) : during the last 5 (five) years from the date of submission of tenders, Tenderers should have completed activities with subject and volume identical or similar to those of this public procurement. By construction "similar" to the subject of the contract should be understood: Construction works for introduction of energy-efficient measures in buildings, incl. repair works for installation of hydro- and thermal insulation and installing windows and doors in buildings for implementation of energy efficiency measures in existing buildings with a total build-up area: at least sq. m. Comment: The contracting authority has set excessive requirements for technical capacity (minimum level) for performance of construction and assembly works. (buildings with total build-up area: at least sq. m.)

39 Public Procurement Monitoring Conditions affecting negatively the competition in public procurement Construction Sector Public Procurement contracting authority Vratsa Municipality under Regions in Growth Operational Programme Assignment: Implementation of engineering works (design, implementation of construction and assembly works and implementation of designer supervision) in connection with the implementation of projects under the Operational Program "Regions in growth" in two lots. The public procurement is intended for renovating multifamily residential buildings, aiming at implementation of energy efficiency measures. Quote: III.1.3) Technical and professional capacity: Required minimum level(s): Tenderers should have completed activities with subject and volume identical or similar to those of the public procurement during the last 3 (three) years from the date of submission of tenders. By design "similar" to the subject of the contract should be understood: Services for the elaboration of technical investment projects related to the implementation of energy efficiency measures in buildings, incl. construction and repair works for installation of hydro- and thermal insulation and installing windows and doors in buildings for implementation of energy efficiency measures in existing buildings with a total build-up area: at least ,06 sq. m. for lot 1 and at least ,22 sq. m. for lot 2. Comment: The contracting authority has set excessive requirements for technical capacity (minimum level) for performance of construction and assembly works. Total build-up area: at least ,06 sq. m. for lot 1 and at least ,22 sq. m. for lot 2.

40 Methodology and information sources Information Sources Public procurement portal at the Public Procurement Agency. Data processing methodology : The data is processed by experts at the relevant sections of BCC by type of construction: Building construction Civil Engineering Infrastructure Water Supply and Sewerage Power Engineering Infrastructure Design and Supervision The data is reported on a monthly basis - number of notices for a particular month.. Priority of the monitoring report - BCC assessment at an expert level of : conditions affecting negatively the competitive environment laid down in the selection criteria, evaluation indicators leading to subjective decisions in awarding of contracts or elimination of participants in public procurement procedures 40

41 Elena Nedeva Expert Design and Construction Supervision Eng. Emil Gigov Chief Expert Building Construction, Civil Engineering Infrastructure Eng. Yoanna Betova - Expert Power Engineering Infrastructure Eng. Veselka Peshova-Expert Analyses and Forecasts Tanya Bachvarova- Chief Expert Analyses and Forecasts, Project Leader of " Public Procurement Monitoring