Public Procurement Monitoring. June 2016

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2 Public Procurement Monitoring June 2016

3 Public Procurement Monitoring Conditions affecting negatively the competition in public procurement, Construction Sector Trends in public procurement Construction sector - comparative analysis June 2016 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) June 2016 Public procurement notices for June 2016 amount to 125 of a value of BGN 163 million. Trend: April is the last month with requirements under the old PPA. This is the reason for not performing a comparative analysis with the previous year.. Procurement notices with announced estimate value in June 2016 are 123 or 98,4 % of the total number of procurement notices of a value of BGN 163 million. Procurement notices with no value announced 2 procurement notices registered or 1,6 % of the total number of procurement notices in June 2016.

5 Public Procurement Notices (number and value) June 2016 by segments Civil Engineering Infrastructure. 26 procurement notices in June 2016 for this segment, representing 20,8 % of the total number of procurement notices with an announced value of BGN 24 million or 14,7 % of the total value announced in the construction sector. Building Construction as a segment of the construction industry represents 12,0 % of the total number of the procurement notices in June 2016 or 15 procurement notices with total announced estimate value of BGN 7 million representing 4,3% of the total announced value in the construction sector. Power Engineering Infrastructure 24 public procurement notices in this segment representing 19,2 % of the total number of the procurement notices in June 2016 with announced estimate value of BGN 116 million or 71,2 % of the total announced value in the sector.

6 Public Procurement Notices (number and value) June 2016 by segments, Construction Sector Public procurement notices in the Water Supply and Sewage segment are 3 or 2,4 % of the total number of public procurement notices with announced estimate value of BGN 3 million or 1,8 % of the total announced estimate value. Design and Supervision. The public procurement notices in this segment are 57 or 45,6% of the total number of public procurement notices in June 2016 with a total estimate value of BGN 13 million. This is a share of 8,0% of the total announced estimate value of the public procurement notices in June 2016.

7 Public procurement notices by type of construction, June 2016, /number/. June 2% 21% 46% 19% Civil Engineering Infrastructure Power Engineering Infrastructure Building Construction Design and Supervision Water Supply and Sewage Infrastructure 12%

8 Public procurement notices by type of construction, June 2016, value г. м. януари Design and Supervision; 8,0% Water Supply and Sewage Infrastructure; 1,8% Building Construction; 4,3% Civil Engineering Infrastructure; 14,7% Power Engineering Infrastructure; 71,2%

9 Public procurement notices in the Civil Engineering Infrastructure sector in percentage by types of activities for June Civil Engineering Infrastructure. 26 procurement notices in June 2016 in this segment representing 20,8 % of the total number of procurement notices with an announced estimate value of BGN 24 million or 14,7 % of the total estimate value in the construction sector. Building, reconstruction and repair of road and railroad infrastructure in June 2016 represents 73,1 % 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 June 2016 represents 15,4 % of the total number of procurement notices in this segment. Cultural monuments and archaeological sites in June No public procurement notices in this segment. Landfills for household and construction waste in June 2016 represent 7,7 % of the total number of procurement notices for the Civil Engineering Infrastructure sector.

10 Public procurement notices in the Civil Engineering Infrastructure sector in percentage by types of activities for June 2016 Earthworks in June No public procurement notices in this segment of Civil Engineering Infrastructure. New construction and renovation of parks, children s playgrounds, stadiums and recreational areas in June 2016 represent 3,8 % of the total number of procurement notices in the Civil Engineering Infrastructure sector. Winter maintenance and cleaning of the road network in June No public procurement notices in this segment.

11 Public Procurement Notices in the Water Supply and Sewage Infrastructure in percentage by types of activities, June Public procurement notices in the Water Supply and Sewage Sector are 3 or 2,4 % of the total number of public procurement notices with an announced estimate value of BGN 3 million, or 1,8 % of the total announced estimate value. New construction and repair of wastewater and effluent treatment plants in June there are no public procurement notices in this segment. New construction and repair of pump stations in June The share of procurement notices in this segment of the Water Supply and Sewage Sector is 100%. Construction and reconstruction of water supply and sewage installations in June There are no public procurement notices in this segment. Sewage collectors rehabilitation in June There are no procurement notices.

12 Public Procurement Notices in the Water Supply and Sewage Infrastructure Sector in percentage by types of activities, June Construction of sediment trap and tanks - No public procurement notices in this segment in June Water Cycle Project - no procurement notices in this segment in June Drilling Works - no procurement notices in this segment in June 2016.

13 Public Procurement Notices in the Building Construction Sector in percentage by types of activities June 2016 Building Construction - 15 procurement notices representing 12,0 % of the total number of procurement notices in June 2016 with total announced estimate value of BGN 7 million representing 4,3% of the total announced value in the construction sector New construction holds a share of 13,3% of the total number of procurement notices in the Building Construction segment in June Reconstruction, repair works and other construction works, restoration and conservation in building construction represent 86,7 % of the procurement notices in the Building Construction segment in June 2016.

14 Public Procurement Notices in the Power Engineering Infrastructure Sector by types of activities June 2016 Power Engineering Infrastructure 24 public procurement notices in this segment representing 19,2 % of the total number of procurement notices in June with an announced estimate value of BGN 116 million or 71,2 % of the total announced value in the sector. Energy efficiency measures - represent 83,3% of the procurement notices in June 2016 in the Power Engineering Infrastructure segment. Repair, reconstruction and assembly works hold a share of 16,7% of the total number of procurement notices for the segment in June New construction in June 2016, there are no public procurement notices in the segment.

15 Public Procurement Notices in the Design and Construction Supervision Sector, June 2016 Design and supervision. 57 public procurement notices or 45,6 % of the total number of procurement notices in June 2016 with a total announced estimate value of BGN 13 million. This is a share of 8,0% of the total announced value of public contracts for June The distribution is as follows : Providing expertise and technical services, consultations, technical assistance with a share of 14,0 % of the total number of procurement notices in the Design and Construction Supervision segment in June Investment project development and designer s supervision - a share of 66,7 % of the total number of procurement notices in the Design and Supervision segment. Construction supervision and preparation of construction site passports - a share of 15,8 % of the total number of procurement notices for the Design and Supervision segment. Energy efficiency audits, which increased from the beginning of the year and indicate a share of 3,5%.

16 Share of public procurement notices according to the criterion Source of Financing, April 2016 /Number/ according to PPA data OPTTI 1 OP Regions in growth 3 OP Rural Development 22 EMPEA none Budget - 96 OP Environme nt none EU Solidarity Fund none Financial mechanism of the European Economic Area And Norwegian Financial mechanism - none Financial Mechanism for European Economic AREA none OPHRD none Национален доверителен фонд. 1

17 Trend in Public Procurement according to the criterion Source of funding /number/. Operational Programme INTEREG Greece - Bulgaria none. European Refugee Fund Programme no procurement notices. Connecting Europe Mechanism - 1 Bulgarian-Swiss Cooperation Programme - none. Asylum, Migration and Integration Fund 1. ISPA none

18 Public Procurement Monitoring June 2016 according to criterion Contracting Authority Public procurement notices for June 2016 announced by the municipalities amount to 102 or 81,6 % of the total number of procurement notices. Utilities and public sector for July or 2,4% of the total number of procurement notices. Hospitals and educational institutions 3 public procurement notices announced for June 2016 or 2,4 % of the total number of procurement notices. Ministries and agencies 17 public procurement notices or 13,6 % of the total number of public procurement notices in June. Other public procurement notices in June no procurement notices.

19 Public Procurement Notices according to the criterion Contracting Authority, number June Source: Public Procurement Agency June Municipalities 2% 2% 14% Utilities and public sector 82% Hospitals and educational institutions Ministries and agencies Other 19

20 Public Procurement Notices Contract Awarding Procedure June 2016 Open procedure 33 public procurement notices or 26,4 % of the total number of procurement notices. Procedure without publication of contract notice 2 or 1,6 % of the total number of procurement notices. Restricted procedure - 2 procurement notices or 1,6% Procedure with publication of contract notice - no public procurement notices. 20

21 Public Procurement Notices Contract Awarding Procedure June Direct negotiation - 6 public procurement notices or 4,8 % of the total number of procurement notices. Procedure without publication of contract notice 18 or 14,4 % of the total number of procurement notices. Public competition - 64 public procurement notices or 51,2 % Procedure with publication of contract notice - no public procurement notices. 21

22 Contract awarding procedure /number/ June 2016 June open procedure 51% 26% 2% 2% 5% 14% negotiation without notice negotiations with notice restricted procedure direct negotiations procedure without publication of contract notice public competition

23 Public Procurement Notices according to criterion: Value, June 2016 Calculations are based on Public Procurement Agency s data 2% Announced estamate value 123 No value announced 2 98% 23

24 Lowest price The lowest price is used by the contracting authority in 2 procurement notices or 1,6% of the total 125 procurement notices in June 2016 Contract awarding criterion June 2016 Most economically advantageous tender 61 бр. или 57,5% от For a total of 62 procurement notices in June the Contracting Authority has selected the criterion Most economically advantageous tender or 49,6 % of the total 125 procurement notices. Calculations based on PPA data No criteria /for awarding procurement contracts/ 61 procurement notices have no evaluation criteria or 48,8% of the total 125 procurement notices. *these are mostly procurement contracts under procedure without publication of contract notice 24

25 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 June 2016 the following certificates are required in the public procurement notices : ISO 9001 : 2008, this certificate is required for 41,6 % of the procurement notices. ISO 14001:2004, this certificate is required for 21,6 % of the procurement notices. OHSAS18001:2007, this certificate is required for 12,0 % of the procurement notices. SA 8000 : none ISO 27001:2005 none IEC 17020:2005 none 17025:2005 no requirements ISO :2012 none ISO no requirements ISO :2003 no requirements ** The percentage is calculated based on the procurement notices excluding those for supervision and procedures without publication of a contract notice.

26 PUBLIC PROCUREMENT MONITORING CONDITIONS AFFECTING NEGATIVELY THE COMPETITION IN PUBLIC PROCUREMENT CONSTRUCTION SECTOR The findings of the Working Group at the BCC performing monitoring Conditions, affecting negatively the systems of procurement contract awarding in Bulgaria are as follows : The analysis for June 2016 indicates that breaches, weaknesses and restrictive criteria resulting in subjective decisions and setting of restricting barriers were found in 6 public procurement notices. Civil Engineering Infrastructure and Water Supply & Sewage there are no conditions affecting negatively the competition in public procurement in June Building Construction in 3 procurement notices there are conditions affecting negatively the competition in public procurement. Power Engineering Infrastructure - 3 registered unconformities in the public procurement notices in June Design and construction supervision - no registered unconformities in the public procurement notices in June 2016.

27 Violations in Public Procurement Notices by Segments of the Construction Sector, June 2016 Design and supervision Power engineering infrastructure Civil engineering infrastructure and water supply and sewage Building construction 0 0,5 1 1,5 2 2,5 3 3,5 Civil engineering infrastructure Power engineering Building construction Design and supervision and water supply and sewage infrastructure violations

28 Distribution of the unconformities by Operational Programmes June 2016 June OP Regions in Growth "Regional Development" Municipalities Мinistries and Аgencies FINANCIAL MECHANISM OF THE EUROPEAN ECONOMIC AREA AND, Rural Areas Development Programme Hospitals and educational institutions

29 Public Procurement Monitoring Conditions affecting negatively the competition in public procurement Construction Sector Public Procurement contracting authority - Ministries and agencies - National Assembly / NA / of the Republic of Bulgaria. Construction and Assembly Works - overhaul of the roof of the building of the National Assembly, Sofia, 2, National Assembly Sq. Quote: The subject of the contract includes replacement of the existing five (5) skylights and restoring compromised sections of the roof cladding and drainage system and facades. Tenderer shall be registered in the Central Register of Professional Builders in accordance with Art. 3, para. 2 of the Construction Chamber Act for execution of construction projects first category. The document, which proves compliance with the requirement is a certificate of registration with CPRB for execution of construction projects first category. Comment: The building of the National Assembly is a cultural monument with a category of national importance". The design was developed by a team that includes architect Atanas Kovachev - registered with the Register of the Ministry of Culture, but there is no information that authorization by the Monuments of Culture is in place. There is no requirement for the builder to have letter 'M.

30 Public Procurement Monitoring Conditions affecting negatively the competition in public procurement Construction Sector Public Procurement contracting authority Hospitals and schools - 18th Secondary School "William Gladstone - Sofia - Internal renovation of classrooms and amenity premises in the building of 18 th Secondary School. Quote: The tenderer shall be registered in the Central Professional Register of Builders / CPRB / under Art. 137, para 1, item 3 b, c of the TDA and the Regulation on the registration and keeping of CPRB and a foreign participant shall be registered in a similar register under the law of the Member State in which it is established. Comment: The building is a cultural monument of local importance. There is no requirement for registration in CPRB. Public Procurement contracting authority Maritsa municipality - Construction and furnishing of nursery in kindergarten in regulated land plot XVI - kindergarten, quarter 15 of the plan of the village of Rogosh, Maritsa Municipality. Comment: The documentation does not specify minimum and maximum deadline for completion. In the investment project are specified various children's facilities, and they are missing in the bill of quantities. There is no specification of materials nad low voltage installation in the bill of quantities. The prepared documentation is not complete, which is an obstacle to the submission of high quality tender.

31 Public Procurement Monitoring Conditions affecting negatively the competition in public procurement Construction Sector Comment: The documentation does not specify minimum and maximum deadline for completion. In the investment project are specified various children's facilities, and they are missing in the bill of quantities. There is no specification of materials nad low voltage installation in the bill of quantities. The prepared documentation is not complete, which is an obstacle to the submission of high quality tender.. Procurement contracting authority - Pernik Municipality - Execution of Construction and Assembly Works in connection with the implementation of the National Energy Efficiency Programme for Multifamily Buildings in the city of Pernik for residential building with administrative address: Pernik, 34, "Krakra str. Quote: Name and address of the contractor Official name: BIG BUILD EOOD; UIC Национален регистрационен номер: Postal address: 691th str., block 2, entrance A, floor 3, ap. 6

32 Public Procurement Monitoring Conditions affecting negatively the competition in public procurement Construction Sector Comment: The contractor company specified already with the award of the public contract has no registration with the Construction Chamber in Bulgaria. Violation - pursuant to Art. 157 para 2 of the TDA and Art. 3 of the Construction Chamber in Bulgaria Act. Procurement contracting authority Burgas Municipality Implementation of Engineering works - design and execution of construction and assembly works relating to the implementation of the National Energy Efficiency Programme for Multifamily Buildings on the territory of the Municipality of Burgas. Quote: III.1.3) Technical and professional capacity: Minimum level(s) required: 2. Tenderers should have experience in execution of construction works / construction and / or design and execution of construction / equal or similar to the subject matter of this public contract and completed in the last 5 / five / years from the filing date of the tender. By construction "similar" to the subject of the contract should be understood: Construction works for implementation of energy efficiency measures in residential buildings, incl. repair works for laying hydro- and thermal insulation and installing window frames in buildings for implementation of energy efficiency measures in existing residential buildings with total built-up area: at least 1500 sq. m. /applicable for all lots/. Comment: Excessive requirements

33 Public Procurement Monitoring Conditions affecting negatively the competition in public procurement Construction Sector Procurement contracting authority - municipality of Burgas "Implementation of Engineering works - design and execution of construction and assembly works relating to the implementation of the National Energy Efficiency Programme for Multifamily Buildings on the territory of the Municipality of Burgas" in 20 lots. Quote: III.1.3) Technical and professional capacity: Minimum level(s) required: 2. Tenderers should have experience in execution of construction works / construction and / or design and execution of construction / equal or similar to the subject matter of this public contract and completed in the last 5 / five / years from the filing date of the tender. By construction "similar" to the subject of the contract should be understood: Construction works for implementation of energy efficiency measures in residential buildings, incl. repair works for laying hydro- and thermal insulation and installing window frames in buildings for implementation of energy efficiency measures in existing residential buildings with total built-up area: at least 1500 sq. m. / applicable for all lots /. Comment: The contracting authority has set excessive requirements for technical capacity for performance of construction works in buildings with built-up area: at least 1500 sq. m.

34 Methodology and information sources Information Sources Public procurement portal at the Public Procurement Agency. Методология на обработка на данните: 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 34

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