Is the low­est bid the best of­fer?

Financial Mirror (Cyprus) - - FRONT PAGE -

Be­cause of the ob­jec­tions very of­ten raised, which has by now be­come rou­tine in bids for the public and semi-public sec­tor for ser­vices of­fered, ten­ders con­tinue to place a con­di­tion that “the award is based on the low­est bid.”

Thus, and with­out con­sid­er­ing the knowhow, ex­pe­ri­ence and history of the ten­derer, the ten­der awarded goes to the cheap­est. This may not be wrong, but is it in the public in­ter­est? So, we end up with a sys­tem where what­ever the ex­pe­ri­ence of a ten­derer, out­sourc­ing work to our own area of prop­erty de­vel­op­ment or real es­tate, all kinds of bids are sub­mit­ted with a dif­fer­ence range from EUR 1,000 up to 5,000.

This huge dif­fer­ence, as an in­di­ca­tion, es­pe­cially in cases that re­sult in the courts, such as ex­pro­pri­a­tion, fea­si­bil­ity stud­ies, etc., the re­cip­i­ent is obliged un­der the terms of the of­fer to go to the cheap­est.

In a re­cent case, the dif­fer­ence from our bid of EUR 3,500 to the suc­cess­ful bid­der (one-man of­fice with a history of two years) was a mere 300 eu­ros. The case even­tu­ally ended up in court, where we as de­fen­dants ap­peared on be­half of the owner and our col­league rep­re­sented the ex­pro­pri­a­tion au­thor­ity. The out­come is still pend­ing, but in courts, apart from ex­pert and sci­en­tific knowl­edge, a huge part of the ar­gu­ment is based on im­pres­sion the wit­ness will give the court. So if there is no rel­e­vant ex­pe­ri­ence and the de­fen­dant’s pre­sen­ta­tion is suc­cess­ful, it is un­der­stood that this will be against the public in­ter­est.

Of course we’re not to say that any­one who has no ex­pe­ri­ence should be re­jected, but a ba­sic pro­fes­sional ex­pe­ri­ence (depend­ing on the sever­ity of the case) is nec­es­sary. This re­minds me of the no­to­ri­ous as­sess­ment of the pre­mium prop­erty op­po­site Hil­ton ho­tel (for the Qatari pro­ject) where we sub­mit­ted a bid (and won) for EUR 5,000, while the other bid­ders put in for 20,000. Our of­fice was ac­cused of all sort of things, to which was added the com­ment the tech­ni­cal cham­ber ETEK that “there should be a min­i­mum level for fees” etc. So, I now ask ETEK – where has “the cheap­est” rule gone? Do they adopt or re­ject it at will?

Per­haps, the best way is for ten­ders to first con­sider the ba­sis of ex­pe­ri­ence and knowhow, and at the sec­ond stage to opt for the cheap­est bid. Look­ing to find the most suit­able so­lu­tion, the reg­u­la­tions for ten­ders are not fea­si­ble be­cause the Ten­ders Coun­cil will raise ob­jec­tions. In the case of the Qatar in­vest­ment, and to the credit of then pres­i­dent Demetris Christofias who was harshly crit­i­cal of the sys­tem, the whole deal was up in the air be­cause of op­po­si­tions and de­lay sur­round­ing the is­sue. The other party may have failed to con­vince the Ten­der Board, but on the other who paid for the whole de­lay? The whole deal may have even­tu­ally gone belly up for other rea­sons, but imag­ine what would hap­pen if we had all been in agree­ment and the trans­ac­tion failed be­cause of our own ap­peals and ob­jec­tions process.

Another case with sim­i­lar ten­ders was as­signed to two agen­cies for the es­ti­ma­tion of a prop­erty held by a public or­gan­i­sa­tion for which a four-page pre­sen­ta­tion was sub­mit­ted, but with­out sup­port­ing ev­i­dence af­ter which our of­fice (the most ex­pen­sive bid­der) was as­signed to as­sess the two pre­vi­ous re­ports, which took us al­most 1 1/2 month and a re­port of around 30 pages – nat­u­rally, the num­ber pages cer­tainly does not make sense if the con­tent is not of rel­e­vant qual­ity. In the past, we have also been as­signed en­vi­ron­men­tal im­pact stud­ies which are of­ten dished out in a hap­haz­ard way, to which ETEK (here we agree with them) ar­gued that the qual­ity of the re­ports should se­ri­ously be taken into con­sid­er­a­tion.

This is where we need ETEK to stand firm in its in­ter­ven­tions to the state or public ser­vices and a sys­tem where the non-run­ner up ten­derer would in­deed have the right to protest, but not to stop the whole pro­ce­dure that would cause fur­ther un­nec­es­sary de­lays. The prob­lem is par­tic­u­larly ob­vi­ous in ar­chi­tec­tural com­pe­ti­tions where work stops be­cause of these pro­ce­dures (such as the Paphos ma­rina case).

The growth of the Cyprus econ­omy and the im­ple­men­ta­tion of such projects should be the pri­mary goal, es­pe­cially in view of the cur­rent eco­nomic sit­u­a­tion and per­haps a change should be in­tro­duced in the law to award the low­est ten­derer some form of com­pen­sa­tion if the cheap­est bid was ini­tially dis­qual­i­fied for other valid rea­sons. It is not fair that the process is con­stantly one-sided to the detri­ment of the state. Fur­ther ed­u­ca­tion in all mat­ters is nec­es­sary. How­ever, the re­cent com­ment by Trans­port and Com­mu­ni­ca­tions Min­is­ter Mar­ios Deme­tri­ades re­gard­ing the new pro­ject for a na­tional mu­seum in Nicosia was the worst.

Asked how the cost of the pro­ject will be re­duced from EUR 70 mln to 50 mln, as es­ti­mated by quan­tity sur­vey­ors, he was com­pletely neg­a­tive un­der­min­ing the pro­fes­sion, while to the ques­tion of who will un­der­take the task in the plan­ning and over­sight stage, up un­til the fi­nal ten­der is awarded, and if some­one will mon­i­tor or fol­low up on the de­ci­sion, he had no re­sponse.

So, this pro­ject is cru­cial pro­ject of mon­u­men­tal im­por­tance for tourism and rev­enue in­flow to the cap­i­tal, will prob­a­bly never be im­ple­mented un­less there are changes in at­ti­tudes or oth­er­wise.

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