As already voiced by the BizProtect Platform, the technical specifications and other criteria in the invitations for tender procedures in the field of public procurement are adjusted for specific organizations in order to ensure their victory, and as a result contracts were always signed with the same organizations.

BizProtect had alerted the relevant authorities about this issue. As a result,  as a solution to the problem, on 16 November, 2017, the RA Ministry of Finance  adopted the  decision of the Government of the Republic of Armenia N 1454-N "On approving the procedure for assessing the qualification requirements for purchasing items and participants submitting qualification items approved by optional selection of customers."  According to the mentioned decision, the Ministry of Finance of the Republic of Armenia was authorized to conduct an expert examination of the characteristics of the approved purchase items of the customers and the qualification requirements for the participants from the point of view of maintaining the demand for competition.

However, the alerts received after that indicated that even in the presence of this mechanism, the malicious practice of creating specifications for specific individuals continues.  These are reports:

Against the RA Ministry of Defense

"The tender under the code “RA Ministry of Defense-GHAPDZB-7/67” provides as a professional experience for purchase of napkins, the fact of supplying napkins, paper towels, and dispenser/paper towels. Whereas it is a domestic good and a contract for the supply of similar goods was required to be defined as a contract for the supply of domestic products. We can assume that the tender was announced in such a way that a specific participant would participate and there would be no competition. The opportunity for the other participants to participate in the competition has been limited.”

“With this letter I would like to inform you that in the e-tender under the codes "RA Ministry of Defense NTAD-EARAPRB-9/26", "RA Ministry of Defense NTAD-EARAPRB-9/28" ՀՀ "RA Ministry of Defense NTAD-EARAPRB-9/30" announced for the purchase of medical supplies, the technical specifications of goods (177 shares) imported by one company have been included, without any changes, which creates unequal conditions of competition for other companies in the market thus hindering the expansion of the circle of participants and the encouragement of competition between them, which contains possible corruption risks.”

For many years, the RA Ministry of Defense have been announcing tenders for the purchase of medical supplies and consumables with the same technical characteristics, and the same company has always been the winner. The applications of the other participating companies were rejected or the companies were included in the list of participants who did not have the right to participate in the procurement process. This year, no other company except for "CURATIO" Co.Ltd participated in the procurement process. We conducted surveys on almost all doses and received mostly negative answers with unfounded justifications. It should be noted that the technical specifications require: 1. a certificate of registration of goods in one of the EU countries or in the United States or in Japan (except for products manufactured in the Republic of Armenia). 2. International certificate of production quality control (ISO, GMP, CE Mark or other) issued to the manufacturer. 3. Appropriate Certificate (or) quality certificate issued by the manufacturing organization (or the official representative of the manufacturer) for the given product. The products offered by us have the above-mentioned certificates. The availability of these certificates proves the use of products, high quality and safety. Please instruct the State Control Service of the Republic of Armenia to investigate the facts raised in this letter, to ensure corruption risks, including with the Ministry of Defense official and/or any other high-ranking person (persons) in connection with the possible interconnection of "Curatio" LLC, in case of violations to take appropriate action against them and to impose sanctions on the person (s) who committed the offenses.

In the tenders of "medical supplies" consumables include only the technical specifications of the products produced by one manufacturer, which does not allow other organizations to participate in the auctions. This is especially true of the tenders for resuscitation, anesthesiology, trauma and orthopedics. For example, 3-6 of the shares in the electronic tender with the code RA PNTAD-EARAPRB-9/3.”

Against the "Barekargum Tnorinutyun” CJSC of Etchmiadzin Community Municipality of the RA Armavir region

"On 18 March, 2019, the customer announced the tender 19/4 of the RA UAE HEI, then the 19/6 competition of the RA UAE HRC, which I think was carried out by a directed order, violating the RA laws and government decisions, pointing out the specific brand, presenting it. Technical characteristics, which do not correspond to the requirements of the RA Government Decision N 1699-N of 26 October, 2006, the groundless requirements of the licenses. I express hope that in the future, as a result of legislative changes, tenders of such directed nature, with meaningless restrictions, will be excluded, as a result of which even small but well-equipped with experts organizations will be pushed out of the market.”

Against Vanadzor Community Municipality of RA Lori region 

"The customer has announced a tender under the RA LMVK GASHARB-19/42 code, in which a company that has temporarily ceased its activity has participated. Does the company that has temporarily suspended its activities have the right to participate in the procurement process? If so, please provide links to the law, for which I would be grateful. I think it would be right to settle this issue in the law. "

Against the "Service for the Protection of Historical Environment and Cultural Museum-Reservations" SNCO under the RA Ministry of Education and Science 

"On 13 September, 2019 PMAT-GHRB-19/33 tender was been announced for the purpose of acquiring services for organizing cultural events. The opening of the tender took place on 20 September, 2019, and the event should take place on 29 September, 2019 in the Lori Fortress of the RA Lori Region. I consider it necessary to mention that the 19 technical point of the tender stipulate a condition to agree in advance with the customer. According to the tender information published in the procurement newsletter, one participant applied for the tender, and on 25 September the winner of the tender was MOD ART LLC, which belongs to Kamo Areyan's son (https://hetq.am/en/article/83418): Taking into account that the service event should take place on 29 September, but as of 25 September, there is no information in the bulletin about the contract signed, and point 7.1 of the tender agreement stipulates that the contract enters into force upon signing by the parties. The organization suspects that the customer had preliminarily agreed with MOD ART LLC, otherwise the organization would not have taken the risk and would not have participated in the tender under the above-mentioned terms and conditions. Please intervene in this case so that such cases are excluded in the future.”

Against "Yerevan State Medical University after Mkhitar Heratsi" Foundation

"Let's say that there are numerous problems in the procedures for participating in state procurement tenders. We would like to touch upon one of them. The customer has announced an invitation to quote on the cartridges. According to the law on procurement, equal conditions must be created for participants, but the customer must specify the date of production of the cartridge, the label with the existing holographic sign and the zigzag layer on the box of the cartridge. This limits our participation in the next rounds, in case when our organization was the first with its offered price threshold. Can we consider this as an obvious bias and a violation of the law? Can the appearance of the cardboard box of the product and the opening manner be a mandatory condition in the technical description of the product? Is the purchasing company authorized to announce a tender with a technical specification suitable for it? Does the purchasing company have the right to request a tender only with the original brand factory cartridge? Does the purchasing company have the right to prohibit the full participation of compatible cartridges in the tender? Purchase code: GHAPDZB-2019 / 8-5-YSMU. Thanks in advance.”

After studying this report, the expert team of the BizProtect, has repeatedly submitted letters to the authorized body in the field of public procurement, the RA Ministry of Finance, as well as to the state body exercising control, the RA State Control Service. In order to emphasize the importance of the issue, a letter was submitted to RA Prime Minister Nikol Pashinyan. Meetings were organized at the RA Ministry of Finance, including meetings with several Ministers of Finance, Deputy Ministers and the Head of the Procurement Policy Department. In particular, it was proposed that the competent authority set certain group of products for the specifications of the subject of purchase with certain minimum standards (guidelines), which will exclude double-natured comments on the characteristics of the specific subject.

As a result of the follow-up advocacy carried out by the BizProtect, the following two systemic solutions were given to the problem:

A) On 2 November, 2019, the RA Government adopted  "Amendments to the Decision N 526-N of the Government of the Republic of Armenia of  4 May, 2017 “On Making Addendum to the Decision of the Government of the Republic of Armenia N 1454-N of November 16, 2017"  Decision N 1422-N. This decision refers to a new, participatory procedure for the examination of technical characteristics. In particular, before the deadline for amendments to the invitation may expire, anyone may provide the client with a justification for the requirements of the subject of the procurement defined by the invitation, to ensuring competition and non-discrimination provided by law. The customer will publish the summary of the discussions of the received justifications together with the minutes of the application opening session in the official procurement bulletin.  

B) According to the Action Plan of the State Financial Management System Reform Strategy for 2019-2023, approved by the RA Government Decision No. 1716-L of 28/10/2019, the improvement of the procurement planning system has been defined as an Action, ensuring that the identical needs of the bodies are met related to the same procurement items with the same specifications and at the same estimated prices. The RA Ministry of Finance informs that within the framework of the implementation of the mentioned measure, the latter is planing to develop and submit to the RA Government a draft legal act regulating the process.

In addition it should be emphasized that the RA State Control Service has studied the possible corruption risks related to the RA Ministry of Defense, including the possible interconnection of "Kuracio" LLC with the official and/or other high-ranking person (persons). As a result of the monitoring, such interconnection was observed.

The RA State Control Service also carried out a similar monitoring based on the report against the "Service for the Protection of Historical Environment and Cultural Museum-Reservations" SNCO. The results of monitoring were presented to the Minister of Education and Science.

The BizProtect.am website operated by the Armenian Lawyers’ Association (ALA) is a whistleblowing platform targeted at corruption and any other issues, risks and issues that impede business activity. This site also provides opportunity for anonymous alerts. Appropriate steps are being taken to verify the authenticity of alarms and provide solutions.