Delyan Dobrev’s parents have won a tender in Smolyan with … “risk management strategy”

The mayor of Smolyan, who is also the district leader of GERB, has signed a pellet supply contract with the parents of his colleague Delyan Dobrev in Haskovo, after eliminating their competition from the public procurement procedure.

The “Vizyor” /Viewfinder/ company from Haskovo will deliver 700 tons of pellets to Smolyan Municipality over the next three years. This was made clear when awarding the public procurement in which the “Risk Management Strategy” was a leading condition. The tender, as it is already known, was won by the company owned by the parents of GERB MP Delyan Dobrev.

The contract with their company was signed on June 30, between the mayor of Smolyan Nikolay Melemov and the partners in “Vizyor” Zlatka and Alexander Dobrevi. Nothing unusual for the political reality in Bulgaria, where every day public contracts are won by companies close to the people governing the country. Nothing unusual if “Vizyor” was chosen because of the lower price or higher quality of the pellets they will deliver. But not after the actual removal of the other tender participants.

The pre-announced winner

The public  procurement for regular supplies of pellets for heating was announced by the municipality of Smolyan at the beginning of the year. The estimated delivery price is “of 452 BGN” per tonne, and the weighing factors of the award criteria are: price – 60%, term of delivery – 20% and … risk management – 20%. Three companies – “Vizyor”, “Hightec” and “Toplivo” – have submitted documents for participation in the tender.

“Hightec” was excluded from participation yet at the first meeting of the commission because its price proposal was not placed in a separate sealed envelope. At the next meeting for consideration of the technical proposals, the second participant – the joint-stock company “Toplivo” was eliminated as well. The motive – “a substantial omission in the presented “Risk Management Strategy”.

The “omission” was found by the three-member Commission appointed by an order of the mayor of Smolyan Nikolay Melembov. The Commission includes three employees of the Municipality – legal advisor, accountant and a specialist from the “Administrative and Information Service” Directorate. There is no expert assessment of strategies in the documents, as the requirement of the Public Procurement Act is in cases where the quality indicators are not quantifiable. This was shown by the examination of the tender documentation. Thus, the tender final was reached without competition, only by “Vizyor”. The mayor of Smolyan, who is also the district leader of GERB, signs a contract with the parents of his colleague in Haskovo Delyan Dobrev – district chief of GERB in the city. The price at which they will deliver the agreed pellets is almost 407 BGN per tonne.

Are pellet supplies risky?

In 2017, public procurements for supply of pellets were announced by the municipalities of Bourgas, Lesichovo, Lom, Sitovo, Tutrakan, Svoge, Ardino and Smolyan as well as General Directorate “Border Police”, South-West State Enterprise – Blagoevgrad and two schools – “Hristo Botev” in Sofia and “St. Paisii Hilendarski” in Zlatitsa. With the exception of Smolyan, all other principals have placed only one winner selection criterion – the lowest price.

Addiction

For the ten months since the beginning of 2017 Smolyan has announced 10 public procurements. In all of them, the lowest price was not the criterion for assessments of the bids. For the announced in April tender competition for repair of streets and overpasses, amounting to BGN 3.6 million, the leading criterion for selecting the winner is the “Organization for implementation of the procurement”  with 60% weighing factor. The price is only with 40% weighing factor.

With the same awarding criteria, a public procurement was announced in May for repair of four schools and a kindergarten for more than BGN 5.5 million. And the latest public procurements illustrate the obvious “addiction” of the administration, led by the mayor of Smolyan Nikolay Melemov to the “risk management”. 

In the announced on July 15th public competition for the selection of a company to reconstruct the water mains in the village of Momchilovtsi for nearly BGN 2 million, the price formed only 30% of the final assessment. The 50% weighing factor is again the “Risk Management Strategy”.

With exactly the same criteria (50% for risk management, 30% for price and 20% for term of delivery), the offers will be assessed for the announced in October procedures for construction of roads to the villages of Vievo and Sivino. They are for nearly BGN 1.4 million. In the absence of objective criteria for assessing these strategies, the Mayor of Smolyan will in practice acquire unlimited freedom of choice for the future contractor of  public procurements.

What is “risk management”?

A definition of risk management is given in the Public Sector Financial Management and Control Act. “Risk management comprises identifying, evaluating and controlling potential events or situations that may adversely affect the achievement of the organization’s goals and is intended to give reasonable assurance that the objectives will be achieved” – it is written in Art. 12, par. 2 of the Act. The Act obliges the budget organizations, municipal enterprises and all those who are administering European funds, to develop risk management strategies and update them every three years. Municipality of Smolyan, which eliminates companies from participation in public procurement tenders due to significant deficiencies in their strategies, has no such strategy, showed the check of “Pro Veritas”. On its website, in the „Strategic Programmes” menu, 19 programs, plans and strategies are listed. In all of them, not a single word is mentioned about “risk management”. The purpose of public procurement is to ensure real competition. That is why the law does not admit the use of indicators that do not allow a clear motivation to choose the winner of the procedures. Now, applying its universal “know-how” – “risk management strategy” and obviously neglecting the law, the local administration and the mayor of Smolyan acquire unlimited freedom when awarding activities paid by public funds. Thus, the choice always turns out to be predetermined.