The “devil” is in the details: How procurement for the EXPO will be done – it looks like a law, but it’s still a regulation

Feb 3, 2024

Link to original article: https://n1info.rs/biznis/djavo-je-u-detaljima-kako-ce-se-raditi-nabavke-za-expo-lici-na-zakon-ali-je-ipak-uredba/

It looks like the Law on Public Procurement – but it is not. It is about a new regulation which, in accordance with the lex specialis, prescribes how procurement will be carried out and jobs awarded for EXPO 2027. Nemanja Nenadić from Transparency Serbia reveals that the differences are hidden in “little things” – increased limits of the procurement value for which a public call is published, but also the absence of a prescribed minimum deadline for submitting bids. “Thus, there is no obstacle for one of the special EXPO 2027 companies to announce a public call for the procurement of works worth 100 million euros and to ask interested companies to send their bids – by tomorrow” warns Nenadić.

On February 1, the Government of Serbia adopted the Regulation on the rules for the procurement of goods, services or works required for the realization of the international specialized exhibition EXPO Belgrade 2027.

Nemanja Nenadić, program director of the organization Transparency Serbia , points out for the portal N1 that the first thing that anyone familiar with the Law on Public Procurement will notice – when meeting the Regulation of as many as 62 articles that the Government passed for procurement within the EXPO 2027 project – is that many provisions from that law have been transferred into it.
“Logically, the question arises – why was this done, if previously the application of the Law on Public Procurement was excluded by a special law for EXPO”, Nenadić points out.

The answer, he says, is partly hidden in the “trifles”, that is, the differences that are noticeable in this regulation in relation to the Law on Public Procurement.

Two important differences

“The first important difference is that the limits for the implementation of the procedure for which a public call is published are higher than those provided for in the Law on Public Procurement, so instead of the thresholds of one million dinars for services and goods and three million dinars for works, they are raised several times here – to 12 million dinars (for goods and services) and 24 million dinars (for works)” Nenadić points out.

For purchases of lesser value, as he adds, three offers are collected (from companies of the orderer’s choice), without publishing a public invitation.

“Another ‘little thing’ that is omitted in the Regulation, but exists in the Law, are the deadlines for submitting bids. The client (especially a company) must set a deadline for submitting bids, but, unlike the Law on Public Procurement and the elementary logic for a public invitation of any kind, no minimum deadline that can be set is prescribed. Thus, there is no obstacle for one of the special EXPO 2027 companies to publish a public invitation for the procurement of works worth 100 million euros and to ask interested parties companies to send offers – until tomorrow” warns Nenadić.

For the sake of comparison, in the Law on Public Procurement, when it comes to more valuable procurements, the shortest possible deadline is 15 days, and that, as our interlocutor explains, if there is extreme urgency.

“The existence of the possibility of shortening the deadlines in the Law on Public Procurement is a key indicator that the application of that law is not excluded due to the alleged urgency of construction on the EXPO 2027 project , but for another reason – the desire to avoid any possibility of contesting decisions on awarding contracts” he warns.

Who will protect other bidders

Nemanja Nenadić points out that a much bigger problem than the bad solutions from the Regulation is what is not regulated in the regulation, nor could it be regulated by that act, and that is – the protection of the bidder’s rights.

“As Transparency Serbia warned as soon as the proposal for the Law on EXPO 2027 appeared on the parliamentary website (there was no prior public discussion or announcement), the only reason the Government could have for proposing the exclusion of the Law on Public Procurement is precisely the intention to exclude the possibility of legal protection in the event that procurement conditions are set or rules are violated during the selection of contractors” our interlocutor points out.

He explains that the fact that principles from the Law on Public Procurement, such as the prohibition of discrimination, are rewritten in the decree – has no significance in a situation where a company that was interested in getting a job, but was prevented from doing so – has no one to complain to.

Namely, when procurements are carried out according to regular law, in such cases a request for the protection of rights is submitted, first to the contracting authority, and then to the Commission for the Protection of Rights in Public Procurement Procedures.

“Even if the public stands up, or some other state body notices that the terms and criteria of the procurement have been rigged, there would not be a single legal mechanism through which the contracting authority could be obliged to cancel such a procurement, that is, it would only be a matter of his good will” says Nenadić.

Unconstitutional article of the EXPO law

According to Nemanja Nenadić, four days ago, Transparency Serbia submitted to the Constitutional Court an initiative to challenge the constitutionality of Article 14 of the Special Law for EXPO, in which the violations of procedures during the adoption of the law, the unconstitutionality and harmfulness of its provisions were described in detail.

“In addition to the fact that the exclusion of the application of the Law on Public Procurement is controversial due to Serbia’s international obligations, and above all the Stabilization and Association Agreement with the EU, the authorization of the Government to pass this regulation is beyond any doubt unconstitutional” Nenadić points out.

He explains that in Article 14 of the special law, the Government is authorized to “closer regulate” the procurement procedure of special EXPO companies.

“However, it is legally impossible to ‘regulate more closely’ something that is not regulated by law at all” he points out. And, the Government passed the decree precisely with reference to this provision.

“In some of its earlier decisions, the Constitutional Court abolished norms that had the same deficiency, and therefore we do not see the possibility of doing otherwise in this case. The only question that remains is whether the Constitutional Court will take this initiative into consideration in a timely manner and whether it will suspend the implementation of the disputed provisions until its decision is made, or whether it will decide on this only when all procurements for the EXPO have already been contracted and when it will be too late to prevent the damage that can be expected to occur due to the restriction of competition for obtaining these jobs” indicates our interlocutor.

Lex specialis

A special law – lex specialis – “on special procedures for the implementation of the international specialized exhibition EXPO Belgrade 2027” was adopted at the end of October last year.

“The implementation of the EXPO Belgrade 2027 project represents a general interest of importance for the overall economic development of the Republic of Serbia. All procedures carried out in accordance with the provisions of this law are considered urgent and all state bodies and bodies of local self-government units, business companies, as well as other bodies and institutions that exercise public authority are obliged to issue acts within their jurisdiction without delay” this law states.
The organization Transparency Serbia initially warned that the works for the construction of the exhibition space for EXPO 2027, facilities for the accommodation of participants and visitors, the National Stadium and the accompanying infrastructure will be contracted without applying the Law on Public Procurement “which creates a great risk that the costs will be higher than they would be in conditions of full competition”.

“That ‘recipe’ has already been tried in several other cases, the most famous of which are ‘ Belgrade Waterfront ‘, ‘Moravian Corridor’ and (unrealized) ‘Southern Stream’. Due to the exclusion of the Law on Public Procurement, in the event that discriminatory conditions are set for the selection of contractors, it will not be possible to dispute this before any state body” Transparency Serbia stated at the time.

This lex specialis refers to the implementation of the EXPO BELGRADE 2027 specialized exhibition, as well as the construction of the National Football Stadium and housing facilities for the accommodation of participants and visitors.

Recently, the Minister of Finance Siniša Mali stated that a “completely new city” is being built in Surčin for the needs of the EXPO 2027 exhibition, which, in addition to the fair, the National Stadium and apartments, will also include a new aquatic center for water sports with swimming pools, diving boards…

And future costs have already increased.

The costs are even higher.

Presenting the ” Leap into the future – Serbia 2027 ” plan, Serbian President Aleksandar Vučić said on January 20 of this year that 17.8 billion euros will be invested in its implementation .

That is significantly more than the original 12 billion euros , announced only half a year earlier.

Big announcements also brought new questions: do these promises have a foothold in reality or will the state, as the Fiscal Council already estimated, “bury” in debt .