The bids by two candidates for the delivery and building of an integrated electronic government (e-government) system were opened on August 29 by State Administration Minister Nikolai Vassilev.
Hewlett-Packard Bulgaria offered a price of five million leva while Siemens Business Services put forward a price of less than four million leva.
It was expected that the ministry would name the winner in the next few days. However, several business organisations have alleged they already knew who would get the job, because, they claim, the entire tender procedure was skewed to favour a particular candidate.
In July, the Bulgarian Association of Information Technology (BAIT) called for the termination of the public procurement procedure. BAIT chairperson Zlatko Zlatev said that there was a lot of potential for corruption in the procedure, as a result of which the state would incur losses.
Vassilevs ministry said that as much as 90 per cent of the money would be spent on hardware.
But, Zlatev alleged at a news conference, the hardware terms of reference had been drawn up in a way that suited a particular company, Hewlett Packard. Only 10 per cent of the money would be used for the purchase of software, and this amount should have been larger, he said.
In a media statement hours after BAITs news conference, Vassilev firmly rejected BAITs allegations and said certain circles are interested in the failure of our ministrys e-government project.
Vassilev said that BAITs request that public procurement procedure be stopped was not supported by all companies in the sector.
The criteria are high, as we cannot allow any failure. Some of BAITs members had submitted bids for the tender, Vassilev said.
I cannot accept the tone and the whole content of the letter requesting termination of the procedure. It is biased, groundless and unsubstantiated, he said.
On August 1, BAIT received support from the Bulgarian Industrial Capital Association (BICA) who, in a media statement, called the tender the latest scandalous and corrupt procedure.
We would not want this to be the latest failed, non-viable information system project - but one generously paid for by the State, the employers association said.
Later in August, the Bulgarian Industrial Association (BIA) joined the two organisations protest, and the controversy around the tender was even brought to the attention of the European Commission (EC).
On August 21, a meeting took place at the Cabinets offices between the Interior Ministrys Anti-Corruption Public Council (MIAPC) and EC officials who had been working on the final verification and conclusion of the justice and internal order chapter of EU accession.
BIA president Bozhidar Danev, in his capacity of a member of the MIAPC, presented the position of Bulgarias private sector on ways to reduce corruption. One of the areas where BIA saw corruption was in relations between business and the state administration.
Danev described the delivery of electronic equipment as a particular problem.
A distorting competition practice is to predetermine the contractor by means of intentionally formulated ToR (Terms of Reference), he alleged.
BIA did not stop there. On August 16, the Council of Economic Growth, a body consulted by the Cabinet as part of public-private dialogue on national economic policy, held a meeting. At the request of the business sector, one topic discussed at the meeting was public procurement for the supply and setting up of the e-government integrated system.
Although CEG is just a consultative body with no powers in law, the combined efforts of BIA and BAIT managed to start a discussion about the controversial tender, BIA spokesperson Ani Alashka told The Sofia Echo on August 29.
We fully support BAIT in their protest against the tender procedure because we think that the whole tender was done in a way to match the offer for a certain candidate and this candidate is Hewlett-Packard Bulgaria Alashka said.
If you just see what was written in the ministrys requirements for the tender, this would become pretty obvious. The specifications to which the candidate had to answer were very incorrectly put, she said.
According to Alashka, one of the requirements was that software had to be produced by Hewlett Packard in general. Another requirement was that candidates had to have two similar projects already done in Bulgaria, a requirement that only Hewlett-Packard met. It makes it clear that Hewlett-Packard Bulgaria was the favoured candidate.
It is as if they had forgotten only to write down the size of the shoes of the manager of the winning company, Alashka said.
What BAIT and BIA could hope for, according to Alashka, was a complete revision of the tender procedure. However, this would not stop the tender even though BAIT has already lodged court action against the procedure. According to the recent changes to the Public Procurement Act, lodging court action cannot stop a tender procedure. Of course, if after some time the court finds the procedure was incorrect, the whole e-government system project might be blocked. This could easily turn into something similar to the sagas of the Trakia Highway deal or the deal about the Black Sea airports in Varna and Bourgas. These two deals were attacked in court and were each delayed by more than six months.
Vassilev said previously that the Government was ready to spend six million leva on the e-government project. The project should be implemented by the end of 2007.
The Sofia Echo contacted the PR company representing Hewlett-Packard Bulgaria, which undertook to provide comment, but was not able to by the time the newspaper went to press.
E-government was not the only problem that Vassilev has had to face recently.
In July, it emerged that the launch of a new electronic register of Bulgarias more than 800 000 commercial corporations would not happen as planned on October 1 and would be pushed back to January 1 2007 or even October 1 2007.
The register is expected to streamline the setting up of businesses and to erase phantom companies with identical names. The delay, which now seems inevitable, has been caused by the fact that only a month before the deadline, the Registry Agency is short of the necessary staff and information system capacity. This has raised fears that commercial register reform might fail if the new system starts operation before it is completely ready. The electronic register is one of the obligations Bulgaria undertook ahead of its forthcoming membership of the EU.
The Finance Ministry, in charge of the Registry Agency, has not yet submitted proposed amendments to Parliament, as the procedure for the new register requires. However, this is expected to happen in September.
Vassilev, on the other hand, has shown strong evidence of action against corruption. According to a report presented at an anti-corruption seminar on August 28, the most frequent irregularities committed in Bulgarias state administration included procedural violations in the attestation of civil servants, failure to disclose financial interests, and conflict of interests. The report, compiled by the State Administration Ministrys Inspectorate, said that checks conducted between April 1 and August 25 had found 1103 irregularities in central and local government departments.
The checks revealed that 137 civil servants either had failed to disclose their financial interests or were involved in conflict-of-interest situations.
The list of irregularities also included unfounded promotion of civil servants, salary increases without attestation, and violations of personnel recruitment contest rules.
The inspectorate has issued 130 statements and sets of recommendations to remove the irregularities. Vassilev said that a further 200 checks would be conducted by the end of this year. Some of the most vulnerable offices would be checked two or three times.
Control has been enhanced, Vassilev told Bulgarian news agency BTA, in order to boost the confidence of the Bulgarian public, the business community and the international partners in the standard of public services and in the transparency of the state administration.
Funding saved through public procurement procedures will allow an additional 5000 civil servants to receive English language training this year.
