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Messenger Birth of the “tender mafia”
From the moment of independence until 2000, officials themselves chose from whom, for how much and in what quantities to buy goods and services for the needs of the state. Imagine that! It was during that period of legislative imperfection that the seeds of corruption in the tender sphere were sown. And how hard it was for the ministry’s fat cats to give up such a golden vein.
A bit more about the tender procurement system. The birth of «tender mafia».
From the moment of independence until 2000, officials themselves chose from whom, for how much and in what quantities to buy goods and services for the needs of the state. Imagine that! It was during that period of legislative imperfection that the seeds of corruption in the tender sphere were sown. And how hard it was for the ministry’s fat cats to give up such a golden vein. And on February 22, 2000, the Verkhovna Rada adopted the Law “On the Procurement of Goods, Works and Services for State Funds”.
It would seem the problem was solved and the evil eradicated. The solution was simple – all procurements had to be conducted in the transparent environment of an open tender (auction). Supplier companies had to offer the best price and quality of goods and services. But suddenly, out of nowhere, a public organization called “Center for Tender Procedures and Business Planning” appeared and claimed copyright on tender documentation, the very process of procurement with state funds. All supposedly according to the law.
The founders and owners of the aforementioned public organization claimed that they had “allegedly” developed the public procurement system thanks to which the state would save a billion a year. Without them, the state would suffer multi-million losses and the legitimate copyrights of the inventors would be infringed.
It turned out that listed for the owners of the organization were: “Samples of tender documentation” (certificate PA No. 5086 of 17.01.2002); “Methodology for evaluating tender proposals” (certificate No. 6443 of 22.10.2002); “Methodology for conducting checks of customers’ compliance with the requirements of current legislation when procuring goods, works and services with state funds” (certificate No. 6443 of 14.08.2002) etc.
The SBU services and the Ministry of Justice intervened. After an investigation it turned out that those so-called inventions were not such and, in fact, they were essentially copies of certain provisions of the Law “On the Procurement of Goods, Works and Services for State Funds” and a number of regulatory legal acts of the Ministry of Economy.
The role of this organization was that, through connections in government bodies, they allegedly guaranteed the client (who turned to them and joined their ranks) a win in the tender. Their services, negligible in content, sometimes reached 10,000 for an A4 sheet. Also, the tender winner was obliged to pay 6% of the tender amount. If the client refused to pay – the tender was lost. More than 20,000 firms became winners of this organization, but at what cost?! It is no secret why such public organizations and business associations are created. Want to win a tender? Get a permit? Join our organization! For a high fee we will help prepare the documents, pay everyone. A good intermediary layer between the client and the state. Thus officials obtained a clean scheme for passing bribes.
The “income” of that organization amounted to about 300 million per month.
“Thanks to” such a scheme the state suffered multi-million damage due to the fact that the cost of services was artificially inflated, and since the tender was carried out purely formally – the quality of services left much to be desired. Private businesses also suffered losses due to the large sums they paid to promote exactly their goods and services. No fair competition.
Below is an approximate scheme of the «tender mafia» taken from independent sources, by logically correlating the necessary connections to carry out schemes of this scale.
In March 2008 the Verkhovna Rada repealed the law on public procurement. Accordingly, the Tender Chamber ceased to exist.