Irregularity in public procurement, Tarja Richards ... - Interact

Irregularity in public
procurement
Tarja Richard
Managing Authority
MED programme
Programme cofinancé par le Fonds européen de
Développement Régional
Programme cofinanced by the European Regional
Development Fund
Type of irregularity 1/3 *
in public tenders above (or below) the treshold of EU Directive
1.Non-compliance in advertising
Absence of publicity --100% cut
Partial or insufficient publicity –25%
(local, national)
(Notice of award not published – 2-10%)
2.Contract without competition –100%
* Source: COCOF guidelines for determining financial corrections –
07/0037/01-EN
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Type of irregularity 2/3
in public tenders above (or below) the treshold of EU Directive
Additional services commanded, exceeding by >
50% the value of the contract – 100% of the amount
exceeding 50% of the value of the original contract
Reduction of commanded services without
reducing the price of the tender –25% of the final
value of the contract
Unlawful negociation during the award process -
- 25%
+ ToR contents not clear enough to identify services asked
for
Type of irregularity 3/3
in public tenders above (or below) the treshold of EU Directive
Conformity of the award criteria:
Award criteria not published
Unlawful (discriminatory) award criteria
Too spesific criteria (exclusive)
= 25%
+ Real award criteria not corresponding what has been
published in the tender or not all criteria used
+ ‘Slicing’ a bigger tender to smaller contracts to avoid
public procurement procedures
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Overall principals of public
procurement
Equal treatment
Transparency
Competition
(= accessibility of publicity, absence of favouritism,
same procedure for all )
Traceability
+ value for public money (efficiency, lowest cost
for similar quality)
When irregularities are found
Case-by case analysis
Does the irregularity bring real
consequences to the result of the tender?
Is it possible to identify the exact value of
the irregularity?
Gravity of the irregularity =
% of the funding to be recovered
3

How are irregularities detected?
-MED programme framework
Primary responsable the MS = FLC system
Programme level/ Ex Ante:
Visits on the spot (JTS/MA)
Sampling ~20% of projects with risk
criteria orienting the annual samples
LP and partners equally targeted
How are irregularities detected?
-MED programme framework
EX Post – Progress Reports
JTS verifications: deliverables, external expertise costs,
services
If detected during the project operating time:
-reducing the following reimbursement amount
If risk of ‘systemic’ error (project or MS level):
-freezing payments until clarification
If detected during 2 nd level control (ex post):
-recovery procedure foreseen in the audit trail
4

Systemic or ponctual errors?
-MED programme framework
Systemic at partner level or project level
- no procurement rules or insufficient
internal/external control
Systemic within national FLC system
- centralised control with insufficient verification of
public procurement conformity, or decentralised
with insufficient competence requirement for
controllers
Ponctual (errors in one tender procedure)
Irregularities in public tenders
MED programme approach
Programme tools
Factsheet 19 (guidance)
Audit trail (notification and recovery system)
1st level control guide and checklist
National and programme level FLC seminars
MA/JTS control visits
+ National public procurement rules of each MS
5

Irregularities in public tenders
MED programme approach
« The amount of financial correction..should be
equal to the amount of expenditure wrongly
charged to the fund.. » (COCOF)
The amount of public tenders is known in each project (budget lines
external expertise and services)
The FLC verifies the respect of national/EU rules
The JTS checks deliverables (progress report)
No flat rates or partial cuts foreseen in the programme (the controller
decides if the expense is eligible or not – EC 1080/2006, Article 16)
100% cut in case of irregularities found in FLC
(except in Greece)
Irregularities in public tenders
MED programme approach
Problem areas
Minimum tresholds for tender procedures:
different between Member States
Below the national (regional) minimum treshold,
different national instructions apply
Civil society structures (not public authorities) do
not always have existing procedures for tenders
6

Irregularities in public tenders
MED programme approach
Standard procedures in public tenders launched by
the MA:
Always publicity in the European OJ independently of the
size of procurement
Terms of Reference in English and in French
Publicity on the programme website
Published award criteria used in the analysis tables that
are sent to the approbation of the Monitoring Committee
+ Coherence with the procurement rules in France
(cooperation with the public tender service of the MA
structure)
Conflict of interest
Financial Regulation 1605/2002, Art 52.2
(impartiality and objectivity of the decider are jeopardized by familiar,
emotional, political ties or there is an economic or other direct
interest affecting the choice)
How to deal with the conflict of interest in a programme governed by
13 States (Monitoring Committee) and 102 on-going cooperation
projects?
How to attract sufficient amount of offers for expertise tasks with only
a few specialised structures? (publicity level, language,..)
7

Thank you
Programme cofinancé par le Fonds européen de
Développement Régional
Programme cofinanced by the European Regional
Development Fund
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