Ústí nad Labem received a fine of 300,000 from the ÚOHS for a faulty contract

Brno - Ústí nad Labem was fined 300,000 crowns by the Office for the Protection of Competition (ÚOHS) for mistakes in the contract for the first phase of the revitalization of the center. In the contract worth 139 million crowns, ÚOHS identified three serious violations, noting among other things the non-transparent selection of the winner. Kamil Rudolecký, the vice-chairman of the antimonopoly office, informed ČTK about this. The city can appeal the fine to the chairman of ÚOHS, but it will consider further steps.
The office is currently without a chairman following the resignation of Martin Pecina, who became the Minister of the Interior. The government this week proposed ČSSD MP Petr Rafaj to head ÚOHS, but he must be appointed by the president.
The city of Ústí nad Labem has forwarded the ÚOHS statement to its legal office, according to spokesman Milan Knotek, which is to confirm or refute the finding of wrongdoing. "If it really occurred, the city will certainly investigate the extent of any wrongdoing by the companies or individuals involved in the whole matter," Knotek said. According to him, the selection procedure for the first phase of the revitalization of the center was conducted by a private engineering company on behalf of the city.
In February 2005, the city limited the number of bidders for the contract through a lottery, and only representatives of the city were present during the drawing. According to Rudolecký, this is an absolutely non-transparent method, as it could not be independently verified. Representatives of individual bidders were also unable to participate in the lottery. "The relevant protocols do not contain a description of how the lottery was conducted," he noted.
The city allegedly committed another violation by confusing the criteria for assessing the bidders' ability to fulfill the contract with criteria assessing the entire contract, including its economic advantages, in the assignment. In evaluating the offers, Ústí nad Labem reportedly did not sufficiently justify their final scoring ratings. The contract was eventually awarded to the company Eurovia, formerly SSŽ.
ÚOHS has dealt with public contracts in Ústí nad Labem in the past as well. The office conducted an in-depth review of contracts at the municipal office and last year ordered the municipal office to reissue several public contracts due to errors in the originally announced ones. However, the antimonopoly office did not impose a fine at that time, as the deadlines for initiating administrative proceedings or imposing a sanction had expired.
In 2007, the municipality had an audit conducted to dispel suspicions regarding the contracts. The auditing firm PricewaterhouseCoopers examined contracts from 2003 to 2005 and found no significant violations of legislation or the city’s internal regulations. ÚOHS reviewed a total of 35 contracts from 1997 to 2005. According to them, the problems were primarily with older contracts; due to expired deadlines, ÚOHS could not impose a fine.
A more well-known penalty was imposed on the city for 145,000 crowns for illegal contracts related to information technology from 2004 and a case from the year before last involving the construction of flood protection walls on Střekov embankment. At that time, the office ordered the tender to be reassessed, but did not fine the city.
In 2007, Zlín received a record penalty of three million crowns for errors in contracts, including non-transparent lotteries and limiting the number of bidders. However, the court annulled it, and ÚOHS is now reviewing it again.
Last February, ÚOHS head Pecina also confirmed a fine of half a million crowns for non-standard lottery procedures for Karlovy Vary regarding a contract for the construction of a new hall. In this case, ÚOHS noted that the competition organizer selected two of the companies, including the winner, from a closed urn for several dozen seconds, while the other tickets were drawn significantly more quickly. Vary disagrees with the penalty.