State Audit questions economic side of COVID-19 protective gear procurement

State Audit questions economic side of COVID-19 protective gear procurement

The audit performed recently does not allow for the conclusion that the necessary goods procured by Latvia’s Defence Ministry and Center for Defence Military Sites and Procurement (VAMOIC) were purchased for the most economic prices, as reported by State Audit (VK).

In the report, auditors reveal cases in which, according to VK, contracts were signed with suppliers in a time when goods identical to the ones procured as part of those contracts were available at considerably lower prices. The procurement procedure was not quick in all observed cases. Additionally, auditors also found major problems with surveying of protective gear – the sector the responsibility for which lies with the State Fire and Rescue Service (VUGD).

Continuing inspections, the State Audit evaluated procurement procedures for acquisition of individual protective gear and disinfection substances between 2 April and 9 June, when Defence Ministry and VAMOIC were delegated with responsibility of managing crisis reserves. VAMOIC was provided EUR 45 million from the government. The centre has signed procurement contracts worth a total of EUR 38.9 million. As of 30 June, the centre paid EUR 15.1 million for supplied goods, VK notes.

“State Audit failed to confirm all contracts were signed with contenders who offered the lowest possible prices at the time of submission of offers” says State Auditor Elita Krūmiņa. ‘Following the stabilization of the situation, Defence Ministry should have reacted and changed its approach, returning to economical offers, allowing price and quality criteria to dominate in the contender evaluation procedure. Non-application of Public Procurement Law does not cancel the duties outlined in other laws that regulate the public sector’s operations with budget finances and property.

Non-application of Public Procurement Law does not relieve of the duty to spend state budget finances economically.

Unlike other departments, Defence Ministry was provided with an order in accordance with which procurements are to be organized. There are also recommendations from EU and national institution regarding behaviour in a state of emergency. The defence department, when performing centralized procurements of individual protective gear and disinfection substances, has mostly complied with the specific order.

Between 17 April and by the end of the state of emergency in Latvia (9 June) the procurement procedure in the defence sector was held in two stages. First authorities looked if it was possible to ensure supplies are delivered on time. Evaluation was also performed for security, volumes and document submission criteria. Contenders’ offered prices were evaluated in the second phase. During inspections auditors failed to find sufficient proof that the initially established order was used equally during the entire state of emergency – May and June included.

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