The tender appeal fee of 20,000 became 10 million. will they appeal?

«My speech is dedicated to the sectoral issues of the Finance and Budget Committee, in particular, the state budget and financial control. Why, because it is obvious that proper financial control over the effective and rational use of state budget funds will be the basis for a stable economy of our state. And in this context, I attach great importance to the effective spending of state budget funds and control over them in the field of state procurement,” Hasmik Yengoyan, a member of the “Strong Armenia” opposition faction, said today in the National Assembly.

He spoke about the following issues in his speech.

Issues in the field of public procurement

“Why am I talking about public procurement, dear colleagues, because the state budget funds are approximately up to 45% is spent in this sector (the rest is salaries, social security payments and military spending). It is natural that if it is possible to spend that 45% of the budget effectively, we will have real savings and a really strong economy. In this context, one of the most important functions of this commission should be effective financial control.

And what do we really have? In fact, the control system that was working at least until 2022, at the initiative of the government and the law passed by the National Assembly, was fundamentally destroyed.

More objective. In 2022, the government presented to the National Assembly a project by which the system of complaints of businessmen in the field of public procurement was significantly revised, and, I will not be afraid of this word, worsened: The rights of businessmen in this area were significantly reduced, which brings and will bring serious corruption risks,” he said.

Changes to the appeals system and their implications

“Until 2022, in the case of disputes related to purchases, when businessmen noticed obvious illegalities on the part of state bodies, they had the opportunity to appeal it to a special judicial administrative body, called “Complaint Examiner”:

In 2022, at the initiative of the government, that body was dissolved and the opportunity to investigate complaints was given exclusively to the courts:

It seems that this is just a legal dispute and not very interesting, but what actually happened?

• Loss of accessibility. Previously, business owners could apply for services without a lawyer, as the procedure was easy and cheap. Now, when the question has been submitted to the courts, businessmen have to bear huge costs by resorting to legal services (which, by the way, have also entered the field of VAT and have also become more expensive).
• Unbelievable increase in state taxes. With the same package, the Law “On State Duty” was also amended. Determined for examination of tender complaints The state tax of 20,000 drams became up to 10 million drams:

Imagine the situation. if the entrepreneur sees that the invitation to tender is discriminatory, is written “for a specific company”, or was illegally rejected in order to recognize the winner of the participant who offered a more expensive price in second place, and wants to restore his right, he has to pay a fee of 1% of the price of the given procurement procedure (tenders).

If, for example, tenders worth 1 billion drams are disputed, the state fee for the lawsuit submitted to the court for the recognition of the right can be up to three instances. 30 million dramsnot including legal fees,” noted the lawyer MP.

Systemic problems and corruption risks

“As a result of all this, businessmen and thinking people have a valid impression that the ruling power with this project simply does not want the field of tenders to be disputed, so that the state bodies can do what they want in this field. Businessmen refrain from going to court, fearing to lose those enormous sums, because they enter into a kind of “war” with the state.

This is problematic even for judges. If the judge approves the claim, he has to make a decision to return the state tax (for example, 10 or 20 million AMD) to the business owner. While in case of private disputes money is taken from one company and given to another, here the other side is the state, and the money must be returned from the state budget.

Thus, the right to effective judicial protection has been limited at the legislative level, which will definitely lead to the flourishing of real corruption schemes and mechanisms in the field of public procurement (45% of the budget). There is no control, there is no institution of punishment,” said Hasmik Yengoyan.

Judgments without consequences

“To the credit of our courts, even under the conditions of this huge financial burden, there are businessmen who fought for their rights, and there are many satisfied claims. Courts have often found that invitations to tender contain discriminatory requirements, impose conditions that serve the interests of a particular company, and wrongfully reject bidders.

Dear colleagues, a question arises. How many official investigations have been assigned to those guilty evaluation commissions and heads of clients? I have not received such information. But doesn’t the ruling power already have a legally effective judicial act, where the illegality committed in the field of state tenders has been recorded in black and white? Were the aforementioned persons punished? Of course not, which once again suggests that corruption is flourishing in this area.

I can say a lot more about purchases, purchases made by one person and blacklists, but considering that my time is limited, I will use this opportunity next,” concluded the member of the “Strong Armenia” faction.

Details in the video.

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