The authorities that manage European funds will be required to reduce the value of the refund or deny it altogether, in case they find violations of national rules on public procurement, says an emergency ordinance approved by the Government and obtained by MEDIAFAX.
If the contract was awarded without observing advertising requirements, or it was expanded through additional documents by a combined value that exceeds the legal limit on public purchases, the state will refund no money.
In the case of a contract expanded through additional documents signed in violation of national and community legislation on public purchases, the state will refund no money if the combined value of those documents exceeds the legal limit, or will reduce the refunded amount by up to 25% if the combined value is below the legal limit.
The ordinance says that, if the award documents or participation announcement do not describe every qualification and selection criteria, the state will reduce the refunded amount by 5%, 10% or 25%, depending on severity. The same penalty will be applied in the case of a contract awarded using illegal criteria, or using a qualification/selection criterion to evaluate the offers.
If potential bidders have been barred from taking part in a procedure by restrictive criteria, such as the requirement to have an office in the country or in the region, or too specific technical standards that favor a single supplier, the state will reduce the refunded amount by 25%, even 100% in serious cases.
A 25% reduction will also be applied if the contract’s objective is described insufficiently or discriminatively, as well as for companies that continued negotiations during the award procedure, unless these discussions concerned only clearer/more complete offers or the contracting authority’s obligations. In these cases, the reduction may be 10% or 5%, depending on severity.
Reducing the contract’s objectives without a corresponding reduction in its value will be penalized by the value difference plus 25% of the contract’s final value.
In case of improper application of certain auxiliary auction elements, such as contract award announcement, the refunded amount will be reduced by 2%, 5% or 10%, depending on the severity. If this flaw is only formal, with no potential financial impact, there will be no reduction.
All these penalties may be enforced only for contracts whose value is greater than or equal to the threshold set by national legislation on public procurement, which require publication in the Official Journal of the European Union. According to the law, any public auction for work contracts worth at least EUR4.85 million and service contracts worth at least EUR193,000 must be published in the Journal of the EU.
For contracts with a value below this threshold, the penalty for the failure to observe award procedure advertising and transparency requirements, or for additional documents signed without competition, will be 25% of the amount to be refunded.
Using qualification/selection criteria that bar potential bidders from taking part, such as the obligation to have an office in the country/region, or too specific technical standards that favor a single supplier, the refunded amount will be reduced by 5%-10%.
The ordinance says these penalties also apply to the financing instruments used in the Common Agricultural Policy and the Common Fishing Policy.
According to the act, the investigations and penalties will be run and decided by the European fund management authorities, through their own control structures. The authorities must also address the government’s Antifraud Department as soon as they find indications of fraud or attempted fraud, and must ask the court to annul the illegally awarded contract.
The investigation may take up to 90 days and a further 90 days, if it needs to be more complex and entails collaboration with other structures. This means the refund procedure can be delayed by up to six months.
The result of the investigation is sent to the European Union or international public donor, who can decide to continue the procedure to apply financial corrections. In this case, Romanian and European authorities will attend a conciliation hearing. If it fails, the authorities may challenge the decision to apply financial corrections in court.
The ordinance says that, if the European Union/public international donor decides, following an external control, to suspend or cut payments for a certain program because of systemic problems or faults with the management and control systems, which may create systemic problems, the fund management authority must draw up a plan to repair these faults.
The act also says Romania is required to report to the European Anti-Fraud Office every case that has been the target of a primary administrative investigation.