Miltex procurement of uniforms faces no competition

In just two years, the Banja Luka-based company "Miltex" has secured 30 contracts for the procurement of firefighting or work uniforms from municipalities, cities, and public institutions in Republika Srpska. A significant portion of these contracts were obtained through direct agreements, while in almost all other cases, the company was the sole bidder in open procedures or competitive requests for public procurement.

This monopolistic position for "Miltex" has been facilitated by well-coordinated tender conditions, through which various contracting authorities systematically eliminated any potential competition for this evidently favoured bidder.

An example of such practice is the procurement of firefighting uniforms for the city of Prijedor.

In the tender, where the total value of the procurement was estimated at 55,555.55 BAM (excluding VAT), no one other than the Banja Luka-based company participated, and their offer, slightly lower than the estimated value, was accepted without hesitation.

Manipulated tender conditions, as well as changes to tender conditions during the process, in this case, are not the only instances of favouritism towards this bidder.

Conditions Under Condition

Supporting the suspicion that the tender for the procurement of firefighting uniforms in Prijedor was tailored to favour "Miltex", the way in which tender conditions were altered after the announcement of this public procurement on September 15th of last year raises concerns.

By September 22nd, the requirement for bidders to possess valid certificates proving the minimum required standards for the offered clothing was removed from the tender documentation. Instead, a new condition was introduced, obligating bidders to have a certificate demonstrating compliance with the ISO 9001 quality standards.

Despite the amendment being made during the "leak" of the bid submission deadline, which expired on October 17th, no extension of the deadline occurred. Additionally, the notice of the change in tender documentation still needs to be published. The changes were later inserted into the folder with tender documentation on the public procurement portal. The modifications were never announced on the website of the city of Prijedor.

In this manner, according to experts in the field of public procurement, any potential competition in this process is further limited and effectively eliminated from the competition.

"As for the deadline for receiving bids, if there is a change that substantially alters the procurement, the deadline can be extended, but it's not obligatory if there are more than 7 days left until the deadline. However, these deadlines may not be sufficient for a bidder to gather tender documentation, for example, if they fall on weekends or holidays, which is again a way to eliminate competition, regardless of what the law says", explains Damjan Ožegović from Transparency International BiH.

Nevertheless, in the case of this public procurement, the limiting factor for competition is not solely the bid submission deadline. It is also noteworthy that one of the key conditions in the tender documentation requires the bidder to provide proof that, in the last two years, they have successfully executed at least one contract "related to the subject procurement" with a value not less than 45,000 BAM.

While the law allows for the establishment of such a condition, it doesn't negate the fact that it favoured "Miltex", especially since the specified period for providing evidence of contract execution in the given amount is two years. The law also allows for the requirement that the bidder has completed a job of a certain value in the past three years, and it could have been specified that, within that period, they executed one or more contracts of the mentioned value.

By examining the records on the public procurement portal, it becomes evident that in such a scenario, there could have been other interested bidders for the procurement of firefighting uniforms for the city of Prijedor. For instance, in the past three years, other well-known suppliers have procured firefighting (official or work) uniforms for multiple cities and institutions in Bosnia and Herzegovina. In the past two years, "Miltex" did not face such competition.

For comparison, almost simultaneously and with nearly identical terms, the city of Istočno Sarajevo also executed a public procurement for firefighting uniforms. The tender conditions in this case were slightly different, requiring bidders to have completed at least one or more contracts in the past three years, with a total value not less than 50,000 BAM excluding VAT. However, it was explicitly stated that the contracts of the mentioned value must exclusively relate to "work firefighting uniforms".

Under such conditions where space for competition is limited, only one bid was received for this public procurement – the one submitted by "Miltex" from Banja Luka. The value of this single and consequently deemed "most favourable" bid was 59,782.75 BAM, which is a mere 46.31 BAM less than the total estimated value of the public procurement.

It can be observed, through various examples, that contracting authorities, leveraging legal ambiguities, utilize a broad range of changes in tender conditions to favour a specific bidder, as we have discussed before. However, in the case of procurement of firefighting and other uniforms in the public sector in Republika Srpska, regardless of how the conditions are "crafted", they always seem to leave "Miltex" without competition.

This bidder was without competition even when it entered into a contract with the "KPZ Foča" (Correctional Facility Foča) on October 17, 2022, for the procurement of uniforms for security services, worth 94 thousand BAM excluding VAT.

This time, among the conditions for participating in the public procurement procedure, there is no mention of executed contracts whose subject is the same or at least similar to the subject of procurement. Instead, bidders are required to have achieved a minimum total turnover of 94,000 BAM excluding VAT in the past three years.

Certainly, without "Miltex", finding a bidder simultaneously engaged in the procurement of uniforms and achieving such a turnover would not be easy. Competition will still have to wait, even concerning this condition.

However, there are cases when competition manages to break through the initial tender barriers.

Nonexistent Competition

An example is the procurement of "complete work uniforms" for the city of Banja Luka. The contract for this procurement, worth 86,682 BAM, was signed on April 1, 2022. Another bid was received for this tender, submitted by the bidder "ANG" Ltd. from Banja Luka.

Although it was about 10 thousand BAM more favourable than the selected bid, this offer was rejected due to minor technical deficiencies. The bidder was not given a deadline to rectify the deficiencies, which is a legally provided option.

This was the fifth public procurement contract for uniforms (or parts of uniforms) that the city of Banja Luka had concluded with the same bidder in the past three years. In the previous four cases, this company faced no competition.

"Miltex" also secured a contract based on a competitive request for the procurement of firefighting uniforms for the municipality of Lopare in May of last year. The contract's value was 19,836.10 BAM excluding VAT. In this case, bidders were not required to provide evidence of previously executed contracts.

In the end, there was no competition. It was not present even when the same bidder received a contract worth 59,434 BAM excluding VAT from the Banja Luka Clinical Center in December 2022. The procurement involved uniforms for the security service of this healthcare institution.

In the coming days, it seems that "Miltex" will secure more lucrative contracts, judging by the advertised tenders. Potential competition may not even file complaints, as we were told by a company (known to the editorial staff), because complaints incur costs and are of no benefit to anyone.