Public works: back to lowest bid

The Public Works Ministry yesterday unveiled proposed legislation that would radically overhaul the way the State awards major construction contracts, which has long been criticized as corrupt and inefficient. The draft bill puts an end to the so-called «mathematical formula,» a fiendishly complicated system introduced by the previous, Socialist government in the 1990s to replace the practice of awarding public works contracts to the lowest bidder. Now, tenders will once again be secured by companies offering the cheapest bid. However, according to Public Works Minister Giorgos Souflias, new safeguards will ensure that the old problem of companies submitting rock-low bids to secure the deal, and then drastically upping the bill during the course of the works, will not re-emerge. «We will secure transparency and efficiency in the system, using absolutely objective criteria in awarding public works contracts,» he said. «This is a very important move in fighting corruption.» Under the new system, Souflias said, any attempt by bidders to rig the process would result in the offending firms being thrown out of the tender and losing their letters of guarantee – which, in cases of companies offering bids regarded as unrealistically low, will be increased to up to 35 percent of the total value of the contract. The proposed legislation will also simplify the process under which the government cashes in the letters of guarantee, while there will be much steeper fines for contractors who fail to meet even interim construction deadlines. Once a contractor has been ejected from a project, the work will automatically be awarded to the firm that submitted the second-lowest bid. The bill will be tabled in Parliament at the end of the month.