Road and Motorway Directorate ordered without tendering, divided contracts into lesser ones, and discriminated tenderers

PRESS RELEASE on Audit No. 13/27 – June 9, 2014

The Supreme Audit Office (SAO) scrutinized the maintenance and seasonal repairs of main roads and motorways within the period 2010–2013. Maintenance and repairs costs amounted to CZK 31,500 million and were funded by the State Fund of Transport Infrastructure and the Ministry of Transport.

Auditors scrutinized over 100 public contracts worth CZK 4,500 million in total. Violations of the Act on Public Contracts were revealed in 30 cases worth totally over CZK 1,000 million. Among errors were cases of contracts concluded without tendering in spite the conditions were not met for applying such procedures. In other cases, Road and Motorway Directorate divided orders in parts so that it was possible to address only one specific applicant. For example, works on the left side were separated from works on the right side during a reconstruction of the bridge in Mohelnice in 2009. Repairs of each side were ordered as simplified “below-the-threshold” public contracts in spite of the fact that only one summarizing building permission was issued, the works were done by one supplier, and the building inspection was performed at both sides of the bridge at the same time.

With 15 public contracts worth nearly CZK 1,000 million, Road and Motorway Directorate limited the number of competitors and as a result, the prices for construction works could not have been decreased by bidding. The Directorate limited numbers of competitors by requesting high qualification criteria. For example, the competitors for a contract for repairing the bridge at Lichnov were requested to have own asphalt wrapping plant, which would finish the planned work in three hours. Only one of nine involved competitors met such a condition.

In other cases, Road and Motorway Directorate did not use the possibility to divide contracts into parts, which could stimulate the competition. When repairing the flood damage on main roads in Moravia-Silesia Region, Road and Motorway Directorate concluded one big contract worth CZK 420 million, which consisted from 10 individual construction works. The competition only required tenderers–companies with minimal annual turnaround in the amount of CZK 1,300 million and experience with at least three construction works worth over CZK 421 million. Such requirements could be met only by companies that develop main roads and motorways. But the said contract included common repairs. When analysing price offered by the competitors, auditors revealed that CZK 38 million could have been saved by dividing the work.

Auditors also scrutinized modernisation works on D1 motorway. In the section from Mirošovice to Kývalka, the entry documentation contained serious errors including unfair qualification criteria and unclear conditions. For modernisation of the section from Lhotka to Velká Bíteš, Road and Motorway Directorate provided additional information 468 times. The reconstruction works at audited sections of D1 motorway got sometimes delayed by 10 months in spite Road and Motorway Directorate hired a legal agency to elaborate the entry documentation and its services cost CZK 22.6 million.

Auditors also scrutinized costs of seasonal repairs of roads and found various possibilities of savings. For example, there were big differences in prices of similar works, which could not be explained by specific local conditions. In Zlín Region, road’s shaping by a milling cutter cost on average CZK 2,237 per hour, while in Žďár nad Sázavou District (Vysočina Region), it was only CZK 712 per hour.

Communication Department
Supreme Audit Office

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