Market announcement

Title

Eesti Ehitus comments on claims made in the written media

Message

After having read speculations in the written media and claims of managers and
counsels to Merko Ehitus as though Eesti Ehitus behaves unfairly in public
procurements with the purpose to exclude competition, we deem necessary to
clarify the issues. 
 
• Disputes in public procurement proceedings are neither unusual nor
prohibited. They constitute an important aspect in the procurement proceedings.
Upon occurrence of possible problems, such problems are resolved in respective
appeal proceedings.   Similar appeals are often submitted in procurement
proceedings. This has been done previously by Eesti Ehitus, Järvevana AS
(former Merko Ehitus) as well as all other market participants. 

• The aim of the Public Procurement Act is execution of public procurements on
most favourable terms for the state, guaranteeing, at the same time, equal
treatment of the tenderers and receipt of a service/product complying with the
required quality. 

• In respect of public procurements, Eesti Ehitus has acted based on the
understanding originating from the usual practice that the public procurement
proceedings regulated in the Public Procurement Act is a formal proceedings
where rules set with regard to the tenderers have to be accurately complied
with in order to ensure transparency of the proceedings and equal treatment of
the tenderers. In the procurement proceedings only the fact as to whether the
particular tenderer and its tender comply with the requirements of the Public
Procurement Act and the contract documents is assessed. In case the tenderer
does not comply with the requirements, conclusion of a public contract with
such a person is not possible. It should be understandable that only an
enterprise with an outstanding reputation having passed fair competition and
corresponding to all applicable requirements may conclude an agreement with the
state. There are plenty of such enterprises in Estonia (i.e. not only one or
two). 

• Eesti Ehitus does not argue in order to exclude a competitor from the market
(which is ridiculous), but to guarantee equal opportunities (rights and
obligations) to all competitors.  We contested the resolution of the
contracting authority as we wish to comprehend unambiguously and clearly
certain conceptual alternatives which concern a large number of entrepreneurs
in the country: may an enterprise whose activities may be connected to
circumstances which might be considered as problematic upon successful
participation in the procurement proceedings break away from such circumstances
merely by establishing a new company or not. If, based on the appeal, it should
be decided that this is possible, the setting of qualification criteria in the
public procurement proceedings as well as the proceedings itself may be
considered as useless. 

Provided that the understanding of Eesti Ehitus proves to be wrong, it is clear
that all enterprises, including all tenderers in public procurements, must take
into account that: 

• The Public Procurement Act does not apply equally to everybody and
interpretations of law based on the ability of the participants of the tenders
to provide suitable interpretations and persuade the public authority of the
correctness of such interpretations are accepted.'

• The possibility of division of companies set forth in the Commercial Code is
a simple possibility to break away from all problems and pursue activities,
taking along, however, the strong positive indicators from the period preceding
the problems and leaving the negative indicators to the “old” company or a
company established with this special purpose.

• This would enable repeated division of a company always when serious problems
that need to be getting rid of occur. All entrepreneurs that have been
re-established by making such a clean sweep may without any limitations make
use of indicators (e.g. the turnover) of the initial enterprise upon taking
part in public procurements and competing with other enterprises. 


Kind regards, 
Jaano Vink
Chairman of the management board
AS Eesti Ehitus