Following a recent audit of Ministry of Education and Research COVID-19 rapid test procurements in 2021, the Ministry of Finance has said that their findings will likely lead to the launch of a misdemeanor procedure, and subject to the procedure would be Minister of Education and Research Liina Kersna (Reform).
It all started with poor planning. The recommendation that schools use rapid testing was already included in the "White Paper" compiled by the newly sworn-in government last spring. This document, which according to Prime Minister Kaja Kallas (Reform) was born at the grassroots level, was to be a mainstay of the entire fight against COVID.
Regarding the recently published audit report, Kristel Mesilane, director of the Public Procurement and State Aid Department at the Ministry of Finance, said that the organization of mass rapid testing in schools could have been better planned at the national level. The Ministry of Social Affairs, the Health Board and the Ministry of Education and Research were all responsible for doing so.
She noted, however, that when the Estonian government decided on October 26 to implement mass testing in schools, the Education Ministry had just five days to come up with the necessary rapid tests. "This circumstance was unforeseen by both the Ministry of Education and Research and the customer," she said.
Thus the ministry can't be faulted for opting for the fastest procurement method, i.e. an unannounced negotiated public procurement. A contract was signed with SelfDiagostics OÜ on October 28, whose offer was 2 million rapid tests for €5.1 million. And by the beginning of the new school week, the tests were already available in most schools.
Bid sought from just one company
The competition reacted by kicking up a fuss. As it turned out, the only company to be contacted for a bid was SelfDiagnostics OÜ. According to Mesilane, the Ministry of Education broke the law by calling just one business. "Maximum competition must be ensured even in cases of exceptional proceedings," she explained.
Kersna's adviser, Mario Kadastik, recalled that options at the time were limited. "Just two companies had actually piloted the use of tests in schools," he said. "Of these, we also had info regarding one of them that they just wouldn't be able to manage in that time."
The Finance Ministry official, however, said that there had to be more potential bidders, as just one month later, the Education Ministry was already contacting 11 companies. Greater competition isn't expected of procurements for nothing.
"In this case, all of this public money was directed to just one company as a result of a single decision," Mesilane said, adding that it's possible that if more companies had been involved, the state could have gotten a better deal. "The price of rapid tests was cheaper in the procurement just a month later."
Second procurement also not publicly announced
According to Kadastik, what drove the price up in the first procurement was the urgent and complex logistics task involved; within a matter of days, the needed tests were flown into Estonia from elsewhere in Europe. Negotiating with more companies just wasn't possible timewise, he said, citing the second procurement, which took weeks of work on the ministry's part, for comparison.
"That time we asked what tests companies would be offering, and allowed the Health Board to decide which of these would be suitable for the school environment," the adviser to the minister explained. "And in reality, the Health Board scrapped most of them."
On November 23, the Ministry of Education and Research concluded a new procurement contract. Under the framework agreement, Medesto Logistics OÜ would provide 2.1 million rapid tests at a total cost of €2.37 million. One test cost €1.14.
Once again, a contractor was found via an unannounced negotiated public procurement procedure. While the price was cheaper this time, according to Mesilane, the new contractor should have been found by means of a standard public procurement.
"At that point, the 'unforeseen' criterion was no longer fulfilled," she explained. "Right when the first procurement contract for buying rapid tests was signed is when they should have started drawing up the next procurement, and it would have been good for this one to be an open procedure."
Kadastiku claimed that they wasted no time preparing the next procurement. An open public procurement nonetheless would not have been feasible, he continued, pointing to the third rapid test procurement announced by the State Shared Service Center in December.
"A professional institution dedicated to public procurements conducted this open procedure, and it took three months and a week," he pointed out.
According to Mesilane, the law provides for open procurement procedure deadlines to be shortened to 30 days from announcement to contract. The Ministry of Education and Research had this much time. Or they would have, had they been economical in their use of the tests.
"The government determined that it was necessary to test children who had not had COVID and were unvaccinated twice a week," she said. "To our knowledge, that is not exactly how things were done in schools; testing was done more times per week, and all children were tested."
Kadastik nonetheless found that it would have been extremely optimistic to count on an open procurement actually succeeding in 30 days.
"The State Shared Service Center told us very clearly that while these exceptions for conducting expedited [procurements] exist, they weren't actually applicable," he said. "In practice, schools would have been closed in any case had we gone that route."
Liina Kersna likely to face misdemeanor procedure
"The Public Procurement Act includes characteristics of a misdemeanor, however," Mesilane said. "If there is evidence of signs of a misdemeanor, the extrajudicial body [the Ministry of Finance] is obligated to launch and conduct a misdemeanor procedure."
The recently concluded audit indicates two possible misdemeanors. "These are the amendment of a procurement contract framework agreement in breach of requirements, and the concluding of a procurement contract or framework agreement without having conducted the required procedure," she said. "The Ministry of Finance is currently weighing launching a misdemeanor procedure."
It is not a requirement to launch a procedure, and the Ministry of Finance finds one breach or another in nearly all planned supervision, but these infractions tend to be minor. In the case of the rapid test procurements, however, the stakes were higher.
"In this case, these contract volumes were very big," Mesilane said. "In such cases, the law must be applied particularly strictly. And public interest here is very significant as well."
As the ministry has not yet been informed of the launch of a misdemeanor procedure, Mesilane cannot announce it in the media either. She did say, however, that a procedure would likely be launched.
"Misdemeanor procedures cannot be conducted for state and local government institutions," the Finance Ministry official explained. "Thus if the client involved is a state institution, it's only possible to punish a natural person."
In the case of the test procurements, the person subject to the procedure would be the one who signed the procurement contracts. "That is the minister of education and research," she said.
Both violations involved in the possible misdemeanor procedure could mean a fine of up to €1,200 if found guilty.
Speaking to ETV news broadcast "Aktuaalne kaamera" on Monday, Kersna took responsibility for what happened.
"If the Ministry of Education and Research did indeed break the law when procuring rapid tests and a misdemeanor procedure needs to be launched, [then] I did indeed sign these contracts, and I will clearly also take responsibility for this, as keeping schools safely open is the responsibility of the minister of education and research," Kersna said. "If I get punished for doing so, then of course I will take responsibility and also accept this punishment."
Adviser: Minister demanded results and legal correctness
According to Kersna's adviser Kadastik, the ministry did the best it could within the information field at the time. "And hindsight also indicates that we did the right thing," he said. "All later decisions have indicated that it couldn't have been done any other way."
He added that the ministry believes it did not break any laws in conducting the rapid test procurements in question.
"There may be some kind of matters of interpretation here, and we've utilized points that aren't very standard, which are intended for extraordinary situations, and these create precedents, but that does not mean that we went and directly violated the law," he said.
Kadastik said that it was important for Kersna as minister that solutions be found.
"Our primary premise and mandate was that schools must remain open," he recalled. "This is what was promised all the time. In that regard, Liina motivated us to make all of this happen. But she also constantly questioned whether these actions were right, whether this was legally correct, whether that was possible. It wasn't, 'Do whatever you can, regardless of what the law says.'"
Editor: Aili Vahtla