Tele2 challenges 71 state agencies' communications tender in court
Internet and mobile communications service provider Tele2 has challenged a state communications services tender to cater to 71 agencies. The company claims that conditions were tailored to suit winner Telia that put in the most expensive bid.
Last week, Minister of Finance Annely Akkermann and Minister of Entrepreneurship and Information Technology Kristjan Järvan received a letter from CEO of Tele2 Estonia Christopher Robbins.
The head of Tele2 is not happy with how the Information and Communication Technology Center (RIT) went about finding a mobile and landline phone services provider for over 70 state agencies, with competitor Telia's most expensive bid coming out on top.
"It is not just a legal dispute but raises questions on various levels of how public administration is executed," Robbins wrote.
Telia asked for €1.2 million for four years of work, with Elisa putting in a lower bid and Tele2 undercutting the tender winner threefold.
Anna Pauliina Aavik, legal counsel for Tele2, said that she has noticed Telia being favored before, for example, in self-service conditions. "Reading public procurements' self-service requirements often amounts to reading a technical description of the Telia self-service system," Aavik suggested.
This and other criticism amounts to a conclusion that the tender was tailored for Telia.
"That is not true, Ergo Tars, director of the Estonian Information and Communication Technology Center, said. "We asked service providers for feedback with this tender and received no suggestions when the time was right.
No one contested the conditions when the tender was first declared.
Anna Pauliina Aavik said that challenging the conditions beforehand would have been very difficult. "We would have to prove why the contracting party does not need particular self-service functions or technology," she explained.
The agencies did not ask for anything unprecedented. Firstly, self-service should be accessible without having to contact a consultant first. Because the last tender organized in 2017 for 30 agencies went the way of today's challenger Tele2, Ergo Tars knows what the beneficiaries expect in terms of changes.
"If I need to divert incoming calls to a different mobile number, I need to first contact my office manager who then contacts the customer manager who can make it happen. I need to take time for it, ask someone else to do something and then wait for it to get done," Tars said. "Instead of taking a minute to log into the self-service environment, divert my number and be done with it."
The agencies also want to be able to talk on the phone and surf the web at the same time. While all three major ISPs (Telia, Elisa, Tele2) offer the functionality, Tele2 offers it primarily on Apple phones.
Aavik explained that the operator and manufacturer must have a separate agreement for every device model. "The larger the device manufacturer, the easier this usually is," Aavik said, adding that talks with manufacturers are ongoing.
Thirdly, state agencies want the functionality to make calls over Wi-Fi. Ergo Tars said that this is especially important in modern office buildings made of concrete, metal and glass. He said that ordinary cellular signal can be pretty weak in them. "This would greatly increase service coverage where 4G and 3G cannot reach," Tars said.
Three months later
Tele2 did not initially contest the conditions, decided to participate in the tender and complemented their bid with a document where it promised to develop the additional services inside three months after signing the contract. "The things needed to meet tender conditions are in the works," Aavik remarked.
This did not satisfy RIT and Tele2's bid was disqualified.
Ergo Tars said that services are procured for some agencies that are already used to the new functionality. "It would be very difficult to explain to them why they would have to go without those services for three months. It would be stagnation in service quality," Tars suggested.
Tele2 later told Estonia's public procurements dispute committee that it planned to develop the functionalities inside three months of entering its bid, as opposed to singing the contract, meaning that they should be ready by now.
The company's legal counsel said that the bid could have been phrased better and that such documents are often not sent to the lawyers for review, adding that RIT should have asked for clarification.
The committee largely sided with the contracting party and found that the decision to disqualify Tele2 had merit.
The company turned to court as it finds the decision to reject its bid is groundless, Aavik emphasized.
Tele2 to continue providing services for the duration of the action
In terms of how Tele2 managed to undercut the competition threefold in its bid, Aavik suggested that many agencies already have Tele2 devices. "These final prices are based on consumption," she suggested.
Tele2's claim that a single bidder was preferred is supported by the fact that Elisa was also disqualified. "I believe issue was taken with their landline phones and their functionality. The contracting party found that Elisa has failed to meet certain technical criteria," Aavik said.
RIT has a different explanation. "There were procedural errors that kept us from finding the bid acceptable," Ergo Tars said.
While Elisa refrained from detailed comments, the ISP suggested that tender conditions were open to interpretation and not very good. "The best solution would be to terminate this tender and hold a new one without the additional conditions. This would yield a more favorable communications services solution also from the taxpayer's point of view," Elisa said.
It is unclear how long the action could take, meaning that 71 agencies will have to seek alternative solutions in the meantime. The contracts of sides to the previous joint procurement expired in October. This allows Tele2 to continue offering the service for some time to come.
"We have extended the contract starting November 1 until we have clarity in terms of its replacement," Aavik said.
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Editor: Marcus Turovski