"We have now reached the negotiation phase of the procurement process, which was announced in July 2023. Three of the five joint bidders who submitted their proposals by the March 15 deadline have advanced to this stage. These bidders are MDCS Systems OÜ and AS Maru Metall (joint bid), Weatherhaven Global Resources Ltd and AS Semetron. Their initial proposals were deemed compliant," Andri Maimets, communications director at the Estonian Center for Defense Investments (RKIK), told ERR.

During the preliminary market research preceding the tender, the RKIK contacted eight companies to assess their previous experience, the systems they have sold and their ability to produce systems that meet the purchaser's requirements.

Maimets noted that the RKIK aims to conclude negotiations with the bidding companies by mid-September, with final offers expected by the end of October. "It should be noted that these deadlines are tentative and may change," he emphasized.

He added that because this is a large-scale international procurement process involving a complex subject matter, matters are taking longer than usual – such processes can generally take up to two years.

After the final offers are submitted, they will be reviewed, and the winner of the tender will be determined based on evaluation criteria. The RKIK will then enter into a seven-year framework agreement with the successful bidder.

The winner will be responsible for building mobile field hospitals and dressing stations for the Estonian and Lithuanian defense forces according to specified orders. This may also include the construction of separate modules if needed, as well as providing related user training, repairs and maintenance.

The immediate need for the Estonian Defense Forces is to acquire one mobile field hospital, with plans to add around ten mobile dressing stations in the coming years. However, these needs may increase during the course of the contract, Maimets explained. The procurement also takes into account the requirements of the Lithuanian Defense Forces, but for specific details regarding Lithuania, RKIK suggested reaching out to Lithuanian authorities for comment.

When the tender was announced, Lt. Col. Lauri Bender, senior staff officer of the analysis and planning department at the Estonian Defense Forces General Staff, noted that the process has considered the ongoing war in Ukraine.

"The experience from the Ukrainian war, particularly with the field hospitals sent there, has clearly shown that our long-standing development efforts have been on the right track. The mobility of hospitals and dressing stations is crucial for providing quality, fast and as safe as possible medical care on the battlefield. This new procurement represents a significant step forward in this regard," Bender said. "Lessons from Ukraine show that vehicles and structures bearing Red Cross symbols have often been targeted by the aggressor. Therefore, it is vital that medical units are well-hidden in the field and capable of constantly and rapidly changing locations."

Tender plagued by allegations of misconduct

In April, MDCS Systems OÜ and AS Maru Metall claimed that the procurement process was in serious violation of the law and biased, suggesting that the tender conditions might have been tailored to favor Semetron.

The companies' lawyers pointed out that the reference contract requirement stipulated that the bidder must have produced or sold mobile dressing stations or field hospitals to a NATO member state within the past five years. According to the companies, this imposed a restriction that only contracts with public authorities were acceptable as references, even though public procurement law prohibits excluding experience from the private sector in this way.

The complainants also criticized the Estonian Center for Defense Investments (RKIK) for failing to respond to their questions within the designated timeframe and for changing the fundamental conditions of the procurement.

The companies further expressed dissatisfaction that the procurement did not require an official price list or pricing policy. They argued that if a contract were signed as a result of the procurement and the cost of the services to be procured were only determined later, it would violate the principles of transparency, accountability, equal treatment and effective use of competition.

The two companies concluded that the only way to ensure that the contract would not be awarded in violation of procurement rules was to cancel the process altogether.

In the subsequent supervisory proceedings, the RKIK responded to the Ministry of Finance, which conducted the review, asserting that the claim that the technical conditions were biased toward one particular company was unfounded. RKIK argued that if the conditions had been skewed in favor of one company, the other bidders would not have been able to submit compliant offers, yet they did.

The center also noted that all conditions were known from the time they were electronically published, but they were not challenged.

The Ministry of Finance decided to close the supervisory proceedings, concluding that although there were shortcomings in the procurement process, declaring it invalid would have been disproportionate. The ministry pointed out that the complainants failed to file a challenge within the prescribed timeframe, despite being aware of the requirements and conditions set out in the procurement documents. Thus, the grounds for terminating the supervisory procedure were met.

At the same time, the Ministry of Finance acknowledged that some of the qualification conditions may have had a potentially restrictive effect on competition. However, since these conditions were not challenged before the Public Procurement Review Committee, issuing a directive would not have been justified in terms of legal certainty and peace.

--

Follow ERR News on Facebook and Twitter and never miss an update!