In May 2023, the Ministry of Information and Public Development of the Republic of Kazakhstan published a tender with a pre-qualification selection, according to which it was looking for a supplier to purchase an information network worth more than 1 billion tenge.
According to the technical specification, the procurement required the delivery of a set of equipment for building a high-performance local area network, which involved around 122 switches of five different types. In June, this procurement was declared invalid due to a lack of submitted bids. Less than a month later, the department republished the tender, this time using an open procedure.
However, the bids of five potential suppliers from Astana and Almaty, which included companies such as ALG Innovations LLP, Integrity-A.A. LLP, ABE Project LLP, National Security & Communication LLP, and Bolashak Tamer Group LLP, were rejected. Interestingly, the committee consisted of 11 people, 10 of whom raised objections regarding each of the five potential suppliers.
Furthermore, during the discussion of the tender documentation, six other potential suppliers voiced their criticisms of the procurement requirements, citing the Law of the Republic of Kazakhstan 'On Public Procurement'. Their arguments were based on the fact that the customer specified exact characteristics for the switches and set conditions that allegedly led to a restriction on the number of potential suppliers.
Consequently, the potential suppliers concluded that the technical specification of the tender was tailored to a specific equipment manufacturer, and the tender itself was tailored to a particular supplier. The organiser, for their part, responded to all the companies' comments by stating that the requirements were specified with the range of 'not less than' and 'not below' the stated characteristics.
It is worth noting that one of these suppliers – KRAMtech LLP – mentioned during the discussion that in 2022, the Ministry had already conducted this tender, which was subsequently cancelled due to numerous violations identified by the State Internal Audit Department of Astana. The author states that the technical specification from the previous year did not place such an emphasis on specific characteristics of the supplied equipment.
"Based on a comparison of 2022 and 2023, the Customer deliberately restricted data virtualisation technologies so that only certain Suppliers would meet the Customer's requirements, while leaving the rest of the technical part unchanged. If our comments are ignored, we will be forced to appeal the preliminary discussion protocol to the Department of Internal State Audit for the city of Astana", stated a representative of the company.
The editorial board of the FBRC reviewed last year's tender. It turned out that the technical specification for 2022 was almost identical to the requirements for 2023. The procurement organisers did at that time receive a notice to rectify violations identified as a result of a desk audit. However, according to the report from the State Internal Audit Department of Astana, the tender was cancelled because potential suppliers did not submit the necessary documents, yet the organiser accepted their bids regardless.
"The organiser set a requirement in the technical specification for potential suppliers to provide authorisation letters from the manufacturer (or its dealers or distributors) of the equipment offered for supply. According to the technical specification approved in the tender documentation, this procurement предусматривает the supply of switches, a firewall, optical cable, and optical transceivers.
However, a desk audit of the tender bids from Jay Kay & Partners LLP, Global Novicom LLP, Bolashak project LLP, Smart Tech Solution LLP, KRAMtech LLP, and Timir LLP established that these potential suppliers did not specify the brands and models of the optical cable and optical transceivers offered for supply, nor did they provide authorisation letters from the manufacturer (or its dealers or distributors) for these goods", the document states.
Furthermore, it was reported that the authorisation letter submitted by the potential supplier KRAMtech LLP did not list the names of the goods for which authorisation to supply was provided. At the same time, other potential suppliers did not specify the concrete characteristics of the offered goods, nor other requirements stipulated in the technical specification. Consequently, their bids were rejected from participation in the tender.
Thus, an ambiguous situation arises: last year, the organiser turned a blind eye to the non-compliance of potential suppliers with the requirements, resulting in a reprimand from the supervisory authority, whereas this year, a thorough check of document compliance resulted in a lack of suitable suppliers.
Currently, the review of additions to bids for this procurement is ongoing. We cannot assert that the tender was initially rigged for a specific supplier, because in that case, the deal would most likely have been concluded long ago. It is possible that the MIOR did indeed specify excessively high requirements for the goods, which complicated and delayed the procurement procedure.