Price Works Wonders - a Subjective View on Public Procurement
I'm following with great interest the progress of work on amending the Public Procurement Law, which in its current form - in my opinion - is a threat to the economy rather than a way to combat corruption or create a competitive market.
In recent days through the words of President Krzysztof Kwiatkowskio, the Supreme Audit Office presented a positive opinion on the changes. In a similar tone, - during their conference in Warsaw - representatives of the Business Centre Club expressed their views.
It's surprising that discussions about the law and planned changes are concentrated around the construction industry, yet they could easily be extrapolated to the entire economy. On the other hand, the construction industry is an example of the biggest failure of the public procurement system, or rather: the problems that arose from the law's implementation are hardest to deny in the construction industry specifically.
From the huge investments made by the state, roads of varying quality were built, but not a single company emerged that would be able to compete for road investments in the European market.
But let's go back to the beginning:
Recent years have shown that corruption is a complex problem and the law does nothing to prevent it. As for competitiveness...
Let's look at how it works:
An entity announces a tender and although the law provides a loophole, in the vast majority of cases price is listed as the only criterion. Why? Because in our bureaucratic reality, there's a lack of people capable of defending their positions. There's a lack of people who are ready to argue that it's in their unit's interest to pay more...
Most companies that could participate in tenders don't even take up the challenge, as just preparing the documents will take them from several to dozens of hours. They can always treat submitting documents as an act of desperation or a testing ground - but never as a way to earn money.
And only money guarantees that a company can develop, invest in people, technologies, and research.
It should be remembered that price limitation can occur at two levels: limiting the operating costs of the company and limiting material costs.
In the first case, it means that companies investing in their own development won't be competitive; in the second case, they will strive to buy the cheapest, and therefore the lowest quality materials (not produced in the domestic economy).
The market is flexible and will adapt to any situation, so companies have emerged that specialize in submitting tender offers.
Price decides everything - very well.
The client will get a product or service at the lowest price... but is it the one they expected?
From the statements of people who are their recipients, it appears not!
Tenders, instead of becoming a stimulator of economic development, are actually its contradiction. It's rare to find decisions where a t-shirt produced in Poland would mean more than one imported from Asia. Material certifications? Who checks them, even though the smell of releasing (decomposing) chemical compounds is hanging in the air...
A company conducts social activities, so what...
Let's approach the topic differently: when buying a sofa for our living room, do we always choose the cheapest one? Besides analyzing our financial capabilities, don't we consider appearance, upholstery quality, design, who made it, sometimes where... Why doesn't this rational principle apply in tenders?
Price works wonders? Maybe, but certainly not the lowest price.