The Procurement Monitoring Bureau (PMB) decided to forbid Latvenergo sign a contract for providing consultation services for the Visagina NPP project from the winner – British Project Financing Solution Limited.

Deloite Latvia submitted a complaint about this service procurement. The PMB’s application review commission declared the complaint partially justified.

According to Deloitte Latvia, it would have been best for Latvenergo to decline the offer of the British company, because it is abnormally cheap. In Deloitte Latvia’s opinion this pretender has not fully understood the requirements of the negotiation procedure and performed an insufficient risk assessment. This is why this company offered the lowest price than other participants. This price, according to Deloitte Latvia, does not adhere to the actual market price.

Latvenergo, on the other hand, notes that the participants’ price difference cannot be a reason on its own to declare the offer abnormally cheap, because «abnormally cheap» is the only type of offer that is incapable of fulfilling all the terms of the contract. The company also noted that the monthly rate is dependent on the number of actual consultants in the team of consultants. After comparing the average monthly wage of Project Financing Solutions Limited consultant (6 875 EUR) with the next lowest price offer of another pretender (5 455 EUR), Latvenergo concluded that the price offers of pretenders do not differ significantly.

The energy company also noted that it has verified the pretender’s price justification by requesting clarifications and explanations for the conditions that are stated in the offer. In the end, it was concluded that the pretender has fully considered all requirements of the stated objective and that the price offer of the said pretender is appropriate.

Latvenergo believes that the statement that the offer of Project Financing Solutions Limited does not comply with the stated requirements of the negotiation procedure.

The PMB notes that the monthly rate of Project Financing Solutions is 27 500 EUR, while Credit Agricode Corporate and Investment Bank offered 60 000 EUR, and the submitter of the complaint – 79 000 EUR. The PMB agrees that the price difference does not mean that the offer is abnormally cheap only based on the price difference. The bureau does note, however, that a significantly lower price of the offer is one of the factors that can be evident of an abnormally cheap offer.

Nevertheless, the application review commission concluded that there are other important factors in this case, factors that note that the offer of Project Financing Solutions Limited could be abnormally cheap. The PMB noted that the price does not include different taxes and other possible costs.

The PMB believes that Latvenergo should have requested a more detailed explanation from Project Financing Solutions Limited about the most important conditions of the company’s offer.

The bureau requested that Latvenergo rectifies the stated violations and repeatedly assesses the offer of Project Financing Solutions Limited within 20 working days. This decision can be appealed within one month of it becoming in force.

Ref: 102.109.109.2922