Following is the English translation of the company announcement made public on
12 October 2010:
A reply to the competitors' accusations made on the Estonian public service TV
channel ETV (7 October) and in the national daily Postimees (9 October)
Contrary to the allegations spread in the media by Lemminkäinen Eesti and its
partners, the bid made by Nordecon International's subsidiary Nordecon Infra for
the design and construction of the Aruvalla-Kose road section is technically
correct, complies with all regulatory and contract notice requirements and is
the most favourable one for the state both in the technical and financial terms.
The substance of all challenges concerning the process have been repeatedly
reviewed not only by the Estonian Road Administration (the contracting
authority), but also the Public Procurement Dispute Review Committee set up
under the Ministry of Finance and an administrative court and all their
decisions reflect the same - that Nordecon Infra has acted correctly and its bid
meets all effective requirements, being the most successful one of all
qualifying tenders.
From the outset, Nordecon made the maximum effort to offer the highest possible
technical quality and, at the same time, a reasonable price. It is a
distinguishing feature of all design and construction tenders that the bidder
has to do a lot of groundwork in order to find a solution that complies with the
rules and is also technically viable.
Relevant facts:
The public procurement tender for the design and construction of the E263
Aruvalla-Kose road section was announced on 25 September 2008. According to the
notice, the contract was to be awarded using the negotiated procedure.
In the tender documentation that was available to all bidders the contracting
authority, the Estonian Road Administration, provided for the suggestion of
alternative solutions: “The tenderer may suggest alternative technical and
technological solutions for the project and project work. Alternatives may not
be suggested for the construction of the pavement for the main road (including
ramps).” This means that all bidders had an opportunity to do their homework and
develop the most suitable engineering solution for the road including the width
of the central reserve. Nordecon Infra was the only one that made use of the
opportunity.
In addition, the Road Administration imposed clear restrictions on any potential
alternatives: “The tenderer shall prepare drawings and written explanations in
support of any alternative solutions it suggests and shall enclose them to the
tender documentation. The alternative solutions shall be documented at least at
a level commensurate with that of the preliminary design documentation and with
the same degree of accuracy.” This means that a bidder wishing to suggest a
technical solution that differed from the preliminary design underpinning the
tender could not have submitted just a few sentences or general references to
its ideas. Instead, it would have had to submit thorough technical documentation
complete with drawings and explanations as part of its initial bid.
All interested construction companies submitted their bids together with all
suggested technical alternatives or the client's preliminary design solutions by
30 November 2009.
On the opening of the bids, the prices were as follows (in millions, EEK/EUR):
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| 1 | Nordecon Infra AS and Ramboll Eesti AS | 596.3/38.1 |
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| 2 | Merko Ehitus AS, Tallinna Teede AS, AS A.C.B, | 648.8/41.5 |
| | AS K-Projekt, OÜ Järelepinge, | |
| | Ehituse and Tarkvara Inseneribüroo OÜ | |
--------------------------------------------------------------------------------
| 3 | Lemminkäinen Eesti AS, AS Teede REV-2, | 680.9/43.5 |
| | AS Tref and AS Teede Tehnokeskus | |
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| 4 | Ehitusfirma Rand ja Tuulberg AS, | 789.2/50.4 |
| | SIA Binders and SIA Izenierbuve | |
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In the light of the false accusations being spread by Lemminkäinen Eesti and its
partners, it is crucial to note that the bid submitted by Nordecon Infra and
Ramboll Eesti included a properly developed and presented technical solution for
the central reserve of the road. The tender documentation prepared by the Road
Administration did not explicitly require the construction of the so-called wide
central reserve. It was possible to suggest an alternative (narrow) solution as
Nordecon Infra and Ramboll Eesti did.
After the opening of the bids, the contracting authority checked the
documentation filed by all bidders and announced all tenders compliant with the
requirements, which meant that negotiations were launched with all the above
companies with a view to specifying the substance of their bids. The procedure
is regulated by Section 67 Subsection 1 of the Public Procurement Act under
which negotiations are held to adjust a tender, if necessary, to the
requirements stipulated in the contract notice, but not to change the tender,
let alone supplement it with project solutions it did not initially contain. In
the present case this principle, which is based on the equal treatment of all
tenderers, means that the bidders that did not suggest a narrow central reserve
in the first stage of the tender had no right to do so after the completion of
the negotiations in the second stage of the tender.
After the negotiation stage, all bidders submitted their adjusted bids by 27 May
2010. This time the prices were as follows (in millions, EEK/EUR):
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| 1 | Lemminkäinen Eesti AS, AS Teede REV-2, | 484.0/30.9 |
| | AS Tref and AS Teede Tehnokeskus | |
--------------------------------------------------------------------------------
| 2 | Nordecon Infra AS and Ramboll Eesti AS | 506.2/32.4 |
--------------------------------------------------------------------------------
| 3 | Merko Ehitus AS, Tallinna Teede AS, AS A.C.B, | 519.4/33.2 |
| | AS K-Projekt, OÜ Järelepinge, | |
| | Ehituse and Tarkvara Inseneribüroo OÜ | |
--------------------------------------------------------------------------------
| 4 | Ehitusfirma Rand ja Tuulberg AS, | 647.3/41.4 |
| | SIA Binders and SIA Izenierbuve | |
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After the opening of the bids, the contracting authority declared the one
submitted by the consortium led by Lemminkäinen Eesti to be the best on account
of the most favourable price.
As the process had induced in Nordecon Infra reasonable doubt that in their
initial bid, i.e. before negotiations, Lemminkäinen Eesti and its partners did
not suggest an alternative technical solution for the central reserve (a narrow
one) together with supporting drawings and explanations as required by the
tender documentation but that the alternative was added later in a manner
inconsistent with Section 67 Subsection 1 of the Public Procurement Act,
Nordecon Infra challenged the announcement of the bid made by Lemminkäinen Eesti
and its partners as the winning tender and the challenge was considered
justified also by the Public Procurement Dispute Review Committee.
Thus, Nordecon has acted correctly and regards any accusations of having
violated some tender procedures (including the malicious allegations of the CEO
of Lemminkäinen Eesti) as baseless.
Nordecon International is a group of construction companies whose core business
is construction project management and general contracting in the buildings and
infrastructure segment. Geographically the Group operates in Estonia, Ukraine
and Finland. The parent of the Group is Nordecon International AS, a company
registered and located in Tallinn, Estonia. In addition to the parent company,
the Group includes more than 15 subsidiaries. The Group's consolidated revenue
for 2009 was 2.4 billion kroons (155 million euros). Nordecon International
Group currently employs around 750 people. Since 18 May 2006, the company's
shares have been quoted in the main list of the NASDAQ OMX Tallinn Stock
Exchange.
1 euro = 15.6466 kroons
Raimo Talviste
Nordecon International AS
Head of Finance and Investor Relations
Tel: +372 615 4445
Email: raimo.talviste@nordecon.com
www.nordecon.com
Nordecon International's response to allegations made in the media regarding the award of the public procurement contract for the design and construction of the Aruvalla-Kose road section
| Source: Nordecon