Call for probe into Romania aid contract

Date: 14/06/01

By John Shelley

THE EU's anti-fraud office OLAF has been asked to investigate a €2.6-million aid programme for Romanian children after a contract for running the scheme was awarded in apparent breach of Union rules.

Four companies which applied to set up a publicity campaign addressing the sensitive issue of child abandonment insist the contract should be torn up and the tendering process restarted.

They say the contract was awarded to advertising giant Saatchi and Saachi even though its consortium included a firm, IMAS, which was involved in defining the terms of reference which were sent to firms applying for the tender.

The losing companies, including McCann-Erickson, EurO&M, BBJ Bipeg and ARCA Consulting, say this created a clear conflict of interest and gave the winner an unfair advantage.

Union tendering rules explicity prohibit any relationship between firms applying for a contract and those involved in drawing up the tender documents.

They state: "Natural and legal persons who have cooperated to prepare the terms of reference of the tendered project or have otherwise contributed to define the activities to be implemented under the contract, may not participate in the tender either as tenderers or as members of a consortium."

There were also other apparent irregularities in the process of awarding the contract last month. Ten companies were originally asked to compete, whereas EU rules stipulate only a maximum of eight should take part.

Vanni Puccioni, chief executive of Rome-based Arca Consulting, said: "At the end of the day taxpayers' money has been handled in a way which does not offer the best value for money."

The decision on awarding the contract was made jointly between the Romanian authorities and staff from the Commission's Union delegation, then headed by Fokion Fotiadis.

Both have vigorously defended the tendering process, saying that the involvement by IMAS - a report studying public perception of child protection - was included merely as supplementary information and did not form a core part of the terms of reference.

They say it was drawn up before and independently of the child abandonment project. "We insist there has been no breach in the rules," said Jean-Christophe Filori, spokesman for enlargement Commissioner Günter Verheugen. "But a company can challenge this in court if they want to."

However one Commission official admitted he was not surprised by the furore surrounding the case because Romania had a "bad reputation" when it came to the handling of EU funds. "It's the poorest and the most shambolic of the candidate countries and it has one of the least prepared public administrations," he said.

Constantino Radu Florescu, director of the programme for Saatchi and Saatchi said the complaints were just "sour grapes" and insists his company won the contract due to the quality of its bid and its reputation for effective on-the-ground work in Romania.

Western charities estimate there are almost 100,000 orphaned or abandoned children in Romania, which is still struggling to cope with the disastrous legacy of communist dictator Nicolae Ceausescu's efforts to restrict family planning and boost the population.

A spokesman for OLAF confirmed that the office had received a complaint and was currently considering whether to launch a full scale investigation.

The European Union's anti-fraud office OLAF has been asked to investigate a €2.6 million aid programme for Romanian children after a contract for running the scheme was awarded in apparent breach of Union rules.