Czech competition office upholds CZK 70,000 Health Ministry fine

2010-02-10

The Czech Office for the Protection of Competition (the UOHS) has upheld its CZK 70,000 (€2,681) fine imposed on the Health Ministry as a result of the Ministry’s improper procurement procedure for awarding the contracts for a media campaign in 2005, according to the CTK news agency.
In December 2005, in order to avoid organising a public tender, the Health Ministry divided a contract for the creation of a lifestyle disease TV awareness campaign worth more than CZK 6m (€0.23m) into four separate contracts, involving the prevention of: lung cancer, cervical cancer, obesity and colorectal carcinoma, each worth less than CZK 2m (€0.07m). Because the value of the separate contracts was lower than the threshold specified in the Public Procurement Act, the Ministry awarded the contracts without organising a tender. It initially chose three different companies to carry out the campaign, but in the end it awarded all four contracts to one company, called TCB–CZ.
The fine was first imposed by the UOHS in April 2009, but the Ministry appealed against the authority’s decision. In its decision dismissing the Ministry’s appeal, the UOHS argued that the four contracts – as part of one campaign carried out at the same time – constituted one whole, and that the Ministry had, therefore, breached the law.