Ministry Fined CZK 200,000 for Flawed Geoportal Contracts

Competition Watchdog Cites Irregularities in Digitalization Tenders

The Ministry for Regional Development (MRD) faces a significant fine for awarding key contracts without proper public bidding. The Office for the Protection of Competition (ÚOHS) imposed the penalty, highlighting procedural missteps in the creation of the National Regional Planning Geoportal.

Unpublished Negotiations Lead to Penalty

The MRD was fined CZK 200,000 after awarding three contracts for the National Regional Planning Geoportal through negotiated procedures without prior publication. Petr Mlsna, chairman of the ÚOHS, announced the decision, with spokesman Martin Švanda detailing the findings in a press release.

The Ministry’s actions were deemed unlawful by the competition watchdog. This stemmed from the Ministry’s failure to properly conclude administrative proceedings related to a previous tender for a competition dialogue. The ÚOHS confirmed the Ministry’s procedural errors in May, despite contracts already being signed with Sevitech CZ and Synchronix in February.

Minister Ivan Bartoš was not directly linked to the penalty described in the article.

Digitization Project Plagued by Delays

The process for digitizing construction proceedings, initiated in October 2021 under former Minister Klára Dostálová, faced significant delays. The call for offers was ultimately sent out in January 2024, with the ÚOHS confirming the Ministry’s procedures only in May of the same year.

In its initial ruling, the ÚOHS stated that the contracts were concluded in violation of the law, as the conditions for negotiated procedures were not met. Švanda explained the reasoning: “In the present case, there was an extremely urgent situation due to the contracting authority, which in the previous tender for a public contract awarded in proceedings with the competition dialogue was time delay, whose merits did not show and caused that he was not able to terminate the tender in time.”

The Ministry has to pay a fine of 200,000 crowns to digitize building proceedings — The Supreme Administrative Court building in Brno, Czech Republic.

Ministry’s Appeal Rejected

The Ministry’s appeal against the ÚOHS decision was unsuccessful. The watchdog pointed to numerous delays and inconsistencies in the MRD’s conduct, including nearly a year of inactivity between August 2022 and May 2023. Very short deadlines for tender submissions also indicated a rushed process.

Negotiated procedures without publication allow contracting authorities to directly award contracts without competition, but only under exceptionally urgent circumstances. Such urgency must not be self-inflicted. Typically, this procedure is reserved for immediate responses to damage, such as after natural disasters.

Portrait of Jaromír Císař, former head of the National Property Administration. — Jaromír Císař, a former official whose department was involved in digitalization efforts.

Digitalization Rollout Faced User Issues

The preparation for the digitization of construction proceedings was completed last year, aiming for a July 1 launch. While the system did go live, users encountered numerous problems, significantly slowing down construction management. By late June, the ministry acknowledged ongoing complications despite stabilization efforts.

The new system is still undergoing development, with plans for further contract awards. The government targets a full functionality by early 2028, though architects and building authorities express skepticism about this timeline. For instance, a 2023 report by the European Court of Auditors found that nearly 60% of digital public procurement projects in the EU experienced delays or cost overruns (ECA, 2023).

Office for Protection of Competition (ÚOHS)

The Ministry has to pay a fine of 200,000 crowns to digitize building proceedings