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Conflict of interest in public procurement. Special reference to Minerva

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Conflicts of interest can arise in one’s life like little guardians that make us see our little angels and devils hovering around our heads, anxiously waiting to find out which one we will choose. This conflict of interest occurs when a person may have the opportunity to put their private interests ahead of their professional duties.

From the beginning, we must remember the concept of the conflict of interest proposed by the Organization for Economic Co-operation and Development (OECD) when it states that a “conflict of interest” is a conflict between duty and the private interests of a public employee. when the employee has personal interests which may unduly influence the proper performance of his official duties and responsibilities.” This definition is taken from the guide called “Detecting conflicts of interest in public procurement procedures within the framework of structural actions”. This was prepared in 2018 by a group of experts from the Member States coordinated by the Fraud Prevention Unit of “OLAF or the EUROPEAN FRAUD OFFICE” for use by those responsible for the management of contracting bodies in public procurement. . Although this guidance is not legally binding on the Member States, it provides general guidelines and recommendations and indicates the best practices to be carried out in this matter.

The regulation of this concept in terms of public procurement and in our legal system can be found in the Book I, TITLE II, CHAPTER I article 64 of Law 9/2017, of November 8, regarding Public Sector Contracts (referred to as LCSP) “The fight against corruption and the prevention of conflicts of interest”. This precept arises from it Article 24 of the Directive 2014/24/EU OF THE EUROPEAN PARLIAMENT AND OF THE COUNCIL on February 26, 2014 regarding public procurement and covers any situation where the personnel in the service of the contracting authority, who also participate in the development of the tender procedure or influence play. the result has a financial, economic or personal interest, directly or indirectly, which could appear to jeopardize his impartiality and independence in the context of the tender procedure.

Although the article includes different concepts such as corruption and conflict of interest, I must point out that their differences are clear. For the former to occur, an agreement between at least two partners and some kind of payment, bribe or advantage is required. However, a conflict of interest occurs when a person may have the opportunity to put their private interests ahead of their professional duties.

Apart from this small distinction that I did not want to lose, the first part of article 64 of the aforementioned LCSP includes a series of words that give us the key to managing the conflict, before the appearance and when it is revealed. interests. These words are prevent, detect and solve.

” The contracting authorities must take the appropriate measures to combat fraud, favoritism and corruption, and prevent, detect and resolve to effectively control conflicts of interest that may arise in the bidding procedures in order to avoid any distortion of competition and to guarantee transparency in the procedure and equal treatment of all candidates and bidders.”

Prevention refers to previous mechanisms or measures that ensure that these conflicts of interest do not actually arise. The most frequent is the formulation of a declaration regarding the absence of conflicts of interest from persons involved in the contracting files.

Detection refers to the maintenance of preventive measures, as these may change over the time it takes to win a tender process. Therefore, in order to detect these conflicts strictly, follow-up tasks and updates should be carried out on the information already mentioned in the declaration regarding the absence of conflict of interest.

Regarding the solution, there is no article in the LCSP that states how to act, despite the appropriate preventive and detection measures being taken, when a conflict of interest arises. However, certain standards, such as the first mentioned directive (Detecting conflicts of interest in public procurement procedures within the framework of structural activities), establish that the behavior of the staff must be governed by a code of ethics and that both include one with that. relevant sanctions as appropriate disciplinary measures.

A few years later, in 2021, to continue a chronological index in the regulation of conflict of interest, two European standards were published that give a twist to the conflict of interest. Namely,

1.—Regulation (EU) 2021/241 of the European Parliament and of the Council, on 12 February 2021, establishing the Recovery and Resilience Mechanism.

2.—The Order HFP/1030/2021, on 29 September through which the management system of the Recovery, Change and Resilience Plan is configured.

The first of these, and in order to fulfill the obligations established in Article 22, requires Spain (and all the countries receiving the funds) to establish a control system through which any entity, decision-maker or the executive agency can participates. when implementing the measures of the Recovery, Transformation and Resilience Plan (hereafter PRTR), it must have an “Anti-Fraud Measures Plan” which allows it to guarantee and confirm, under its respective scope of activity, that the funds corresponding ones have been added. be used in accordance with the applicable regulations, in particular with regard to the prevention, detection and correction of fraud, corruption and conflicts of interest.

The second of the aforementioned standards includes the measures necessary to achieve the objective, among others, of formulating management declarations before the European Commission with legal certainty, in accordance with the Regulation of the European Parliament and from the Council. In other words, the monitoring and management of the PRTR is facilitated, based on the principles of the Irish League legal certainty, coordination and responsibilitywith the idea of ​​maximizing the absorption of the funds assigned to Spain in the Recovery and Resilience Mechanism.

From this moment on, all Spanish public entities must have this plan of anti-fraud measures that would complete the management of those conflicts of interest that are not found in the LCSP.

As we have already mentioned, it is the measure most used in the prevention phase “Finalizing the Declaration of Absence of Conflict of Interest (DACI)”. (The declaration model regarding the absence of conflict of interest is included in Annex IV of Order HFP/1030/2021, of September 29, which configures the management system of the Recovery, Transformation and Resilience Plan. This statement must be placed with those files and control documents of contracts financed with funds from the PRTR.

In Spain, to facilitate this management, a Guide was published on December 23, 2021 by the State Advisory Board for Public Procurement regarding elements to be incorporated in the files and control specifications of the contracts to be financed with funds. from the PRTR. This guidance governs, among other issues, that those involved in the contractual file must complete the DACI.

“d) All the DACIs completed by the parties involved in the tender will be included by the contracting body and the contractors and subcontractors when they are received.”

However, when we practically accepted these issues, two new regulations were published in our legal system that focus on the management of conflicts of interest.

Firstly, on December 24, 2022, our Law 31/2022, on December 23, on General State Budgets for the year 2023 (hereafter referred to as LPGE) is published in the Official State Gazette and, secondly, D in order to comply with the provisions of these Regulations. One of its additional provisions (the twelfth), on 25 January 2023, Order HFP/55/2023, is published on 24 January, which gives another twist to DACI and conflicts of interest in public procurement matters.

The LPGE for 2023 in the additional provision mentioned above, regarding the procedure for the systematic and automated analysis of the risk of conflict of interest in the procedures executed by the PRTR, introduces some “rules” on how to carry out the analysis of the risk of conflict . of interest, applicable in principle to the procurement procedures financed with PRTR funds. The words “in principle” help me to calm down because I understand that this new regulation should only be applicable to the files financed by the recovery, transformation and resilience funds, but that it should be possible to extend to all contractual files.

The other regulation mentioned, Order HFP/55/2023, of January 24, shows that an EXANTE analysis must be carried out in the contract award procedures related to the execution of the aforementioned PRTR (although we refer here to the contract award procedures, ie this order is also applicable to the granting of subsidies), with the aim of verifying that there is no conflict of interest between the members of the contracting bodies, and the participants in the aforementioned procedures in the various stages of the same. This ruling will be based and based on a ‘data mining’ computer tool from the Tax Agency, MINERVA.

Through the implementation of that computer of the Tax Agency, an analysis will be made of possible family relationships or corporate links, direct or indirect, in which there may be a personal or economic interest that could lead to a conflict of interest, and as specific as the analysis that. beneficial ownership of bidders will be taken into account.

To that end, the order includes a new DACI model for decision-makers in contractual procedures, which refers to the absence of conflict of interest, not only with the tenderers in contractual procedures, but also with the real holders of those procedures. That is to say, with natural persons, owner or owners, of the legal entities that present themselves as bidders.

The Ministerial Order includes a description of the procedure for uploading information on the Tax Agency’s computer tool to analyze the risk of conflict of interest, as well as returning the results of the analysis.

If the result comes in a “red flag” (this means that a risk situation has been identified), the affected decision makers are expected to refrain from the procedure.

The results of the analysis carried out must also be recorded in another computer application called “CoFFEE” (This application is basically a compliance manager that stores data on the milestones and objectives defined in the PRTR). This information system will focus all the information generated by the various ministries, the autonomous communities, town halls, public companies, etc., in the management processes of the initiatives that come from the National Plan.

In summary, this Order comes to prevent the strengthening of a conflict of interest, preventing it from occurring while it is carried out before the award of contracts. It is a system that allows the prevention of situations of conflict of interest effectively and agilely, contributing to the faster execution of the funds from the PRTR.

In my opinion, these latest published regulations regarding conflict of interest try to regulate some issues that should be inherent in people. Bombproof morality and ethics.

Monica Iruela Gutierrez

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