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Lithuanian Agency Wins EU Presidency Tender with Negative Bid
🇱🇹 Lithuania /Economy & Trade

Lithuanian Agency Wins EU Presidency Tender with Negative Bid

From Delfi · () Lithuanian

Translated from Lithuanian, summarized and contextualized by DistantNews.

At a glance

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  • Jogaila Morkūnas's agency, "Pirmoji kava," won a tender to organize events for Lithuania's EU Council presidency by offering a negative price.
  • The agency proposed a net payment of 18,150 euros (VAT included) to organize 21 events, with the total contract value at 1.3 million euros.
  • The negative price stemmed from a bid to rent multimedia projectors for a price of minus 6,400 euros each, which experts suggest may not even be needed.

Jogaila Morkūnas's agency, "Pirmoji kava," secured a multi-million euro contract to organize events during Lithuania's presidency of the Council of the European Union by offering a negative price. The agency proposed to pay 18,150 euros (including VAT) for the right to organize 21 events, despite the total contract value reaching 1.3 million euros.

The Ministry is not obliged to purchase the entire quantity of services specified in the contract and pay the maximum contract value.

— Ministry of Foreign Affairs (URM)Explaining the terms of the contract awarded to 'Pirmoji kava' for EU Council presidency events.

The unusual negative bid was driven by the rental of multimedia projectors. "Pirmoji kava" offered to rent a single projector for minus 6,400 euros (excluding VAT). As the tender required pricing for 15 projectors, this resulted in a total negative cost of 96,000 euros (excluding VAT) for this specific item. Experts suggest that these projectors might not even be necessary for the events.

The Public Procurement Service (VPT) stated that it has evaluated tenders where suppliers effectively paid the contracting authority, indicating such scenarios are possible. The Ministry of Foreign Affairs (URM), which awarded the contract, clarified that it is not obligated to purchase all services or the full contract value. Services will be procured based on need at the agreed rates, not exceeding the initial contract amount.

all market participants act according to the same conditions and evaluation methodology set by the contracting authority.

— Jogaila MorkūnasCommenting on the tender process and the conditions for participants.

J. Morkūnas declined to comment on the profitability of individual projects or specific financial outcomes, emphasizing the distinction between the overall procurement value and the organizer's remuneration or profit. He noted that all participants operate under the same conditions set by the contracting authority. The URM confirmed that the unusually low price was assessed according to legal procedures, with the supplier providing justifications and explanations. The tender was organized by the Central Public Procurement Organization on behalf of the URM, with five companies participating. Other bids ranged from 85,000 to 457,500 euros. "Pirmoji kava" previously provided services during Lithuania's 2013 EU Council presidency, though the cost for those services was not disclosed.

the supplier was asked to justify it, and he provided supporting documents and explanations.

— Ministry of Foreign Affairs (URM)Describing the process of evaluating the unusually low bid.
DistantNews Editorial

Originally published by Delfi in Lithuanian. Translated, summarized, and contextualized by our editorial team with added local perspective. Read our editorial standards.

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