Around 1.2 Billion Drams in Alleged Abuses in the Procurement Process of Educational Network Service

The State Interests Protection Department of the Office of the Prosecutor General of Armenia has investigated documents received from the State Oversight Service regarding the results of constant monitoring of procurement procedures organized for the needs of the National Center for Educational Technologies from 2013 to 2020. To ensure the completeness of the study, necessary information was requested and obtained from the aforementioned organization.

The investigation revealed that between 2012 and 2015, each October, the responsible division of the organization submitted purchase requests for the acquisition of service delivery for the educational network, setting the estimated purchase price at 700 million 344 thousand AMD each year. In the announced procurement procedures, one participant, "Y..." LLC, was recognized as the winner every year, and contracts were signed for the procurement of these services at values of approximately 716 million AMD, 700 million AMD, 700 million AMD, and 703 million AMD, respectively.

According to the Armenian Government's decree on organizing the procurement processes, prior to the confirmation of procurement invitations, except for construction projects, members of the evaluation committee are obliged to study the relevant markets of Armenia and create a written assurance regarding the market prices for goods and services included in the procurement invitation, attaching a detailed explanation comparing the estimated price with the market price and supporting documents for the study.

The investigation determined that no market study was conducted to establish the estimated price for the service delivery in the procurement process of the educational network. Furthermore, the contracts signed with the same company for similar services between 2017 and 2019 totalled approximately 400 million AMD each year, which is 300 million AMD less than the contracts signed between 2012 and 2015.

This indicates that responsible officials of the organization, apparently violating the legal requirements regarding the organization of procurement processes, did not conduct a market study in the procurement procedures for the educational network services, resulting in the establishment of unjustified estimated prices. Consequently, the execution of contracts with the company from 2012 to 2015 caused the state a total damage of around 1 billion 200 million AMD.

Considering the data obtained from the study indicating apparent characteristics of criminal offenses, a criminal case has been initiated by the State Interests Protection Department based on the characteristics of part 2 of article 308 of the Criminal Code of Armenia. The criminal case has been sent to the Investigative Committee of Armenia with the task of conducting a preliminary investigation.

Note: The accused or suspected person is considered innocent until proven guilty in accordance with the procedure established by the Criminal Procedure Code of Armenia through a court ruling that has entered into legal force.