Two IT&C Companies Colluded For A EUR100M Public Acquisition Deal - An Investigative Report

Building an intranet to enable the Romanian veterinary authority to track all tagged domestic animals was a 100 million euros deal "doctored" by at least four people already indicted, following a police investigation. One of the four is the sales director with Hewlett-Packard Romania, Orest Robciuc, accused to have rigged the bidding. The other three are: Liviu Harbuz and Sorin Mitrea, former president and general manager of the national veterinary authority, respectively, and Ovidiu Vladu, owner of IQ Management, another IT&C company taking part in the bidding along HP Romania.

The alleged wrong-doing occurred in 2004, but investigators believe the affair was planned at least one year ahead.

In early 2003 Harbuz asked the then minister of agriculture Ilie Sarbu to approve the implementation of an intranet system for the veterinary authority, which was supposed to link together the 42 county subsidiaries and the three institutes controlling the livestock health, the quality of drugs and bio-products used in the veterinary work, and that of the quality of food, respectively.

Sarbu did sign the request made by Harbuz. But the latter perverted the initial agreement with an internal memo, which divided the contract among the 42 local subsidiaries of the veterinary authority. Thus, the initial 100 million euros contract, which should have been the object of public bidding, turned into 42 smaller contracts, all under the 40,000 euros legal threshold for calling a public bidding.
Thus Harbuz wrote that Sarbu approved "the public acquisitions procedure via request for offers," which of course, was not true.

The local veterinary authorities were informed that five IT&C companies showed interest in the contract: IQ Management, HP Romania, Omnilogic BGS, Dim Software, and Uranus ltd.

Only two companies actually send their offers to the veterinary authority in Bucharest, and further investigations would reveal that the two companies which should have competed for the contract, in fact colluded. They were IQ Management and HP Romania.

Both companies sent their technical and financial offers to all the local subsidiaries, and filled in as many times 1,000 lei money orders to qualify for being selected for the public acquisition contract.

Robciuc signed for HP Romania, though he was not legally delegated by his company to sign money orders. This means the money orders sent by HP Romania were void and not legally binding for the company, which should have been reason enough to disqualify the company from the contest, as Robciuc alone admitted during an interview with Jurnalul National.

Another more shocking aspect is that all the paper-work sent by both companies supposedly competing with each other for the deal were filled in by the same person.

IQ Management offered a price a few tens of euros lower than the one of HP, thus getting the contract. Two additional contracts were handed over to IQ Management: one to offer accountancy software for the 42 local subsidiaries - as only the scientific institutes declined the deal, and a second one to build the 42 web-sites, at 10,000 euros each.

So, on the face of it, HP Romania had lost three contracts worth a total of one million euros in 2003, in favor of IQ Management.

One year later bidding was to take place, this time for tagging Romania’s livestock, at a price-tag of 100 million euros. By contract, some 3,500 PCs and printers were to be bought for being handed over to the vets which should have conducted the tagging all around the country.
IQ Management was again the winner.
Only that HP Romania provided IQ Management via Computerland some 1,300 PCs and 50 printers, worth a total of two million euros. Sources close to the investigation told us Robciuc said HP Romania was not that interested in getting the deal, and in fact taking part in the offer was just an attempt to worm-up relations with IQ Management, which later bought the PCs from HP Romania’s partners.

Robciuc also told Jurnalul National about the seminars organized by IQ Management for the management of the national veterinary authority which in fact were true orgies.
HP Romania general manager, Radu Enache, was unavailable for comment.