When choosing a private service provider, public entities – the state, municipalities and their capital companies – must conduct a public procurement procedure that provides for the participation of the widest possible range of applicants. The Competition Council (KP) conducted negotiations with the municipality of Tukuma region in order to prevent non-compliance with the regulation of neutrality of competition, which is defined in Article 14.1 of the Competition Law (KL), as the municipality has so far not implemented public procurement for the receipt of building management services in the city of Tukuma for those apartment buildings whose residents do not have the right to manage have taken over.
In the second half of 2023, KP started research on the market for building management services in Tukuma region municipality, incl. on the actions of the municipality of Tukuma region, without holding procurement procedures, concluding contracts with several private sector building management service providers for the management of multi-apartment residential buildings, the management rights of which have not been taken over by the residents, in Tukum. After ascertaining the facts, the KP conducted a negotiation procedure with the municipality of Tukuma region in order to ensure compliance with the neutrality of competition in the operation of the municipality as much as possible.
Taking into account the opinion expressed by the Procurement Supervision Bureau (IUB), as well as the one mentioned by the KL, the KP states that in cases where the residents of multi-apartment residential buildings have not made a decision on taking over the house management rights at the general meeting, the municipality should select the building management service providers in a public procurement procedure. In order to prevent the possible risk of violation of competitive neutrality, the KP asked the municipality to provide an opinion and a possible action plan to promote competition in the market for the provision of housing management services in the city of Tukum.
After getting acquainted with the KP assessment, the municipality of Tukuma region has undertaken to promote informing and educating residents about taking over management rights, to explain and remind residents in depth in the municipality’s newsletters and other communication channels about their opportunities to take over multi-apartment residential buildings, additionally publishing publicly available information from the Construction Information System about persons who ensure the provision of residential building management services.
Likewise, the municipality of Tukuma region has committed to the private traders who, according to the contracts concluded with the municipality, currently manage houses not occupied by residents – SIA “TUKUMA NAMI” and SIA “JAUNTUKUMS” – to set a deadline (no later than 30.12.2024) by which they it is necessary to ensure the organization of general meetings of residents of apartment buildings under management, so that the residents decide on taking over management rights. After the set deadline, the municipality, in accordance with the instructions of the IUB and the KP, has undertaken to organize the procurement procedure for the management of multi-apartment residential buildings not occupied by residents in the city of Tukum.
Accordingly, as a result of the negotiation procedure carried out by the KP, the municipality of Tukuma region has committed to take active actions in order to ensure the observance of competitive neutrality in its activities as much as possible. KP will continue to monitor the actions of the municipality regarding the houses not taken over by residents, and also encourages the municipality to carry out a thorough research of the market situation in order to find out the range of potential applicants and set reasonable criteria for applicants, thus ensuring that the widest possible range of applicants participates in the procurement.
______________________________________________________________________________________ The prohibition of public persons to hinder, limit or distort competition is stipulated in Article 14.1 of the Competition Law and came into force on January 1, 2020.
In order to ensure compliance with the requirements of the law, the KP conducts negotiations with the public figure. If, during the negotiations, compliance with the requirements of the law is not achieved, ensuring a result favorable to competition, the KP may refer public persons to the Ministry of Environmental Protection and Regional Development in connection with a violation in the operation of the municipality or with a proposal to the Minister of Economy, if the violation results from a regulatory act.
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Tags: concludes negotiations municipality Tukuma region aim promoting competition market building management services
