Million-Euro Tender for the KAPS Dining Facility: Why Did Construction Fail to Meet Deadlines?
The construction of the Dining Facility[1] at the Kosovo Academy for Public Safety (KAPS), valued at over one million Euros, was initiated at the end of 2022 but did not comply with the stipulated completion timeline. This contract, worth €1,064,447, was signed on November 25, 2022, with a completion date set for November 30, 2023.
The winning consortium, “Astraplan SHPK” and “Gërguri SHPK,” received a six-month extension to complete the work, extending the deadline to June 30, 2024. However, the construction of the Dining Facility remained unfinished even within this extended timeframe, leading KAPS to unilaterally terminate the contract.
“Measures were taken against the construction company, including the unilateral termination of the contract, due to non-compliance with the dynamic work plan. The economic operator was notified promptly regarding the non-extension of the work deadline. On July 16, 2024, the decision to terminate the contract was sent to ‘Astraplan SHPK’ and ‘Gërguri SHPK’,” a KAPS spokesperson stated.
Shortly before the extended deadline, the contracted consortium made three successive requests to KAPS for a second extension to complete the work by December 10, 2024. Following the third request, the consortium was informed of the unilateral termination of the contract.
“Yes, we requested three successive extensions: the first on June 13, 2024, the second on June 28, 2024, and the third on July 16, 2024. After the third request, we accepted KAPS’s unilateral termination; we found it reasonable to request an extension until December 10, 2024,” stated “Astraplan SHPK,” the leading company of the consortium.
The company stated it never agreed with the unilateral contract termination.“We have expressed our disagreement with the contract termination through several letters,” declared “Astraplan SHPK.”
Furthermore, KAPS reported that they have requested the insurance company to initiate procedures for confiscating the security deposit.“The total value of this security was 10% of the contract value,” said Bekim Dakaj, Procurement Division Manager at KAPS. Beyond the failure to complete the Dining Facility project at KAPS within the specified timeframe and the subsequent contract termination, it is also crucial to understand the tendering process for this project.
How the Tender Process for the Construction of the KAPS Dining Facility Unfolded
The contract notice for constructing the Dining Facility at KAPS was published on July 1, 2022. The open procedure tender was estimated at €1,287,785. On October 6, 2022, nearly three months after the tender announcement, KAPS recommended the consortium ‘Astraplan SHPK & Gërguri SHPK’ for the one-year contract with a bid of €1,064,337. The contract was signed with them on November 25, 2022.
The tender had four bidders in total: “Astraplan SHPK & Gërguri SHPK” (€1,064,337), “Arad 94 & Isars” (€1,158,897), “Al Group” (€1,277,339), and “Limora” (€1,552,019). Of these, only two bids were deemed responsive — “Astraplan SHPK & Gërguri SHPK” and “Arad 94 & Isars.” However, “Arad 94 & Isars” was disqualified as their bid was not the lowest. The other two bidders, “Limora” (€1,552,019) and “Al Group” (€1,277,339), were declared non-responsive and eliminated from the competition for failing to meet the required criteria.
The contracting authority, KAPS, justified the elimination by stating the requirements for tender security for 120 days, necessary ISO 15838 2009 the ISO 50001 2018 certifications, a bank turnover of €2,500,000 for the last three years (2019, 2020, 2021), bank financial support of €300,000 to commence work, contracts and references for completed work in the last three years, and lists of professional engineering staff, workers, work equipment, and a dynamic plan.
Although nearly two years have passed since the contract was signed, it has yet to be published on the KAPS e-procurement platform. The document was obtained through a request for access to public documents at KAPS. KAPS explained that the e-procurement system did not accept the contract due to its large document volume.
In response to the issue regarding the non-publication of the contract on the KAPS e-procurement platform, the Public Procurement Regulatory Commission (PPRC) provided the following clarification.
“The entire contract should have been uploaded and made public. If there were any uncertainties and they could not upload it, they should have contacted the Public Procurement Regulatory Commission for assistance. Additionally, the KRPP has cooperation with the National Audit Office (NAO) and has informed them that whenever they notice that the contract management module, including the publication of the contract, is not being followed, the tender should be audited,” said Osman Vishaj from PPRC.
Obtaining the Construction Permit After Contract Signing
Even though the contract for constructing the Dining Facility at the Kosovo Academy for Public Safety (KAPS) was signed in November 2022, the construction permit for the Dining Facility had not yet been secured as required by Paragraph 19 of Article 19 of the Public Procurement Regulation[2]. KAPS indicated that the construction conditions were met on December 2, 2022, and the construction permit was obtained on December 14, 2022.
“KAPS began the permit process in the Municipality of Vushtrri in April, and additional documents were continuously requested. Construction conditions were met on December 2, 2022, and the construction permit was obtained on December 14, 2022,” KAPS stated.
This contradicts the Public Procurement Regulation[3], which, according to paragraph 19 of Article 19, state: “No work contract can be initiated without securing the permits/approvals for the spatial location where the project will be executed, and all necessary permits from relevant regulatory authorities for interactions with energy networks and connections to public service systems.”
The contracted consortium for the over €1 million tender by KAPS, “Astraplan SHPK” & “Gërguri SHPK,” stated that the construction permit, flooding, and collapse in the construction pit contributed to the project’s failure to meet the set deadline.
According to “Astraplan SHPK,” based on the construction permit conditions, they were not allowed to start work until December 27, 2022, more than a month after the contract signing.
“As a result, we effectively worked only three days in 2022,” stated “Astraplan SHPK.”
At the beginning of 2023, the construction company reported flooding on January 19, 2023, which filled the construction pit with water and caused its collapse.
“This doubled the work, and throughout this period, we were unable to start work until around mid-May 2023. All these factors contributed to the project not being completed within the stipulated timeframe,” stated “Astraplan SHPK.”
The Supervisory Company Contracted Six Months After Project Initiation
For the supervision of the over €1 million project, the company “ARCH Empire LLC” was contracted. KAPS stated that, due to a lack of professional staff for project supervision, they engaged a professional supervisory company. The supervisory company was contracted approximately six months after the commencement of work, specifically on May 29, 2023. The one-year contract[4] with “ARCH Empire LLC,” valued at €6,962, concluded on May 30, 2024, one month before the extended deadline requested by “Astraplan SHPK” & “Gërguri SHPK” for the project’s completion. “ARCH Empire LLC” was contracted through a re-tendering process, as the initial tender for supervising the Dining Facility construction project at KAPS failed because none of the bidders met the criteria. In the initial tender, published on February 8, 2023, and canceled on March 8, 2023, three other companies bid, but not “ARCH Empire LLC.”
“ARCH Empire LLC” confirmed that the first request for an extension of the work completion deadline was made on November 16, 2023, by “Astraplan SHPK,” about 16 days before the contractual deadline. On November 21, 2024, “ARCH Empire LLC” recommended extending the deadline for completion, and on November 23, 2024, KAPS approved this request. They stated that KAPS was informed about the delays, problems, and the possibility of not completing the project within the planned and requested time, which was set by “Astraplan SHPK” as of June 30, 2024. KAPS stated that, based on the circumstances and the report from the supervisory company, they terminated the contract with the consortium “Astraplan SHPK” & “Gërguri SHPK.”
“ARCH Empire LLC’s” contract ended at the end of May 2024, while work on the KAPS Dining Facility was still ongoing. KAPS, through a negotiated procedure without publication of the contract notice, opened another tender for supervision and re-invited “ARCH Empire LLC” intending to extend the contract for another six months. However, the tender was canceled, considering the economic operator as non-responsive at a time when the construction consortium “Astraplan SHPK” & “Gërguri SHPK” were also notified of the unilateral contract termination.
“Work Execution Dynamics: Poor”
In at least four reports by the contract supervisor “ARCH Empire LLC,” the work dynamics for the construction of the Dining Facility at the Kosovo Academy for Public Safety (KAPS) were evaluated as “poor.” In the reports dated November 17, 2023, and November 29, 2023, which were submitted to KAPS just days before the contractual deadline for the completion of the work, the execution dynamics were rated “poor.” The same description was used in two other reports dated December 21, 2023, and April 25, 2024.
“Work execution dynamics: poor” – states the report by the supervisory company “ARCH Empire LLC.”
Based on the line items where “ARCH Empire LLC” described the amount of work completed, it is observed that in the eighth and final line item, for which the invoice was submitted in April 2024, 69.65% of the work was completed, leaving 30.35% of the work unfinished.
Items | Invoice | Work Completed | Work Remaining |
---|---|---|---|
1 | 08.02.2023 | 8.51% | 91.49% |
2 | 31.05.2023 | 25.49% | 74.51% |
3 | 21.07.2023 | 28.58% | 71.42% |
4 | 15.09.2023 | 39.54% | 60.46% |
5 | 20.11.2023 | 48.18% | 51.82% |
6 | 29.11.2023 | 56.51% | 43.49% |
7 | 22.12.2023 | 61.83% | 38.17% |
8 | 29.04.2024 | 69.65% | 30.35% |
Source: Supervisory Report by “ARCH Empire LLC,” April 25, 2024
The contract management document, signed by contract manager Ilir Namani, details the submission of invoices for eight line-items and the value of the work completed in each. This document, obtained through a public records request, states that the first line-item invoice was submitted on February 8, 2023, numbered 1/2023. The total value of completed work was €90,596.84, from which a 15% advance was deducted, leaving €77,007.31 payable.
The second line-item invoice dated May 31, 2023, numbered 9/2023, details the following: Under two line items, line item 2. Earthwork and Drainage (item 2.1): The planned quantity of earth was exceeded by 1,946.73 cubic meters, and under line item 7, Waterproofing and Thermal Insulation Work (item 7.2): The planned quantity of insulation material was exceeded by 146.25 square meters. The total value of completed work for this report was €180,668.41, with a 15% advance deducted, leaving €153,568.15 payable.
A letter dated May 2, 2023, from the contractor “Astraplan SHPK” & “Gërguri SHPK,” requested approval for the increased quantity of waterproofing work.
“The quantity of PVC waterproofing work according to post-measure POS 7.2 is insufficient to complete the project. According to the technical conditions for performing the waterproofing works, the pre-measure (quantity) did not calculate the waterproofing of elevator shafts and the extension part,” the contractor’s request stated.
The contract manager, Ilir Namani, informed that “based on all legal procedures, I have approved the exceeding of the waterproofing quantity because approval was necessary to continue the work.”
In a letter dated February 16, 2023, the contractor requested an increase in the quantity of earth excavation. The letter, obtained through a public records request, states that “according to the technical conditions for earth excavation, the quantity is greater on-site, and this increase has also been affected by the floods of January 19, 2023.”
“The excavation pit’s slopes collapsed significantly, closing a part of the basement pit,” the request continues.
Regarding this request, contract manager Ilir Namani approved the increased quantity of excavation work, stating, “Approval was necessary to continue the work.”
“This also happened due to the floods in January 2023 and continuous rainfall,” Namani emphasized in a letter obtained through a public records request.
The contract plan document notes that the third line-item invoice was received by KAPS on July 21, 2023, numbered 14/2023. The total value of completed work was €32,875.93, with a 15% advance deducted, leaving €27,944.54 payable.
The fourth line-item invoice was submitted on September 15, 2024, numbered 16/2023. The total value of completed work was €116,726.11, with a 15% advance deducted, leaving €99,217.19 payable. The invoice for the fifth item in the contract management plan is stated to have been submitted on November 20, 2023, under the number 23/2023. The total value of completed work was €91,969.50, with a 15% advance deducted, leaving €78,174.08 payable.
For the sixth line item, two invoices were submitted: Invoice dated November 29, 2023, numbered 29/2023, valued at €81,176.47, with a 15% advance deducted, leaving €69,000.00 payable, and Invoice numbered 30/2023, valued at €7,485.13, with a 15% advance deducted, leaving €6,362.36 payable. The total value of completed work was €88,661.6, with a 15% advance deducted, leaving €75,362.36 payable.
The seventh line-item invoice was submitted on December 22, 2023, numbered 37/2023. The total value of completed work was €56,592.25, with a 15% advance deducted, leaving €48,103.41 payable. The eighth line-item invoice was received on April 29, 2024, numbered 05/2024. The total value of completed work was €83,225.11, with a 15% advance deducted, leaving €70,741.34 payable.
Public procurement expert Valmir Ilazi referred to delays in the realization of public procurement contracts in Kosovo as “common issues.” He emphasized that public institutions need to be more demanding and hold supervisory bodies accountable to ensure better implementation of control mechanisms and utilize more technology for real-time monitoring.
“Although measures have been taken to improve the management of procurement projects, they are often insufficient on the ground. The lack of quality training and professional supervision has rendered these steps ineffective. To avoid delays, a more professional and intensive approach to implementing these measures is necessary,” he said.
Despite the extended deadline, the KAPS Dining Facility construction project failed to be completed as planned. The termination of the contract with the construction consortium and issues in project supervision highlight ongoing challenges in contract management in Kosovo. KAPS has yet to announce a new tender for continuing the project, and food service will continue in the current KAPS Dining Facility building.
Disclaimer:
This article was produced under the project “Encouraging transparent, accountable and efficient public money spending through public procurement in Kosovo” funded by the European Union and implemented by Democracy Plus (D+). Its contents are the sole responsibility of the author and do not necessarily reflect the views of D+ or the European Union.
[1] https://e-prokurimi.rks-gov.net/SPIN_PROD/application/ipn/DocumentManagement/DokumentPodaciFrm.aspx?id=2131010
[2] https://e-prokurimi.rks-gov.net/HOME/Documents/Legislation/Rregulloret/shq/Rregullore%20Nr.001_2022%20p%C3%ABr%20prokurimin%20publik.pdf
[3] https://e-prokurimi.rks-gov.net/HOME/Documents/Legislation/Rregulloret/shq/Rregullore%20Nr.001_2022%20p%C3%ABr%20prokurimin%20publik.pdf
[4] https://e-prokurimi.rks-gov.net/SPIN_PROD/APPLICATION/IPN/DocumentManagement/DokumentPodaciFrm.aspx?id=2491393