NSS confirmed a fine for Karlovy Vary for non-standard "drawing"

Brno/K. Vary - The Supreme Administrative Court confirmed a fine of half a million crowns for the so-called "Karlovy Vary lottery." The method of drawing participants for the tender for the construction of a sports hall was criticized by the antitrust office, which considered the narrowing of the number of competitors to be non-transparent. Therefore, it imposed one of the highest fines for public procurement on Karlovy Vary. Now its conclusions have also been confirmed by the Supreme Administrative Court.
    The city takes the court's decision as a definitive conclusion to the case and was not very surprised by the verdict. According to the spokesperson of the municipal authority, Jan Kopál, they tried to make use of all available legal remedies against the original conclusion of the antitrust office. "There was a certain legal opinion that discussing the method of the draw, which is not regulated by law in any way, is not standard. For this reason, the city turned to the court," said the spokesperson.
    The Karlovy Vary lottery has become a term in the Czech Republic. Footage from the controversial draw has been viewed by tens of thousands of people on the website youtube.com. The two-and-a-half-minute clip shows that the competition organizer took several dozen seconds to draw two companies, including the winner, from a closed container while pulling out other tickets significantly faster. The person conducting the draw commented that the tickets were stuck together, and thus they could not be separated in the container. A notary who witnessed the incident laughed at the man's behavior.
    According to the NSS ruling, the drawing of the last two interested parties could give rise to suspicions that the person was not actually drawing at all, but was searching for a predetermined ticket in the container which they were supposed to pull out, but could not find it. For applying the principle of transparency according to the Public Procurement Act, the court stated that it does not matter whether that was actually the case, whether the person conducting the draw was really feeling for the ticket, or if it was merely due to the clumsiness of the drawing person.
    "The motives of the individuals participating in the selection of candidates for the public contract are therefore not decisive for assessing the violation of the principle of transparency. A violation of the principle of transparency occurs regardless of whether it can be proven that a specific legal obligation was violated," stated NSS judge Zdeněk Kühn.
    The fine of 500,000 CZK is one of the highest that the antitrust office has imposed on cities and municipalities. The Karlovy Vary municipal authority already paid the fine two years ago, after which it appealed against it. However, the city did not incur any damage since the fine was fully covered under a contract by the company that organized the draw.
    The draw narrowed the number of applicants for the contract from the originally registered 16 firms to five. Ultimately, the consortium of firms Syner, Baustav, and Metrostav, which was drawn last and before which there was an unusual delay, built the hall for approximately 1.2 billion crowns. The hall was opened last June and was the largest investment project of the city in its modern history. By the end of 2009, it earned approximately 777,000 crowns and is expected to be profitable this year as well.
    The highest penalty so far, three million crowns, was imposed on Zlín for long-term and intentional circumvention of the law in many contracts. This penalty was recently reduced to 800,000 crowns. The highest fine is thus the one imposed on Hradec Králové amounting to 1.5 million crowns for violating the law regarding a concession contract for the parking system. However, this penalty is not yet final.