Four companies won one in ten euros from 2020 Spanish emergency contracts

On 31 March 2020, in the first crazy days of the state of alarm, the Government of Murcia (Spain) awarded the management of its public television to CBM, the company that already held the contract. The difference is that, this time, it did so using emergency processing, an exceptional system that allows ultra-fast procurement, without opening a file and with very little prior controls and transparency. This system, the fastest and most direct available under the national Public Procurement Law (LCSP in Spanish), even allows officials to initiate contracts orally, and write the conditions later. Emergency procurement is limited to three very clear situations: catastrophic events, situations that pose serious danger and national defense needs.

The just-declared pandemic was and is a catastrophe that posed serious dangers, which is why officials used this system to purchase, for example, masks. It takes a little more imagination to understand how a routine public television service contract renewal helps fight the pandemic. But Murcian officials proved up to the task.

In the Murcian justification, the first argument is that the state of alarm stopped administrative procedures so the regional government could not continue the tender they had already opened. Beyond the fact that delays are not a sufficient cause to use the emergency procurement system, they did have time: the existing contract dated to 2015 and had already been extended three times. The latest extension expired on 30 April, but officials only published the tender for replacing it on 25 February, after several delays. Given that starting date, it was almost impossible, regardless of pandemics or a state of alarm, that bids would arrive on time.

The second argument is more ethereal: television is essential in disasters, Murcian officials wrote. Not approving the contract via emergency rules posed a “significant danger to people’s health and lives.” So they approved 744,000 euros per month under emergency procurement rules until the government could select a winning bid in an ordinary open tender. The plan was for it to be just a patch for two months, May and June, but the Murcian government has extended it twice. The last extension laid the groundwork for another extension in 2021.

The Murcia public television contract is one of many officials snuck in among the masks, plastic screens and diagnostic tests. In total, Spanish public entities awarded and published at least 16,589 emergency contracts during 2020, totalling more than 6.445 billion euros. Emergency contracts made up almost 15% of all public contracts signed that year, an unprecedented percentage. For comparison: the General State Administration signed 658 emergency contracts worth 3.2 billion euros in 2020, up from 50 emergency contracts worth 27 million euros in 2019 and 12 contracts worth 3 million euros in 2018.

That is not surprising. It was a truly extraordinary situation. But what did it buy? From whom? And, most importantly, did our public officials follow the few emergency procurement rules? Are there more suspicious contracts? Spoiler: The answers to those last two questions are no and yes.

Four companies captured one in every ten euros

The health crisis forced many companies to reinvent themselves. Others saw opportunities in the midst of crisis. This is the case of FCS Select Products, an energy drinks company based in Barcelona with a branch in China that had never worked in the health sector. Thanks to four contracts signed with the Ministry of Health, all of them signed on March 23 and totalling more than 217 million euros, it became the main importer, or intermediary, of the Government.

FCS Select Products is the company that won the most money via emergency procurement in Spain in 2020. One of its directors had been convicted in 2015 for fraud, as revealed by El Confidencial. After those four contracts (here, here, here and here), it did not sign any more with Spanish public entities. It was a one-hit wonder. But a very, very lucrative one.

Emergency awards by company in 2020