Say you're a government tenders committee that wants to procure some service or other. Say you get four bids from four vendors. One wants NIS 104,000, one wants NIS 120,000, one is demanding NIS 709,000 and one wants NIS 856,000. What would you do?
The answer is patently obvious. Any normal tenders committee would stop the tender process in its tracks and try to understand whence the enormous difference in bids. Maybe there was a mistake in the tender.
But that is not what the tenders committee of the now defunct Religious Affairs Ministry did in 2001, in its NIS 50 million tender to renovate mikves (ritual baths). Even though there were staggering gaps in the bids it received, it chose the lowest bid, from Tohar Hamikvaot, belonging to Rabbi Haim Levy.
Ostensibly the committee did the right thing in choosing the lowest bid. Yet hang onto your hats: when the Housing and Finance ministries began an investigation in 2004 that continues to this day, that cheapest bid turned out to be the most expensive.
How could that happen? Simple. On all sorts of items, Tohar Hamikvaot's bid charged an unarguably unrealistic NIS 5 per square meter.
For instance, for pouring a cement ceiling, Tohar Hamikvaot asked for only NIS 5 per square meter, while the realistic price was NIS 130. For netting it asked for NIS 5 per square meter instead of NIS 610.
For concrete walls it asked for - you guessed it - NIS 5 per square meter while a rational price would have been NIS 1,160. That went on throughout the tender and that's how Tohar Hamikvaot could file the lowest bid.
It is a company's prerogative to offer prices on which it will lose money. But in practice, Tohar Hamikvaot did not lose a sou. Miraculously the actual specifications for upgrading the mikves did not include the items on which the Rabbi would have lost money.
That belated inspection found that out of 80 items included in the renovation of one mikve, there were only 7 on which Tohar Hamikvaot had asked for NIS 5 per square meter. The other 73 were items for which it asked for the full price.
In fact, more than the full price: it asked for more than the companies that lost the tender had demanded. As a result, the Religious Affairs Ministry found itself paying NIS 1.1 million for the renovation of a single mikve. If it had chosen the runner-up in the tender it would have paid only NIS 963,000 for the same job.
God's hand, or gamble
The Religious Affairs Ministry lost more than NIS 100,00 for one single ritual bath and the tender encompassed dozens of them.
"Four contractors participated in the tender," wrote the inspector working for the Housing and Finance ministries, in his inspection report for 2004. "Two contractors gambled (or had prior information) on the items that would actually be ordered."
Delicately put, to be sure. If it wasn't the hand of God, one has to wonder how the contractors knew which items to underprice. A police investigation ended in nothing.
The inspector, Dr. Yoav Sarne, who chairs the Association of Engineers & Architects in Israel, allowed himself to be a tad less delicate when summing up his findings: "I have no doubt that the tenders committee failed in its management of the tender, in agreeing to continue the tender although it had no estimate of costs, even though the gaps between the offers were entirely unreasonable. There is no doubt that the commissioner failed at the professional level when preparing the tender, analyzing the results, and agreeing to continue the process with these warped results."
Haim Levy, CEO of Tohar Mikvaot: "The company won the tender and received orders that were signed by the director-general and accountant-general of the Religious Affairs Ministry. The company won the tender honestly and knows of no criticism regarding the tender or its work."
The director-general of the Religious Affairs Ministry at the time, Moshe Shimoni, refused to answer questions. He would only say: "The issue of the mikve tenders was examined in the past by the authorized bodies and despite the best efforts of ill-wishers, no stains were found in my conduct."
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