The Swiss federal administration awarded 361 contracts last year without first putting the requests out to tender, a newspaper report says.

"/> The Swiss federal administration awarded 361 contracts last year without first putting the requests out to tender, a newspaper report says.

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Swiss officials sidestep procurement law: report

The Swiss federal administration awarded 361 contracts last year without first putting the requests out to tender, a newspaper report says.

Any public contract worth more than 230,000 francs ($ 234,960) must first be put out for tender.

In 2011, the administration signed off on an average of one such contract every day without requesting any bids, newspaper Tages Anzeiger reported.

Last year, the total value of contracts above the 230,000-franc threshold that were awarded by the administration without bids amounted to almost 376 million francs ($ 384.1 million), the newspaper revealed.

Finance Minister Eveline Widmer-Schlumpf awarded 100 such contracts, with an estimated combined worth of 116 million francs ($ 118.4 million). Economics Minister Johann Schneider-Ammann has tripled the value of awards for contracts over the threshold since Doris Leuthard ran the department in 2009, raising the total to 79 million francs ($ 80.6 million).

Last year alone, Urs Ursprung, former director of the Federal Tax Office, awarded 35 contracts to Insieme for a failed computer project. The discovery of these awards lost Ursprung his job.

The newspaper found that the Department of Defence had actually reduced the number of contracts over the threshold to 27 million francs ($ 27.5 million), a quarter of the total two years earlier. A spokeswoman said this was due partially to the introduction of clear guidelines but also periodic inspections.

Exemptions to the 230,000-franc rule exist where very specific technical requirements need to be met, or where the intellectual property of a particular contractor is relevant.

Not all of these awards are a bad thing, lawyer Christoph Jäger told the newspaper.

“There are cases in which a direct award is in absolute conformity with the law and in addition is cheaper," he said.

Nevertheless, Jäger explained that tenders have positive effects, not only because they limit the opportunities for corruption, but also because those entering into them often offer better prices.

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Luxembourg urges fight to guard banking centres

Financial centres such as London, Singapore and Switzerland should hit back after being on the receiving end of attacks over banking secrecy, Luxembourg's Finance Minister Luc Frieden says.

Luxembourg urges fight to guard banking centres
Luxembourg Finance Minister Luc Friedan. Photo: Government of Luxembourg

Luxembourg, which has come under pressure over its role as a tax haven, must step up cooperation with its peers to protect the right of client confidentiality, Frieden said on Tuesday.

He made the remarks after meeting with Swiss President Eveline Widmer-Schlumpf, who is also Switzerland's finance minister.

“We need to step up coordination with other financial centres and come to a common understanding on client secrecy,” Frieden said.

At the same time, they would also have to meet “indispensable and absolutely necessary” standards of honesty on tax matters, he added.

“It is all about better protecting the privacy of clients,” he said, speaking alongside the visiting Widmer-Schlumpf.

Financial centres such as Luxembourg and Switzerland have been on the defensive since the global financial crisis in 2008 on charges that their secrecy laws made money flows harder to track, so enabling tax evasion.
Increased cooperation now should go beyond the issue of privacy since “there were other regulatory initiatives which we we need to come together on,” Frieden said.

“In a crisis, many states looked only to their national markets,” he said.

“We need to show that international financial centres are needed.”

Clients now come to Luxembourg or Switzerland not for secrecy or tax avoidance but to benefit from the financial services they provide, he said.

Widmer-Schlumpf made a similar point.

“We work with money that has been notified to the fiscal authorities and we should build our business model on the . . . quality of our financial services.”

Frieden noted that he had just begun talks with the US authorities so as to comply with the Foreign Account Tax Compliance Act (FATCA) which allows for an exchange of information on the assets of US citizens living abroad.