The European Commission will eventually exceed the predicted taxpayers’ money amount under contracts for a total of €100 million for the creation of a massive IT security network, as well as the purchase of mobile phones and notebooks.
Internal documents and confidential emails received from the EUobserver website imply poor management of framework contracts with external providers that exceed the normal prices and worse – this is happening with the knowledge of senior officials and the management of the European Commission’s Directorate-General for Informatics (DG Digit).
These contracts include, inter alia, the purchase of Apple iPhones and Microsoft Surface Pro notebooks and all products appear to be sold at increased prices by the German supplier of Bechtle AG.
Such devices are supposed to be sold without VAT following the rules laid down in the Protocol on the Privileges and Immunities of the European Union. But the European Commission has agreed to pay over the base price.
At the time of the submission of the October 2017 contract, a new iPhone X with 256GB storage was sold at a price of EUR 1,319 with 19% VAT included on the Apple Germany website. This means that the European Commission had to pay around €1,000, but instead it gave EUR 1,188.29 for this model, according to leaked documents.
The European Commission has provided the EUobserver with the controversial contract following a request under the Freedom of Information Act, but has hidden the motives for pricing for commercial secrecy reasons. However, the leaked document reveals the prices in full.
It also shows that the Directorate-General for Informatics spent €719.82 on iPhone 8 64GB. The price including 19% VAT for the model was 799 euros, meaning that EC had to pay EUR 671.43.
It also paid EUR 872.97 for iPhone 8 with 256GB and 972,07 for iPhone 8 Plus with 256GB – again above the base price.
A similar purchase scheme with an overcharge instead of discount was applied to Microsoft Surface Pro computers from the same German supplier when the Commission agreed to purchase them at above base prices in 2014.
At this time, Microsoft on its website in Belgium sells its Surface Pro 3 i5 portable computers with 256GB of storage and 8GB RAM memory for EUR 1,299 with a 21% VAT. However, the Commission agreed to pay EUR 1110.26 for each device or almost 40 euros above the base price.
The Commission does not answer the questions why it agreed with these prices and whether additional hidden fees could explain the incremental costs. It has not yet answered whether a part of the VAT was paid only to be recovered later.
Finally, authorities could not explain how many devices were purchased under the specific irregular contracts. Instead, the Commission gives “roughly accurate” figures of nearly 1,000 iPhone units purchased for the six months since last December, from the German supplier and at least 36 Microsoft laptop since 2014.
The spokesperson of Bechtle AG also did not reply to the price issues under the contract. But one thing is certain – the loss of both public money and public confidence remains.
