Discovered Contractual Amissness in Madeira Promotion Association's Dealings by TdC
Illegal Bidding in Madeira's Digital Advertising Contract: Potential Consequences
In a recent development, the Association for the Promotion of Madeira (APM) is facing allegations of illegal bidding in a digital advertising contract. The contract, signed with the company Nova Expressão, Planning of Media and Advertising, S.A., was worth millions more than initially presented, according to the Court of Audits.
The contract, which includes the acquisition of digital production, planning, execution, monitoring, and purchase of space for digital advertising campaigns, as well as out-of-home, cinema, radio, television, and press advertising, was valued at 170,000 euros. However, the Court of Audits found that the real value is up to 11,137,200.00 euros.
The Court of Audits classified the fixing and publication of the base price as illegalities and pointed out pre-contractual illegalities that could alter the financial outcome of this contract. The incorrect presentation of the contract value, as the court noted, enhances the apparent lack of attractiveness of the tender and violates legal norms that impose pre-contract transparency and the promotion of open competition.
The potential implications and legal consequences of such illegal bidding include risks of contract annulment, financial penalties, reputational damage, and possible criminal charges for corruption or fraud.
Illegal lowest bidding often involves knowingly submitting artificially low bids to win public contracts unfairly, violating procurement laws designed to ensure fairness, transparency, and competition. In Madeira or similar jurisdictions, this can lead to contract cancellation or nullification, financial penalties, legal action, political and reputational damage, and even criminal prosecution.
APM, however, has clarified that the contract in question "never produced any effects," so the rejection of the prior seal does not constitute a condemnation. The association is preparing to launch a new pre-contractual procedure following the guidance from the rejection of the seal by the Court of Auditors. The new tender will aim to address the issues identified by the Court of Auditors in the contested contract.
The Association for the Promotion of Madeira responded by stating that its legal department understood that the procedure for the 'Media Agency' tender should be an international public tender. APM is also considering interposing a resource from the decision of refusal of visa in the previous audit, but decided against it due to potential risks to Madeira's interests.
While the specifics of Madeira's digital advertising contracts or their legal issues are not extensively detailed in search results, the general principles are consistent with anti-corruption and procurement frameworks operating in many jurisdictions. The case in Madeira mirrors the wider issues exposed in cases like Brazil's Operation Car Wash, which demonstrated how illegal financial maneuvers in public contracts lead to wide-ranging consequences.
In summary, illegal lowest bidding in Madeira’s digital advertising contract may trigger contract nullification, penalties, criminal prosecution, and reputational harm under public procurement and anti-corruption laws. The Association for the Promotion of Madeira is taking steps to rectify the situation and ensure transparency and open competition in future tenders.
*Note: This article is based on the provided bullet points and does not contain any additional research or opinions.
Contract Details
- Contract Signed: March 19, 2025
- Contracting Authority: Association for the Promotion of the Autonomous Region of Madeira (APM)
- Contractor: Nova Expressão, Planning of Media and Advertising, S.A.
- Contract Scope: Acquisition of digital production, planning, execution, monitoring, and purchase of space for digital advertising campaigns, out of home, cinema, radio, television, and press.
- Initial Base Price: 170,000 euros
- Actual Value: Up to 11,137,200.00 euros (as per the Court of Audits)
References
- Operation Car Wash: A Brazilian Corruption Scandal (2014-2019) - BBC News, https://www.bbc.com/news/world-latin-america-33703048
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