Introduction

A recent investigation has revealed yet another case of financial mismanagement, where a state-funded contract worth 173 million drams ($432,000) yielded absolutely no tangible results. This case, which revolves around a failed government contract, exposes systemic flaws in oversight, accountability, and procurement processes in Armenia’s public sector.

Failure of the Contracted Company

The contract in question was awarded to a company that had previously shown inconsistencies in delivering projects. Despite clear indicators of its incapability, the company was once again selected to participate in a government tender. However, as expected, the project failed to be completed, leading to financial losses and inefficiencies.

Government officials overseeing the contract claimed that there were continuous delays, and when the company finally attempted to present their work, it was deemed substandard. Reports indicate that the company’s two-year operational plan had already exhibited serious shortcomings, leading to concerns over service quality and potential cost-cutting measures that would negatively impact the final deliverables.

Unfinished Project and Lack of Accountability

Despite the failure of the contracted company to deliver the promised project, officials initially extended the deadline, giving them additional time to meet contractual obligations. However, even after the extension, the company was unable to submit a functioning system. Investigators found that no concrete progress had been made.

When officials refused to accept the incomplete work, the company attempted to renegotiate the terms, citing unforeseen difficulties. However, the core issue was clear: the company lacked the capacity to deliver on its contractual obligations, and yet, it was awarded the contract. The question remains: How did such an incapable firm secure the contract in the first place?

Government Response and Obstruction

In an attempt to obtain official clarification, investigators reached out to multiple government agencies involved in the procurement process, including the State Audit Office and the Ministry of Finance. While some officials declined to comment, others provided vague and non-committal responses, further raising concerns about the lack of transparency in public spending.

When attempts were made to contact Ashot Muradyan, a key figure in the procurement process, he denied knowledge of the failed project, contradicting previous internal communications. Furthermore, an attempt was made to contact another relevant official, Janjughazyan, a former finance minister, who declined to provide any comments on the matter. Despite this refusal, sources confirmed that he was aware of the project and had professional ties with key figures involved in the failed procurement.

Further inquiries directed at Murad Muradyan, a representative of the contracted company, also went unanswered. Multiple requests for comment, including direct phone calls and written inquiries, were ignored, suggesting a deliberate effort to avoid scrutiny.

The Need for Stronger Oversight Mechanisms

This case is yet another reminder of the urgent need for stricter oversight in government procurement processes. The fact that a company could be awarded such a large contract, fail to deliver, and yet face no significant consequences raises serious concerns about corruption, accountability, and financial mismanagement in Armenia’s public sector.

Experts emphasize the necessity of having clear control mechanisms to prevent such financial losses in the future. Key recommendations include:

  1. Mandatory Background Checks on Bidding Companies – Ensuring that only companies with a proven track record of successful project completion are eligible for tenders.
  2. Stronger Oversight from Regulatory Bodies – Independent audits should be conducted at multiple stages of a project to ensure accountability.
  3. Strict Penalties for Contract Violations – Companies that fail to deliver should face financial and legal consequences, including being barred from future government contracts.
  4. Public Transparency in Procurement – Government contracts should be publicly accessible, allowing civil society organizations and the media to monitor progress and identify potential issues.
  5. Legal Repercussions for Negligent Officials – Officials who approve and oversee failed projects should be held personally accountable for financial losses incurred.

Referral to Anti-Corruption Authorities

In response to the findings of this investigation, a formal complaint has been submitted to the General Prosecutor’s Office and the Anti-Corruption Committee. Authorities have been urged to investigate the case, identify responsible parties, and initiate legal proceedings where necessary.

While government institutions claim to be committed to fighting corruption and ensuring transparency, cases like these prove that financial mismanagement remains a persistent issue. The Armenian public deserves answers, and more importantly, they deserve action.

Conclusion

The failure of this 173-million-dram project represents a glaring example of financial irresponsibility, systemic corruption, and bureaucratic inefficiency. While officials continue to avoid accountability, public funds continue to be wasted on projects that yield no results. If no corrective measures are taken, similar cases will persist, eroding public trust and worsening Armenia’s economic challenges.

The government must take decisive action to prevent such failures in the future. Without immediate reforms, Armenia’s public sector will remain vulnerable to corruption and inefficiency, with taxpayers bearing the burden of these costly mistakes.