Bulgarian SMEs Disgruntled over Public Procurement Rules

Business | July 7, 2010, Wednesday // 17:39|  views

Bulgarian SMEs are unhappy with the existing public procurement regulations. Photo by BGNES

Small and medium-sized enterprises claim to be largely excluded from the BGN 10 B market of public procurement orders in Bulgaria.

According to a survey of the Bulgarian Industrial Association, public institutions in the country spent a little over BGN 10 B on public procurement contracts in 2009 but the conditions of the tenders are advantageous to primarily to big business.

The BIA points out that while SMEs often offer more innovative and economically feasible solutions, they are legally restricted from bidding for contracts which are longer and entail larger sums of money. At the same time they face the “unnecessarily” high fees for participating in the respective tenders.

The small and medium-sized companies have complained that even when they win a public procurement contract, the payment of the money owed by the government comes with vast delays. They insist on setting firm payment deadlines of no longer than a month. As of June 2010, the Bulgarian state owes BGN 600 M to SMEs for services they performed.

The BIA survey of over 3 000 SMEs shows that the technical requirements for own capital amounting to at least 40%-50% of the value of the potential state contract also exclude many of them from the bidding because the smaller firms mostly rely on funds from credits.

70% of the respondents have revealed that they have encountered corruption when seeking to apply for public procurement contracts, and recommend publicity and public access to price and technical offers as part of the tenders.

55% of them believe that the currently existing Bulgarian public procurement register does not provide sufficient and complete information to prevent corruption practices.

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Tags: small and medium-sized entities, SMEs, Bulgarian Industrial Association, survey, public procurement, Public Procurement Act, public procurement procedure, corruption


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