50% of Bulgarian Public Procurement Deals in H1, 2012 Flawed

Domestic | August 20, 2012, Monday // 17:14|  views

Photo by Sofia Photo Agency

Nearly half of the public procurement contracts signed in the first six months of 2012 are flawed, according to the Bulgarian Public Financial Inspection Agency (PFIA).

According to PFIA data, as cited by Trud daily, inspections revealed irregularities in 406 out of a total of 886 public procurement deals.

The ministries in charge of the deals have attributed the flaws to the insufficient preliminary control.

By August 18, 2012, only 376 out of 6204 public procurement deals were subject to preliminary control, which uncovered problems in 1/3 of them.

The contracting authorities were given the opportunity to amend or terminate the deals.

Uninspected public procurement deals become a responsibility of the Commission on Protection of Competition (KZK), which has received 946 complaints since the beginning of the year.

KZK has come up with decisions on half of the cases referred to it, with 95 procedures returned for revision due to unreasonable terms and requirements.

Another recurring violation is the requirement for an exact number of previously won projects combined with a specified turnover of the companies for past years.

The problem of splitting a large public procurement contract into several smaller ones to sidestep the statutory procedure is also serious, with 112 such cases registered since the beginning of 2012 involving a sum of over BGN 200 M.

Public procurement deals are subject to preliminary, ongoing, and follow-up control, with different entities in charge of the different stages.

Preliminary inspections are conducted by the Public Procurement Agency, which, however, manages to cover only 15-20% of all tenders per year due to their huge number.

Ongoing control over public procurement deals is the responsibility of the contracting authority (state agency or institution).

Follow-up control over public procurement deals is carried out by PFIA, which, however, sometimes checks contracts after the expiration of the statute of limitations.

Apart from that, all public procurement deals can be reviewed by KZK.

According to Yordan Kisyov, Chair of the Confederation of Employers and Industrialists in Bulgaria (CEIBG), appealing public procurement deals at the anti-trust watchdog is a complicated, expensive and uncertain procedure.

He says that the huge number of violations is due to incompetent and corruption-prone government officials working at the contracting authority.

He argues that the solution involves adopting restrictive rules in the different sectors and abolishing time requirements.

He goes on to explain that decreased consumption is making more and more companies turn to public procurement.

The lack of preliminary control and the unnecessary requirements create problems for municipalities trying to absorb EU funds.

When violations are detected, municipalities are required to return the money, with financial corrections under the Regional Development Operational Program amounting to BGN 22 M since its launch.

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Tags: Confederation of Employers and Industrialists in Bulgaria, CEIBG, public procurement, Public Procurement Agency, Public Financial Inspection Agency, Commission on Protection of Competition, KZK, EU funds, regional development program


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