Public tenders criticism

The European Commission’s largely-positive report on Bulgaria’s performance under the Co-operation and Verification Mechanism (CVM) on justice and home affairs, issued in July, highlighted several areas where the Government should take immediate action.

Two such recommendations were squarely aimed at the public procurement sector, where Government checks, quoted by the report, showed an “irregularity rate of 60 per cent among all tenders verified. This rate reaches almost 100 per cent for large public infrastructure projects where the authorities have an obligation of ex-ante control.”

Specific tasks included continuous risk assessment regarding the implementation of public procurement legislation; pro-active prevention measures; strengthening the administrative capacity of state bodies to perform checks, including the provision of improved training for officials in identifying and preventing conflict of interest; ensuring that sanctions are fully implemented to strengthen deterrence; and encouraging co-operation between state institutions to pool expertise and create economies of scale.

In the immediate aftermath of the report, Prime Minister Boiko Borissov vowed to boost the staff numbers of the Public Procurement Agency and have a new Public Procurement Bill being debated in Parliament within three months, even though a set of amendments to the existing law had been passed by MPs on July 13, a week before the report was published.

The deadline was unrealistic, with Parliament and Cabinet both in summer recess in August, but also because the bill would need expert input, according to Emil Radev, an MP for Bulgaria’s ruling party GERB. Radev was part of the group that drafted the amendments approved  by Parliament in July.

The bill was already being drafted, but would take between six and eight months to finalise, Radev said on August 9. The deadline for the new law was August 2011, by which point all European Union member states had to transpose the EU’s directive 2009/81/EC on defence and security procurement.

The bill was expected to give the Public Procurement Agency wider-reaching powers to check tenders both before a contractor is selected (ex-ante control) and after a contract is awarded (ex-post).

According to Radev, the CVM progress report’s criticism in the area had already been dealt with by the amendments passed in July – at the time the monitoring committee visited Bulgaria in June, the amendments were still being debated between readings in Parliament.

“The amendments were a step forward as regards ex-ante control and appeal procedures. For the first time, we have introduced sanctions on the tender principals if they breach the law,” Radev told Kapital weekly.

“We also introduced the mandatory control by the Public Procurement Agency for tenders worth more than one million leva, financed with European Union funds,” he said.

A major loophole in the law closed by the amendments was barring tender principals from signing a contract with the tender winner and executing it even while the decision was being appealed in court, Radev said.

But another big loophole that needed to be removed was the ability of tender principals to sign annexes that allowed them to bypass some of the restrictions imposed by law. “Contract annexes should be allowed only under very specific circumstances and be applicable only to deadlines whenever unforeseen circumstances arise. One such case could be if in the course of construction, some ruins are found that need to be preserved,” he said.

The group drafting the new law would have to consider other measures to limit corruption, ranging from harsher punishment for principals that breach the law to stricter controls by state bodies over the execution of public procurement contracts. “Despite the existing regulations, there are still instances where the law is not observed by the tender principal,” Radev said.

Article The Sofia Echo