Monitoring Public ProcurementSeminar on anti-fraud and anti-corruption in Slovakia

Jan Ondrus, Bratislava, 13.3.2014

Monitoring Public Procurement

- Open Public Procurement website - Advocacy- Benchmarking- Case studies- Trainings & workshops

Open Public Procurement websiteIn 2011, Transparency International Slovakia launched the “Open Public Procurement” (tender.sme.sk) website that enables users to monitor tender results in a more comprehensive way.

The goal of this project is to increase the transparency of public procurement in Slovakia by filtering, aggregating and processing available procurement data.

Public procurement in Slovakia

annual value of public tenders: € 7 - 9 billion three out of four Slovak citizens believe that government tenders are often

associated with corruption (survey, FOCUS, 2012) business owners estimate that up to 13% of the government orders’ value

is spent on bribes (survey, Business Alliance of Slovakia, 2012)

Despite its flaws the major problem is not the legislation itself but rather its implementation corruption can be reduced through more effective public pressure as well as higher professional skills of public servants.

Legislation

Act 25/2006 on Public Procurement

more than 20 amendments 3 amendments in 2013 - major changes in force from

July 2013 goal: making the process faster and more effective

Influencing the legislationProject “Improvement of public procurement in the Czech Republic and Slovakia“ (2009-2013) implemented in cooperation with “Oziveni” 3 publications (2012) Seminar - Public procurement: Experiences and challenges (2012) Conference – How to improve public procurement (2012)

TIS helped to implement into the amendment multiple ideas: two-stage appeal process, the evaluation of the quality of deliveries, publication of tender documentation or reduction of administration for competitors.

Analysing the impact of the new legislation

There is less competition in tenders, they take longer and the savings decreased (2014)

length of one tender: 145 days (2013) vs. 136 days (2012) average number of contenders: 2,6 (2013) vs. almost 3 (2012)

percentage of tenders with one offer remains stable (46%) percentage of tenders with e-auction decreased from 58% to

44%

Benchmarking studies

Analysis of hospital tenders between 2009 and 2012: Intensity of competition in public procurement is low (2012)

Joint project of Transparency International Slovakia and the Institute for Economic and Social Reforms

analysed 2 771 contracts of 60 hospitals percentage of tenders with one offer: 54,6% (40% more than in other

sectors) average number of contenders: 1,7 vs. almost 3 in other sectors more competition could have saved more than € 116,1 million

Benchmarking studies

The largest hospitals are buying the most expensive electricity (2013)

3 out of 9 analysed hospitals are buying overpriced electricity 2 out of those 3 were not using ordinary public procurement method 3 largest hospitals are not using the opportunity to receive quantity

discount The approximate saving in these hospitals could amount up to € 450

000 in total.

Benchmarking studies

How is the state purchasing cars (2013) between January 2012 and November 2013 state administration bought

1304 cars 82% cost less than € 20 000 most expensive - Mercedes E400 for € 67 000 - bought by State Material

Reserves of Slovak Republic in a tender with one contender.

“It seems that the conditions in the competition have been designed in a manner that no other car could have fulfilled them” Jozef Vydra, journalist

1/2 of all tenders had only one contender

Case studies

Small country. Both in tourism and tenders. (2013)Premier Consulting - largest consulting firm in the area of EU funded projects in Slovakia since 2003 it managed almost 1000 projects with a total value of € 285 million 4 civil associations created by 4 business representatives in January 2013 promised funding of € 320 000 (4x € 80 000) from the Agricultural Paying Agency Premier Consulting was managing all 4 tenders winners - two companies established in January 2013 owned by Marcel Moravcik -

lawyer of Premier Consulting and classmate of Miroslav Lopata (co-owner of Premier Consulting)

1) no experience 2) strange contract conditions 3) connections to the Agricultural Paying Agency

Case studies

Trully a National Stadium? (2013) state decided to support the construction of a new National football stadium total budget: € 70 million, state support: € 27, 2 million stadium is going to be privately owned with 0% state ownership no analysis explaining the state support no architectural competition as of today no public procurement for the construction company.

Trainings & workshops

E-auctions: the road to transparency, competitiveness and effective management with public funds (2013) Series of workshops (Levoča, Ružomberok, Bratislava) during which was

presented the manual on the use of e-auctions During the workshop 30 participants were informed about what are e-

auctions, how to use them and in which cases they provide better results than the classic procedure

September 2014 – September 2015: Eight training sessions for activists and officials on how to adopt better purchasing practices as well as how to control the awarding of contracts in more effective manner.

Thank you for your attention-

Questions?

Jan Ondrus, ondrus@transparency.sk