І. SURVEY PRESENTATION:
The National Coactivity Center of Institute for Legal Analysis and Research (ILAR) performs national survey on „Crisis in the award, implementation and control systems of public procurement in Bulgaria“.
Information about the survey is uninterruptedly published on the website of the organization - www.ipai-bg.eu.
The survey is conducted by a working group constituted to the National Coactivity Center of ILAR, which includes acting magistrates - judges and prosecutors, national public procurement experts, economists and other specialists.
The main task of the working group is to analyze the ascertained by the Bulgarian National Audit Office and the Public Financial Inspection Agency (PFIA) negative trend in public awarding authority, expressed in actions or inaction, conductive to discredit and violation of award and implementation procedures of public procurement. For the purposes of the survey is provided an assistance by the competent national authorities and in this regard the results of 96 (ninety six) Audit reports of inspections by the Bulgarian National Audit Office, 280 (two hundred and eighty) Financial inspections carried out by the bodies of the Public Financial Inspection Agency are available for viewing and analyzing.
A mechanism is established to allow the contracting entity within the group of public awarding authorities checked by the bodies of the Bulgarian authorities, in the activities of which are found irregularities by the Bulgarian National Audit Office and Public Financial Inspection Agency, to present their views, to dismiss the findings with a relevant motive, to substantiate the lack of violations contained in the inspection reports of the control bodies, to submit additional documents, results of resolved litigation apropos of penal rulings issued from the inspections, which actions aim to create a reasonable conviction that the irregularities found are abated, or the information published does not present the objective reality. Every action taken by the contracting entities and all documents and legal opinions provided shall be analyzed during the survey.
ІI. LEGAL FRAMEWORK OF THE SURVEY:
The survey shall be performed by the National Coactivity Center of ILAR as a result of a received written request and a resolution of the Governing board of the organization, objectified in section 3 of Minutes №26/30.10.2011 from the twenty-fifth regular session of the governing body of ILAR. The implementation of the survey is part of the adopted "Development strategy of Institute for Legal Analysis and Research 2009-2012" and by this reason its implementation is consistent with the objectives of the organization contained in art.7 from the Statute of ILAR. The survey is fully consistent with the mechanisms for objective`s achieving of the organization mentioned in art.8 from the Statute of ILAR, its implementation is also in compliance with the terms of fund spending of the organization contained in art.9 from the Statute of ILAR and art.2, art.3, art.4 and art.8 from Rules and Order for Conducting Activities of Public Benefit of ILAR.
The Governing board of ILAR assumes that the implementation of Program IV of Strategy 2009-2012: "Strengthening the rule of law 2009-2012" Partition 2: "Independent public monitoring," Project № 1 "Transparent management of public resources by the state administration" and Project № 2 "transparent management of public resources by the municipalities" and the survey „Crisis in the award, implementation and control systems of public procurement in Bulgaria“ shall contribute to the transparency of public procurement awarding in Bulgaria, which is a systemic problem of national importance, causing controversy in the public domain.
ІІI. PROBLEMS ENCOUNTERED:
The analysis on the inspection findings of the control bodies ascertain that the negative phenomena currentness grows with the increasing amount of funds allocated through public procurement, including the Cohesion Funds of the European Union. The fact that, most of the payments with origin – the financial funds of the EU- are realized through the public procurement is well known to the public in Bulgaria. The mechanism of public procurement is a primary method of award and execution of projects in the area, which stipulates a rise in the allocated funds and corruption pressure in the sector. The effect is intensified by the deepening economic crisis, which is a catalyzer of interest towards the aforementioned public relations, significantly increasing the tension among the participants in the procedures and their frustration in case of failure. From far back in the Bulgarian public domain escalated a strong sensation that the public procurement is an essential tool for maintaining of political corruption, which is one of the main reasons for the trust decline towards the political parties and the governmental and municipal institutions.
Nationwide it turned out that over fifty percent of the procedures conducted by virtue of the Public Procurement Act (PPA) and Ordinance for Assigning Small Public Procurement (OASPP) according to the information from Public Financial Inspection Agency and over seventy percent of the procedures conducted by virtue of the PPA and OASPP according to the information from the Bulgarian National Audit Office are corrupted by lack of adequate attention or competence when applying the requirements of the legal basis by the public awarding authority. The aforementioned was announced on a meeting of the National Coactivity Center of Institute for Legal Analysis and Research by the Chairperson of the Governing Board while presenting the results of a study carried out on these social relations. The Public Financial Inspection Agency has found violations in more than half (58%) of the public procurement conducted in the country, which fact is more than disturbing. Considerable violations have been found during the inspection of the activities of public awarding authorities in foregoing years (2009, 2008, 2007, etc., as well as 2009, 2010 and 2011). The field of the aforementioned public relations falls into the column "risk areas" due to the found by the Public Financial Inspection Agency and the Bulgarian National Audit Office serious misuse in public procurement nationwide. The conclusions of the Bulgarian National Audit Office`s inspections are even more disturbing, because according to them between 70 and 85% of the public procurement conducted contain violations, most often associated with an attempt for manipulation of the procurement itself. Over the past four years the experts of the Bulgarian National Audit Office have inspected 5500 public procurement award procedures to the total value of BGN 5 billion and they have found administrative violations in more than 60% of the cases.
A preliminary survey conducted by ILAR shows identical facts related to the absorption of EU funds, respectively to the organizing and conducting of public procurement related to EU funds and public procurement concerning the absorption of funds from the municipal or state budget. According to the government, the fines imposed on the municipalities for violation of procedures related to the implementation of EU projects reach the amount of BGN 50 million. The so-called financial corrections amount to about BGN 50 million, as two-thirds of them are due to violation in the preparation of public procurement and because of laying down discriminatory conditions.
The inspections carried out by the Public Financial Inspection Agency during year 2010, have found 2250 violations in 807 public procurement procedures to the value of BGN 1.2 billion. The inspections conducted in the municipalities have shown 1 392 violations in 440 public procurement award procedures to the value of BGN 555 million. The inspections conducted in the ministries have shown 193 violations in 105 procedures to the value of BGN 346 million. In addition to the results there were 206 cases of non-conduction of public procurement award procedures to the value of BGN 72 million in the presence of grounds. The most procedures not conducted, in spite of the necessity of their conduction were found in the municipalities (118 cases) and in commercial companies with state capital shares (42 cases). The government of the country took actions, which resulted in adoption of amendments in the Public Procurement Act, which provoked criticism from the business organizations, according to which the changes in the legislation do not solve the basic problems of the procedures. With the adoption of the amendments in the PPA a new mechanism for preliminary control of the public procurement was introduced, aiming to regiment the system and to reduce the number of appeal.
What would be the effect of the adopted amendments in the Public Procurement Act in Bulgaria shall be revealed few months after 26th of February 2012, when the amendments of PPA shall take effect.
The violations, allowed by the public awarding authority in the country may be divided into three categories:
I. Illegally conducted and awarded public procurement;
II. Public procurement, with insufficient evidences for legal conduction and award;
III. Public procurement, which may be assumed as illegal due to lack of evidence of their conformity with the law.
ІV. GENERAL INFORMATION FOR THE SURVEY:
Considering the resolution of the Governing Board of ILAR, the findings of the survey through the medium of the National Coactivity Center of the organization shall be sent firstly to the European Commissioner for Internal Market and Services - Michel Barnier responsible for the enforcement of EU legislation related to the internal market, to the European Commissioner for Inter-Institutional Relations and Administration - Maroš Šefčovič and the European Commissioner for Justice, Fundamental Rights and Citizenship - the Guardian of the EU Charter of Fundamental Rights - Viviane Reding, and then to the national competent authorities.
The survey gives utterance to the aspirations of the non-governmental sector to overcome the systemic problems related to the planning, conduction, award and implementation of public procurement at countrywide level, through the exercise of independent public monitoring. The idea is the transparency in the award and implementation of public procurement procedures in Bulgaria to be a leading principle. One of the tasks set before the survey is to define the omissions and violations in the practice of the public awarding authorities and the legislation in force. It is planned the survey to identify and propose methods for overcoming of the existing vicious practices and violations of the legislation in force as well as to submit amendments in the legislation, if necessary. During the conduction of the survey will be followed the typical corruption violations at the time of award of public procurement procedures, in order to solve the existing problems through adequate measures proposed by the organization.
A team of highly qualified law specialists participate in the survey: including acting magistrates - judges and prosecutors, legally competent jurists - some of them engaged in a direct function of lecturers, researchers and other specialists, well versed in the necessary research and practical potential for the implementation.
The prosecutor’s office in Bulgaria more often takes actions of institution of preliminary proceedings, which results in the retrieval of a criminal liability of the awarding authority for the flagrant law violation. The number of audit cases, by the authorities of the European Commission in Bulgaria, of the aforementioned activities is expected to increase due to the disturbing information from the preliminary survey.
