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05.10.2012г.
INTERIM REPORT №1

National survey „Crisis in the award, implementation and control systems of public procurement in Bulgaria“, accomplished by ILAR.

INTERIM REPORT

№1

Author of Interim Report №1:

Working group established to the National Coactivity Center (NCC) of Institute for Legal Analysis and Research (ILAR) performing national survey on „Crisis in the award, implementation and control systems of public procurement in Bulgaria“.

Addressees of interim report №1:

EUROPEAN COMMISSION: Mrs. VIVIANE REDING- European Commissioner for Justice, Fundamental Rights and Citizenship - the Guardian of the EU Charter of Fundamental Rights and Vice-President, in return of your reference number JUST A1/JC/js/D(2012) 71951;

EUROPEAN COMMISSION: Mr. MICHEL BARNIER- European Commissioner for Internal Market and Services - in return of your reference number ARES (2012) 766494-26/06/2012.

DEAR MRS REDING AND MR BARNIER,

First of all we would like to thank you for the support about our work, received by the European commission in the person of the European Commissioner for Justice, Fundamental Rights and Citizenship - the Guardian of the EU Charter of Fundamental Rights - Viviane Reding – containing in the written exposé[1] and the statement made[2] by the European Commissioner for Internal Market and Services - Michel Barnier  regarding the activities of our experts, related to the conduction of a national survey on „Crisis in the award, implementation and control systems of public procurement in Bulgaria“, realized by the working group established to the National Coactivity Center (NCC) of Institute for Legal Analysis and Research (ILAR).

The evaluation of the survey by the European Commissioner - Mr. Barnier, calling it an "important work" performed by the ILAR and "initiative to increase the transparency in the process of award"[3] of public procurement, gives us further confidence in the usefulness of our activities and obliges to even higher extend our experts to carry out an objective, accurate and professional analysis of the condition of the public procurement award in Bulgaria, to be provided to the Commission.

І. PREAMBLE AND SURVEY PRESENTATION.

The survey is conducted by a working group constituted to the National Coactivity Center of ILAR, which includes Bulgarian 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 in the past four years 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.

Towards the 30^th of September 2012 in the scope of the survey have been examined and analyzed the results of 104 (one hundred and four) Audit reports of inspections by the Bulgarian National Audit Office, the information from 390 (three hundred and ninety) Financial inspections carried out by the bodies of the Public Financial Inspection Agency. At the conduction of the survey have also been analyzed other documents - obtained in connection to the survey 126 pieces of questionnaires filled in by the representatives of the municipalities surveyed; 632 pieces of public invitations on award of public procurement (institute introduced by the change of the PPA on the 26^th of February 2012); 117 pieces of internal rules adopted by the mayors of the Bulgarian municipalities in accordance with the requirements of Article 8b of PPA; 39 pieces of letters containing measures taken to improve the work of the administration of the Bulgarian municipalities surveyed related to the application of the PPA and the public procurement award; 100 work meeting have been sat with representatives of various municipalities and more than 216 hours of phone calls have been made with them.

Through the adopted survey`s regulations is established a mechanism 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 are analyzed during the survey by the experts of the organization.

ІI. LEGAL FRAMEWORK.

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 FROM THE PFIA AND THE NATIONAL AUDIT OFFICE INSPECTIONS :

The analysis on the inspection findings of the control bodies ascertain that the distribution of the contraventions on public procurement as negative phenomena keeps growing 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 sixty percent of the procedures conducted by virtue of the Public Procurement Act (PPA) and Ordinance for Assigning Small Public Procurement (OASPP) (now repealed)  according to the information from the Public Financial Inspection Agency for year 2010 and over seventy percent of the procedures conducted by virtue of the PPA and OASPP (now repealed)  according to the information from the Bulgarian National Audit Office for year 2010 are corrupted by lack of adequate attention or competence when applying the requirements of the legal basis by the public awarding authority.

The Public Financial Inspection Agency has found violations in more than half (58%) of the public procurement conducted in the country, which fact is repeating more than once which makes it more than disturbing. In year 2011, 60% of all      1368 public procurement proceedings conducted to the value of BGN 1.5 billion, have been corrupted. Considerable violations have been found during the inspection of the activities of public awarding authorities in the foregoing years (2009, 2008, 2007, etc., as well as 2009, 2010, 2011 and 2012).

The field of the aforementioned public relations falls again 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 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, on 156 Bulgarian municipalities have been imposed financial corrections for violation of procedures related to the implementation of EU projects, which have reached the amount of BGN 43,298 698 million towards the 30^th of September 2012). Two-thirds of them are due to violation in the preparation of public procurement and because of laying down discriminatory conditions – a worrying trend for the public procurement award, which continues to grow.

The findings of the Public Financial Inspection Agency and the Bulgarian National Audit Office` reports, concerning violations of the PPA are confirmed in the progress of the survey by the examination of documents for public procurement award.

The most common violations found in the progress of the survey are:

1.              subdivision of public procurement contracts in breach of Article 15, paragraph 6 of the PPA;

2.              mixing the selection criteria with the criteria for offers evaluation;

3. implementation of unclear and inaccurate evaluation techniques, which lack scales for evaluation for the criterion " the most economically advantageous tender", in the cases when some of the indicators cannot be estimated with a mathematical formula- contrary to Article 37, paragraph 2 of the PPA;

4. unmotivated reports of the committee, especially when the latter offer certain participants in the procedure to be suspended, and when they do not accept the written statements under Article 70 of the PPA;

5. lack of short description of the offers, when the evaluation criteria is the most economically advantageous tender – contrary to Article 71, paragraph 4 of the PPA;

6. presence of discriminatory conditions and unjustified restrictions in the requirements for the participants;

7. inconsistencies between the requirements specified in the notice and in the documentation for participation in the procedure;

8. irregularities in the conduction of the procedure, described in detail in Article 68 - 70 of the PPA;

9. infringement in the appointment of the commission, not including members possessing the professional expertise and practical experience required in accordance with the subject matter and complexity of the public procurement and as a result the commission may not be called expert and to perform the task assigned –to evaluate professionally the offers presented and other violations.

As a result of the inspections carried out by the Public Financial Inspection Agency during year 2010, have been found 2250 violations in 807 public procurement procedures to the value of BGN 1.2 billion. The findings for 2011 show clearly that at 821 public procurement procedures to the value of BGN 1.1 billion the Public Financial Inspection Agency has found 2458 violations during the year 2011. The inspections conducted in the municipalities during 2010 have shown 1 392 violations in 440 public procurement award procedures to the value of BGN 555 million, for year 2012 -1 440 violations in 492 public procurement award procedures to the value of BGN 693 987 001, therefore for fourth year in a row the Bulgarian municipalities are leading with the number of violations of the PPA.

 In addition to the results for year 2010 there were 206 cases of non-conduction of public procurement award procedures to the value of BGN 72 million in the presence of grounds. For year 2011 according to the financial inspections there were 358 cases of non-conduction of public procurement award procedures to the value of BGN 228 003 883.

For year 2010 the most procedures not conducted, in spite of the necessity of their conduction were found in the municipalities (118 cases) and in the commercial companies with state capital shares (42 cases). For year 2011 have been found 167 cases of non-conducted procedures in the municipalities to the value of BGN 43 333 029. The largest number of non-conducted procedures in the presence of grounds for conduction for year 2011 have been established in the following areas: Sofia City - 113 procedures for BGN 148 711 029, Varna - 40 procedures BGN 19 506 055, Burgas - 35 procedures for BGN 6 732 033, Plovdiv - 21 procedures for 13 547 739, Stara Zagora - 14 procedures for BGN 14 793 426 etc.

From the beginning of the year (26^th of February 2012) is effective an amended 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. A new institute - public invitation under Chapter Eight "a" of the PPA was introduced. It may not be stated well-grounded that the new mechanism at current does give the required result. Moreover – the public invitations revealed even more extensive opportunities for malpractices and violations instead of achieving the opposite 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.

In pursuance of 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. 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.

V. INTERIM INFORMATION.

Interim conclusions and findings of the working group, considering the stage of the ongoing national survey "Crisis in the award, implementation and control systems of public procurement in Bulgaria":

1. The experts of the organization ascertain the existence of a statutory established[4] complex legal regime for adoption and implementation of the Bulgarian municipalities, regulating the processes of planning, preparation of documents for participation, coordination of project documents, conduction of procedures and control of the performance of public procurement contracts, which did not establish effective boundaries to ensure compliance with the fundamental principles of the award - equality, publicity, transparency and predictability in the actions of the  procuring entities.

The most striking cases of difficulties encountered in the application of PPA were found towards the 30^th of September 2012 in the activities of the following municipalities: Septemvri, Dalgopol, Suhindol, Roman, Djebel, Momchilgrad, Lom, Velingrad, Lesichovo, Panagyurishte, Peshtera, Breznik, Pernik, Asenovgrad, Karlovo, Kuklen, Maritza, Isperih, Glavinitsa and Nova Zagora –generally 20.

Towards the 30th of September 2012 the most entrepreneurial municipal governing bodies, which took measures to overcome the identified during the survey difficulties and problems in the application of the PPA, manage the municipalities – Belogradchik, Gurkovo, Krumovgrad, Krivodol, Kotel, Mezdra, Strazhitsa, Sungurlare, Satovcha and Hisar – generally 10.

Towards the 30th of September 2012 the most conservative municipal governing bodies, which despite the help they`ve received did not take any effective measures to overcome the identified during the survey difficulties and problems in the application of the PPA, manage the municipalities Septemvri, Dalgopol, Suhindol, Roman, Djebel, Lom, Velingrad, Lesichovo, Panagyurishte, Peshtera, Breznik, Pernik, Asenovgrad, Karlovo, Kuklen, Maritza, Isperih, Glavinitsa, Nova Zagora – generally 19.

Towards the 30th of September 2012 the most non- transparent municipal governing bodies for the survey, which in the conduction of the survey did not take measures to enhance  the transparency in the award of public procurement, despite the identified difficulties and problems in the application of the PPA, manage the municipalities Avren, Asenovgrad, Bolyarovo, Breznik, Beloslav, Burgas, Velingrad, Varna, Glavinitsa, Dalgopol, Djebel, Dragoman, Elhovo, Isperih, Kuklen, Karlovo, Kaspichan, Kostenets, Lom, Lesichovo, Momchilgrad, Malko Tarnovo, Maritza, Nessebar, Nikolaevo, Nova Zagora, Omurtag, Panagyurishte, Pernik, Provadia, Pavel Banya, Pomorie, Roman, Razlog, Septemvri, Suvorovo, Sredets, Sozopol, Teteven, Hitrino – generally 40.

Towards the 30th of September 2012 the most transparent municipal governing bodies, which in the conduction of the survey took measures to enhance  the transparency in the award of public procurement, manage the municipalities Belitsa, Borino, Garmen, Gurkovo, Dolna Mitropolya, Zlatitsa, Iskar, Ivanovo, Makresh, Mezdra, Strelcha, Sungurlare, Satovcha, Tryavna, Hisar – generally 15.

2. According to the procuring entities the condition[5] of the existing legal framework in Bulgaria confront the smaller municipalities with serious legal problems, they do not have the resources to deal with, without raising the costs or the use of external legal consultations.

Towards the 30th of September 2012, lack of expert resources at necessary level to implement the provisions of the PPA is ascertained in the municipalities: Bolyarovo, Borino, Bratsigovo, Breznik, Varbitsa, Gorna Oryahovitsa, Gurkovo, Dalgopol, Dragoman, Isperih, Kaspichan, Kuklen, Lesichovo, Malko Tarnovo, Nikolaevo, Nikola Kozlevo, Parvomay, Pavel Banya, Stambolovo, Tunja – generally 20.

Towards the 30th of September 2012, particularly serious is the state of the internal rules, adopted by virtue of Article 8”b” of the PPA by the municipalities: Berkovitsa, Breznik, Bratsigovo, Bratya Daskalovi, Velingrad, Varshets, Dalgopol, Elhovo, Isperih, Iskar, Krumovgrad, Kneja, Kuklen, Kaspichan, Momchilgrad, Nessebar, Pavel Banya, Panagyurishte, Peshtera, Provadia, Septemvri, Suvorovo and Roman – generally 23. The municipal governing bodies are aware of the aforementioned problems; although up to date the working group has no evidences that the municipalities have taken effective measures, probably due to the lack of necessary capacity.

3. Incorrect perception, interpretation and application of the provisions of the PPA and the European legislation in force is one of the most common sources of errors in the absorption of EU structural funds and in the spending of funds from the national budget.

The most frequent violations of the general principles of the European legislation - equality, transparency, predictability, equal opportunities for participation in the procedures and compliance with the right of information of the participants in the procedures for award of public procurement, to ensure prudent and timely information about each procedure and the result of the choice implemented- have been ascertained at the municipalities: Breznik, Burgas, Valchi Dol, Velingrad, Glavinitsa, Dragoman, Dalgopol, Elhovo, Isperih, Kardzhali, Sredets, Sofia Municipality, Sungurlare, Septemvri, Pirdop, Panagyurishte, Pavel Banya, Peshtera, Parvomay, Razgrad, Straldzha, Strazhitsa and Sopot – generally 23. To many of the municipal governing bodies is paid special attention by the experts of the organization for the compliance with the principle of equality, guaranteed by the European law, which in most of the cases did not lead to the expected result and the violations of the principle have continued.

4. Only a few Bulgarian municipalities make the effort to establish effective prevention aimed at averting of violations and introduction of additional measures for incensement of security and transparency in the public procurement award. Out of the 39 notification letters received for measures undertaken, 10 of the municipalities do not indicate effective measures and some of the municipalities have sent more than one letter.

  Information about the measures aimed at improving the performance of the administration of the Bulgarian municipalities are obtained from the municipalities Asenovgrad, Belitsa, Belogradchik, Berkovitsa, Breznik, Varshets, Gurkovo, Garmen, Gorna Oryahovitsa, Dolna Mitropolya, Dolni Chiflik, Dupnitsa, Elhovo, Zlatitsa, Ivaylovgrad, Iskar, Ivanovo, Kotel, Krumovgrad, Krivodol, Mezdra, Nikola Kozlevo, Novi Pazar, Pavlikeni, Peshtera, Pirdop, Parvomay, Satovcha, Strazhitsa, Strelcha, Sungurlare, Straldzha, Tryavna, Tunja, Chernoochene and Hisar - generally 36.

According to the survey results, there are no established mechanisms of prevention increasing the level of security, transparency and predictability in public procurement award at the municipalities: Bolyarovo, Bratya Daskalovi, Breznik, Borino, Bratsigovo, Berkovitsa, Varshets, Velingrad, Varbitsa, Gorna Oryahovitsa, Dalgopol, Elhovo, Isperih, Kneja, Kuklen, Krumovgrad, Kaspichan, Lesichovo, Malko Tarnovo, Momchilgrad, Nessebar, Nikolaevo, Nikola Kozlevo, Parvomay, Peshtera, Pavel Banya, Panagyurishte, Provadia, Roman, Septemvri, Stambolovo, Suvorovo and Tundja – generally 33.

5. Most of the Bulgarian municipalities formally adopt their internal rules “to ostensible meet" the requirements of Article 8b of PPA, obliging the  procuring entities to regulate the planning, the organization of the procedures conduction, the public procurement award and the control over the execution of the public procurement contracts.

Towards the 30th of September 2012, the most striking cases of municipalities with established severe problems in the internal rules adopted by virtue of Article 8b of PPA are: Banite, Bratya Daskalovi, Berkovitsa, Breznik, Bratsigovo, Varshets, Velingrad, Dalgopol, Elhovo, Isperih, Iskar, Krumovgrad, Kneja, Kuklen, Kaspichan, Momchilgrad, Nessebar, Peshtera, Pavel Banya, Panagyurishte, Provadia, Septemvri, Suvorovo and Roman – generally 24. The municipal governing bodies are aware of the aforementioned problems; although up to date the municipalities have not taken effective measures to improve the condition of the internal rules.

6. Part of the Bulgarian municipalities demonstrate lack of willingness to cooperate, lack of self-critical disposition and unwillingness to revise down ascertained malpractices and as a result we are able to make the logical conclusion on inaccessibility of the municipal governing bodies and administration, lack of effective communication and a willingness to cooperate with NGOs. The finding is proven in the survey by the different attitude of the representatives of the municipalities participating and not participating in the survey.

Towards the 30th of September 2012, the municipalities with a clear luck of effective communication and willingness to cooperate with NGO`s are in generally 216, as follow: Aytos, Avren, Asenovgrad, Beloslav, Belene, Bolyarovo, Borino, Bratya Daskalovi, Bratsigovo, Breznik, Banite (Smolyan), Burgas, Velingrad, Valchi dol, Varna, Varbitsa, Glavinitsa, Devin, Djebel, Dimovo, Dragoman, Dobrichka, Dryanovo, Dupnitsa, Dalgopol, Elhovo, Ivaylovgrad, Isperih, Kaspichan, Knezha, Karlovo, Kirkovo, Kostenets, Kuklen, Lesichovo, Lom, Lyaskovets, Makresh, Malko Tarnovo, Maritza, Momchilgrad, Nikola Kozlevo, Nessebar, Nikolaevo, Pavel Banya, Panagyurishte, Pernik, Pomorie, Pirdop, Provadia, Razgrad, Razlog, Roman, Septemvri, Slivnitsa, Sozopol, Sopot, Stambolovo, Straldzha, Suvorovo, Sredets, Suhindol, Tunja, Teteven, Hitrino – 64 pieces of municipalities participating in the survey as well as the municipalities Aksakovo, Alfatar, Anton, Antonovo, Apriltsi, Ardino, Balchik, Bansko, Boboshevo, Bozhurishte, Boynitsa, Boychinovtsi, Borovan, Borovo, Botevgrad, Bregovo, Brezovo, Brusartsi, Byala (Varna), Byala (Ruse), Byala Slatina, Veliki Preslav, Veliko Tarnovo, Venets, Vetovo, Vetrino, Vidin, Vratsa, Valchedram, Gabrovo, General Toshevo, Georgi Damyanovo, Godech, Gorna Malina, Gotse Delchev, Gramada, Gulyantsi, Galabovo, Dve mogili,  Devnya, Dimitrovgrad, Dobrich, Dubnik, Dospat, Dulovo, Elena, Elin Pelin, Etropole, Zavet, Zemen, Zlataritsa, Zlatograd, Kazanlak, Kaynardja, Kameno, Kaolinovo, Karnobat, Kovachevtsi, Kozlodui, Koprivshtitsa, Kostinbrod, Kocherinovo, Kresna, Krichim, Krushari, Kubrat, Kula, Kardzhali, Levski, Letnitsa, Lovech, Loznitsa, Lukovit, Laky,  Lyubimets, Madzharovo, Medkovets, Miziya, Mineralni Bani, Montana, Maglizh, Nevestino, Nedelino, Nikopol, Nova Zagora, Novo Selo, Omurtag, Opaka, Pazardzhik, Perushtitsa, Petrich, Pleven, Plovdiv, Popovo, Pordim, Pravets, Primorsko, Radnevo, Radomir, Rakitovo, Rakovski, Rila, Rodopi, Rudozem, Rujintsi, Ruse, Sadovo, Samokov, Samuil, Sandanski, Svilengrad, Svishtov, Svoge, Sevlievo, Silistra, Simeonovgrad, Simitli, Sitovo, Sliven, Slivo pole, Smolyan, Stamboliyski, Stara Zagora, Sofia, Saedinenie, Tvarditsa, Tervel, Topolovgrad, Trojan, Tran, Tutrakan, Targovishte, Ugarchin, Hadzhidimovo, Hairedin, Harmanli, Haskovo, Tsar Kaloyan, Tsarevo, Tsenovo, Chavdar, Chelopech, Cherven Bryag, Chiprovtsi, Chirpan, Chuprene, Shabla, Shumen, Yablanica, Yakoruda and Yambol – 151 pieces of municipalities non-participating in the survey.

VІ. PRACTICAL INFORMATION.

The findings of the experts, carrying out the national survey „Crisis in the award, implementation and control systems of public procurement in Bulgaria“, related to the surveillance over the processes of planning, preparation of documents for participation, coordination of project documents, conduction of procedures and control of the performance of public procurement contracts, divide the Bulgarian municipalities into five main groups.

І-st group of municipalities: In the progress of the survey is found that the governing bodies of those municipalities have adopted best practices and have taken additional measures to improve the administration work associated with the application of the PPA.

At present, eleven Bulgarian municipalities belong to the group- Belitsa, Garmen, Dolna Mitropolya, Zlatitsa, Ivanovo, Kavarna, Pavlikeni, Ruen, Strelcha, Tryavna and Hissar.

The aforementioned municipalities have adopted internal rules in accordance with the requirements of Article 8b of PPA, which stipulate effective mechanisms for planning, preparation of documents for participation, coordination of project documents, conduction of procedures and control of the performance of public procurement contracts, and the observation over these municipalities shall continue in the progress of the survey. The mayors of these municipalities have planned measures to improve the work of the municipality and to increase the expertise capacity of the employees in the planning, organization and award of public procurement, as well as to the control over the execution of the contracts as a result of award pursuant to the PPA, and they have informed ILAR for them. During the observation of these municipalities in the progress of the survey have been identified best practices in the application of the PPA.

Eight of these municipalities have introduced best practices in the application of the PPA, which enhance the security and transparency in the award of public procurement: Belitsa, Garmen, Dolna Mitropolya, Zlatitsa, Pavlikeni, Strelcha, Tryavna and Hissar.

Eleven are the municipalities that have adopted internal rules in accordance with the requirements of Article 8b of PPA and the European legislation: Belitsa, Garmen, Dolna Mitropolya, Zlatitsa, Ivanovo, Kavarna, Pavlikeni, Ruen, Strelcha, Tryavna and Hissar, which contain intentional mechanisms that subordinate and ensure compliance with the fundamental principles of European legislation - transparency, predictability, equality, publicity and effectiveness in public spending.

IІ-nd group of municipalities: In the progress of the survey is found that the governing bodies of these municipalities demonstrate willingness to improve the administration work associated with the application of the PPA and on this stage of the survey they have planned certain measures, expected to lead to the establishment of best practices, which stipulate effective mechanisms for planning, preparation of documents for participation, coordination of project documents, conduction of procedures and control of the performance of public procurement contracts. The observation by the experts of the organization over the activities of these municipalities continues in the progress of the survey.

At present, eight Bulgarian municipalities belong to the group- Gurkovo, Dolni Chiflik, Krivodol, Mezdra, Novi Pazar, Sungurlare, Satovcha and Chernoochene.

The aforementioned municipalities have declared in writing their intentions to adopt or they have already adopted internal rules in accordance with the requirements of Article 8b of PPA, which stipulate effective mechanisms for planning, preparation of documents for participation, coordination of project documents, and conduction of procedures and control of the performance of public procurement contracts. The observation by the experts of ILAR over the activities of these municipalities continues in the progress of the survey. The mayors of these municipalities have informed the ILAR about measures planned to improve the work of the municipality and to increase the expertise capacity of the employees in the planning, organization and award of public procurement, as well as to the control over the execution of the contracts as a result of award pursuant to the PPA. During the observation of this group of municipalities in the progress of the survey have been identified best practices or their governing bodies have declared intention to initiate best practices in the application of the PPA, but on some key issues of the measures, representing best practices, further information is awaiting or the effect is examined.

Municipalities that belong to this group, which have declared their intentions to initiate best practices and additional mechanisms to improve the application of PPA: Gurkovo, Mezdra, Novi Pazar, Krivodol, Sungurlare, Satovcha and Chernoochene - generally 7.

Municipalities that belong to this group, which have adopted internal rules in accordance with the requirements of Article 8b of PPA and the European legislation: Gurkovo, Dolni Chiflik, Mezdra, Krivodol, Novi Pazar, Sungurlare, Satovcha and Chernoochene - generally 8.

IIІ-rd group of municipalities: In the progress of the survey is found that the governing bodies of these Bulgarian municipalities declare their ambition to initiate positive practices, but towards the present moment they do not take any actions for the initiation of these practices and in view of the aforesaid the observation of these municipalities will actively continue in the progress of the survey.

At present, nineteen municipalities belong to this group – Belogradchik, Berkovitsa, Borino, Breznik, Varshets, Gorna Oryahovitsa, Dobrichka, Dupnitsa, Iskar, Knezha, Kotel, Krumovgrad, Opan, Peshtera, Parvomay, Sozopol, Sopot, Strazhitsa and Tunja.

Typical for this group of municipalities is that their governing bodies have repeatedly declared their intentions to adopt for example internal rules in accordance with the requirements of Article 8b of PPA, which stipulate effective mechanisms for planning, preparation of documents for participation, coordination of project documents, conduction of procedures and control of the performance of public procurement contracts or to initiate additional measures, but at present it has not been done. In view of the aforesaid the observation of these municipalities will actively continue in the progress of the survey. Some of the mayors of these municipalities have informed the ILAR about their intentions to plan, in order to initiate or they have already initiated measures, planned to improve the work of the municipality and to increase the expertise capacity of the employees in the planning, organization and award of public procurement, as well as to the control over the execution of the contracts as a result of award pursuant to the PPA; other municipal governing bodies have not planned measures aimed to improve their work in the application of the PPA. The group of abovementioned municipalities has only declared intentions to introduce best practices in the implementation of the PPA, but at present none have been identified by the experts of the organization as efficiently initiated and operational. These municipal governing bodies probably really intend to improve their work, but due to different reasons at present their intentions are still at the level of a declaration of willingness - without real actions been taken to implement the necessary measures, for which measures the experts of ILAR have been informed.

 Municipalities (11 in number) which have declared their intentions to initiate best practices and additional mechanisms to improve the application of PPA: Belogradchik, Berkovitsa, Breznik, Varshets, Gorna Oryahovitsa, Dupnitsa, Iskar, Kotel, Krumovgrad, Peshtera, Parvomay.

Municipalities (9 in number) which have repeatedly declared their intentions to adopt internal rules in accordance with the requirements of Article 8b of PPA, but haven`t adopted them at present: Belogradchik, Berkovitsa, Breznik, Gorna Oryahovitsa, Dupnitsa, Iskar, Krumovgrad, Parvomay and Tunja.

Municipalities (8 in number) which have not planned to initiate best practices and additional mechanisms to improve the application of PPA: Borino, Dobrichka, Knezha, Opan, Oryahovo, Sozopol, Sopot and Tunja.

IV-th group of municipalities: In the progress of the survey for the municipalities in this group are ascertained malpractices in the public procurement award; their governing bodies do not undertake measures to enhance  the level of effectiveness and lawful application of the PPA; lack internal rules adopted in accordance with the requirements of Article 8b of PPA or they have been formally adopted and do not stipulate effective mechanisms for planning, preparation of documents for participation, coordination of project documents, conduction of procedures and control of the performance of public procurement contracts; they do not express their own position on the deficiencies ascertained by the Audit Office and the Public Financial Inspection Agency to avoid or reduce the risks the municipality to be referred to in the summary report of the survey as a procuring entity and a beneficiary of grant programs funded by the European Union which does not observe the principles and norms of the PPA and the European legislation.

At present, twenty six municipalities belong to this group– Beloslav, Bratsigovo, Velingrad, Valchi Dol, Varbitsa, Dalgopol, Elhovo, Isperih, Kaspichan, Kuklen, Lesichovo, Makresh, Malko Tarnovo, Maritza, Momchilgrad, Nikola Kozlevo, Nikolaevo, Pavel Banya, Panagyurishte, Provadia, Razgrad, Roman, Septemvri, Stambolovo, Straldja and Suvorovo.

Typical for these municipalities is that their governing bodies have not declared their intentions or have declared intentions long time ago (obviously formally) to adopt internal rules in accordance with the requirements of Article 8b of PPA, which stipulate effective mechanisms for planning, preparation of documents for participation, coordination of project documents, conduction of procedures and control of the performance of public procurement contracts. In view of the aforesaid the observation over the work of these municipalities will actively continue in the progress of the survey. Some of the mayors of these municipalities have informed the ILAR about measures planned to improve the work of the municipality and to increase the expertise capacity of the employees in the planning, organization and award of public procurement, as well as to the control over the execution of the contracts as a result of award pursuant to the PPA; other municipal governing bodies have not planned any measures aimed to improve their work in the application of the PPA. In the progress of the survey most of the abovementioned municipalities have not declared intentions to introduce best practices in the implementation of the PPA. These municipal governing bodies may intend to improve the administration work, but due to different reasons at present they have neither declared such an intention, nor have taken actions to implement the necessary measures.

It is necessary to be established an effective system for civil monitoring over the activities of the municipalities to force the municipal governing bodies to ensure to the appropriate extent and to establish permanently the principles of awareness, predictability, publicity and transparency in the processes of planning, conduction, preparation, award and performance of public procurement. At this stage only the inspections of the control authorities of the European Commission and the exercise of various forms of external pressure on this group of municipal governing bodies would catalyze the improvement of their work, which at present seems not to comply strictly with the requirements of the Public Procurement Act and the Community legislation regulating these processes. According to ILAR` experts the activities of these municipalities shall change for the better, mainly as a result of an unfailing external pressure.

Procuring entities with established malpractices in the application of the PPA; the governing bodies of which do not undertake measures to enhance  the level of effectiveness and lawful application of the PPA; lack internal rules adopted in accordance with the requirements of Article 8b of PPA or they have been formally adopted and do not stipulate effective mechanisms for planning, preparation of documents for participation, coordination of project documents, conduction of procedures and control of the performance of public procurement contracts are the municipalities (19 in number): Beloslav, Bratsigovo, Velingrad, Valchi Dol, Varbitsa, Elhovo, Isperih, Lesichovo, Malko Tarnovo, Maritza, Momchilgrad, Nikola Kozlevo, Nikolaevo, Pavel Banya, Provadia, Razgrad, Stambolovo, Straldja and Suvorovo.

Procuring entities with internal rules in critical condition which do not correspond to the requirements of Article 8b of PPA and do not stipulate effective mechanisms for planning, preparation of documents for participation, coordination of project documents, conduction of procedures and control of the performance of public procurement contracts are (6 in number): Kuklen, Dalgopol, Kaspichan, Panagyurishte, Roman and Septemvri.

V-th group of municipalities: Procuring entities by virtue of the PPA for which in the progress of the survey is found that their governing bodies do not participate actively in the survey or they have terminated their participation, resulting in the call of a logical conclusion for inaccessibility of the governing bodies and the administration of the municipality, due to lack of effective communication. The aforementioned municipalities have shown lack of willingness to enhance the effectiveness of the administration work, respectively the transparency in the public procurement award and in view of the aforesaid the deficiencies ascertained by the Audit Office and the Public Financial Inspection Agency shall be included in the final report of the survey the way they have been covered in the audit reports and financial inspections of the control authorities. In other words, these municipalities shall establish the group of unscrupulous procuring entities and beneficiaries of grant programs, funded by the European Union, that do not respect the principles and norms of the PPA.

An effective system for civil monitoring over the activities of the municipalities is also established to force the municipal governing bodies to ensure to the appropriate extent and to establish permanently the principles of awareness, predictability, publicity and transparency in the processes of planning, conduction, preparation, award and performance of public procurement. At this stage only the inspections of the control authorities of the European Commission and the exercise of various forms of external pressure on this group of municipal governing bodies would catalyze the improvement of their work, which at present seems not to comply strictly with the requirements of the Public Procurement Act and the Community legislation regulating these processes. According to ILAR` experts the activities of these municipalities also shall change for the better, mainly as a result of an unfailing external pressure.

At present, one hundred and seventy six municipalities belong to this group - Avren, Asenovgrad, Banite (Smolyan), Belene, Burgas, Varna, Glavinitsa, Devin, Djebel, Dimovo, Dragoman, Karlovo, Kirkovo, Kostenets, Lom, Lyaskovets, Nessebar, Nikolaevo, Pernik, Pomorie, Razlog, Sredets, Teteven, Hitrino, Aksakovo, Alfatar, Anton, Antonovo, Apriltsi, Ardino, Balchik, Bansko, Boboshevo, Bozhurishte, Boynitsa, Boychinovtsi, Borovan, Borovo, Botevgrad, Bregovo, Brezovo, Brusartsi, Byala (Varna), Byala (Ruse), Byala Slatina, Veliki Preslav, Veliko Tarnovo, Venetz, Vetovo, Vetrino, Vidin, Vratsa, Valchedram, Gabrovo, General Toshevo, Georgi Damyanovo, Godech, Gorna Malina, Gotse Delchev, Gramada, Gulyantsi, Galabovo, Dve mogili, Devnya, Dimitrovgrad, Dobrich, Dolni Dubnik, Dospat, Dulovo, Elena, Elin Pelin, Etropole, Zavet, Zemen, Zlataritsa, Zlatograd, Kazanlak, Kaynardja, Kameno, Kaolinovo, Karnobat, Kovachevtsi, Kozlodyi, Koprivshtitsa, Kostinbrod, Kocherinovo, Kresna, Krichim, Krushari, Kubrat, Kula, Kardzhali, Levski, Letnitsa, Lovech, Loznitsa, Lukovit, Laki, Lyubimets, Madzharovo, Medkovets, Mizya, Mineralni Bani, Montana, Maglizh, Nevestino, Nedelino, Nikopol, Nova Zagora, Novo Selo, Omurtag, Opaka, Pazardzhik, Perushtitsa, Petrich, Pleven, Plovdiv, Popovo, Pordim, Pravets, Primorsko, Radnevo, Radomir, Rakitovo, Rakovski, Rila, Rodopi, Rudozem, Rujintsi, Ruse, Sadovo, Samokov, Samuil, Sandanski, Svilengrad, Svishtov, Svoge, Sevlievo, Silistra, Simeonovgrad, Simitli, Sitovo, Sliven, Slivo pole, Smolyan, Stamboliyski, Stara Zagora, Sofia, Saedinenie, Tvarditsa, Tervel, Topolovgrad, Trojan, Tran, Tutrakan, Targovishte, Ugarchin, Hadzhidimovo, Hairedin, Harmanli, Haskovo, Tsar Kaloyan, Tsarevo, Tsenovo, Chavdar, Chelopech, Cherven bryag, Chiprovtsi, Chirpan, Chuprene, Shabla, Shumen, Yablanica, Yakoruda and Yambol.

The aforementioned municipalities do not participate actively in the survey or they have terminated their participation, resulting in the call of a logical conclusion for inaccessibility of the governing bodies and the administration of the municipality, due to lack of effective communication.  The practice has shown that these municipalities lack the willingness to enhance the effectiveness of the administration work, respectively the transparency in the public procurement award and in view of the aforesaid the deficiencies ascertained by the Audit Office and the Public Financial Inspection Agency shall be included in the final report of the survey the way they have been covered in the audit reports and financial inspections of the control authorities.

Namely these municipalities shall establish the group of unscrupulous procuring entities and beneficiaries of grant programs, funded by the European Union, that do not respect the principles and norms of the PPA, specified in the scope of the survey. In view of the aforesaid the observation over the work of these municipalities will actively continue.

VII. MAJOR GROUPS OF PROBLEMS.

1. Most of the Bulgarian municipalities do not plan effectively and apparently they are not willing to do so, which may prompt of ignorance or unwillingness to comply with the fundamental principles of EU and national legislation, regulating the public procurement.

At the time of conduction of the survey was found that the largest procuring entity in Bulgaria – the municipalities do not plan effectively and this is the reason for splitting of public procurements by violating the law. This is one of the main reasons the municipalities to lead the most problematic charts associated with the application of the PPA. Typical representatives of the group are the municipalities: Bolyarovo, Berkovitsa, Breznik, Bratya Daskalovi, Bratsigovo, Velingrad, Varshets, Varbitsa, Gorna Oryahovitsa, Elhovo, Dalgopol, Isperih, Iskar, Krumovgrad, Kaspichan, Kuklen, Knezha, Lesichovo, Momchilgrad, Malko Tarnovo, Nikolaevo, Nessebar, Nikola Kozlevo, Peshtera, Parvomay, Pavel Banya, Provadia, Panagyurishte, Suvorovo, Stambolovo, Septemvri, Strazhitsa, Tunja and Roman – generally 34. The municipal governing bodies have been informed of the aforementioned problems; although up to date no effective measures have been taken, probably due to the lack of requirable capacity.

2. A significant number of the Bulgarian municipalities adopt their internal rules by virtue of Article 8”b” of the PPA formally, when coping them they do not take into account the content and the legal requirements to the same.

The governing bodies of most of the Bulgarian municipalities adopt the internal rules formally and due to this they do not plan effectively, split public procurement, do not conduct effective preventive control over the activities of the administration and so their mayors are directly responsible for all violations of the PPA, often becoming victims of the jurisdiction authorities due to unexercised control and undetected another’s mistake. This is the second major reasons the municipalities to lead the most problematic charts associated with the application of the PPA. The following municipalities belong to this group: Bratya Daskalovi, Breznik, Bolyarovo, Berkovitsa, Bratsigovo, Velingrad, Varshets, Varbitsa, Gorna Oryahovitsa, Dalgopol, Elhovo, Isperih, Kuklen, Krumovgrad, Kaspichan, Knezha, Lesichovo, Nikolaevo, Nikola Kozlevo, Nessebar, Momchilgrad, Malko Tarnovo, Pavel Banya, Panagyurishte, Provadia, Peshtera, Parvomay, Roman, Stambolovo, Septemvri, Suvorovo, Strazhitsa and Tunja – generally 33. The municipal governing bodies of these municipalities have been informed of the findings of plagiarism and the disadvantages of copied by other procuring entities internal rules; although up to date no effective measures have been taken, probably due to the lack of requirable capacity.

3. The Bulgarian municipalities, obviously due to the lack of the requirable capacity for application of the law, copy documents on public procurement award and thus they introduce in their practice somebody else`s mistakes.

The plagiarism is another serious problem of the Bulgarian municipalities related to the public procurement award. Due to lack of sufficient and competent administration, most often the municipal employees have recourse to literally copy documents and any other instruments and documents, when they are commissioned the compilation of contract documents, internal rules by virtue of Article 8”b” of the PPA and any other in-house acts. The aforementioned attitude of the municipal administrations to the functions performed transfer and multiply a lot of mistakes in the work of the Bulgarian municipalities - as an example of outright plagiarism can serve the municipalities: Borino, Bratsigovo, Belogradchik, Bolyarovo, Gurkovo, Gorna Oryahovitsa, Dobrichka, Ivaylovgrad, Kuklen, Parvomay, Roman, Sopot and Hitrino.

Only 73 of the public invitations analyzed are consistent with the fundamental principles of the European legislation and 559 of them breach the principle of equality, publicity, transparency and predictability in the actions of the public awarding authorities.

4. Most often the activities of the municipal governing bodies lack the willingness to review any established malpractices and to introduce best practice related to the public procurement.

The governing bodies of a lot of the Bulgarian municipalities being very confident to the servicing administration and underestimating the importance of the public procurement award do not want to review any established malpractices, introduced only due to plagiarism, luck of professional expertise and practical experience of the administration enforcing the PPA. In such cases most often the administration doesn’t want to bear responsibility and it doesn`t bear responsibility due to the formally adopted internal rules. Usually such an administration makes a big effort the contracting entity` internal rules by virtue of the PPA not to engage them with responsibilities. In such cases, the entire responsibility is beard by the contracting entity, who is forced to bear even the burden of the plagiarism and the mistakes of the servicing administration. Such problems are found in the activities of the municipalities: Berkovitsa, Bratya Daskalovi, Breznik, Bolyarovo, Borino, Bratsigovo, Velingrad, Varshets, Varbitsa, Gorna Oryahovitsa, Dalgopol, Elhovo, Isperih, Kuklen, Kaspichan, Knezha, Lesichovo, Malko Tarnovo, Momchilgrad, Nikolaevo, Nessebar, Nikola Kozlevo, Krumowgrad, Parvomay, Pavel Banya, Panagyurishte, Provadia, Peshtera, Roman, Stambolovo, Septemvri, Suvorovo and Tunja – generally 33. The municipal governing bodies have been informed of the aforementioned problems; although up to date no effective measures have been taken, probably due to the lack of requirable capacity.

5. Most often the representatives of the Bulgarian municipalities look for the reasons of their mistakes at the application of the PPA out of the range of the activities and incompetence of the municipal employees.

Some of the municipal governing bodies show demonstratively no willingness for any cooperation, complete lack of self-critical disposition in their work as they plead the most often justification to be the partiality in the activity of the control authorities in the face of the Bulgarian National Audit Office, the Public Financial Inspection Agency, the consultants and organizations they work with. Other Bulgarian municipalities` governing bodies use the frequently changing legislation, the lack of effective communication among the municipal governing bodies, the lack of effective support from the Association of the Bulgarian Municipalities and other reasons falling outside the perimeter of their liability, to justify their own failures. The following municipalities belong to this group: Breznik, Bolyarovo, Borino, Bratsigovo, Velingrad, Varshets, Dalgopol, Elhovo, Isperih, Kuklen, Lesichovo, Malko Tarnovo, Nikolaevo, Nessebar, Parvomay, Pavel Banya, Panagyurishte, Peshtera, Roman, Stambolovo, Septemvri and Tunja – generally 22. The municipal governing bodies have been informed of the aforementioned problems; although up to date no effective measures have been taken, probably due to the lack of requirable capacity.

6. On a large-scale the Bulgarian municipalities do not use effectively the prevention, allowing them to correct any mistakes made in the activity, guaranteed by the provisions of Article 36a of the PPA.

Perhaps driven by the misunderstanding and ignorance of the legal framework, combined with the lack of qualified specialists in the application of the PPA the municipalities do not use the institute for mistakes prevention made ​​in the public procurement award, introduced by the provisions of Article 36a of the PPA. Very often the text of the internal rules adopted by virtue of Article 8”b” of the PPA is missing  a preventive mechanism on the activities of the evaluation committee, instead of which the text of the law is copied and placed in the internal rules.

7. More often the Bulgarian municipalities become hostages to incorrect consultants due to the lack of administrative capacity.

In the progress of the survey was ascertained that due to the misunderstanding and ignorance of the legal framework or the lack of qualified specialists in the application of the PPA the administration of the Bulgarian municipalities is about to make a hostage of incorrect consultants every mayor, who cannot afford to exercise qualified expert control over the activities of the administration and the external contractors. As evidence of this witness the growth of financial corrections imposed on because of discriminatory conditions in the documentation or other problems arising from public procurement documentations prepared by external consultants and uncorrected by the competent administration and other regulations related to the preparation, award and execution of public procurement contracts.

VІІІ. BEST PRACTICES.

1.                 Identified best practices, related to the application of the PPA, representing effective measures taken to increase the publicity in the public procurement award, are established in the awareness and research of the activities of the municipalities: Belitsa, Borino, Garmen, Gurkovo, Dolna Mitropolya, Devin, Zlatitsa, Iskar, Ivanovo, Makresh, Strelcha, Satovcha, Tryavna and Hissar - generally 14 Bulgarian municipalities;

2.                 Established incentive of the municipal governing bodies and shown striving towards an effective implementation of measures for increasing of the award publicity are established in the awareness and research of the activities of the municipalities: Belitsa, Borino, Belogradchik, Garmen, Gurkovo, Dolna Mitropolya, Dolni Chiflik, Devin, Zlatitsa, Iskar, Ivanovo, Krumovkrad, Krivodol, Kotel, Mezdra, Makresh, Strelcha, Sungurlare, Satovcha, Strazhitsa, Tryavna and Hissar - generally 22 Bulgarian municipalities;

3.                 Introduced preventive mechanisms aiming to provide effective and timely identification of mistakes in the application of the PPA and effective mechanisms for planning, preparation of documents for participation, coordination of project documents, conduction of procedures and control of the performance of public procurement contracts are established in the activities of the municipalities: Belitsa, Garmen, Dolna Mitropolya, Zlatitsa, Ivanovo, Krivodol, Ruen, Strelcha, Satovcha, Sungurlare and Hissar- generally 11 Bulgarian municipalities;

4.                 Additional measures planned, which shall lead to the establishment of best practices, representing effective measures for enhancement of the municipal capacity for planning, preparation of documents for participation, coordination of project documents, conduction of procedures and control of the performance of public procurement contracts are established in the activities of the municipalities: Belitsa, Belogradchik, Berkovitsa, Gurkovo, Garmen, Dolna Mitropolya,  Zlatitsa, Iskar, Ivanovo, Круможград, Krivodol, Pavlikeni, Satovcha, Sungurlare, Hissar and Tunja - generally 16 Bulgarian municipalities;

 ІХ. ASCERTAINED INTENTIONS FOR INTRODUCTION OF BEST PRACTICES.

In the progress of the survey is found that the governing bodies of certain Bulgarian municipalities show their intention to initiate positive practices, but towards the present moment they do not take any actions for the initiation of these practices and in view of the aforesaid the observation of these municipalities will actively continue in the progress of the survey. At present, twenty municipalities belong to this group – Belogradchik, Berkovitsa, Borino, Breznik, Varshets, Gorna Oryahovitsa, Dobrich, Dupnitsa, Iskar, Knezha, Kotel, Krumovgrad, Opan, Oryahovo, Peshtera, Parvomay, Sozopol, Sopot, Strazhitsa and Tunja.

Х. CONCLUSION.

A working group performing national survey on „Crisis in the award, implementation and control systems of public procurement in Bulgaria“, constituted to the National Coactivity Center of ILAR, notes that some of the findings and conclusions made in the conduction of the survey fully overlap the statements in the Report from the Commission to the European Parliament and the Council on progress in Bulgaria under the Cooperation and Verification Mechanism, presented on the 18^th of July 2012.

After a thorough analysis of the materials collected - completed questionnaires, information and discussions on the workshops, analysis of the internal rules, visits on site, the experts of the ILAR came to the conclusion that the violations of the PPA are due to several main factors:

1.                  lack of expert capacity in the municipalities, with the required professional preparation, knowledge and experience, related to the application of the PPA;

2.                  lack of resources in the municipalities to engage for their activities good consultants – jurists or lawyers;

3.                  lack of internal rules, which meet the requirements of Article 8”b” of the PPA as purpose and content;

As a result of the aforementioned reasons, public procurement in Bulgaria is not planned properly, which often leads to splitting of contracts in breach of Article 15, paragraph 6 of the PPA and to many other problems, identified in the survey.

Considering the abovesaid the experts of the Organization share the position of the Commission which is part of the Report – expressed in section ІІ.3 „Fight against Corruption 2007-2012“, regarding the Bulgarian issues related to the public procurement and corruption in the public administration stressing that the latter is inextricably linked to the processes of public spending, as noted in the document.

The specialists of Institute for Legal Analysis and Research considering the actual situation in Bulgaria, agree with the Commission that the weaknesses in the implementation of the Public Procurement legislation are an important source of corruption[6], which may serve as a logical explanation of the results of the survey showing the unwillingness of a group of Bulgarian municipalities to participate in the survey; to increase the transparency of their work and to switch to public procurement awarding in strict compliance with the principles of the European legislation and the rules of the European Union under the surveillance of civil organizations.

We are pleased to note that the work of ILAR and the implementation of a national survey "Crisis in the award, implementation and control systems of public procurement in Bulgaria" overlap completely the recommended[7] by the Commission independent monitoring system of the public authorities in Bulgaria. Considering the existing problems of the award procedures in Bulgaria the protection of the public interest requires the permanent establishment of an effective system for civil monitoring to help ensure to the appropriate extent and to establish permanently the principles of awareness, predictability, publicity and transparency in the processes of planning, conduction, preparation, awarding and performance of public procurement by the public authorities in Bulgaria. Evidences about the aforementioned are the well-known cases in which different Bulgarian public institutions unacceptably violate the principles of equality, transparency, predictability, equal opportunities for participation in the procedures and compliance with the right of information of the participants in the procedures for award of public procurement, to ensure prudent and timely information about each procedure and the result of the choice implemented.

As you had the chance to convince yourselves our organization has entire disposal of a team of highly qualified law specialists, 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, teaching and practical potential for the implementation of the tasks set before our team.

Unfortunately the data collected and analyzed through the survey confirms that at this stage only the inspections of the control authorities of the European Commission and the exercise of external pressure in various forms would catalyze the improvement of the work of the public institutions in the country. The Bulgarian municipalities, the largest procuring entities in Bulgaria belong to that group and they are obliged to comply strictly with the requirements of the Public Procurement Act and the Community legislation regulating these processes. According to ILAR` experts the activities related to the public procurement are still one of the spheres of the social life in Bulgaria, which shall change for the better, mainly as a result of a constant external pressure – conclusion[8] contained in the Report on Bulgaria from the European Commission to the European Parliament and the Council.

Considering that the Rule of Law is a fundamental value of the European Union, and that many of the Bulgarians expect[9] the European Commission to actively participate in resolving of the existing problems, related to the corruption in Bulgaria. The ILAR experts’ express their strong support for more definitive course of profound control over the activities of the Bulgarian public institutions by the authorities of the Commission.

Even more - we're not far from the conclusion that any sanctions imposed by European Control authorities and their irrevocability, in many cases, are the main reason for taking certain actions leading to improvement of the work of the Bulgarian municipalities and enhancement of the expert capacity of the employees in the planning, organization and award of public procurement, as well as to the control over the execution of the contracts.

We would like to accentuate on our willingness in the future to cooperate with the experts of the Commission in the fulfillment of the control over the work of the Bulgarian administration and the implementation of the national and European legislation related to the public procurement.

DEAR MRS REDING AND MR BARNIER,

That’s why is obvious that the planning, preparation of the procedures, award and the control over the execution of the public procurement contracts in Bulgaria, considered as a single process is possible to change for the better, mainly as a result of an external pressure, for the exercise of which the European Commission shall be engaged in the shortest possible time, as the Bulgarian citizens expect. The ILAR experts’ express their strong support for more definitive course of profound control and the exercise of all legal forms of pressure over the activities of the Bulgarian public institutions by the authorities of the Commission, for which in needed we are ready to assist at least with information.

30^th of September 2012,