Public procurement is a system where public needs meet private offers, a gate between the public and the private sphere, a sphere with huge corruption risks. Good regulation and transparent procedures are necessary to minimize these risks, and also to create a market of tenders that makes government procurements effective and fosters competition at the same time.
Together with other NGOs, the Budapest based K-Monitor Watchdog for Public Funds run a research to compare public procurement systems in the V4 region. Given an insight into problems with public procurements, it became clear that the challenges these countries face are very similar. Procurements are regularly manipulated, procurers leak insider information to chosen bidders, procurement agencies write tenders that are specially tailored to certain companies, municipalities split up tenders to avoid stricter procurement rules that apply when reaching a threshold, tender winners modify the content during fulfillment by lowering quality or raising prices. In exchange, decision-makers receive kickbacks from the winners, invite government friendly companies to take part as subcontractors or find other ways to express their gratitude. According to estimates of Transparency International – Czech Republic 75% of Czech corruption is somehow related to public procurements. Prosecution, however, is a rarely initiated.
Procurement laws have been updated and modified regularly by each of the V4 countries’ governments. Nevertheless the legal framework is not able to stop misconduct and corruption in public procurements. Transparency, though, can make it harder to misuse the procurement systems for criminal moneymaking. It is not surprising that the biggest scandals in this field were uncovered first by the press and not by the authorities.
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This article was published in Visegrad Insight 1/2012.
