The average annual losses caused by poor performance of public procurement contracts add up to at least 1,300 million leva, 2 per cent of GDP, Assoc. Prof. Konstantin Pashev from the Governance Monitoring Association (GMA) said on Thursday.
He set forth the findings of a project for transparent governance at the central and the local level implemented by the Economic Policy Institute, the GMA and the National Association of Municipal Clerks in Bulgaria.
Data from the National Corruption Monitoring System show that one in two companies paid a bribe in 2002, compared with one in ten in 2007. Overall, 80 per cent of business representatives claim that corruption does exist. The researchers attribute the discrepant data to a dropout of casual players from public procurement rather than to a decline in corruption, Pashev said.
He quoted sociological surveys which showed that 43 per cent of companies tendered for contracts in 2002, as against a mere 10 per cent in 2007. The average number of companies tendering for a public procurement contract also dropped.
Huge financial resources are distributed through public procurement contracts. In 2008 their value totalled 11.1 per cent of GDP, and total contract value increases by an average of 31 per cent every year, said Pashev. This is difficult to control due to insufficient administrative capacity. Contracts are small by European standards at less than 200,000 euro per contract, which increases the workload of controlling bodies.
Construction and services account for two-thirds of the market. These contracts require serious expertise to ascertain that the finished project matches the winning tender, Pashev said.
There is very little control over implementation in the management of public procurement contracts. A large proportion of contracts still are awarded through negotiations.