Social responsibility
Evaluation of public procurement in the Czech Republic
Public Procurement System, according to the researches by the World Bank, is mostly subject to corruption. Transparency International – Czech Republic (TIC) in December 2004 started a project focused on public procurement in the Czech Republic. TIC’s long-term objective is this project to contribute to more transparent procedures and to minimize opportunities for corruptive practices in the process of public procurement.
TIC has made evaluation of inefficiently used funds during public procurement in the Czech Republic of losses that result from that and evaluation of the lack of transparency of public procurement. Experts from the field of public financing, public administration and local self-government from the University of Economy from Prague have prepared methodology that enabled mapping of the process of public procurement on central and local level and determination of the size of inefficiently allocated funds. The analysis was based on data received by the Ministry of Finance, the Czech Statistics Bureau and other state institutions.
The research concluded that in 2004 expenditures for purchase of goods and services by the central power were 4.3% of GDP and 14.7% of them is inefficiently used. The purchases of local self-government were 6.2% of GDP out of which 12% were inefficiently used. The main reason for that is the impact of political representatives in the process of decision-making about awarding contracts for public procurement. Politicians on all levels use their influence to adjust the conditions for award; they interfere in the work of procurement commissions and have the right to refuse the decisions made by these commissions. Apart from that, public administration lacks effective control mechanisms.
The evaluation has also shown that there is significant lack of transparency in terms of awarding building contracts and there are close relations between some building companies and local politicians.
The research has also analyzed the purchases made by the Ministry of Defense. The chart below presents data on the way of awarding contracts in this Ministry in the course of 3 years.
|
Year |
|
Open tender |
Restricted tender |
Direct contract |
|
2002 |
Number of contracts |
32% |
7% |
60% |
|
Values of contracts |
5% |
4% |
91% |
|
2003 |
Number of contracts |
6% |
19% |
75% |
|
Values of contracts |
13% |
18% |
69% |
|
2004 |
Number of contracts |
6% |
21% |
74% |
|
Values of contracts |
3% |
6% |
91% |
It is obvious that only few of the resources were allocated in open tenders and the system lacks transparency and in many of the cases there was no objective reason to approach to purchases with close tenders or direct contract.
There are several reasons for the bad condition in the field of public procurement in the Czech Republic: a low level of will for revealing any information, close relations with suppliers and insufficient control and monitoring by competent bodies, opposition, the media and the public. One of the key obstacles is the lack of political will to really improve the situation.
In 2006 the project continued with the preparation of specific legal measures that are to strengthen institutional control of the process of public procurement, lobbying to legislation for accepting the reforms and observance of the economic activities of public enterprises.
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