After ten months of promises and hassling the MPs were able to accept at the end of April the notorious amendments to the Law on Public Procurement. Next week the bill will probably be published in the Official Gazette. However, it will take no effect. This formally will happen on July 1. And actually many of its provisions will become effective as soon after the first of October. In other words, for a few more months spending public funds will be under the old rules, under which over the last five years only were given over 33 billion levs.
In practice, the only new text that will come into force immediately after its publication, is related to the recognition of future claims under procurement contracts as collateral for lending. Now banks do not recognize these documentary guaranteed income of companies and accordingly deny them funding. Therefore procurement contracts can only be signed by companies that have strong internal funds.
The most disputed innovation – that in certain cases the state may award contracts without competition – will apply after July 1. These are in house auctions where mayors or ministers will employ their discretion right and for different purposes the state will pay to companies as it wishes to. It is necessary that experts from the Council of Ministers write a methodology for pricing in these cases, but the enterprise as a whole seems absurd, because there is no way the construction of a same object to come to the same cost in Sofia and Yakorouda for example. So it will be quite interesting to see how the state it will apply the option of awarding without tender.
As of rom 1 July under the Public Procurement Act will apply also for the Prosecutor General and administrative heads of the prosecution in the country. So far they have not been explicitly mentioned in the norm, and therefore did not have to hold public tenders for supplies and services.
Another important innovation that will be applied on the same date, is the deposit as a guarantee of execution. Rather than the 3% of the value payable now, the sum will become five percent. The change was made upon the suggestion of a member of GERB party Tomislav Donchev on the grounds that the contractor must be more protected if it encounter setbacks and delays in project implementation.
From the first day of July, what will be removed is the practice of setting limiting conditions for economic and technical capacity of the candidate, such as number of executed contracts, minimum annual turnover and more. Now it was through such techniques that the entities were screened prior to competition and most public funds reached only a certain range of businesses.
Last but not least, after less than two months, all companies that have obligations under the Tax Procedure Code to the state or municipalities will be prohibited from participating in public procurement. This will not apply if there is agreement on rescheduling or deferral of debts. Out of the game with public auctions will remain also the companies who have been convicted and rehabilitated for breach of health and safety requirements at work or have violated the rights of workers.
The key changes relates to increasing transparency in government spending, however, are left for after 1 October. Thus the „pride“ of Deputy Premier Daniela Bobeva – the so-called buyer’s profile, which is expected to bring out all the facts on the procedures for procurement and disbursement of billions of levs will not start functioning soon. In the current regulatory framework now the buyer’s profile is of desirable nature, and for the Bulgarian institutions this is understood more as something objectionable.
The BANKER
