New Bulgarian government reports irregularities in defence contracts

New Bulgarian government reports irregularities in defence contracts
By bne IntelliNews February 20, 2017

A check on public procurement under Bulgaria’s previous centre-right government has revealed dozens of violations in the defence ministry, caretaker Prime Minister Ognyan Gerdzhikov said on February 17. 

In January, President Rumen Radev appointed the caretaker government, which will rule the country until early general elections on March 26. The caretaker government’s role is limited and its main task is to prepare for fair and democratic elections.

However, Gerdzhikov initiated a check on public procurement under the previous Citizens for European Development of Bulgaria (GERB) government led by Boyko Borissov. Borissov resigned in November after GERB’s candidate lost to Radev in the second round of the presidential elections. 

It found violations in 45 public procurement procedures of the ministry of defence conducted last year, a notice on the government’s website said on February 17. In 2016, the ministry conducted 113 procedures, but terminated 31 of them. 45 of the remaining 82 procedures were found to be flawed.

Other findings concerned the road infrastructure agency, the ministry of economy and the SME promotion agency, where in a significant number of procedures the terms of reference or the documentation included rules that did not provide a level playing field, the notice said. 

Delays to procedures were found in the ministries of agriculture and food, health and interior, as well as the registry agency.

According to data from the ministry of finance, there are an increased number of cases with serious indications of cartel agreements. Specific risks in the area of centralised procurement are concerted actions by businesses in a particular sector. They damage the real economy and competition and lead to unfavourable financial terms for the public administration, the notice said. While it is possible to approach the antitrust regulator, cartel cases are difficult to prove and take years, the government admitted. 

On the other hand, in some ministries there were no significant violations in conducting public procurement. These included the ministries of finance; transport, IT and communications; youth and sports; environment and water; agriculture and food; labour and social policy; education and science; tourism; and energy.

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