Using Transparency Against Corruption in Public Procurement (eBook)

Dr Irena Georgieva is a Bulgarian attorney and expert in public procurement law with over 15 years of practice. Currently she works as a legal advisor and manager of her own niche law office in Sofia focused on public procurement and data protection matters. Dr Georgieva has graduated in law from the Sofia University (Master in Law 2003) and has also a post graduate qualification in accountancy from the University of National and World Economy, Sofia (2005). She obtained her doctoral degree in the University of Groningen, Netherlands (PhD 2015), with dissertation thesis on public procurement law. She takes part in many undertakings related to public procurement matters – round tables, open discussions and seminars - and is also a regular author of public procurement articles published in domestic and international law & business magazines. She is a member of the Sofia Bar Association.

Foreword 6
Preface 8
Contents 10
About the Author 14
Abbreviations 15
Table of Cases of the European Court of Justice and the General Court (in chronological order) 20
Chapter 1: Introduction 22
1.1 Aspects Analysed 22
1.2 Benchmarking 23
Chapter 2: The EU Principles in Public Procurement. Transparency – Origin and Main Characteristics 25
2.1 The Procurement Principles. The Concept of Transparency 25
2.2 Transparency – How Does it Start? 29
2.2.1 The Meaning of Transparency 31
2.2.2 Features and Functions of Transparency 33
Providing the Right Amount of Information 34
Increase of Competition 35
Control, Collaboration and Participation in Government Policies 36
Anticorruption Instrument 38
A Moral Postulate 39
2.3 Transparency in the EU Public Procurement Legislation and the Work of International Organisations. Evolution of the Principle 39
2.3.1 The Treaties and the European Court of Justice 40
2.3.2 The Directives 42
2.3.3 The Work of International Organisations Towards Transparency in Public Procurement Procedures 44
WTO 45
OECD 46
Transparency International 46
2.3.4 Evolution of the Transparency Principle in the Field of Public Procurement 47
Traditional Perception 47
Anticorruption Aspect. Shift of Priorities 50
2.4 Progress and Degradation of the Principle of Transparency. The Example of Bulgaria 54
2.4.1 Historical Predisposition 54
2.4.2 Transparency in the Bulgarian Procurement Legislation 60
2.5 Concluding Observations 64
Bibliography 68
Chapter 3: Corruption – Definition and Characteristics 70
3.1 The Reasons for This Chapter 70
3.2 Corruption – Common Definitions 71
3.2.1 Forms of Corruption 72
3.2.2 Origins 74
3.2.3 Causes and Consequences 76
3.2.4 International Organisations Against Corruption 76
3.3 Corruption in Figures 77
3.4 Corruption in Government Procurement – A Global Review 78
3.5 Members States with Higher Levels of Corruption – The Example of Bulgaria 82
3.5.1 Historical Explanation of the Predisposition to Corruption 82
3.5.2 Economic Factors for Corruption in Bulgaria 86
3.5.3 Corruption in Bulgaria in Figures 88
CPI 88
CMS 90
3.5.4 Corruption in Government Procurement 92
3.6 Concluding Observations 94
Bibliography 94
Chapter 4: The Public Procurement System in Bulgaria: Authorities, Participants, Control and Achievements 96
4.1 What Is Examined, and Why? 96
4.2 The Participants 97
4.2.1 Contracting Authorities 97
4.2.2 Bidders 99
4.3 Authorities Involved in the Public Procurement Process. Controlling and Appellate Authorities 100
4.3.1 Council of Ministers 100
4.3.2 Controlling Authorities 100
The Public Procurement Agency 102
National Audit Office and Public Financial Inspection Agency 106
4.3.3 Appellate Authorities 111
Commission for Protection of Competition 112
Supreme Administrative Court 113
4.4 Why Not Less Burdensome But More Effective? 115
4.5 Some Warriors in the Uneven War Against Corruption in Bulgarian Public Procurement 116
4.5.1 Who Are They? 117
4.5.2 Center for the Study of Democracy 118
4.5.3 Transparency International in Bulgaria 120
4.5.4 The BORKOR Project – An Attempt to Transfer German Experience in Bulgaria 125
Pre-qualification 128
Central Public Procurement Services 129
4.6 Where Does Bulgaria Stand Now? 133
Bibliography 134
Chapter 5: Infringements in Procurement Procedures. Corruption Loopholes and Practices 136
5.1 Methodology 136
5.2 Statistics 138
5.3 Types of Infringements and Incidents of Corruption 142
5.3.1 Choice of Object Phase 142
Disbursement of Public Funds Without Regard to Legal Rules 142
Splitting/Subdividing Public Procurements with the Purpose of Evading the Law 144
Unsubstantiated Implementation of a Negotiated Procedure Without Prior Publication of a Contract Notice 148
5.3.2 Announcement Phase 151
Setting Very Short Time Limits for Tender Preparation 151
Lack of Coordination Between Documents 153
Inclusion of Selection Criteria and/or Technical Specifications Which Unreasonably Restrict Participation in the Procurement or Offer an Advantage to One of the Tenderers/Candidates 155
Mixing Up Selection and Contract Award Criteria 160
Infringement of, and Changes in, the Evaluation Methodology 162
5.3.3 Procedure Conduct Phase 166
Unjustified Cancellation or Continuance of Procedure on Behalf of Contracting Authorities 166
Participation and Award to ‘Related Parties’. Conflict of Interest. Bid Rigging 169
Unreasonably Favourable Offers 171
5.3.4 Contract Implementation Phase 174
Unwarranted Amendments in the Course of Implementation of Public Procurement Contracts 174
5.4 One Verdict, Among ... Few 177
5.4.1 Background 177
5.4.2 Infringements Found 178
Inclusion of Requirements Which Unreasonably Restrict Participation in the Procurement and/or Offer an Advantage to One of the Tenderers 178
Infringement of, and Changes to, the Evaluation Methodology 179
Unjustified Elimination of Tenderers and Continuing the Procedure with Only One Candidate 179
5.5 Findings and Future Challenges 181
5.5.1 Relevant Conclusions 181
5.5.2 New Legislative Decisions – New Corruption Loopholes 182
Reserved Awards 183
Preliminary Market Consultations 184
Self-Cleaning Mechanism 184
Bibliography 186
Chapter 6: The German Procurement System – A Successful Battle Against Corruption 187
6.1 Benchmarking Mechanism 187
6.2 Why Germany? 189
6.2.1 Legislative Similarities 189
6.2.2 Corruption Level 189
6.2.3 Public Procurement System 192
6.2.4 Socioeconomic Differences 193
6.3 Main Characteristics of the German Public Procurement System – Applicable Legislation 196
6.4 Main Principles. Transparency Obligations 198
6.5 The Integrity Pact as a Tool to Optimise Transparency and Curb Corruption 200
6.6 Contracting Authorities Under GWB 202
6.7 Procedures 202
6.8 Award Criteria 204
6.9 Appeal 205
6.10 Corruption in Public Procurement and the German Way to Combat It 210
6.10.1 Corruption Prevention Legislation 210
6.10.2 Anticorruption Strategies and Institutions 212
6.11 Successful Pillars to Raise Against Corruption in the Award of Public Contracts 214
6.11.1 Adequate Legislative Decisions Providing Clear and Unambiguous Rules 215
6.11.2 Modernised and Facilitated Conduct of Procurement Procedures 221
6.11.3 Centralised Procurement 225
6.12 Lessons to Be Learned from Germany 228
Bibliography 230
Chapter 7: Public Procurement in Austria – Reforms Limiting Corruption 232
7.1 Why Austria? 232
7.1.1 Legislative Similarities 232
7.1.2 Corruption Level 234
7.1.3 Public Procurement System 236
7.1.4 Socioeconomic Differences 237
7.2 Main Characteristics of the Austrian Public Procurement System – Applicable Legislation 240
7.3 Main Principles. Transparency Obligations 243
7.4 Contracting Authorities Under BVergG 246
7.5 Procedures 251
7.6 Award Criteria 253
7.7 Appeal 255
7.8 Corruption Prevention 261
7.8.1 Corruption Prevention Legislation 262
7.8.2 Responsible Bodies 265
7.8.3 Other Anticorruption Efforts in Public Procurement 270
7.9 What Can Be Borrowed from Austria? 272
Bibliography 274
Chapter 8: Conclusions 276
8.1 Groups of Conclusions 276
8.1.1 Transparency Principle Efficiency Against Corruption 276
8.1.2 Control and Appellate Authorities Effectiveness 279
8.1.3 Outline of Good Practices 280
8.2 Recommendations 284