New Public Procurement Monitoring System from EU Grants18 February 2011
National Development Agency introduced a new, centralised monitoring system for public procurement processes of EU funded investments based on guidelines from the European Commission, aiming to prevent irregularities experienced in the past and the consequent loss of funds.
The European Commission expressed continuous concerns regarding public procurement processes of EU funded investments: in autumn 2011 the Commission suspended interim payments of the Transport Operational Programme due to irregular public procurements of Metro 4, and the 2010 audit of the Social Renewal Operational Programme also indicated that public procurement monitoring is not appropriate and not integral to the process.
The National Development Agency started preparations for the introduction of full and uniform process integrated monitoring of public procurement procedures in summer 2010, and since December 2010 the process integrated monitoring of all public procurement procedures above the Community threshold and works above HUF 300 million has been carried out by the dedicated Public Procurement Supervisory Department.
Process integrated monitoring practically ceased possible irregularities in the use of EU funds through public procurement as the National Development Agency can monitor all stages of public procurement processes in real time, and can interfere in the case of suspected infringement.
This helps to prevent such cases of the past as those of the Csepel wastewater processing facility, where irregular public procurement resulted in the withdrawal of grants in a total of HUF 10 billion, or of Metro 4, where the same reason resulted in the removal of contracts in a total of HUF 60 billion from the tender. Such irregularities have put a heavy burden on Hungary's budget.
The National Development Agency indicated the initiation of the public procurement process and the involvement of the necessary expertise in accordance with the statutory provisions in the form of a prior information notice published in the Official Journal of the European Union on 1 September 2010.
In accordance with the provisions of Act on Public Procurement the National Development Agency carried out the public procurement process concerning the involvement of experts in the process integrated monitoring of public procurement in December 2010 and January 2011; legal action was not taken against the procurement.
Criteria for financial standing, professional abilities and conflict of interests were determined in the public procurement process in accordance with the tasks to be performed.
The contract period of the public procurement is four years, the estimated cost is determined based on the duties fulfilled, but this is not equivalent to the total value of the contract. Estimated cost was determined based on similar procurements of the institutional system (managing authorities and the 15 intermediary bodies) in the past as these tasks had been handled by different authorities previously.
In the public procurement process tender documents were requested by four tenderers, and one tenderer submitted a tender: PD Konzorcium, which has two members, Dr. Pacsika Law Firm and Dezső és Társai Law Firm.
As the tender submitted by the consortium met all requirements of the contract notice and the tender documentation, it was announced as winner.
The hourly fee rate submitted by the consortium is HUF 16,000 (net), which complies with the market average, making claims about "unprecedented fees" made by certain newspapers invalid.
There is no obligation whatsoever to use available advisor capacities – the National Development Agency will solely use these on an on-demand basis with special emphasis on the strict rules of cost-effectiveness.