The institutional system of public procurement in Hungary Dr. András Nagy Public Procurement Council Hungary

Introduction, history 1991 European Agreement, came into force in 1994  european acquis Minor national traditions in pp procedures 1995 first Act on PP adopted continuous revising 2003 new harmonized Act

General character of the legal framework, basic concepts A) All relevant provisions in a single Act Procedural and institutional rules (above and below the EU thresholds, all CAs) Exceptions in special areas – government/minister decrees (health care purchasing, national security and defense procurements, publication of tender, centralized procurement, etc.)

B)Regulating all possible decisions, behaviour, circumstances PP Act includes: rules on conflict of interest, documenting the procedure, internal audit, tender bond, price of tender document, detailed rules of opening the bids, evaluating the bids, public announcing the winner, details of executing the contract, etc.

Centralization - Decentralization Since ’95 in the Government sector – centralized public procurement (entities supervised by the Gov., bodies financed by the National Health Fund) Other CAs may join (e.g. municipalities) Priority products & services: telecommunication, IT, office equipments, furniture, stationary, vehicles, fuel, some sanitary products

Main figures in 2003 (in million EUR) General country data Central Government- 446 Municipalities- 687 Utilities- 349 Others- 716 Total Centralized pp Telecommunication - 20 IT Office equipments - 8 Furniture - 23 Stationary - 16 Vehicles - 19 Fuel - 37 Sanitary products - 9 Total - 277

Advantages vs. Disadvantages of centralized pp For Significant savings in some products (especially in purchasing cars) Aggregating of demands makes easier the co- ordination & management of government procurement Institutions are relived of procuring on their own Against Difficult to find acceptable & legally correct solutions for SMEs Awarding the contract to only 1 supplier  monopol market (frame contracts vs. framework agreements)

The role of Public Procurement Council Independent from the Government, reports yearly to the Parliament Special body – enforcing pp policy Main activities: a) publication of tender notices b) legal remedy system c) help-desk function d) others (international relations, trainings, statistics, etc.)

Structure of the Council 18 members + president 6-6 members delegated by a) contracting authorities b) tenderers c) public interest Members are not renumerated by the Council, employed by their delegation body Council meetings – ad hoc, yearly at least 7

Operational bodies within the Council Arbitration Committee legal remedy body 24 commisioners – civil servants appointed & removed by the Council may not be ordered Secretariat All other duties than the legal remedy a) help-desk activities b) publication of tender notices c) making opinion on draft legislation d) trainings, international relations, statistics e) yearly report to the Parliament

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