Public Procurement

The purpose of public procurement supervision review is to use the public funds economically and in accordance with the competition rules. The Office has exercised its supervision of this area since 1995. The administration of public tenders is closely watched in the Czech Republic, as it is in other countries, because a large portion of public funds is expended that way and the public has an understandable interest in seeing this money spent effectively and economically. The Office’s objective is to achieve, mainly through its decision-making activities, a free and open competition between the suppliers, along with a selection of the best proposal in a transparent manner devoid of any discrimination. The ultimate goal is the preservation of public funds. The parties should treat the individual tenders responsibly and suppress especially the cases that circumvent the public procurement law. That refers particularly to those situations where, by intent or by negligence, an agency may award a contract amounting to many millions of Czech crowns directly to a specific firm without taking advantage of competitive bidding in a competitive climate. It is the obligation of the contracting authority to provide the basic elements of competitive bidding, those being transparency of the selection process and equitable, non-discriminatory treatment of the individual bidders. If the Office detects a breach of the law, it may opt for what is called remedial measures, such as reinstating the unjustly excluded bidder to the process, or cancelling the entire tender. Should the contract be completed by the time the Office finds indications that the law had been broken, it cannot impose remedial measures, only penalties. A separate category related to public procurement, as well as competition in general, are cartel agreements between the bidders. The bidders may, for example, agree which of them will submit the lowest bid and be assured of winning, only to switch places on the next tender. However, since both bids are overpriced to some extent, the purchaser ends up paying much more for the contract than if the winner had been picked in a fair contest from fully competitive bids.

Decisions of the Office in the area of public procurement (only in Czech)