The reform of the public procurement system in the proposed version will significantly reduce the level of openness and competition, raising legitimate concerns about the transparent and effective use of public funds, according to a joint statement by the Latvian Chamber of Commerce and Industry (LTPP), the Competition Council (CC), the Bureau for Prevention and Combating Corruption (BPBC), the society 'For Openness - Delna' ('Delna'), and the Latvian Federation of Security and Defense Industries ('DAIF Latvija').
Organizations note that the reform provides for a tenfold increase in the amounts within which the state and municipalities can purchase goods, services, and carry out construction works without conducting an open procedure and even without publishing the relevant announcement. The threshold values for the procurement of goods and services will increase 14 times, while for construction works, it will increase 270 times. As a result, up to 555 million euros annually may be spent without public market notification and without a real opportunity for companies to submit their proposals in a timely manner.
Moreover, LTPP, CC, BPBC, 'Delna', and 'DAIF Latvija' stated that the reform could significantly reduce the level of competition in the procurement sector, as limited access to information directly affects the number of participants. In turn, a smaller number of competing offers typically leads to higher contractual prices.
According to the organizations, the European Commission has calculated that each additional bid in a procurement process reduces the contract price by an average of 2.5%.
At the same time, the lack of publicly available data may limit the ability of supervisory authorities to exercise proactive control in the field of public procurement and to timely identify potential risks in the allocation and use of public funds.
The organizations emphasize that the current version of the reform does not provide mechanisms to ensure transparency and effective control over the allocation of public funds, which raises legitimate concerns about possible abuses and insufficient opportunities to prevent them. Furthermore, the proposed changes do not contain the necessary provisions for applying supply chain security principles in procurement.
The authors of the statement support the goal of the reform - to reduce bureaucracy and increase procurement efficiency. However, they emphasize that openness at all stages is necessary for oversight and public control. Businesses must receive timely information about the expenditure of public funds, as only real competition and the participation of small and medium-sized enterprises ensure better prices and quality for the state.
Organizations also highlight the importance of accountability in public governance and procurement: heads of state and municipal institutions must bear real responsibility for the effective and sustainable conduct of procurements - from planning and decision-making to risk management.
In this regard, the organizations urge the legislator to ensure the publication of complete information about all procurements at all stages of their conduct, as well as to establish accountability for the management of institutions in organizing the procurement process.
LTPP, CC, BPBC, 'Delna', and 'DAIF Latvija' call on the legislator to make the necessary amendments to the draft law. The organizations note that public procurement reform is an important tool for managing public finances, but thoughtless decisions can undermine public trust, reduce the benefits of fair competition, and increase the risk of inefficient spending of funds.
As reported, the budget and finance (tax) commission of the Saeima will continue to review the amendments to the public procurement law next week.
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