After four years of running, central state purchasing does still not work

Press release to audit No. 17/24 – 20. 8. 2018

The Supreme Audit Office (SAO) has audited the centralized public procurement in the state administration for the period of 2014-2017. So far, there are two such systems: through the Resort System, ministries carry out purchases for themselves and organizations that come under their competence. Through the second system, the Central State Purchasing, the Ministry of Finance and the Ministry of the Interior carry out purchases for the entire state administration. Central State Purchasing, however, still does not work even after four years from its launch and does not bring the expected savings. But neither the Resort System is used as expected.

16 resorts, which include over 500 organizations, are obliged to introduce and use the Resort System. Initially, it was assumed that contracts would be awarded annually through the resort systems for more than CZK 45 billion. In 2016, however, it was only CZK 8.2 billion. More than half of them were public contracts of the Ministry of the Interior.

The use of the Central State Purchasing is voluntary. Only one contract was awarded during its operation, namely the purchase of office paper worth CZK 118 million. However, by the end of 2017, only 40% had been drawn. Some ministries continued to buy office paper from their previous suppliers because it was cheaper than paper traded through the Central State Purchasing.

The government assumed that centralized procurement would bring significant savings, lower administrative burdens, and would streamline purchases. However, pursued savings are distorted and do not indicate the benefits of centralized public procurement. Other benefits are not being pursued at all. For example, according to the SAO, the centralized purchase of software products is more effective. It is quick, simple and allows for a professional support of the central contracting authority, such as the Ministry of the Interior.

A prerequisite for the operation of the Central State Purchasing is, among other things, securing technical support for the collection of requirements from the entire state administration. This was supposed to be provided by the National Electronic Tool (NEN, from the Czech “Národní elektronický nástroj”). Since its launch in 2014, nobody has been using it to support the centralized public procurement because it does not work as it is requested by the central contracting authorities.

To what extent the centralized public procurement is used can be evaluated on the basis of contract data published in the NEN Journal. However, the Ministry of Regional Development (MoRD) does not dispose of data from the NEN Journal in the scope and structure that would allow such an evaluation to be carried out. Even though the MoRD is the administrator of the information system, the NEN Journal is its part. The MoRD is thus dependent on the system supplier and would have to pay for it.

Communication Department
Supreme Audit Office

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