Friday, July 21, 2006

Rough road through the way of public procurement after the EU accession

Rough road through the way of public procurement after the EU accession
László Velikovszky
Head of Unit
Hungarian Development Office – Unit for Procurement Coordination and Control
Deák F. u. 5.
1052 Budapest
Phone: +36-30-2227428

The new Hungarian Act on Public Procurement entered into force on 1 May 2004, on the day of Hungary’s EU accession. But it’s important to emphasize that those parts of the new Act which regulate contract award procedures for public procurement with support from European Union structural funds and Cohesion Fund entered into force on 1 January 2004. The main purpose of the Act was to ensure the total harmonization of the Hungarian regulation to the Community Law. This purpose has come to fruition.
Furthermore the purpose was to provide for transparency and extensive public control in the reasonable use of public monies, ensure the fairness of public competition in the course of public procurement in accordance with our applicable international agreements and European Community legislation and hereby promote the reduction of risks of corruption. The principles of fairness and public nature of competition also predominate in the course of Hungarian contract award procedures. In the remedy proceedings regulated by the Act the application may be submitted only on an infringement of principles.
The Hungarian regulation of public procurement also wanted to assure the transparency of use of public monies through determination of thresholds of the public procurement. Although the Community directives on public procurement deal only with the public contracts of a value reaching or exceeding the Community thresholds, the Member States of the EU had the possibility to establish their national thresholds. Hungary has exploit this opportunity. Therefore our Act has determined three kinds of regimes on thresholds and procedures: public procurements reaching or exceeding Community thresholds, public procurements of a value reaching or exceeding the national thresholds but not reaching the Community thresholds and finally public procurements below the national value thresholds.
The Hungarian Act on Public Procurement determines the contracting authorities extensively: with respect to the contracting authorities the Act distinguishes two larger groups: one of them is called the classical contracting authorities and the other one is called the special contracting authorities. The fist group involves for example ministries, central budgetary authorities, public bodies, public foundations, those entities whose subsidy is granted by the State or the EU by more than 50 %. The second group involves entities operating in the water, energy, transportation and electronic telecommunication sectors. The system of the remedies in relation to public procurement also harmonizes with the Community Law. This system regulated by the Act ensures immediate and efficient remedies after the occurrence of the infringements. It imposes sanctions against breaking and evading the Act.

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