REGARDING THE DRAFT FOR THE ESTABLISHMENT OF A CENTRAL PURCHASING BODY IN THE ICT SECTOR

The current proposal by Bulgarian Industrial Association (BIA) suggests transferring the responsibility for the procurement of computers and peripheral devices from the Ministry of Finance (MF) to the Ministry of Electronic Governance (MEG), with centralized procurement to be carried out through the Central Purchasing Body in the field of Information and Communication Technologies (CPB-ICT).

While the proposed centralization may appear to offer efficiency gains, several significant concerns have been raised regarding the rationale, implementation, and potential consequences of the measure:

1. Lack of Justification and Impact Assessment:
   The draft regulation lacks clear motivation and a detailed impact assessment. Although it identifies inefficient spending of nearly BGN 1.8 million in ICT procurements during 2023–2024, it fails to explain why existing mechanisms were not used effectively, particularly MEG's powers under Article 7g of the Electronic Governance Act.
2. Risk of Preferential In-House Contracting:
   The reported cost-effectiveness of public procurements involving “Information Services” AD raises concerns that MEG, as principal of the company, may promote in-house contracts, potentially limiting competition
3. Potential Negative Impacts on the ICT Market:
   The proposal may cause significant disruptions in the ICT sector, including financial instability for current suppliers, loss of expert personnel, and overall market uncertainty. There is also a risk of setting a precedent where other ministries seek control over specific procurement areas, contrary to the intent of current centralized procurement regulations.
4. Recommendations for Further Action:
• Conduct a thorough post-implementation evaluation of Decree No. 385/2015.
• Develop a comprehensive ex-ante impact assessment of the proposed reform, including:
• The necessity and economic justification for establishing a new procurement structure.
• The impact on employment, expert capacity, and market competition.
• The risks and adaptability challenges for existing suppliers and SMEs
• The potential for jurisdictional conflicts between MF and MEG in cases of overlapping responsibilities.
• Consider establishing an audit board comprising representatives of employer organizations, MEG, and relevant public bodies, to oversee the transition process and prevent market distortion, monopolization, or unfair practices.

In conclusion, the transition to centralized ICT procurement must be approached with careful planning and robust safeguards to ensure market stability, fair competition, and the efficient use of public resources.