Public procurement is widely recognized as carrying particularly high risks in Bulgaria, with conflicts of interest, kickbacks and bribery being frequently reported (ECCVM 2017; ICS 2017). Diversion of public funds and favoritism in the decisions of government officials are common (GCR 2017-2018). Likewise, bribes and irregular payments in the process of awarding public contracts and licenses are common (GCR 2015-2016); almost a third of companies expect to give gifts to procurement officials in order to secure government contracts (ES 2013). More than half of all companies report of corruption preventing them from winning tenders (European Commission, Feb. 2014). Among the main risks of corruption are the concentration of market power in the hands of the public administration, the lack of effectiveness of procurement procedures, the lack of integrity and control of procurement officials and bodies, political interference in the work of the Public financial Inspection Agency (PFIA), structural governance deficiencies, and too many frequent changes to the legal framework of public procurement (CSD 2015, CSD 2017).
The use of single-bidding contracts, in which contracts may be tailored to a single party, are an important corruption risk in Bulgaria (CSD 2017). In fact, evidence shows a concentration of public procurement among larger companies, and the channeling of certain procurement contracts to specific companies (CSD 2015). The award of large road and energy infrastructure development projects, are reportedly heavily affected by political patronage (CSD 2015). Evidence of corruption in such projects, along with projects involving high-level public officials are rarely investigated or prosecuted (ICS 2017). Companies convicted of violating procurement regulations, are excluded from future tenders (CSD 2015).
Bulgaria’s interim government found in February 2017 that over half of the defense procurement contracts signed in 2016 contained irregularities and nine of the contracts are being investigated for fraud (Reuters, Feb. 2017). Former Defense Minister Nikolay Nenchev has been charged with misuse of office for failing to implement a contract struck with Russia for the repair of Bulgaria’s Soviet-era jets (Reuters, Feb. 2017). Nenchev has also been charged with pressuring a subordinate in a procurement contract that ended up costing the state EUR 127,000 (Reuters, Feb. 2017).