12 Nov 2012

Corruption Research Centre at the Corvinus University of Budapest Monitors Public Procurement

(contributed by Mihály Fazekas, researcher at the Corvinus University of Budapest)


While Hungarian authorities publish announcements on the country’s public procurement activities in line with the 2004 EU Directive, this information is not available in a structured format for those who would like to gain insights going beyond any individual announcement (e.g. tracking how much a company won in a given period). In addition, information is not checked before publication by any public authority resulting in multiple errors in the announcements such as typos, missing information, inconsistencies.

In order to improve the current situation and to advance effective corruption control in Hungary, the Corruption Research Centre systematically collects data appearing in the Official Public Procurement Bulletin from 1996 until recent times (quarterly updates). The information is downloaded in a structured database and data quality is enhanced by correcting obvious errors and inconsistencies. For example, a large amount of information on the value of contracts awarded appears written out by letters rather than numbers often ignoring basic grammar rules. We also assign to contract winners their unique tax IDs which allows for tracking companies’ activities over time regardless of changes in their names or addresses.

Using the database constructed from official data, semi-annual monitoring reports are published by the Centre in order to inform citizens of general public procurement trends as well as shed light on specific issues. As these reports have spurred significant media coverage they succeeded in initiating discussions with some important stakeholders. In the February 2012 report, for example, we uncovered the list of the biggest issuers of tenders and companies winning most tenders, which prompted protests from some of them claiming that data was falsified. While referring to exact published announcements could resolve some of the controversy, it also became clear that multiple versions of the same announcements are published in the Official Bulletin without clear reference to each other (e.g. a corrected version of the announcement may appear without clear reference to the obsolete original announcement). This clearly causes significant legal uncertainty for ordinary citizens even in the case of simple questions such as how much a concrete awarded contract was actually worth. In order to alleviate this problem the Centre now explores potential corrections and multiplications among announcements to improve data reliability.

A common theme throughout the reports of the last two years is the strength of competition in Hungarian public procurement. A simple metrics which we monitor recurrently is the contracts awarded when there was only one bidder. Surprisingly to us and to many journalists picking up our findings, about 50% of all contracts were awarded without any serious competition in the last years, without any sign of improvement lately.

Among our future priorities, making the whole dataset publicly available features high. Once data reliability is firmly established and quality improvement possibilities exhausted, the Centre’s database will be able to fully serve the wider public. In addition, after establishing contact with our Czech and Slovak colleagues working on public procurement data a joint report is planned for early 2013 exploring cross-country differences.