Business would like more transparent public procurement in Vilnius and Kaunas

Published June 26, 2018

One out of three businesspeople in Vilnius (31%) and to one out of five businesspeople in Kaunas (19%) have encountered a situation where they chose not to participate in public procurement because, according to them, the process was designed for one particular company to win. According to the survey of businesspeople conducted by Transparency International Lithuanian Chapter (TILC) they also recognise that most suppliers would use personal connections in order to win public contracts.

One out of two businesspeople think that Vilnius and Kaunas city municipalities organise public procurement transparently, however, one third think the opposite. Half of the businesspeople surveyed also tend to trust their competitors and one third of them don’t.

Representatives of different companies see problems in both municipalities. One out of ten businesspeople in Vilnius and one out of seven in Kaunas think that there are situations when their competitors receive confidential information. One businessperson in ten has never participated in a public procurement due to an excessively short application period.

Most of the suppliers (70%) claim that there can be no justification for secret agreements concerning the winners of public contracts. Nevertheless, according to 38% businesspeople in Vilnius and to 28% businesspeople in Kaunas, cartel agreements are likely to occur.

Despite that, 9 out of 10 interrogated businesspeople would still participate in these municipalities’ public procurement.

From the answers of the suppliers it is clear in which spheres Vilnius and Kaunas city municipalities should make improvements: priority areas include preventing the “leaks” of information concerning public procurement processes, better justifying unannounced procurements and fostering competition among suppliers, applying reasonable criteria in evaluating applications and ensuring that technical specifications and qualification requirements would not be designed to favour one particular company.

The results of the study also reveal that public procurement is the most risky in the construction sector.  For instance, 40% of businesspeople who have participated in construction sector public procurements in Vilnius and 30% in Kaunas claim that public procurement process was designed to favour preselected companies.

“It seems that the homework task for Vilnius and Kaunas city municipalities is clear. The key element to win the struggle against corruption is in their hands. In 2018 it is not enough to have an anti-corruption plan with several bullet points concerning public procurement anymore. You have to be able to tell how you know that this year you have organised public procurement more transparently and have fought against corruption more efficiently than the last year. In fact, this also applies to most of the other institutions that spend hundreds of millions of our money,” said Sergejus Muravjovas, the Executive Director of Transparency International Lithuanian Chapter.

TILC conducted the survey of businesspeople who have previously participated in public procurement organised by Vilnius and Kaunas city municipalities from 10 July 2017 to 14 September 2017. A total of 170 companies participated in the survey.

The study was implemented as a part of TILC’s Integrity Pacts initiative, during which TILC monitors two public procurement processes in Vilnius city municipality. The initiative is financed by the European Commission.

More information: Sergejus Muravjovas, sergejus@transparency.lt, +37068997579

More about Integrity Pacts:  www.transparency.lt/saziningumo-susitarimai

A short summary of the results of the study is available here (in Lithuanian), more information on the results of the study is available here (in Lithuanian).