Embezzlement by Bulgarian State Fund Agriculture Continues

The public procurement law concerning municipal projects financed by the EU is being violated once again

Two years ago, Bivol published an expert report describing the mechanisms for misappropriating European money. The report matched a series of investigations into theft from road construction, guesthouses, and other schemes that drain European taxpayers’ money under the so-called “Rural Program” (Rural Development Program, RDP). These publications also echoed in Brussels, where the European Union (EU) demanded changes to the Public Procurement Act to end these thefts.

On April 15, 2016 (two months after the publication of the report), one of the main ways of regulating public procurement – evaluation criteria which do not contribute to the final result – was banned with amendments to the Rules on the Implementation of the Public Procurement Act (Article 33, Paragraph 1).

This change is an achievement in itself, but as it is well known, there are good laws in Bulgaria that are simply not being respected, especially when it is necessary to “divide the portions” between “circles of companies” or, to put it simply – to steal some money.

This is exactly what happened with the ban introduced by Article 33. Paragraph 1. This was established through an investigation by Bivol into the first 15 municipal projects approved for funding during the “new” 2014-2020 programming period. In all of them, the law had been breached on a massive scale. These are contracts amounting to BGN 43 million, signed on September 19, 2017.

The review of public procurement for these projects, launched in early 2018, shows a massive violation of the law. The used evaluation methodologies give more weight precisely to prohibited criteria such as “completeness and how the information is presented in the documents”. This is something that under the law cannot be used as a benchmark for bids’ evaluation.

Whether descriptions are included in the technical proposal and/or are sufficiently clear, detailed, relevant, etc. does not contribute in any way to the end result. On the other hand, the unlawful use of these criteria leads to a distortion of the choice of contractor and consequently, to huge financial losses for the national and European budgets.

A detailed analysis of the unlawful criteria for each of the contracts can be seen in the table attached to this article.

Who is to blame and who pays?

The employees of the State Fund for Agriculture (SFA), who have approved the use of these evaluation methodologies also bear administrative and criminal responsibility. All launched procedures are subject to prior control by the SFA under Article 50 Paragraph 2 of Ordinance 12 from July 25, 2016.

The latter means that the Fund coordinates unlawful evaluation methodologies.

We already have an example of the severe consequences of the use of unlawful methodologies for evaluation in the previous programming period 2007-2013. In its eleventh hour, on October 31, 2016, the second government of Prime Minister Boyko Borisov decided to pay from the state budget i.e. from the money of ordinary Bulgarian taxpayers over BGN 300 million for the financial corrections imposed by the European Commission on municipal projects. At that time, this decision against the interests of Bulgarian people was justified with the so-called “growing pains”, i.e. the municipalities had no experience of working with EU funds. This is a pure lie for two reasons:

  1. The municipalities have experience of working with EU funding under the SAPARD pre-accession program;
  2. The financial corrections have not been imposed due to any specificities in the implementation of projects funded by the European programs, but due to gross violations of the Public Procurement Act or unjustified failure to complete the projects.

Approvals by the SFA and use of the abovementioned unlawful evaluation methodologies lead to a single conclusion – the third “Borisov Cabinet” has not learned any lessons from the financial corrections imposed in the previous programming period and will keep the “growing pains” in place.

See also:

How to Steal from Bulgarian State Fund Agriculture


SFA Official Is Dismissed – System Remains in Captivity






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