9th March 2016

Chamber of Deputies passes Public Procurement draft act

The Chamber of Deputies, the lower house of the Czech Parliament, greenlighted draft act on Public Procurement today. The bill is heading to the upper house, the Senate.

The Czech Ministry for Regional Development announced that the aim of the new bill is to simplify public procurement for mayors. The administrative costs should be lower, as there will be no need to write a protocol on every bid submitted. The tenderer will have a set of criteria to base his/her decision upon, not just the criterion of the lowest price. There is the criterion of life cycle costs, for example. It will also be possible to rule out an unreliable bidder with whom the tenderer had a negative experience in the past. Read a statmenet by the Ministry (in Czech].


The contract winner will be obliged to uncover the ownership structure. This provision would only be applicable to Czech businesses. The Civic Democrats’ (ODS) change proposal proposing that businesses of which a member of the government owns at least 10% cannot take part in the competition was rejected earlier.  MPs thought it would be better to address the issue of business activities of the Czech Finance Minister Andrej Babis within the act on the conflict of interests. Read more (in Czech).

The limit for extra works is set at 50% and the limit for all changes within the contract is set at 30% of the contract value. The limit for contracts for small service concessions, used predominantly by mayors, was raised from 20mil. to 100mil. Kc. The opposition parties, including representatives of mayors claim that the bill will “help” use Kc billions of public money without public control. More details here (in Czech).

Click also on an interview with Petr Gazdík, Deputy Chairman of the Chamber of Deputies and representative of the movement of mayors (STAN) for the Czech Radio Plus. The Act on Public Procurement is about a thin line between bureaucracy and corruption. We wanted less bureaucracy, but we crossed the line and moved towards corruption. The act could make life easier for the small ones, but the question is how will the big ones behave? 

Commentary by Transparency International ČR here. The statement by the Vice-President of the Economic Chamber of the Czech Republic Irena Bartoňová Pálková is available here. More opinions in an article by ihned.cz and in an article by asociacevz.cz.

A summary in English by the Czech News Agency (CTK) here.

Members of the American Chamber of Commerce in the Czech Republic