3rd May 2016

EconLab: Central Purchasing in Czech Republic: current situation & recommendations

EconLab, a think-tank at the Charles University Prague, published a study Collaborative purchasing: foreign best practices and lessons learned for the Czech Republic. The study outlines how far procurements of the government are centralized and gives recommendations how to improve the current situation.

The Czech system of collaborative purchases consists of 16 bodies making purchases on behalf of the allocated government section only. 77 % of municipalities and regions conduct collaborative purchases on their own, the study says.

In 2014, only 0.4 % (58 mil. EUR) of overall procurement volume was centralized under 16 major bodies, while foreign practice is typically 1 - 6 % of the volume under a single body.

Only 30 % of mandated commodities are actually centrally purchased within the government, most likely due to a lack of allocated personnel and e-tools.

The observed gap in commodity purchases outside centralized systems annually costs about 811 mil. CZK (30 mil. EUR) in annual savings on both prices and transaction costs.

Commodities with the largest untapped potential are cars, electricity, natural gas, medical supplies and fuel.

Read the study (in English, executive summary also in Czech). More details in Czech available in an article here.

Members of the American Chamber of Commerce in the Czech Republic