Transparency in Public Procurement and Contracts (LV0040)
Action Plan: Latvia Action Plan 2019-2021
Action Plan Cycle: 2019
Lead Institution: Procurement Monitoring Bureau (PMB)(authority responsible for the commitment as a whole)Central Finance and Contracts Agency (CFLA) (responsibleauthority on the Integrity Pactaccess to EU financial instrumentsfunded projects)
Support Institution(s): State and municipal institutions Ministry of Finance, CFLA, VARAM (SRDA), specificthe municipalities in which the procurement will be monitoredIntegrity Pact (to be selected at launch)fulfillment of the undertaking), VK (public law contract)accessibility issues) Representatives of the society Society for Transparency - Delna, othersmembers of the public, media
Policy AreasAccess to Information, Anti-Corruption, Audits, Capacity Building, E-Government, Legislation & Regulation, Local Commitments, Open Contracting and Public Procurement, Open Data, Public Procurement, Social Accountability
What are the major national and societal challenges that this commitment will address?
There is mistrust in the public about the fairness and usefulness of public procurement results. This disbelief is exacerbated by cases of purchasers acting for selfish purposes on goods,services paid too high for construction work, the quality obtained does not match the price. To multiplypublic confidence in the effective management of State and local authorities by the budget and the European Union Financial means should seek new and effective methods of monitoring procurement, including through promotionpublic participation in procurement monitoring.The Integrity Pact is an increasing use of public procurement surveillance and corruption in Europetool for prevention. It is also supported and promoted by the European Commission. Under its leadership, the Integrity Pact was introduced in 11 EU Member States as a monitoring tool for EU-funded projectssupport. There is a convenient and comprehensive identification of potential risks for certain procurersboth procurement supervisors are needed to build risk analysisa sample of purchases to be audited, as well as members of the public, to strengthen civilian oversight over theprocurement process and public demand for state and municipal institutions to improve their ownperformance in public procurement. At present, the collection of various risk factors must be done manually gathering information from various sources. By digitizing procurement risk assessment,using the Procurement Information published on the Procurement Monitoring Bureau websitenotices and decisions of the Review Panel, interested parties would be giventhe ability to analyze information and select customers to focus on purchasing behaviorincreased attention.Although all procurement contracts and their amendments are published in the Electronic Procurement Systemwww.eis.gov.lv in the profile created for each purchase (contract texts are appended to .pdf or .docxformat), but no structured and easy-to-read information about the contract is availableexecution from the moment of its completion to full execution. It limits the oversight body, non-governmental opportunities for organizations and the public to find out about actual public spendingprocurement contracts, compare contract prices and planned and actual contract deadlines, identify risks of unjustified expenditure.There are contract registers in several Member States of the European Union where information oncontracts, their modification and actual performance, and information is also available in the opendata by publishing it on national open data portals.Information on public-law contracts providing for the provision of public or local funding can not be found for delegated or delegated management tasksin one place. In accordance with the Public Administration Structure Law, information on delegation agreements and Contribution agreements should be published on the website of the delegating authority.This makes it difficult for the public to easily and easily get to know what administrations are in one place tasks delegated to individuals; and on public funding provided for in the terms of delegationaward. The implementation of this commitment will be used in 2018 by the national regulatory authorities results of the internal audit of the Delegation of Public Administration Tasks by the Audit Bodies.
What is the commitment?
The following measures will be taken to promote greater transparency in public procurement and contracts:
1. Structured publication of descriptive data on the performance of procurement contractsUsing information from announcements posted on the Procurement Monitoring Bureau websitethe results of procurement and procurement procedures and changes during the term of the contract and the contracting authorityto enter data on contract modifications and their execution, to create a database on public procurement contracts(Procurement Contracts Register), which would compile information on each contract entered into, reflectingthe initial contract price (the amount at which the contract was concluded as a result of the procurement) and the initial(c) the term of performance, changes in the contract as a result of the changes (change in contract price and term) andthe justification for the amendment, the contract price actually paid on completion of the contract, andthe actual duration of the contract and the reasons for termination if the contract is terminated. Contractregister data to be published and visualized on the Procurement Monitoring Bureau website and open dataformat in Latvian Open Data Portal.The contract register will include the information available from the PMB websiteprocurement notices. Information on contracts for which no publication is requirednotices will not be obtained in this manner. Therefore, as far as possible, in line with what has been said in the working groupthe proposal should explore solutions and benefits and, if necessary, make proposals forproviding publicity for contracts not covered by the law as their contract price does not reachthresholds for the application of the law. Initially, which contracts are covered and from whomamounts should be eligible.When creating such a database, it is essential to protect the restricted information contained in itpublic procurement, providing for exceptions to the general procedure for such public procurementis not included in the database.
2. Digital procurement risk assessment toolDigital procurement risk assessment tool published by the Procurement Monitoring Bureauinformation from your procurement announcements will select information such as a discontinued purchase at one gothe number of lots, the number of amendments made to the procurement documentation, and the number of purchases made by only onesupplier, the frequency with which non - competitive procedures have been used, orthe same supplier is regularly won by the same supplier, etc. etc. Digital Procurement Riskthe evaluation tool will also collect information on the number of procurement notices published by the contracting authority,which are linked to one of the characteristics of the procurement risk (the so - called red risk flags)red flags ). Once a certain level of risk has been reached, procurement authorities will be able toto establish that the procurements carried out by the contracting authority require special attention.
3. Monitoring of public procurement through the Integrity PactAnalyze the possibilities of adapting the Integrity Pact to Latvia's conditions and promoting public participationprocurement, including procurement of European Union fund projects, would be randomly selectedan appropriate Integrity Pact - an independent public benefit organization procurespublic oversight from the moment the procurement documentation is drafted until the procurement contract is completefor execution. As a result, greater transparency in the conduct of public procurement as well as correct procurement is expecteddeveloping documentation, ensuring a level playing field and complying with the lawperformance of the contract resulting from the procurement.When analyzing the possibilities of adapting the Integrity Pact to Latvia's conditions, an evaluation is made of which procurementthresholds and what kind of procurement the Integrity Pact could cover.The Commitment provides for information activities in municipalities on the Integrity Pact and its implementationopportunities and methods for non-governmental organizations with experience with the Integrity Pactimplementing seminars for municipal staff involved in public procurementand monitoring, as well as members of the public, active citizens, journalists, etc.interested. The citizens of the local government would gain knowledge on how to carry out their municipal activitiespublic procurement monitoring, as well as information on your rights to exercise such monitoring.This would facilitate procurement monitoring as well as public participation.The Integrity Pact is a form of public oversight of public procurement. That's itshall take the form of an agreement between the procuring entity, the public body and, ifif necessary, other parties such as bidders and winners.The Pact of Integrity is not a task for public authorities to monitor public procurement -delegation. The oversight functions of the Procurement Monitoring Bureau to oversee this procurementare not delegated and remain unchanged.
4. Research and promote public law contracts (delegation agreements, partnership agreementsand other contracts)The Commitment measure seeks to investigate the availability of information on public law during the reporting periodcontracts, and to develop and make specific recommendations for the transparency of information. How will the commitment help to address the issues identified?The contract register will be developed as a convenient tool for publishing, monitoring and monitoring contract performance informationcost analysis, for example, by providing information on which sectors, departments or agencies;In regions, contract prices tend to increase over the course of the contract, which suppliers usually dodoes not execute contracts for the prices offered in the procurement. Whereas the register of contracts is also intended to include:links to procurement documents and published procurement contract, it will also allow you to analyze how the procurementthe conditions imposed affect the cost and whether there is no post-contract termschange in favor of the contractor. The introduction of a register of contracts will require amendmentspublic procurement legislation, as well as providing easy entry of informationa contract register, which could then be published in an open data format and visualized in a digital formatProcurement Risk Assessment Tool for analysis. Based on the risk assessment, institutions such as PMB, CFLA, State Audit Office and Competitionthe Board will be able to carry out an in - depth assessment of the purchases made by the relevant contracting authorities, analyzing withrelevant procurement information from the respective customer, which will be provided in one place digitalprocurement risk assessment tool. Keeping in mind that the digital procurement risk assessment tool will be freeavailable on the Procurement Monitoring Bureau's website, anyone can analyze the information it collectsa representative of the company, providing convenient and fast information on the customer in question on an annual basispurchases made. The information will be available in a user-friendly way. Yesif necessary, the data will be downloadable in spreadsheet format.In circumstances where the company is actively involved in the monitoring of public procurement and the state or local governmentThe Authority shall provide supervisors with open access to information, the public shall be made aware ofthe usefulness and fairness of public procurement and whether public funds have been dealt witheffective. Citizens can be assured that public procurement is legal, so it isincreased confidence in public administration, in turn, in finding violations of public office or allegedcandidates, it is possible to report immediately to the competent authorities and to suspend or prevent themwaste of public funds.Delegation and participation agreements and other contracts also provide for public fundingperforming delegated administrative tasks and carrying out other activities. The commitment would resultIdentify the public's access to information on:the contracts referred to, the tasks entrusted to individuals and the funding granted; andrecommendations on the necessary measures to ensure transparency, including:the need for legislative changes.
Why is this commitment consistent with OGP values?The commitment shall comply with the following OGP values:
• publicity , as the Register of Contracts will provide the public with information on the contract of interest(Amendments, Execution) freely available on the Procurement Monitoring Bureau website and analyzedin the form of open data. A digital procurement risk assessment tool will provide the public with the opportunityview information about the interested purchaser in a visually friendly way, all in one placein one tool, plus downloading of selected information. Integrity Pactuse will promote openness in public procurement by making it directly accessible to the publicmonitoring the entire procurement procedure. Possible problems withTransparency of Delegation and Collaboration Agreements and Proposals for Informationimproving accessibility;
• Participation , as the contract register and digital procurement risk assessment tool will help the stateaccess to tax data for institutions, private companies and the general publicpayers' money and be better informed about the actual public procurementresults. Access to information will enable the public to become involved in procurement monitoring andto hold the management of a municipality or institution responsible for unsatisfactory procurementorganizational practices and concrete actions to improve the situation. Openness and direct public involvement in the monitoring of public procurement are expected to contributepublic officials' responsibility for the correct and lawful implementation of public procurement and public fundsusage.
Available commitment ornecessary financing:
The establishment of a database on public contracts will be carried outprovided from the budget of the Procurement Monitoring Bureau; orattracting funding from European infrastructureconnecting tool.In order to avoid funding the implementation of the Integrity Pact,contracting or candidate / potential procurement winnermeans,necessaryattractindependentsponsor.The Society for Transparency - Delna has submitted a project whichcan provide funding for seminars in five municipalities.If the project is not approved, funds will have to be sought elsewhere.
Relationship with other documents
The commitment is in line with European Commission documentscalls on Member States to draw up a treatyregisters and other controls on the execution of procurement contractstools and to ensure greater transparency in procurement.The commitment is in line with “GovernmentsactionplanDeclarations on the Cabinet chaired by Arturs Krišjānis Kariņšfor the implementation of the proposed activities'“Improvement of public procurement procedures by increasingtheir effectiveness and reducing the risk of corruption ”(that you have detailed and up-to-date information in one placeon concluded and concluded procurement contractsfor amendments)
Changes are needed in the areas of public procurementlegislation which would oblige the subscriber to entercontract register data on contract modifications and actualcontract performance (contract price and term), as well as contractjustification for termination
IRM Midterm Status Summary
1. Transparency of public procurements and contracts
The following activities will be carried out in order to promote greater transparency of public procurements and contracts:
- Structured publication of data describing the performance of procurement contracts […]
- Digital tool for procurement risk assessment […]
- Public procurement monitoring by means of the Integrity Pact […]
- Conduct a study onand promote the availability of contracts governed by public law (delegation contracts, participation contracts, and other contracts) […]
- Development of the descriptions of methods for the selection of data for the digital tool for procurement risk assessment;
- Local governments have been selected and training seminars with regard to the Integrity Pact (if financing is available) have been given;
- Implementation of the Integrity Pact / monitoring of public procurement (or evaluation of implementation feasibility);
- Publication of the digital tool for procurement risk assessment;
- Incorporation of an obligation to enter information in the contract register in laws and regulations in the field of public procurement;
- Development and introduction of the contract register by ensuring the entry and publication of information;
- Evaluation of the results of the application of the Integrity Pact: a summary of challenges and good practices, proposals for further application;
- Provision of re-usable data sets of the contract register in the form of open data
- Recommendations for the availability of contracts governed by public law (delegation, participation etc.).
Editorial Note: For the complete text of this commitment, please see Latvia’s action plan at: https://www.opengovpartnership.org/wp-content/uploads/2020/01/Latvia_Action-Plan_2019-2021_EN.pdf
IRM Design Report Assessment
Access to Information;
The commitment aims to build upon the previous action plan commitment on public procurement by introducing a number of novelties to advance public contracts transparency. This includes publishing data on changes to contracts and creating a digital tool for procurement risk assessment which make the commitment relevant to the OGP value of access to information.
Latvia has a well-functioning public procurement system, and almost all information regarding public procurement contracts (including the procurement notices, results of procurement procedures, changes in the period of validity of contracts and complaints) is already available to the general public in open data formats  via the Procurement Monitoring Bureau (PMB) and the Electronic Procurement System (EPS) websites combined.  EPS functions as an online catalogue from which suppliers and buyers can select products and services (and thus holds some of the relevant procurement data) as well as an electronic system for submitting tenders for procurement procedures announced in the e-tender subsystem.  PMB on the other hand, provides detailed information on public procurement, including notices on procurement and commencement of procurement procedures, amendments, results, applications for violations in procurement procedures, invitations to application review meetings, application review decisions, explanations on the application of regulatory enactments, guidelines for organising procurements and compilation of available statistical data.
However, information on contract execution such as final deadlines that are (or are not) met and the final payments that are made are not currently published. As noted in the interview with a representative from the involved public institution,  many contracts may be changed significantly during the final phase of their execution, but the information on this is not currently available through either of these platforms (unless the contract in question is especially monitored or if there is a direct investigation into the particular case). They added that including information on what happens during the execution of the contract would give a more complete and transparent overview of the procurement process and allow for a more effective monitoring of public procurement processes. Publishing this kind of information in an accessible manner is also an expectation from the European Commission,  which presents an additional impetus for a solution to be found.
To address the issue, PMB will create a new database of public procurement contracts (a register) by using information from the procurement notices and the results of procurement procedures, along with amendments in the period of validity of contracts that have been published on its website. This database would hold all the relevant information regarding each contract, and the accumulated data from this new register would then be published on the website of the Procurement Monitoring Bureau and on the Open Data Portal. It is not yet clear how action will be taken specifically to ensure the data in this register are standardised and of high quality.
Any obligation for the buyer to upload the necessary information will need to be secured in law and regulations in the field of public procurement. Currently, contract notices and nearly all associated documents are published under current legislation, except the previously highlighted information about the final stages and the deadlines. The Public Procurement Law  prescribes that contract notices are required when a contracting authority is applying open or restricted procedures, competitive procedures with negotiation, innovation partnership procedures and competitive dialogue or plans to establish a dynamic purchasing system. Following this, if changes are made or if the terms for submission are extended, modifications of these notices are also required to be published. The law also prescribes that within 10 days after the conclusion of a procurement contract (or of a framework agreement, or taking a decision to terminate or suspend the procurement procedure or not to establish a dynamic purchasing system), the contracting authority must submit the contract award notice.
In addition, the commitment entails developing a digital tool for risk assessment. This would be based on an already existing data visualisation tool  that the PMB has established. The existing functionalities of this tool (enabling the view of procurement data by category, year and amount) would be extended to enable a more complete assessment of the buyers by, for the first time, compiling all available data about a specific buyer, including largest contracts, winners of tenders and overall expenditures. Currently, it is only possible to manually identify specific relationships between a specific buyer and supplier, as this is not an available function via the existing tool. Most of this data are already available through the PMB website, but the added functions would bring together specific data to connect information to identify ‘red flags’, e.g. how often the buyer in question has broken the contract, how often the contracts are amended significantly, how often negotiated procedure is triggered and how often contracts are signed with the same supplier. This kind of amalgamation is currently not possible. If successful, this could be an example of a good practice whereby not only would the data be open, but also they would be accessible and user friendly. At the same time, the administrative burden would not be increased, as the system is fully automated. It is not clear however to what extent this risk assessment tool will be designed in collaboration with external stakeholders (particularly data users or others such as businesses or civil society) to understand what risks should be given priority. Nor is it clear how the automated system will address issues around guaranteeing data quality.
A third milestone will raise awareness of Integrity Pacts for public procurement through training events across Latvia on the municipal level.  Integrity Pacts are supported by the EU (DG REGIO). There is currently no strong culture of using Integrity Pacts in Latvia.  Input and insights from the events would be gathered for future planning and evaluation of implementing the Integrity Pacts, followed by carrying out a pilot Integrity Pact process in at least one municipality . Aside from the plan to conduct information events, as written, it is unclear which local government will take part in this initiative and who will take ownership of this project.
The fourth milestone proposes a study on availability of information on other types of contracts; however, it does not explain which specific contracts are meant and how they are currently governed by a different legislative framework. Also, the commitment does not specify how this study’s recommendations would be considered and whether the study will lead to any changes.
This commitment has a moderate potential impact for improving access to public procurement data based on the expected results from structured publication of open data describing the performance of procurement contracts. The lack of guarantees exploring or ensuring the data are standardised and of high-quality limits the overall potential impact. The creation of the contracts register and additional functionalities for simplifying access to amendments to procurement contracts on websites of the Latvian PMB and EPS would increase access and usability of contract information, but again, this depends on the quality of the data available. The introduction of the new tool has the potential to ease identification of corruption risks and boost monitoring capabilities but would have greater impact if the information in the tool were aligned with the risks identified by external (such as businesses, civil society, data users) as well as internal (government) stakeholders.
The commitment could be transformative if it were to include greater opportunity for collaboration between government and data users along with civil society and business in the identification of risks. It would also gain from ensuring data are open, of high quality and standardised in the new contracts register. Furthermore, implementing institutions could put a priority on the publication of contracts related to COVID-19, which would make the commitment more relevant to current pressures and issues in procurement. The commitment could have been split because milestones related to Integrity Pacts are quite different from those actions related to public procurement transparency. The milestones on Integrity Pacts could be more specific about where they will be implemented and go beyond enabling public monitoring to guaranteeing participation.