The Greek State has “poured” more than €13,5 billion into the market during a period of 18 months, between January 2020 and June 2021, through the conclusion of public contracts for the provision of services and supplies, the construction of projects, and elaboration of studies.

Follows the complete, revealing report by Stamatis Zisimos in naftemporiki.gr:

The allocation of this amount of money is the greatest since 2010 and concerns a period marked by tough restrictive measures in the economy due to the pandemic. This is why it is a very critical factor for the support of businesses and the economy in general, which was dealt a dramatic blow due to lockdowns.

However, a “bitter” aspect of the period under review is the exceptionally large number of direct award contracts, which amounted to 65% of all contracts.

Fortunately, though, the amount of money allocated for this contract assignment method is limited to about 16% of the €13.5 billion euros.

305,656 contracts

According to data from the Central Electronic Public Procurement Registry (KIMDIS), from January 2020 through June 2021, a total of 305,656 public contracts were ratified – by the approximately 3,500 contracting authorities that operate in the country and have the right to award public contracts – with a total budget of €13.55 billion.

By category of contracts, most of them are related to supplies, however in terms of amount of money, although much fewer in number, the “reins” are held by the category “works contracts”.

More specifically, during the 18 months under review, 175,886 procurement contracts were signed, with a budget of €4.15 billion, 111,096 service contracts with a budget of €3.6 billion, and 10,144 works contracts with a budget of €5.57 billion euros.

A number of other types of contracts were also signed, such as studies and technical or related services contracts, numbering around 8,500 with a budget of almost €300 million.

Direct award contracts

Regarding the type of procedure applied for the award of public contracts, direct awards form the majority, including both usual contracts (Article 118) and procurement and service contracts for the mitigation of Covid – 19 (Covid-19 contracts). Nevertheless, the largest part of the €13.55 billion budget concerns contracts awarded through “open procedure”.

Precisely, 41,143 contracts were awarded through an “open procedure”, with a total budget of €7.74 billion euros. Next in terms of budget are the “restricted procedure” contracts, 1,668 in number, amounting to €1.94 billion euros.

Third, in terms of budget, are the “direct award” contracts numbering 187,706, with a budget of €1.88 billion euros. There are also the “direct award Covid – 19” contracts, which in the period under consideration amount to 10,263, with a budget of almost €290 million.

Adding together all the direct award contracts, their total number amounts to 197,969, and the corresponding budget amount to €2.17 billion.

Through the process of “negotiation without prior publication of a notice” 10,739 contracts with a €782 million budget were signed, 31,070 contracts with a budget of €648 million were awarded through the ”temporary public tender” process, and 2,983 contracts of €90.5 million euros through the “negotiation with prior tender publication” process, while the “competitive tender” contracts were 8,929 in number and had a budget of €89 million; finally, through the “competitive dialogue procedure” 8,740 contracts were signed, amounting to €46.5 million.

The top contractees

Regarding the legal entities with the highest amount of contracts, the data of KIMDIS show that at the top is “Attiko Metro S.A.” with contracts totaling almost €1.4 billion (owing to Metro Line 4 Alsos Veikou – Goudi), it is followed by the Ministry of National Defense with contracts amounting to almost €1.17 billion, then the Project of Electrical Interconnection of Greece with Attica with €975 million, the “Information Society S.A.” with €447 million, the Ministry of Infrastructure and Transport with €429 million, the Region of Attica with €267 million, the Ministry of Civil Protection with €205 million, the Ministry of Shipping and Island Policy with €186 million, and the Region of Central Macedonia with €170.5 million.

December 2020

According to the data of KIMDIS, regarding the development of the number of contracts, it seems, interestingly, that the most contracts – in terms of both number and budget – during the 18 months under consideration were awarded in December 2020.

In particular, in December 2020, as shown in the respective table, there were signed 10,378 service contracts amounting to €309.7 million, 16,187 procurement contracts amounting to €523.4 million, and 787 works contracts amounting to €345 million. It should be noted that the money amount for works contracts in this specific month is not the highest among the 18 months under consideration.

Nevertheless, out of the total 27,352 contracts signed in December 2020, 19,836 of them were signed through the direct award process and their budget amounted to €238 million.

This finding can be perceived as anything but coincidental, as it is related to the “rush” of many contracting authorities to award contracts directly before the end of the year, for obvious reasons.

The legal framework

It should be noted that the exceptionally large number of direct contracts, although a problem in itself, does not necessarily indicate the existence of “opaque” procedures in the distribution of public money, since the legal framework allowed more than 3,500 contracting entities to award public contracts directly, for amounts up to €20,000.

At the same time, there are many cases in which the contracting entities, either for reasons of urgency or for other reasons, “fragment” the contracts so as not to exceed €20,000 each, in order to turn them into “direct award contracts”.

However, with the entry into force on March 9, 2021, of the new law 4782/2021, the maximum money amounts of direct contracts increase by 50% for the contracts of goods, services, and studies and by 200% for the works contracts.

Specifically, the ceiling for a direct award is set at €30,000 when it comes to service and design contracts (from €20,000 that was the limit under law 4412/2016) and at €60,000 for works contracts (€20,000 formerly).

It is noted that the aforementioned increase was applied within the framework of EU directives.

Five-day contract publicity

To ensure transparency, the new framework stipulates that before the award of the contract, the said contract should be posted for a period of five days at KIMDIS, so that any interested party can know the contractor and the exact amount of the cost.

Therefore, if an interested economic operator can offer a better price for the same quality of products or services, it is given the opportunity to inform the contracting authority.

Subsequently, if the contracting authority deems the new offer to be better, then they can invite the interested party to submit a tender and award them the contract. It is pointed out that in order to submit a new tender, the operator must be sent an invitation by the contracting authority.

Best bid

For direct award of works contracts and for amounts between €30,000 to €60,000, the contracting authority must contact at least three economic operators and select the best bid. In this case, too, the five-day publicity applies.

In any case, despite the fact that the ceilings for direct contracts increased, from last March, when the new framework came into force, through June 2021, which is the end of the 18-month period under consideration, there was no increase in direct awards compared to the corresponding four months of 2020.

However, whether the new framework will increase direct contracts remains to be seen in the near future.