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Health crisis leads to broader public procurement distribution in Hungary, Poland and Spain

Public authorities have redirected their public procurement to respond to the health crisis. The European directive on public procurement allows member states to streamline procurement procedures in emergencies. Yet despite this flexibility, the concentration of bids per successful tenderer has decreased during the pandemic.

Increased competitiveness. The pandemic has led to deconcentration in the awarding of public contracts in Hungary, Poland and Spain, according to data from tenders.guru. If we divide the number of tenders by the number of companies contracted, in 2020, the year that saw the outbreak of COVID-19, the average number of public contracts won by each company was lower than in 2019.

Public authorities have redirected their public procurement to respond to the health crisis.  The European directive on public procurement allows member states to streamline procurement procedures in emergencies. Yet despite this flexibility, the concentration of bids per successful tenderer has decreased during the pandemic. This is a good indicator: the lower the average number, the more distributed the market is among different companies. With a higher average, competitiveness is reduced - whether due to a lack of competitors (typical of highly specialised markets) or because the cake is being shared by only a few. 

Thus, Poland has gone from 1.6 contracts per successful tenderer between 1 January and 31 December 2019 to 1.55 for the same period in 2020. Hungary has seen a greater rise in competitiveness, with a reduction in the number of contracts per company from 1.65 to 1.51 from one year to the next. This effect was most noticeable in Spain: in 2019, the average number of contracts awarded to each company winning a tender was 2.13; in 2020, this figure plummeted to 1.42. Caution must be exercised with these figures, however, because along with flexibility in these procurement processes, we find - in the case of Spain for example - a delay in publishing such information on public procurement portals. However, even considering these figures to be provisional, the trend is significant.

Such behaviour was not replicated in Romania, which saw competitiveness decline. And it's worth noting that Romania was already starting from a worse situation than the other European countries mentioned. In 2019, the companies winning public tenders took an average of 5.27 contracts; in 2020, this concentration rose to 5.5 contracts per company, according to data from tenders.guru. Figures that should alarm Bucharest.