Call to simplify tendering process and reduce business costs

Social partners in Bulgaria have met with the Prime Minister to demand reforms to the way tendering for government schemes is carried out. Trade union leaders and employer organisations stressed at the meeting that the number of licensing and registration regimes were a major obstacle to business and needed to be drastically cut. Unions also called for changes in the Public Procurement Act to ensure minimum labour and social standards were met by subcontractors.

Background

Trade union leaders and business organisations met with Bulgarian Prime Minister Plamen Oresharski on 10 June 2013 to discuss problems with public procurement and tendering in the country. Unions and businesses say there are too many different types of regulatory regimes and licenses – 700 at central level and 420 at municipal level.

Employers see them as very cumbersome and are concerned about the related costs, particularly the various fees they are required to pay. They say the situation impedes the creation of new jobs and contributes to a negative investment climate in Bulgaria.

Bozhidar Danev, President of the Bulgarian Industrial Association (BIA), has alleged that at least 180 of the municipal taxes demanded are illegal. According to legislation, fees for issuing of any document of a regulatory nature should be assigned to the municipality. In practice, however, the fee is different in each municipality, although the costs involved are the same.

It was agreed at the meeting that an expert committee should be established to tackle the issue. The committee’s three main goals will be to abolish some of the regimes completely, to reduce fees, and to shorten deadlines for the provision of services.

Regulations introduced by European directives will not be changed.

Social partner proposals

It was agreed at the meeting that there should be reforms to Bulgaria’s Public Procurement Act. This could even lead to new legislation. The aim is to provide more transparency in the tendering process and to broaden the range of companies that have access to public procurement.

Mr Danev says that to reduce the chances of corruption in the system and to increase transparency, each call for tenders must have its own electronic file. This will mean each stage of the competition is monitored up to final implementation.

Trade unions have called for new rules governing the winners of tenders. They say successful companies in the public procurement procedure must be able to give a clear guarantee and commitment on standards throughout the entire supply chain. No matter what the tender is for, the winner should ensure the implementation of collective agreements and laws, the payment of social insurance and the upholding of the sector’s labour standards. This, say the unions, would encourage the executors of procurement contracts to hire subcontractors with a good record of worker–employer relations.

Reviving business

Plamen Dimitrov, President of the Confederation of Independent Trade Unions in Bulgaria (CITUB), suggested a new way of helping to revive the economy. He wants the Bulgarian government to use the Bulgarian Post Office branch network with the backing of the Bulgarian Development Bank to provide cheap loans to small and medium business. This, according to CITUB, would help revive the economy, create jobs, and reduce youth unemployment.

Social partners also said it was important that the price of electricity in Bulgaria was kept stable to help the country’s businesses control their costs.

Increased regulation

Union leaders told the Prime Minister they wanted effective civil control on the State Energy and Water Regulatory Commission. They said government monitors needed to introduce extra supervision for the commission. They also called for the government to veto energy regulator decisions that were made in secret or that were ‘non-transparent’. The unions requested similar public control for the Commission for Protection of Competition and the Commission for Consumer Protection.

Meanwhile, Dimitar Manolov, Vice-President of the Confederation of Labour Podkrepa (CL Podkrepa), warned that unions would be careful to ensure workers’ rights were not affected by any changes to labour laws.

He said they would not allow changes to the Labour Code that, disguised as a new and more flexible regime of work, would be detrimental and against the interests of employees. He said the participation of trade unions in the expert committee was important, and that they would be a loyal partner of the government and employers in the process of strengthening the business environment. They were also keen to help develop measures that would lead to increased investment and job creation and improve the welfare of the people. However, they would only agree to changes to legislation that would not jeopardise workers’ rights.

Commentary

Expanding public control in state regulatory bodies was one of the main requests made during protests in February 2013 that led to early parliamentary elections. Social dialogue will be increasingly supplemented by various forms of civil dialogue and civil society participation in the implementation of important reforms.

Now, along with the creation of a tripartite expert committee to examine the public procurement process, the Council of Ministers has agreed to publish a special electronic proposals form on its website. The idea is to encourage anyone who wishes to submit proposals to the working group for legislative change that might facilitate and improve the business environment in Bulgaria.

Lyuben Tomev, ISTUR

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