Last year companies were awarded public contracts with a total value of CZK 239 billion; CZK 10 billion went abroad

According to the Czech Public Contract Information System, 9,049 public contracts were completed in the Czech Republic in 2010, with the contracting authorities paying out a total of CZK 239 billion, excluding VAT.
While the amount of published and completed contracts dropped by CZK 89 billion compared to 2009, the total amount paid out by contracting authorities increased by CZK 30 billion. The largest number of public contracts (nearly 40% of the total amount) were awarded by municipalities and regions.
“The Information System also contains ‘below-threshold’ public contracts, which indicates that certain contracting authorities publish these expenses even when doing so is not mandatory. On the other hand, according to estimates by the Ministry for Regional Development, the share of public contracts out of the total volume of contracts entered into the Information System has declined for three years in a row. In 2010, public contracts made up less than half ,” said Věra Kameníčková, Head of Analytics at the Czech Credit Bureau (CCB), which prepared the analysis.
The greatest number of public contracts – 4,615 contracts, or 51% – were awarded to limited liability companies. In second place were joint-stock companies with a 32% share; nine percent of public contracts were awarded to sole traders.
Joint-stock companies were, however, the most successful from a financial perspective, accounting for 55% of the money paid out for public contracts – nearly CZK 131.5 billion. Limited liability companies accounted for 37% (nearly CZK 88.5 billion), while sole traders received only one percent (CZK 2.39 billion).
Joint-stock companies earned an average of CZK 176 million, whereas limited liability companies earned an average of CZK 41 million. Joint-stock companies also received the highest average price per contract – CZK 40 million, and each company was awarded an average of 4.4 contracts. The price per contract for limited liability companies was less than half of this amount, and each company was awarded an average of 2.4 contracts.
“Therefore, joint-stock companies that were awarded at least one public contract completed in 2010 were neither the most frequent winner nor did they win the greatest number of contracts ; they did, however, win more than half of the total volume of public contracts . A mere 20% of these companies have bearer shares, a substantial decrease compared to 2009,” said Kameníčková.
Of the individual joint-stock companies, the highest total amount by far, nearly CZK 18 billion, went to Strabag, while Metalimex was awarded CZK 7 billion worth of contracts and OHL ŽS more than CZK 5 billion. The highest number of contracts were awarded to Strabag (127), followed by Eurovia (114 contracts) and Swietelsky (90 contracts).
Of the total number of companies awarded public contracts completed in 2010 and entered into the Public Contract Information System (3,811), 10 had declared bankruptcy by the end of 2010. These companies were awarded 64 contracts with a total value of CZK 245 million. A total of 38 companies awarded 95 contracts valued at CZK 2.6 billion had ceased operating by the end of 2010.
Of the companies winning tenders for contracts in excess of CZK 800 million (49 companies with headquarters in the Czech Republic), only one had a CCB Index of 1– the best possible evaluation. Four companies had a CCB Index of 2, twenty-six had a CCB Index of 3 and seventeen had a CCB Index of 4. One company had the lowest possible rating, and one company did not provide its accounting report with its documentation, making it impossible to calculate a CCB Index for this company. The CCB Index is an indicator created by the Czech Credit Bureau to determine the risk of doing business with a specific company.
“This means that some contracting authorities award substantial public contracts to companies whose financial stability, at least as reflected in the CCB Index, is disputable,” added Kameníčková.
Among the companies awarded public contracts in 2010 were 80 companies with headquarters outside the Czech Republic; these companies were awarded 158 public contracts for a value of more than CZK 10 billion. Nearly 80 of the companies awarded public contracts had been in business for less than two years; these were awarded 152 contracts worth more than CZK 1 billion. One-third of these companies were set up in the same year in which they won a public tender.
The analysis showed that the greatest number of completed public tenders (9,049) in 2010 were awarded by municipalities and regions (nearly 40%); these were followed by government-funded organizations (17%), ministries and other central state authorities (14%) and state owned enterprises (13%).
The greatest amount for published and completed contracts was issued by businesses with a majority public administration ownership – 36% (CZK 86 billion). Municipalities and regions were second with 27% (CZK 64.5 billion). Government-funded organizations were responsible for 16% (CZK 38 billion), ministries and other state authorities 12% (nearly CZK 29 billion).
The highest average price per contracting authority was for the group of state owned enterprises (CZK 470 million); the second highest was private businesses (CZK 291 million). State owned enterprises also had by far the highest number of contracts per contracting authority with 62; the average for all contracting authorities was only five public contracts. Private businesses paid on average CZK 114 million per contract, whereas the average for all contracting authorities was less than half this amount.