Abstract
In 2006 a simplified regime for awarding public contracts was introduced, by means of a special procedure for "below threshold" contracts. Its aim was to enable smaller contracts to be awarded in a simpler and more flexible way.
However, this change began to reduce competition and transparency, and gave contract awarders freedoms they could easily abuse. For this reason, the original maximum threshold for contracts that could be awarded via the simplified procedure (20 million CZK) was reduced to half that amount in 2012.
Introducing these thresholds led, among other things, to contracts' estimated values being manipulated, and to prices being artificially "inflated" towards the threshold. These behaviours were most frequently observed in the building sector.
As the number of public tenders rises and their estimated values cluster more and more closely to the legal threshold for the simplified procedure, inefficiency increases, i.e. the difference between the estimated and actual price of the tenders increases. This difference is up to 15 percentage points greater than in open competitions.