Competition Authority Probes Suspected Cartel in Food Supply Contracts for Hospitals

Bulgaria’s Commission for the Protection of Competition (CPC) has launched an investigation into a suspected cartel linked to public procurement contracts for food supplies to hospitals in Sofia. Millions of leva in public funds are allocated through these contracts each year.

The CPC has begun a preliminary inquiry, which includes the seizure of documents, files and data from the offices of companies involved in supplying food to hospitals in the capital. The inspections form part of an investigation into potential coordinated practices that could amount to serious breaches of competition law.

“We are talking about so-called coordinated practices — that is, bid rigging, prior market allocation, advance price-fixing and, ultimately, the pre-determination of the winning bidder. This is a distortion of competition that harms everyone: contracting authorities, patients in hospitals and, indirectly, public funds,” said Zhelyo Boychev, a member of the Commission for the Protection of Competition.

He added that such practices undermine trust in the public procurement system and lead to inefficient use of public money.

The alert to the CPC was filed in the autumn by MP Vasil Pandov. He said that, formally, companies had taken part as competitors, but without hospitals conducting genuine public procurement procedures.

The threshold is €750,000 — that’s not insignificant. What was being done was to announce contracts just below that threshold, allowing the contracting authority to choose whom to invite. The same three companies were always invited, no other bidders took part, and across different hospitals, one of them would win,” said Vasil Pandov, an MP from 'We Continue the Change–Democratic Bulgaria'.

According to his estimates, state-run hospitals have paid around 10 million leva to these three companies in recent years. Pandov noted that concerns over the quality of hospital food are not unique to Bulgaria, but that the country lacks a clear regulatory framework setting nutritional standards, such as those in place for schools and kindergartens.

BNT team sought comment from two of the three companies alleged to have been involved in the scheme. One company said it was unable to comment due to the ongoing investigation by the Commission for the Protection of Competition.