On Thursday, 14 May, the Saeima adopted amendments to the Public Procurement Law introducing significant changes to public procurement regulations. These amendments introduce a simpler, more flexible, and at the same time more transparent approach to the use of public funds.

The amendments provide for two distinct approaches to organising procurement—strictly regulated procurement and procurement with significantly greater flexibility.

“By introducing a differentiated approach depending on the volume and complexity of the procurement, the amendments to the Public Procurement Law significantly change the structure of procurement regulations, reduce the administrative burden, and give contracting authorities greater freedom of action, while strengthening transparency and competition. As a result, public funds will be used more efficiently, while the public will be provided with greater transparency regarding the procurement process as a whole,” notes Anda Čakša, Chair of the Budget and Finance (Tax) Committee responsible for the progress of the amendments in the Saeima.

At the same time, regardless of the type of procurement or the contract amount, the amendments provide for greater transparency. Within one month of the approval of the budget, contracting authorities will be required to publish annual procurement plans, as well as provide information on funds actually spent and contract amendments. To reduce the administrative burden, procurements of small amounts may be indicated in procurement plans as a total value.

A strictly regulated procurement procedure will henceforth apply to goods and services starting at EUR 140 000, to social and other specialised services starting at EUR 750 000, and to construction works starting at EUR 1 million. This approach will significantly streamline the procurement process for both contracting authorities and suppliers, while maintaining strict regulation for larger and more complex procurements.

Procurements with a value below the specified thresholds, on the other hand, will be divided into small procurements and simplified procurements. Small procurements are intended for goods and services up to EUR 20 000 and construction works up to EUR 30 000. Simplified procurements, on the other hand, will apply to goods and services ranging from EUR 20 000 to EUR 140 000, social and other services from EUR 20 000 to EUR 750 000, as well as construction works ranging from EUR 30 000 to EUR 1 million.

For simplified procurement, the existing formal procedures will be abolished, with compliance with the principle of transparency being the only mandatory requirement. The contracting authority will be required to publish basic information in the Procurement Monitoring Bureau’s Publication Management System at least five days prior to the procurement, ensuring transparent use of public funds and increasing trust in the procurement process.

Maximum flexibility is provided for in these procurements—contracting authorities will be able to negotiate with all potential suppliers or select a supplier even outside the initially submitted bids, for example, by making a purchase at a retail store to ensure the most economically advantageous outcome.

The new public procurement system will be implemented gradually and will fully enter into force on 1 January 2028.

Saeima Press Service