Portugal

The Portuguese Audit Court finds systemic abuse of direct awards

Pedro Telles

Oct 8, 2024 — 1 min read

Back in 2021 the then Portuguese government decided to make procurement more flexible as to ensure the Recovery and Resilience Facility money was spent quickly. In 2023 I warned about some of the risks that the reform had introduced here and here.

Fast forward to 2024 and the Portuguese Audit Court investigated 1632 contracts awarded with 87% being awarded without competition. These represented 64% of the total spend and the Court concluded that 39% should have been subjected to competition. The Court also found that 20% contracts lacked information about conflict of interest.

The most significant problem detected by the Court appears to be direct awards in succession to the same economic operator breaching the legal limits. I have long argued about the risks raised by direct awards in Portugal and this is simply the evidence of said risks being real.

It is unsurprising then that the Court has recommended a revision of the legal regime introduced in 2021, a tightening of the rules on successive direct awards to the same economic operator and improvements for transparency, including implementing the beneficial ownership commitments from the OGP the country signed up to in 2021.

I would add that this points towards a larger problem with public procurement: poor compliance with some formal requirements that despite being mandatory are routinely ignored since the risk of discovery is quite limited. Lack of contract award and modification notices for example, especially for contracts with no or limited competition (which the Court also mentions). In member States without the functional equivalent to the Portuguese Audit Court, how do we know what is the practice there?

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