TENDER-X INTEGRITY RISK REPORT

19 Aug 2021 1

Sample

Municipality Poland

1. Tender-X risk score

The Tender-X integrity risk score of Sample

municipality is 59, which is below the average of

the benchmark organizations’ risk level (Figure

1). For the benchmark group, we selected

comparable Polish public contracts that are

from those product markets where the Sample

municipality is actively procuring – such as road

construction, road lights or cleaning services –

and similar in size. In addition, we disregarded

contracts awarded by small municipalities, that

award less than 20 contracts. In total, we

identified 278,452 benchmark contracts

between 2008 and 2018, that were awarded by

2,251 buyers.

Figure 1 shows the distribution of the 2,251

municipalities and the Sample municipality

according to their average Tender-X scores. All

figures in this report with a benchmark group

present the average risks of these benchmark

contracts compared to Sample municipality. See

more details on data and benchmarking in the

Notes.

Individual integrity risk indicators

Sample municipality scores lower on four out of

five individual risk indicators: its tenders have

significantly lower share of single bidding and

expedited bid results, while its share of closed

procedures and missing call for tenders is

slightly lower than the benchmark organizations’ (Figure 2). However, Sample municipality’s share

of tenders awarded on a short notice is twice as

high as the benchmark contracts.

Figure 1: Sample municipality's Tender-X integrity risk score

compared to benchmark public buyers

(0: low risk, 100: high risk)

Figure 2: Individual Tender-X integrity risk indicators

Contents

1 Tender-X risk score 1

2 Integrity risk profile 2

3 Public procurement profile 5

4 Notes 6

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2. Integrity risk profile

Tender-X integrity risk score over time

Sample municipality’s Tender-X integrity risk score was higher compared to the benchmark group only

between 2008 and 2010 (Figure 3) and has been significantly lower since 2011. Sample municipality has

only 50 contracts for 2018, while it awarded 400-800 contracts in previous years. Overall, Sample

municipality had an average Tender-X integrity risk score of 59 which means that more than half of the

elementary risk indicators flagged some contract level risks on average between 2008 and 2018.

However, the average risk is mainly driven by the early years. In the more recent period of 2015-2018,

the average risk score is only around 30-35.

Figure 3: Tender-X integrity risk score by years

Individual risk indicator analysis

The share of single-bidder contracts awarded by Sample municipality was around 12 percentage points

higher than the benchmark in 2009 and 2010. However, this share decreased significantly and was

consistently lower by 6-12 percentage points since 2011.1

Figure 4: Average share of single-bidder contracts by year

1 We have data for 4,431 contracts awarded by Sample municipality between 2008-2018 with known single-bidding information.

There is only 1 contract awarded in 2018 with single-bidder information.

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The difference in the share of contracts awarded through closed procedures shows a similar pattern: the

share of closed procedures was 1-10 percentage points higher between 2008-2010 compared to the

benchmark group. Since 2011, the share of closed procedures is significantly lower, often only half of

the benchmark values.

Figure 5: Average share of closed procedures by year

Product market analysis

Looking at Sample municipality’s five largest sectors, its average integrity risk score is 16 percentage

points higher than the benchmark group in road construction works. It has close to benchmark risk

scores in ticket and package tours services and engineering design services, and significantly lower than

benchmark risk scores for buying real estate services and cleaning services.2 Note that road construction

works on their own account for more than 28% of Sample municipality’s total spending.

Figure 6: Tender-X integrity risk scores by sector

2 The sectors shown in Figure 6 cover more than 35% of Sample municipality’s spending.

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Supplier analysis

The average risks of Sample municipality’s most frequently contracted suppliers vary but are all below

Sample municipality’s average risk score of 59. Two out of the six most frequently contracted suppliers

of Sample municipality3 (Supplier B and F) have a 7-11 points higher Tender-X integrity risk score

compared to those contracts that these suppliers won from other public buyers (benchmark group4). As

Table 1 shows, Supplier B has roughly 9-times (EUR 3.2 million vs. 350,000), while Supplier F has 3-times

(EUR 321,000 vs. 99,000) more procurement income from Sample municipality compared to all other

contracts they won from other municipal organizations. Suppliers D and E have roughly identical risks,

while suppliers A and C have 31- and 17-points lower risks scores. Even though contractual risks of these

suppliers are comparable or lower than their benchmark contracts, their procurement income is often

skewed towards Sample municipality. For example, Supplier E gets 15-times more procurement income

from Sample municipality (EUR 46m vs. 3m) compared to all of its other municipal contracts (Table 1).

Figure 7: Tender-X integrity risk scores by suppliers

Sample municipality Benchmark group

Supplier A 266,418 278,710

Supplier B 3,222,521 351,421

Supplier C 14,261,025 1,396,201

Supplier D 13,723,996 1,207,033

Supplier E 46,481,875 3,097,660

Supplier F 321,610 99,468

Table 1: Estimated total contract value awarded to the most frequently contracted suppliers of Sample Municipality

3 The six most frequently contracted suppliers of Sample municipality (Figure 9) were awarded 481 contracts since 2008. 4 The benchmark contracts for each supplier are the ones with the same product category as the ones from Sample municipality

awarded (mostly construction related works) but awarded by another public buyer.

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3. Public procurement profile

Contract value

Sample municipality awarded 5,547 contracts worth of EUR 514 million between 2008 and 2019. Its

average contract size is EUR 92,000 and ranges between EUR 40,000-250,000 each year5. It awarded

particularly large sums in 2011 and 2016. Sample municipality awards around 400-800 contracts every

year.

Figure 8: Yearly contract value and number of contracts awarded by Sample municipality

Sectoral breakdown

Most of the public contracts awarded by Sample municipality are construction related: more than 50% is

related to infrastructure, and further roughly 18% to other construction works. It also procures cleaning

services and motor vehicles that account for 5% and 3% of total spending, respectively.

Figure 9: Sample municipality’s estimated total procurement spending by product market

5 For more information on the dataset and methodology, see the Notes.

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4. Notes

Risk indicators

The Tender-X integrity risk score quantifies the likelihood of anti-competitive practices that aim to favour

a specific company. Our underlying indicator definitions are the following:

• Single bidding: a single-bidder contract refers to a contract that received only a single bid during the

tendering process.

• Missing call for tender: Call for Tenders publication is not required for certain procedures. However, public

buyers often fail to put out these publications when regulations would require it, which might signal a

deliberately anti-competitive practice.

• Closed procedure: non-open procedures can be only used under exceptional circumstances or if the tender

is low value in most jurisdictions. For example, a natural disaster or recurrently unsuccessful open tendering

procedures can be a basis of conducting a negotiated procedure where only invited companies can bid.

However, these legitimate reasons for non-open procedures can be misused in practice.

• Short notice: Companies can only participate in public tenders if they have sufficient time to prepare and

submit a bid. Public procurement regulation sets out the minimum bidding period length in most countries.

However, the bidding period length are often shorter in practice – based on the official deadlines published

in the procurement notices.

• Expedited bid results: unusually quick decision on awarding a public contract to a supplier (i.e. the time

between the end of bid submission and the award decision) might indicate the risk of a particularistic

relationship between a buyer and a company.

• Tender-X integrity risk score: it is the average of the 5 individual risk scores at the contract level. Company-

level scores are the weighted (contract value) averages of contract level integrity scores per company. The

Tender-X integrity risk score values range from 0 to 100, with higher values indicative of higher risk of a tender

being awarded in an anti-competitive way.

Data sources and processing

Our public procurement data comes from Government Transparency Institute6 which collects and

maintains public contracting datasets across the world, from more than 50 countries. The Polish data is

collected from 7BZP_PublicWebService , the official government procurement repository of the country,

and the TED (Tenders Electronic Daily), that published above-EU threshold contracts. It publishes call for

tender, contract award and other tendering related announcements.

The published procurement announcements are processed in the following main steps.8 First,

announcements are scraped from the central website; second, individual fields are parsed into a

structured data table from each notice separately – such as buyer name, product codes, company names,

dates or contract values; third, notices that are related to the same tendering procedure are connected

based on cross-references. Fourth, a single record is created by combining the information in the related

announcements that describe the same contracting process. Fifth, the combined database goes through

standard data quality checks and where possible corrections.

Connected company names and organization name deduplication

As procurement notices do not contain unique organization identifiers, we group companies and public

organizations based on their names and addresses. We use probabilistic matching whereby we connect

similar name variants of the same organization (e.g. ‘ABC Ltd.’ and ‘abc limited’). In this report we included

data from all public tenders where the public organizations’ (buyer) name and address (or city) are as

listed in Table 2 (the first column contains the different spelling variants connected in a real-life report).

Due to the lack of unique identifiers, this character-matching-based method is the best available to

identify most of the contracts awarded by Sample municipality.

6 https://digiwhist.eu/, data updates and maintenance are managed by the Government Transparency Institute (http://

govtransparency.eu/). 7 The website publishing the processed procurement information is http://websrv.bzp.uzp.gov.pl/BZP_PublicWebService.asmx. 8 For a technical description of the data processing, see: https://github.com/digiwhist/wp2_documents/blob/master/d2_8.pdf

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Name Address Number of contracts

Sample municipality City A 5,578

Sample municipality NA 88

Table 2: Public organization names, addresses and number of contracts regarded as “Sample municipality” included in the analysis

Dataset and benchmark product markets

We define a benchmark group based on contracts that are comparable to the ones awarded by Sample

municipality. We used the following steps. First, we identified all the main product categories that Sample

municipality (see previous section on how we define “Sample municipality”) awarded at least one contract

based on the 5,656 contracts in the dataset.9 Second, we only kept contracts that have the same main

product categories we found for Sample municipality. We list the 2-digit-level product codes in Table 3

and also show how many lower-level product codes we have identified based on the contracts awarded

by the Sample Municipality. For example, the municipality has awarded contracts related to fencing,

railing and safety equipment installation work (4534000) and installation of road lighting equipment

(45316110) – that are among the 105 different specific product categories under the higher-level

construction code of 45. Third, we have only kept contracts that are comparable in size by keeping only

those that are between the 10th and 90th percentile of the ones awarded by the Sample Municipality.

Fourth, we filtered out contracts awarded by small municipalities that have awarded less than twenty

tenders. As a result, we found 278,452 contracts – awarded by 2,251 municipal organizations – that we

can use as contract-level benchmarks. We calculated organization-level indicators by averaging the

contract level indicators by public organizations (e.g. Figure 1). All graphs show estimations based on the

largest sub-sample where the indicator values are non-missing. For example, some Sample municipality

or benchmark contracts do not contain the final price or the number of bidders.

9 Note that some of these contracts were not successfully awarded, which explains the difference between the eventually analysed

number of contracts and the originally identified 5,656.

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CPV code Product category Number of more detailed

CPV categories

15 Food, beverages, tobacco and related products 1

22 Printed matter and related products 10

30 Office and computing machinery, equipment and supplies except

furniture and software packages 22

31 Electrical machinery, apparatus, equipment and consumables;

Lighting 3

32 Radio, television, communication, telecommunication and related

equipment 12

33 Medical equipment, pharmaceuticals and personal care products 2

34 Transport equipment and auxiliary products to transportation 11

35 Security, fire-fighting, police and defence equipment 1

38 Laboratory, optical and precision equipment (excl. glasses) 1

39 Furniture (incl. office furniture), furnishings, domestic appliances (excl.

lighting) and cleaning products 9

42 Industrial machinery 4

43 Machinery for mining, quarrying, construction equipment 1

44 Construction structures and materials; auxiliary products to

construction (excepts electric apparatus) 9

45 Construction work 105

48 Software package and information systems 9

50 Repair and maintenance services 16

51 Installation services (except software) 2

55 Hotel, restaurant and retail trade services 4

60 Transport services (excl. Waste transport) 1

63 Supporting and auxiliary transport services; travel agencies services 6

64 Postal and telecommunications services 4

65 Public utilities 4

66 Financial and insurance services 4

70 Real estate services 3

71 Architectural, construction, engineering and inspection services 32

72 IT services: consulting, software development, Internet and support 19

73 Research and development services and related consultancy services 3

75 Administration, defence and social security services 1

77 Agricultural, forestry, horticultural, aquacultural and apicultural

services 10

79 Business services: law, marketing, consulting, recruitment, printing

and security 29

80 Education and training services 2

85 Health and social work services 7

9 Petroleum products, fuel, electricity and other sources of energy 6

90 Sewage-, refuse-, cleaning-, and environmental services 20

92 Recreational, cultural and sporting services 11

98 Other community, social and personal services 2

Table 3: Product markets where Sample municipality awarded contracts

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Disclaimer

This report uses publicly available procurement data collected by Tender-X. We apply several additional

steps of data cleaning (e.g. harmonizing prices), use machine-learning algorithms to identify all records

belonging to the same organization, create benchmark categories and calculate tailor-made, contract

and organizational-level risk indicators.

We cannot, however, resolve data errors coming from erroneous source data or imperfect data parsing.

Public procurement announcements often contain incomplete information. Public organizations

sometimes fail to fill out the forms properly which leads to missing prices, number of bids or

miscategorized product categories (e.g. too wide or too narrow). In addition, collecting data from

procurement announcements is a complicated exercise. For example, multiple publications need to be

connected to each tender, which is not feasible when accurate tender identifiers are missing.

Furthermore, as data is collected from several differently structured announcements, certain data

collection errors may arise. Conclusively, all statistics and indicators in this report should be regarded as

estimations.

Further reporting options

This report focuses on a limited set of targeted

integrity risk indicators. If you are interested in more

analytics, we can provide tailored, in-depth

organisational and market risk assessment meeting

your needs.

First, it can include data improvements, detailed

comparisons with other market players, buyer risk

assessment and advanced benchmarking.

Second, we can provide a qualitative risk assessment

based on desktop research and interviews.

Contact the Tender-X team at info@tenderx.eu