Companies Under EPPO Investigation Appear in Kulberg's Frozen ICT Procurements

Prime Minister Andris Kulbergs (AS) stated in an interview on Latvian Television's program “One on One” that the large state information and communication technology (ICT) procurements temporarily suspended by his order also feature companies named in a criminal proceeding launched by the European Public Prosecutor's Office (EPPO) for possible fraud.

Kulbergs emphasized that the sums allocated to these procurements are enormous, making the upcoming work extensive and complex to determine how to proceed with companies under suspicion. He also expects input from the Minister of Smart Administration and Regional Development, Edgars Tavars, who is scheduled to hold a press conference on these issues on June 18.

The prime minister criticized the current system, stating that Latvia “shot itself in the foot” by placing the State Digital Development Agency under a single ministry. In his view, it should be structured as a backbone to ensure a unified system and centralized ICT process across all ministries. He admitted he does not expect to resolve everything in his four months in office but hopes to at least lay the foundation.

Another issue Kulbergs highlighted is the lack of open-source software in state systems, which complicates interoperability and leads to building individual systems. When asked whether it is normal for only a few companies to handle most state ICT procurements, he replied that it would be acceptable if those companies also served private clients and exported, but unfortunately that is not the case.

Kulbergs imposed a 30-day moratorium on large ICT procurements valued over €142,999 (excluding VAT) to review their necessity. Exceptions apply to critical information systems, cybersecurity incidents, urgent legal requirements, and essential state interests. He noted that in 2024 and 2025, €452 million was spent on ICT projects, with 38% handled by three companies. Additionally, €30 million was spent on ICT hourly procurements in the first half of this year, compared to €50 million last year, criticizing the practice of buying hours instead of final solutions.

The Ministry of Finance, in cooperation with the Ministry of Smart Administration and Regional Development and the Procurement Monitoring Bureau, must prepare proposals within 30 days to improve the Electronic Procurement System. VARAM is also tasked with developing recommendations for improving ICT project management, considering the State Audit Office's suggestions. Industry associations have been invited to submit proposals, which will be reviewed by the Cabinet of Ministers after a month.