Latvia to audit large public procurements for efficiency

The Ministry of Finance has drafted a Cabinet protocol decision introducing a mandatory efficiency assessment for major public procurements. The new rules will apply to contracts with an estimated value of €140,000 or more for goods and services, and €1 million or more for construction works.

The assessment covers both ongoing procurements and those still in the planning stage, provided no contract has been signed yet. Special attention is required for information and communication technology (ICT) projects, following a prime ministerial resolution emphasizing the need to evaluate the proportionality of requirements.

Key aspects to be assessed include: justification of the need, cost justification, proportionality of supplier requirements, evaluation of alternatives, and risks of cost overruns or dependency on specific suppliers.

Ministries must submit their assessment results to the Cabinet by September 1, 2026. The requirement also applies to fully state-owned companies, but evaluations must not jeopardize their operational continuity or the provision of critical public services.

The Ministry of Finance states the goal is to optimize spending and avoid procuring excessive or unnecessary solutions, thereby reducing potential cost overruns and promoting more competitive prices for end users.