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Area 4. Transparent and effective public investment

Effectiveness:
35.8%

Parameters in Area

Subsection 4.1 Supervisory boards of companies serving public interest Justification and sources
#90 Composition of supervisory boards
Members of supervisory boards of companies serving public interest* should be selected from persons representing public interest, on the one hand, and professional experts, on the other hand. They all should have clean criminal record, not be in a situation of conflict of interest and have minimum qualification requirements for exercising their function in the area where the company is active.
* A company serving public interest means an undertaking or a company (firm) owned by the state, regions or municipalities.
Effectiveness
75%
Progression
40%
More
#91 Political members of supervisory boards in the public office
Persons representing public interest should be politicians elected to a public office or officers appointed to perform public duties. Non-elected politicians who are party members only should not be eligible for supervisory boards of companies serving public interest.
Effectiveness
75%
Progression
40%
More
#92 Political members of supervisory boards from different state bodies
To avoid conflict of interest the elected politician or nominated officers should as a member of supervisory board come from a different part of the state departments.*
* For example, if the owner of a company serving public interest is the state and its rights are enforced by the competent ministry, and in turn, by the ministry officer, the member of supervisory board shall not come from the same ministry or possibly not from the government; in such a case, politically nominated member of supervisory board could be member of a legislative body and be a member of different political party than the minister which is a superior to the officer enforcing ownership rights of the state.
Effectiveness
50%
Progression
40%
More
#93 One person in maximum two supervisory boards
One person, be it a person representing public interest or professional, shoud be a parallel member of two supervisory boards at most.
Effectiveness
25%
Progression
40%
More
#94 Remuneration of supervisory board members
A person representing public interest in the supervisory board of a company serving public interest whose membership results from public office should only receive remuneration covering costs related to his/her membership in the supervisory board. Person that is in the supervisory board on due to his/her professional skills should receive remuneration according to the nature of his/her managerial post and in relation to the nature of amount of time (part-time, full-time) spent on performing his/her duties in the supervisory board.
Effectiveness
25%
Progression
100%
More
#95 Obligation of politically nominated supervisory board members to inform the public
Persons representing public interest in supervisory boards should have a special obligation to inform the general public about matters relating to areas where the company serving public interest is subject to Act on free access to information.
Effectiveness
0%
Progression
0%
More
#96 Tools for supervisory board members to obtain information
If a member of advisory board does not receive for certain period of time requested information from the management, he/she should be obliged to request to call the general meeting that would solve the problem with the board of directors (management) of the company serving public interest.
Effectiveness
0%
Progression
10%
More
#97 Cooperation of politically nominated supervisory board members in the performance of control checks by the Supervisory Audit Authority
Elected politicians holding a post in the supervisory board of a company serving public interest should thanks to their access to information about functioning of this company cooperate in controlling activities of the Supreme Audit Authority in respect of the company in question.
Effectiveness
0%
Progression
0%
More
#98 Selection fo supervisory board members
The state should try to delimit at least in general way the criteria for choosing apolitical professionals to supervisory boards of companies serving public interest. Persons fulfilling these criteria should be chosen in an open selection procedure afterwards.
Effectiveness
75%
Progression
40%
More
Subsection 4.2 Evaluation of investments from the public interest perspective Justification and sources
#99 Cost and benefit analysis
Before anyone decides to carry out a project paid from public funds it is necessary to determine the costs of such project in advance and the benefits which it will bring to citizens for the overall period of its expected existence.
Effectiveness
75%
Progression
60%
More
#100 Analysis of the overall costs
With respect to the public investment it is necessary take into account not only to the costs of investment but all its costs, that is also costs resulting from the subsequent operation and use of the public works. To evaluate the overall sustainability of the investment it is possible to use the tools commonly used in business practice.
Effectiveness
50%
Progression
60%
More
#101 Obligation of politicians to demonstrate declared benefits of a costlier public investment
From certain financial limit a preliminary obligation should be imposed upon politicians realising public investments consisting in proving that the funds collected from citizens in the form of taxes will be used effectively and efficiently. Investments from the public funds should only be used on projects that have clear benefits or growth potential, such as missing infrastructure.
Effectiveness
50%
Progression
60%
More
#102 Identification of citizens' need
To define the purpose of the public investment it is necessary to identify citizen’s needs, that is to determine and describe the problems which citizens face. Identification of needs shall be conducted, in particular at the local level, by making surveys among citizens concerned.
Effectiveness
0%
Progression
10%
More
#103 Identification of options
To enhance the cost-effectiveness of the solution which is to be financed by the public investments, several alternatives of the solutions should be submitted for consideration.*
* For example, is the best possible solution to build a new four-lane highway to downtown or is it better to repair the existing road and build a cycle path next to it?
Effectiveness
75%
Progression
60%
More
#104 Evaluation of different options
Subsequently, it is necessary to evaluate options especially from the view of their financial burden and benefits for the citizens and entrepreneurs, compare the alternatives and to choose the one that is most suited for the given place and time.
Effectiveness
75%
Progression
60%
More
#105 Standardised impact assessment
In parallel, a standardized impact assessment of investment project funded with public money should be introduced. The standards should be the same regardless of the origin of funds – whether they come from the municipal budget or from state subsidies. Metrics of costs and benefits for citizens and entrepreneurs should be unified in a way that one can tell which project is sensible and which not.
Effectiveness
0%
Progression
10%
More
#106 Disclosure of background documents for the planned public investments
All materials for evaluation of projects should be published on the internet so that the citizens could express their opinion on the investment project before the investment is carried out.
Effectiveness
25%
Progression
20%
More
Subsection 4.3 Tools against “tailoring” of public procurement contracts Justification and sources
#107 Open tendering procedures as wide as possible
Public contracts should be tendered as much as possible in the open tendering procedure. IT contracts should be tendered in the competitive dialogue regime.
Effectiveness
25%
Progression
100%
More
#108 Itemized budget for standardized public contracts
Itemized budget should be a part of tender documentation for standardized contracts, in particular for construction contracts. The expected quality of each given item shall be defined by the state, for example, which quality should the surface material of the highway possess. Providing that an itemized budget is well defined, the price should be the main criteria for the assessment of submitted offers. Public contracts should not be artificially divided into smaller ones.
Effectiveness
50%
Progression
90%
More
#109 Limitation of a technical qualification criteria to a single one
Technical qualification criteria should be based on a principle that a the generally sufficient requirement is the realisation of a similar contract in the past.
Effectiveness
25%
Progression
90%
More
#110 Payment of a part of the price after the completion of the contract
At least 30% of the total price should be paid after completion and takeover of the contract (or clearly specified stage) in order to create pressure on quality.
Effectiveness
0%
Progression
0%
More
#111 Prohibition of additional costs
The limit under which it would not be obligatory to start a new tendering procedure due to unforeseen additional works whould not exceed 10 %. If a supplier due to his/her fault exceeds the budget, he/she should pay the additional costs from his/her pocket.
Effectiveness
50%
Progression
100%
More
#112 Lists of subcontractors and a prohibition to play for more than one team
An obligation to publish the list of subcontractors should be introduced as well as the prohibition to “play for more than one team”. All crucial subcontractors that supply more than 10 % of total financial amount of the contract should be stated in the bid specifying which part of the contract are they are supposed to carry out. The tenderer should not anyhow participate in the realization of the contract if any other than his/her bid is chosen.
Effectiveness
25%
Progression
100%
More
#113 Standardised contract-type for public investments
State should use only its own standardized contract type to prevent the situation when the contract terms and conditions are prepared by the winning candidates. Specifics of individual contract should be stated in appendices of such contracts.
Effectiveness
0%
Progression
0%
More
#114 Externalized evaluation of offers
The evaluation of the best bid should be as externalized as possible.
Effectiveness
0%
Progression
0%
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Subsection 4.4 Disclosing ultimate beneficial owners of companies in public procurement Justification and sources
#115 Transparent ownership structure of companies receiving public funds
Ultimate beneficial owners of companies that won the public procurement tender, including their subcontractors, should be fully disclosed. *
* Companies receiving subsidies, companies carrying out public contracts, including sub-contractors, companies which buy or sell something to the state or which rent to or lease something from the state and finally companies which contract with state owned enterprises or companies in situations where those companies provide public service.
Effectiveness
75%
Progression
90%
More
#116 Exemptions from the ownership structure disclosure rule
Exemption should be granted only to companies whose shares are traded on the stock market (stocks are trade too fast for anyone to be able to monitor the owners and it is not technically possible neither) as well as for banks and insurance companies (their ownership structure is controlled by Czech National Bank and all shareholder change is subject to its approval).
Effectiveness
25%
Progression
90%
More
#117 Declaration of ownership structures
Company receiving public funds should provide the state with a declaration on its ownership structure in which it demonstrates in a clear graphical way its ownership structure up to the ultimate beneficial owner(s).
Effectiveness
50%
Progression
90%
More
#118 Proof of the ownership structures
The ownership structure up to the ultimate beneficial owners is proven by electronic excerpts from relevant registers or securities accounts.
Effectiveness
50%
Progression
90%
More
#119 Proving of ownership structures of foreign companies with paper shares
Foreign companies with certificated bearer shares that want to receive public funds from the Czech taxpayer, whether directly or indirectly, should be obliged to deposit their stock certificates in custody order to credibly prove their ownership structure.
Effectiveness
25%
Progression
90%
More
#120 Check of the submitted ownership structures
In case of doubt about the accuracy of the ownership structure the Financial Analytical Unit of the Ministry of Finance should check the declaration and evidence substantiating the disclosed corporate ownership structure. It should not be possible to own a Czech company that participates on Czech public funds from a country that does not cooperate with the Czech authorities in this context.
Effectiveness
0%
Progression
30%
More
#121 Time period for which the ownership structures must be disclosed
The ownership structure should be revealed for the whole period of utilization of public money and, alternatively, a year or two after because of the company’s dividends are usually paid out with a certain delay.
Effectiveness
0%
Progression
30%
More
#122 Update of ownership structures
If the corporate ownership structure of a company changes during the period of utilization of public money, the company should submit its updated ownership structure at the latest at the end of quarter in which the change occurred; if the structure does not in the meantime change the company submits its ownership structure at the end of utilization of public money.
Effectiveness
0%
Progression
30%
More
#123 Concealing of ultimate beneficial owner(s) not within lawyers' secret
Advocates should be prohibited from concealing the identity of companies’ true ultimate beneficial owners.
Effectiveness
0%
Progression
0%
More
#124 Constraining the dominance of persons receiving public funds
No natural person should be allowed to receive through companies that he/she owns more than a certain percentage of public money.
Effectiveness
100%
Progression
90%
More
Subsection 4.5 Fair assessment of public procurement bids Justification and sources
#125 Broad lists of professional experts for selection into committees for bid evaluations
It is necessary to create broad lists of professional experts from which the evaluators for individual tenders would be randomly selected. The experts on the lists would be chosen on the basis of their education and practice. The lists should include also foreign experts.
Effectiveness
0%
Progression
0%
More
#126 Random computer based selection of evaluators from the expert lists
Individual experts should be chosen randomly from the above specified lists using certified software evaluation committees for individual tenders. The experts should be independent from the contracting authority.
Effectiveness
0%
Progression
0%
More
#127 Bid assessment
Experts chosen to evaluate individual tenders should not know each other. They shall write their evaluation independently on each other. They shall convene only if their conclusions were not unequivocal.*
* Example: Three selected experts evaluate two offers. All three agree in their evaluations that the first offer is the best; in such a case they do not meet. However, if two experts favoured the first offer, but the third the second offer, those experts would meet to compare their evaluations.
Effectiveness
0%
Progression
0%
More
#128 Computer analysis of evaluators
A certified software should analyze who was assigned to which tender evaluation, what did he/she evaluate and how etc. The program should ensure that the same experts were not assigned to evaluate competitions where the same companies would be competing.
Effectiveness
0%
Progression
0%
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#129 Public control of the evaluation software
The results and analyses of expert assignments to individual tenders performed by the certified software should be published to ensure control by the public of software functioning.
Effectiveness
0%
Progression
0%
More
#130 Sanctions for evaluators for manipulation of assessments
If the certified software determined existence of irregularities in assignment of experts or their evaluations, the expert in question should be removed from the list of evaluators or face a threat of a ban of his/her professional activities.
Effectiveness
0%
Progression
0%
More