The Hungarian Competition Authority (GVH) has initiated a new expedited sector investigation to explore the reasons behind single-bid public procurement procedures. Following its previous examination of the medical imaging diagnostics market, the GVH is now turning its attention to the vehicle procurement market. This initiative aligns with the Hungarian government's commitments to the European Commission and aims to enhance the effective use of public funds.

The GVH is mandated to address issues related to public procurement procedures, particularly focusing on uncovering and preventing public procurement cartels. Single-bid procurements pose a significant challenge, as the absence of competition allows bidders to set prices freely, ultimately undermining the efficiency of budgetary resource utilization and harming public interest.

In early 2023, the Hungarian government adopted an action plan aimed at increasing competition levels in public procurement from 2023 to 2026. One of the main objectives of this plan is to significantly reduce the proportion of single-bid procurements in Hungary, thereby fulfilling commitments made to the European Commission. The government has tasked the GVH president with conducting three sector investigations to uncover the causes of single-bid procurements.

The GVH concluded its first expedited sector investigation on December 19, 2024, focusing on the medical equipment market, particularly imaging devices such as MRIs, CTs, and ultrasound machines. The authority found that the proportion of single-bid procurements decreased between 2021 and 2023, both in the overall Hungarian public procurement market and specifically in the medical imaging diagnostics sector, aligning with the government's commitments to the European Commission. The GVH also proposed measures to further reduce the number of single-bid procurements.

As the second phase of its investigation, the GVH has now launched an expedited sector investigation into the domestic public procurement market for passenger and commercial vehicles. Concurrently, the authority conducted unannounced on-site inspections, authorized by preliminary judicial approval, to gather significant amounts of data and information.

This expedited sector investigation serves to identify market problems as outlined in the competition law, particularly when circumstances indicate distortions or limitations in competition, necessitating urgent intervention in the sector. The GVH will analyze information collected from market participants to uncover the detailed causes of competition distortion and take necessary steps to address them.

Upon concluding the information gathering and data analysis, the GVH will summarize the results of the expedited sector investigation in a public report, which it has 30 days to prepare, with the possibility of extending this period twice by 30 days if justified.

According to data from the Public Procurement Authority, the proportion of single-bid contracts has been steadily decreasing in Hungary, indicating a revival of market competition. In the national procedure, the number of contracts related to such procedures dropped from 24.8% in the first half of 2022 to 11.7% in 2024, while in the EU procedure, the proportion decreased from 38% to 27.9% during the same period.