The invasion of the €14,999.99 minor contracts

The data used in this article come from the Public Procurement Platform, where the majority of local and autonomous public authorities publish their contracts. We have downloaded all minor contracts published from the 1st of January 2018, the date on which they were made available, until the 31st of July 2019, the date on which we initiated our in-depth analysis. There are some 346,726 in total.

When analysing their monetary value, we have used the tax-free tender sum , which is the one that determines which type of procedure to follow.

We have excluded from the database those entities that are not public authorities (a concept that is used to classify the different types of entity and their obligations), because minor contract regulations are not 100% applicable to them and we cannot treat such contracts under the same criteria as those that are. Thus, using the existing classification on the public procurement website, amongst other entities in the public sector we have removed the mutual insurance companies, which don't count, and the public sector societies, consortiums and foundations, because some of these are considered to be public authorities and others not.

To be able to clearly demonstrate just how close these minor contracts fly to the legal limits, we decided to exclude contracts for less than €5,000 from the visualisation—and have made this explicit throughout—as in many cases these can be awarded using a far simpler process. Meanwhile, being numerous and for very small sums, they skewed the infographic.

Depending on the key points to be analysed—and bearing in mind that amendments to the Public Procurement Law (LCSP in Spanish) that changed the thresholds of minor contracts came into force on the 18th of March 2018—we have used one range of dates or another for the available data.

The aim was to create a database that would allow us to perform the consultations necessary to spot just how close these contracts come to the limit, how many identical contracts changed price when the thresholds were amended, and which exceed these and are thus illegal.

Cleansing

We created files to analyse each point covered in the article and applied a cleansing process to the whole lot to detect errors and, above all, exclude from our data those contracts to which the thresholds of €15,000 and €40,000 euros do not apply.

To browse the possible red flags, it was vital to cleanse the files we were going to be working with, as we had detected multiple errors in the original data. In all cases where errors were found, these have been resolved. In some cases, for example, we have revealed that what may appear to be illegal contract splitting is in fact files that have been duplicated by mistake. This—the data cleansing—proved to be the most complex and toughest part of the whole process.

We removed all contract reports and possible duplicates and other rows that do not constitute minor contracts. Moreover, we reviewed all those where the contract value doesn't appear or is €0 to search for this sum in other columns, such as the sum finally awarded.

Minor contracts can only be for works, goods and services, but many had codes for other things such as licences, administration, private contracts, and so on. In such cases, we have analysed the object to pinpoint what its real category is (in many cases the code was used incorrectly, for example, with many works contracts marked down as goods and services). Once this was done, we removed those that were not in fact minor: those for public-private partnerships, for assets…. We kept private contracts (such as those for concert acts) because as these only deal with public authorities, they are subject to the minor contract regulations just like the others.

We have applied the four types of exemption stipulated by law:

• General. Relations between authorities and those businesses that are not affected by the rules of the law, such as water and transport companies (regulated by a different law), companies in the field of arbitration, cooperation between several states… These types of contract should not appear on the list of minor contracts, but they do, hence we have removed them to ensure they are not considered as such.
• Subscription to journals and databases. These types of contract can be awarded as minor contracts albeit up to much higher limits—those covered by harmonised regulation—hence their removal.
• Scientific. An addition to the act allows for public servants in the Spanish Science, Technology and Business System to have a higher limit—€50,000 compared to €15,000. But only for research contracts, not general service contracts. We have removed all those that are rightly for research, but left those (and hence the chopping up) for general services that exploit, or simply incorrectly apply, this exemption. To do this, we collated the public servants in the Spanish Science, Technology and Business System using those entities included in the map of the Spanish R + D + i Observatory (ICONO in Spanish) and the Spanish Foundation for Science and Technology (FECYT). We then analysed the public contracts for goods and services signed by these bodies that were considered to be minor contracts. In this case, the limit for minor contracts is set at €50,000, in accordance with the exemptions stipulated by law. Lastly, we checked whether these minor contracts were for general services and infrastructure or not.
• Whenever information on the object allowed us to do so, we have assessed whether they were covered by the exemption that allows for repeat contracts with the same company where these can only be ordered from a particular company because it is for a unique work of art, there is no competition for technical reasons, or rights such as intellectual and industrial property must be protected.

Despite applying all of these exemptions, almost 1,700 contracts still exceed the thresholds set by law.

The data

In addition to the general database used in the visualization, where all contracts exceeding the thresholds have been cleansed, we have created specific queries to find relevant cases. Thus the files—now cleansed—used in our analysis, and which can be downloaded and reused via the Civio open data website are:

• Price changes. Contracts awarded by the same public authority to the same businessperson that changed price in line with the threshold amendments. To this end, we have extracted companies awarded a contract for over €17,900 (in goods and services) and for over €48,000 (in works) before the change of law; and those that after the amendment were awarded new contracts greater than €12,000. These are the files we reviewed to manually pinpoint suspicious price changes.
  • For goods and services.
  • For works.
• Contracts that exceed the thresholds and are therefore illegal.
  • For works, €40,000 +.
  • For goods and services, €15,000 +.
• Small contracts. Minor contracts for less than €

Sources and experts consulted

In addition to an in-depth analysis of the LCSP, we have studied articles on the interpretation of Article 118 (such as this and this, the decisions made by the various advisory boards and OIRESCON on this matter, reports on specific matters, such as licences as minor contracts and in-depth analyses such as those of the Agencia Antifrau.

We have also consulted procurement experts on minor contract processing times, whether the rules apply to private contracts, and a few specific cases that caught our attention. Many thanks to Esteban Umerez, José María Gimeno, Ana Isabel Beltrán, Lola Bataller and Roger Folguera.

If you spot any errors, please let us know

We are aware that the original source, the Public Procurement Portal, contained numerous errors, probably originating from their submission to the system by the contracting public bodies. All of those we've detected have been resolved. We have treated the data with the utmost rigour, however if you do discover any errors in these or in our analysis, please write to us at [email protected] and we will happily put things right.