Procurement Risk:
Very High
Score:
26/100
Government Policy
Q57
25/100
Does the country have legislation covering defence and security procurement with clauses specific to corruption risks, and are any items exempt from these laws?
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This indicator is not assigned a score in the GDI. The country has clear and comprehensive legislation that covers all defence and national security…
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In the country’s legislation, corruption risks are tackled in line with the European Directives [1]. However, it is very broad. As the law provides…
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Generally, the enforcement of public procurement rules in Hungary has been weak, despite the relatively strong/good laws. The XXX/2016 law [1] is used as…
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Q58
42/100
Is the defence procurement cycle process, from assessment of needs, through contract implementation and sign-off, all the way to asset disposal, disclosed to the public?
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The defence procurement cycle is partially done in line with the law on public procurement [1]. The assessment of needs is not entirely formal;…
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The defence procurement cycle for items procured in open procurement is more or less transparent. Information on the annual procurement plan, calls for offers,…
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As noted in 58A the defence procurement cycle is partially formal [1, 2], the assessment of needs is not an entirely formal process. Different…
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Q59
0/100
Are defence procurement oversight mechanisms in place and are these oversight mechanisms active and transparent?
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There is zero oversight on major military procurements and opposition members of the Defence Committee claim that they are also not informed on the…
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This indicator has been scored Not Applicable. While the oversight is non-existing for closed procurements (that is larger for 2018 then the military budget…
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This indicator has been scored Not Applicable. The Budapest based Corruption Research Center ranked the Hungarian system as 38 out of the 61 countries…
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The government published no forward planning for potential purchases. According to the interviewees conducted, no such long-term document exists at all. There is no…
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Only sporadic information is available on the planned purchases, and it is far from comprehensive [1]. The information published often lacks details, including deadlines…
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Most defence purchases are made public. The smaller the purchase, the greater the chance of accessing detailed information on the purchase [1]. In larger…
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Data is available in case of smaller purchases, but for the important military procurments no data available. The data of smaller purchases is accessable…
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Capability Gap and Requirements Definition
Q62
0/100
What procedures and standards are companies required to have – such as compliance programmes and business conduct programmes – in order to be able to bid for work for the Ministry of Defence or armed forces?
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Most companies bidding have to register as a NATO Commercial and Governmental Entity (NCAGE). This registration requires several steps to verify transparency [1] including…
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When procurement is completed through an open tender these policies are implemented, for the most part. There is no problem with open tenders (e.g.…
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Q63
17/100
Are procurement requirements derived from a national defence and security strategy, and are procurement decisions well-audited? Are defence purchases based on clearly identified and quantified requirements?
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Although the National Security Strategy(NSS) [1] and the National Military Strategy (NMS) [2] of Hungary were approved in 2012, the document is far too…
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Currently, there is no scrutiny of the actual purchases [1]. Members of the Parliamentary Commission have no access to the documents and details of…
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Purchases are outside the national strategy [1], and they refer to the Zrinyi 2026 Military Development Plan from 2017 [2].
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Tender Solicitation, Assessment and Contract Award
Q64
25/100
Is defence procurement generally conducted as open competition or is there a significant element of single-sourcing (that is, without competition)?
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There is not enough evidence to score this indicator. Currently, there is limited publicly available data that clarifies how much procurement is open-source. Although…
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According to the law, the Public Procurement Council can terminate bids in single-source competitions and repeat the tender; however, there has been no case…
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Q65
6/100
Are tender boards subject to regulations and codes of conduct and are their decisions subject to independent audit to ensure due process and fairness?
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The Ministry of Defence (MoD) has a multi-level procurement system. However, in former consultations with Deputy State Secretary Siklósi in 2017, he has highlighted…
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For major military procurements, there is no audit trail [1]. Neither the total value of the procurements have been made public recently, nor any…
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There is no public information on the operation and composition of tender boards availble online. Source 6 described their operation as ad hoc and…
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The 320/2015. (X. 30) government decree on the monitoring and authorisation of public procurements does not require the scrutiny of the specification of public…
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Q66
38/100
Does the country have legislation in place to discourage and punish collusion between bidders for defence and security contracts?
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The country has laws in place that prohibit collusion. It is important to note that these laws apply to the defence sector as well.…
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Procurement officials have limited power to exclude companies, but, they can initiate investigations with the relevant authorities [1]. The two relevant authorities are the…
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There are no known cases of collusion, as such this indicator is scored Not Applicable. For important procurements, authorities do not have the tools…
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There is not enough evidence to score this indicator, as no information is available on the frequency of the training.
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Contract Delivery and In-Service Support
Q67
25/100
Are there mechanisms and procedures that ensure that contractors meet their obligations on reporting and delivery?
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The Public Procurement Authority prepared detailed guides [1] for public procurement officials on how to monitor, assess and report upon a supplier’s service and…
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When there has been a public procurement the information is available on the relevant websites [1, 2]. Procurements can be searched by individuals seeking…
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According to the Law on Public Procurement, the contracting authority shall internally audit the procurement procedures. When reporting on the delivery of obligations, the…
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Although transparency is minimal some information was gathered through interviews. Based on the responses it is clear that when it comes politically neutral contracts…
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Q68
42/100
Are there mechanisms in place to allow companies to complain about perceived malpractice in procurement, and are companies protected from discrimination when they use these mechanisms?
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The most important military procurements are not subject to open public tenders. In case of those procurements that are subject of the tender process,…
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The effectiveness and accessibility of open tenders are high. However, in volume and importance, those bids are marginal compared to the major defence procurements…
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Source 6 highlighted that companies rarely use the Public Procurement Authority as they are afraid that they will be excluded from future business. However,…
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Although procurement officials – and the even more Central Procurement Authority [1], as well as the Central Procurement Council, have the right to sanction…
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As described earlier politics can derail any investigation and there have been several cases when the prosecutor general stopped investigations. The most important case…
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The Central Procurement Council has banned or terminated companies from participating in public procurement in the previous years. However, banning companies from further competitions…
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Offset Contracts
Q70
100/100
When negotiating offset contracts, does the government specifically address corruption risk by imposing anti-corruption due diligence on contractors and third parties?
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Since the new EU level regulations have come into force, there have been no ongoing or projected offset programmes in the country [1]. As…
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Since the new EU level regulations have come into force, there have been no ongoing or projected offset programmes in the country [1]. As…
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Since the new EU level regulations have come into force, there have been no ongoing or projected offset programmes in the country [1]. As…
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Since the new EU level regulations have come into force, there have been no ongoing or projected offset programmes in the country [1]. As…
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Since the new EU level regulations have come into force, there have been no ongoing or projected offset programmes in the country [1]. As…
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Agents / Brokers
Q73
25/100
How strongly does the government control the company’s use of agents and intermediaries in the procurement cycle?
View QuestionFinancing Package
Q74
0/100
Are the principal aspects of the financing package surrounding major arms deals, (such as payment timelines, interest rates, commercial loans or export credit agreements) made publicly available prior to the signing of contracts?
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The website of the Office for Defence Management of the Ministry of Defence (MoD) [1] is responsible for publishing information on defence procurement processes.…
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Seller Influence
Q75
NS/100
How common is it for defence acquisition decisions to be based on political influence by selling nations?
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This indicator is not assigned a score in the GDI. Deals often take into account the wider geopolitical context, when it comes to major…
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This indicator is not assigned a score in the GDI. The government rarely justifies its defence procurements with credible and detailed military needs.
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This indicator is not assigned a score in the GDI. In Hungary, there have been practically no cases when domestic pressure (meaning that pressure…
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