site.btaAnti-Corruption Fund Investigation Points to Irregularities in Public Procurement Contracts at 4 Cultural Institutions

A new investigation by the Anti-Corruption Fund (ACF) has raised suspicions of irregularities and rigged public procurement contracts at four cultural institutions. The public procurement contracts for renovations and architectural supervision have a total value of nearly EUR 5 million and are being carried out at four institutions under the Culture Ministry: the Aleko Konstantinov State Satirical Theatre in Sofia, the Drama Theatre in Lovech, the Small City Theatre Behind the Canal in Sofia, and the National Educational Complex for Culture with a Lyceum for the Study of Italian Language and Culture (NUKK) in Sofia.

Daniela Peneva, a legal expert at the ACF, commented that an analysis of the tender procedures reviewed by the ACF team reveals a number of irregularities and violations of the tender conditions. "The email correspondence we have, for its part, raises suspicions of rigged tenders with a predetermined selection of contractors," she noted.

An analysis of the tender documentation shows that in five of the eight contracts reviewed, the winning companies have not completed projects with a similar scope in the past five years, as is required. One of the winning companies, Multi Stroi Comers EOOD, also fails to meet the financial criteria in the contract for the renovation of the NUKK building.

The tender documentation for the renovation of the hall at the Small City Theatre Behind the Canal reveals yet another violation. In this case, the evaluation committee has disqualified candidates for non-compliance with the technical criteria after having already opened their price proposals.

An ACF review shows that the contracts in question have been awarded either individually or through consortia to the companies Crypto Energy EOOD, Multi Stroi Comers EOOD, and D&D OOD. Publicly available information reveals numerous links between them.

Two of the companies - Crypto Energy EOOD and Multi Stroi Comers EOOD - are linked to the same person, Petar Dyulgerov. The offices of both companies are located at the same address in Sofia. Dyulgerov's phone number is also listed as the contact for the company Theatral, which won the procurement procedure for the Small City Theatre Behind the Canal. Once again, Multi Stroi Comers and D&D are listed as partners in this venture.

In the organization of all contracts, two names are present repeatedly - Ivan Sotirov and Kristian Sotirov. They are a father-and-son team of lawyers who have been hired by the contracting authorities as external experts to prepare the contract documentation, and they are also members of the committees that evaluate the candidates' proposals.

The registration of Theatral was filed by attorney Ivan Sotirov. A member of the evaluation committee that selected the company as the contractor is Ivan Sotirov's son, Kristian Sotirov.

ACF has an email communication dated May 16, 2024 that reveals details of the alleged scheme in the Satirical Theatre's contract for the preparation of a draft design and the exercise of author supervision. In the email, Ivan Sotirov, an external expert on the evaluation committee, sent internal documentation regarding the contract to multiple recipients, including Satirical Theatre Director Kalin Sarmenov and project manager Elena Trichkova. Also among the recipients was Crypto Energy EOOD, which was later selected as the contractor.

"The email makes it clear that Dyulgerov's company, without any legal basis, obtained key information related to the contract at least six days before it was announced," Peneva said. "This is an obvious violation of the principle of equal treatment of participants in the public procurement process. It allows Crypto Energy EOOD to prepare its bid based on inside information that is not yet available to the other candidates," she added.

The ACF reached out to project manager Trichkova for comment, who noted that the email communication containing internal information may have reached Dyulgerov by accident.  

Peneva commented that the established links between the contracting firms, as well as the presence of the same external experts, raise the question of whether similar schemes involving collusion and access to internal information have also occurred in the other contracts.

The ACF sent inquiries to the contracting authorities and the companies that won the contracts. In his responses, Dyulgerov did not address the substance of the questions regarding the connections between the companies that won the contracts, nor did he address possible links with the contracting authorities.

The ACF will refer the identified irregularities to the State Financial Inspection Agency and the Culture Ministry, and will provide updates on the actions taken by these institutions.