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Guide for contracting authorities

Internal procurement rules and the annual procurement plan

Who counts as a contracting authority, what your internal procurement rules must cover, and what to do with the annual plan by 31 March. For municipal notaries, finance heads and procurement officers.

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Who counts as a contracting authority?

Whether an organisation is a contracting authority depends on its legal status, how a purchase is funded or what it does, not on its own choice. If it is one, the Public Procurement Act applies to every purchase that reaches the threshold.

Three basic cases:

  1. Classic contracting authorities

    Ministries, budgetary bodies, municipalities and their associations, public foundations and bodies governed by public law, such as institutions mainly funded from public money that serve a public-interest purpose. They must run a procedure for every purchase that reaches the threshold, except in the cases the Act lists as exemptions.

  2. Subsidised companies and NGOs

    They become contracting authorities only for the specific purchase funded by the subsidy, and only if both conditions are met:

    The subsidy: a classic contracting authority subsidises the purchase directly, by more than 50 per cent above the EU threshold or by more than 75 per cent above the national threshold.

    The subject: civil engineering works, the construction of a hospital, sports facility, recreational facility, school, higher education or administrative building, or a service linked to these.

    A separate rule covers EU money: a service contract reaching the national threshold is subject to procurement at any subsidy rate if it is funded directly from EU sources. The Recovery and Resilience Facility is the exception.

    We cover deadline-driven procurement in grant-funded projects on a separate page.

  3. Utility contracting authorities

    Organisations that operate drinking water, gas, heat or electricity networks, transport networks (rail, tram, trolleybus, bus), airports or ports, that extract oil, gas or coal, or that provide postal services, when they buy for these activities. This includes companies under state or municipal dominant influence and companies operating under special or exclusive rights.

    Sewage disposal and treatment is covered only when linked to a drinking water utility.

Thresholds and aggregation

Current national and EU thresholds are on our procurement thresholds page. The estimated value must include every part of a works project, all services serving the same direct purpose and all goods intended for the same or similar use. A purchase may not be split into parts in a way that circumvents the Act or the rules for contracts above the EU threshold.

Register within 30 days

An organisation that falls under the Act must notify the Public Procurement Authority within 30 days by registering as a contracting authority in the Electronic Public Procurement System (EKR). Any change in its data must also be updated within 30 days. Only organisations covered by case 2 (a contracting authority because of a subsidy) and those applying the Act voluntarily are exempt. For services funded directly from EU sources (the separate rule), registration is required too. Our EKR guide walks through the steps.

Common misconception

Internal procurement rules or purchasing policy: what is the difference?

An internal purchasing policy does not replace internal procurement rules. The two rest on different legislation, cover different purchases and set different procedures.

  • Obligation

    Two separate obligations

    Every contracting authority must set out who is responsible for what in its procurement procedures (per procedure, if there are no general rules). Budgetary bodies must also have an internal purchasing policy under the Ávr. Other organisations decide on this themselves or through their governing body.

  • Threshold

    Above the threshold the procurement rules, below it the purchasing policy

    Internal procurement rules govern purchases reaching the national threshold, including those above the EU threshold. The purchasing policy covers everything below. If it does not require aggregation, related items ordered separately can together end up above the threshold.

  • Procedure

    Evaluation committee and EKR versus price quotes

    In a procurement procedure, tenders are assessed by an evaluation committee of at least three members, and the procedure runs in the EKR. Below the threshold the organisation chooses its own controls, such as requesting three price quotes.

  • Consequences

    Legal review versus internal accountability

    If responsibilities are not defined, the Public Procurement Arbitration Board (KDB) may find this an infringement in review proceedings. That alone does not make a signed contract void. A breach of the purchasing policy is usually an internal employment or disciplinary matter.

Required content

What must internal procurement rules contain?

The rules must set out who prepares, runs and internally checks procedures, who decides, who acts on the contracting authority's behalf, how procedures are documented, and who can do what in the EKR. In practice this works best as six chapters.

  • 01

    Preparation and responsibilities

    Who reports a purchasing need, who writes the technical specification, who sets the estimated value, and how budget cover is secured under the financial management rules.

  • 02

    Who decides what

    By position or body: who launches the procedure, who approves the notice and procurement documents, who takes the closing decision, and who signs the contract.

  • 03

    Evaluation committee and expertise

    How the evaluation committee is set up so that the people involved together cover subject-matter, procurement, legal and financial expertise. Also state who checks the bidders. Our register check helps with that.

  • 04

    Conflicts of interest

    Mandatory written declarations from everyone involved in preparing and running the procedure, screening for conflicting interests, and immediate removal of the person concerned from decision-making.

  • 05

    EKR permissions and records

    Who acts on the contracting authority's behalf, which permissions each user has in the EKR, who approves notices before submission, and how electronic records are handled.

  • 06

    Contract performance and record keeping

    Who certifies performance, how contract modifications are handled, and how records are kept. Procedure records must be kept for at least five years from publication of the award notice, performance records for at least five years from completion.

Why downloaded templates are risky

The decision levels in an online template rarely match an organisation's organisational and operational rules (SZMSZ) and signing authorities, and decisions that contradict the SZMSZ can be unlawful. That is why we always fit the rules to your own SZMSZ and signing authorities, as part of our procurement consulting for contracting authorities.

Who adopts the rules, and when must they be amended?

The Act does not say who adopts internal procurement rules and sets no mandatory review cycle. In practice:

  • Adoption: follows the organisation's own allocation of powers (SZMSZ, founding document or articles of association). It makes sense for the rules to be adopted by whoever holds or delegates the decision-making powers in procedures, in a municipality usually the elected council.
  • Amendment: required once the rules no longer match the law or the way the organisation works. Typical triggers are a substantive change in the law, a reorganisation of the SZMSZ or decision-making powers, and the departure of a named officer or EKR user.
  • Review: we recommend once a year, together with the annual plan.
  • No rules at all: you can still launch a procedure, but responsibilities must then be set separately for each one, at the latest before it is prepared. With several procedures a year, that means more work and more room for error.

Deadline: 31 March

Annual procurement plan: who needs one, what goes in it, when to publish it?

Classic and utility contracting authorities must draw up an annual aggregated procurement plan by 31 March each year. Organisations that run procurement only because of a subsidy or a voluntary undertaking do not need a plan.

  • 31 March

    Prepare by 31 March, publish once adopted

    Once adopted, the plan must be published in the EKR without delay. It is public, must stay available until the following year's plan is published, and must be kept for at least five years.

  • Content

    What goes into the plan?

    At least the subject matter, planned quantity, applicable procedural regime, intended procedure type, planned launch date and expected completion date of the contract. When setting the launch date, allow for the minimum time limits of the procedure type. Our procurement deadline calculator works these out for you.

  • Nil plan

    A plan is needed even with no procurement planned

    The Act does not deal with this case separately, but the Public Procurement Authority's position is that the plan must still be prepared and published (Közbeszerzési Értesítő Plusz, June 2019). This view is not binding, but publishing a nil plan in the EKR is the safe course, and no particular form is prescribed.

  • Amendments

    Amending the plan mid-year when a new need arises

    The plan does not oblige you to run the procedures it lists, and you may launch procedures that are not in it. The plan must then be amended when the need arises, stating the reason, and the amendment published in the EKR without delay. Publication is not a precondition for launching the procedure. A procedure launched before the plan is ready must be added to it afterwards.

Practical pitfalls

Common mistakes in internal procurement rules and annual plans

These mistakes are rarely deliberate, but they can be costly: a contract signed without a required procedure is, as a rule, void, and with EU funding it triggers a financial correction. Most happen because the rules stay the same for years while the organisation changes. If you are not sure your own documents are in order, get in touch and we will review them.

  • Rules

    Outdated names, positions and EKR permissions

    The rules name a person or unit that no longer exists, or the people holding EKR permissions are not the ones the rules designate. Yet the Act requires exactly this to be clear: who acts on the contracting authority's behalf and who can do what in the EKR.

  • Evaluation

    The decision-maker sits on the evaluation committee

    The person who takes the closing decision may not be a member of the evaluation committee. Where a body decides, it may only delegate a member with advisory rights, and the vote must be by roll call. Small organisations with few specialists need to watch this closely.

  • Registration

    Missing or outdated contracting authority data

    For a new institution, a restructured company or changed details, the 30-day notification deadline is easy to miss. Without registration you can neither launch a procedure nor publish a plan in the EKR.

References

Our clients since 1996

Municipalities, state institutions, and budgetary bodies for whom we drafted internal procurement rules, maintained annual procurement plans, or managed full procedures.

  • 101 clients on the reference list
  • 36 local council and association
  • 28 company
  • 16 state body
  • 13 other organisation
  • 8 educational institution
Engagement type
  • company MÁV Zrt. Public procurement, procurement consulting, project management
  • state body Fővárosi Törvényszék Public procurement consulting
  • local council and association Nyíregyháza Önkormányzata Public procurement, project management, grant writing
  • state body Oktatási Minisztérium Public procurement, project management
  • local council and association Budapest II. Kerület Önkormányzata District development, public procurement
  • state body Nemzeti Infrastruktúra Fejlesztő Zrt. Technical design, project management

View full reference list → Detailed contracting authority services

Frequently asked questions

Let's review your internal procurement rules and annual plan together

Tell us which organisation you represent and what you want to know about your procurement obligations, internal rules or annual plan. We will look at your situation and tell you how we can help. The first consultation is free and carries no obligation.

Benkó István Zsolt

István Zsolt Benkó

Founder · Lead Public Procurement Expert

Managing our firm since 1996, with over 30 years of professional experience in public procurement and project management.

30+ years experience Public procurement expert

Direct mobile +36-20-424-5411

Legal background

Sources of the rules summarised on this page, based on the consolidated legislation in force.

  • Who counts as a contracting authority: Kbt. Sections 5–7, 9–14, 19(2)–(3) and 26(1)–(1a)
  • Procurement rules vs purchasing policy: Kbt. Sections 19(3), 27(1)–(2) and (4) and 165(3)(d), Ávr. (Government Decree 368/2011) Section 13(2)(b)
  • What the rules must contain: Kbt. Sections 25, 27(1), (3)–(4), 46(2) and 141
  • Adoption and amendment: Kbt. Section 27(1)–(2)
  • Annual procurement plan: Kbt. Sections 42(1)–(3), 43(2)(a) and 43(4), Government Decree 424/2017 Section 7(5)
  • Common mistakes: Kbt. Sections 26(1), 27(1) and (5) and 137(1)(a), Government Decree 256/2021 Section 397