Construction in public procurement: €18 billion and the game of survival

If Bulgarian public procurement were an economy, construction would be its heavy industry. Between May 2023 and June 2026, the official CAIS EOP register recorded 23,662 contracts for construction and installation works (CPV 45), worth a total of nearly €18 billion. That is more than medicine and fuels combined, making construction the undisputed number one by volume of funds.

The giant of the market

The average contract value is €786,710, but that figure is deceptive. The median — the value below which half of all tenders fall — is just €139,035. The gap between the two numbers tells the whole story of the sector: this is a market where a few dozen megaprojects (motorways, large water-cycle schemes, whole-district renovations) pull the average up, while the backbone of the market is thousands of more modest repairs of schools, kindergartens, municipal roads and buildings.

For a company considering whether to participate, this means one thing: construction is accessible at every level. There are tenders worth millions and tenders under a hundred thousand leva. But regardless of size, the rules of the game are the same — and they are more merciless than in any other sector.

The highest elimination rate in the country

Here is the number that should be tattooed on everyone preparing a construction bid: an average of 2.12 excluded bidders per tender. That is the highest disqualification rate of any major sector. With an average of 2.6 bids submitted per tender, this effectively means that in the typical construction procedure almost everyone except the winner is eliminated — not because they offered a higher price, but because they got something wrong in the documents.

This fact upends the entire logic of participation. Many people hold the belief that public tenders are won with the lowest price. In construction, that is only half true: just 55% of tenders are awarded on the “lowest price” criterion. The remaining 45% include a quality component — technical proposal, deadlines, organisation, guarantees. That is the highest share of quality-based evaluation among the five leading sectors, and it is no accident: construction is complex, and contracting authorities want to judge not only how much they will pay, but how the work will be delivered.

The paradox, however, is that most bidders lose neither on quality nor on price, but on eligibility. They are excluded before their bid is even evaluated. And the reasons are tediously predictable.

Why they drop out: the anatomy of failure

Analysis of real evaluation-committee decisions reveals five recurring traps.

First — incomplete documentation. Construction procedures demand an imposing package: declarations of personal standing, certificates of registration in the Central Professional Register of Builders (CPRB), references for similar completed projects, proof of turnover, professional-liability insurance. The absence of even one of these is often fatal. With an average of 47.5 documents per tender and technical specifications that can run to 71 pages, it is easy to miss something.

Second — technical non-compliance. Construction briefs are detailed and specific. When a bidder misinterprets a requirement or proposes a technology that does not match the design, the committee has no right to “fill in the gaps” — the bid is out.

Third — financial errors. Here construction is especially vulnerable because of the bills of quantities (BoQ). One incorrectly priced line, one arithmetic error in the total, one mismatch between a unit price and the overall value — and the bid is disqualified. In our analysis of exclusions we encountered cases where a bidder was eliminated over a discrepancy of three stotinki. A separate but related trap is the “abnormally low price” under Art. 72 of the Public Procurement Act: if the offer is more than 20% below the average, the contracting authority demands a written justification, and a weak justification leads to exclusion.

Fourth — insufficient team qualifications. Contracting authorities require specific credentials — a site manager, a health-and-safety coordinator, and sometimes design licences in engineering-procurement projects. A lack of proven capacity is a frequent cause of elimination.

Fifth — subcontractor problems. A mismatch between a subcontractor’s declared involvement and its actual role, or missing declarations on its part, regularly sinks otherwise competitive bids.

A telling example is one of the design-and-build projects for the major renovation of a school, where a bidder was excluded over a material discrepancy in the offered completion time — 400 calendar days in the standard form versus 394 days in the linear construction schedule. A six-day difference between two documents of the same bid proved enough: the committee held that it could not objectively establish the period within which the bidder undertook to deliver, and declared the offer unsuitable.

The price barely drops

One of the most counter-intuitive findings in the data: the final contract price in construction sits at a median of just −0.4% against the estimate. In other words, the winner wins at a price that is effectively equal to the contracting authority’s estimated value. Even the average deviation is only −3.4%.

What does this mean for business? That construction is not a market of drastic discounts. With a median of 2.6 bids, competition is shallow, and aggressive price-cutting is rarely necessary — and rarely wise, given the risk under Art. 72. The game is not “who bids the cheapest”, but “who manages to submit an eligible, complete and technically correct bid”. Whoever survives to the evaluation stage usually wins at a price close to the estimate.

This is a liberating insight for new entrants: you do not need to cut your margin to the bone. You need to not get eliminated.

EU funds and their particularities

Construction is also the sector with the highest share of European funding — 27.8% of contracts involve EU money. That is more than six times the share in medicine and warrants a separate focus.

EU-funded projects come with their own specifics: stricter publicity and transparency requirements, mandatory information and communication measures, more detailed reporting, frequent inspections. For the bidder this means an extra layer of documentation and a lower tolerance for formal errors — but also a larger, more stable stream of opportunities, especially in energy-efficiency renovation, water cycles and road infrastructure.

The dominant procedure is the “Public competition” (around 45%), followed by “Collection of offers with a notice” for smaller projects and the “Open procedure” for the largest ones. Each has its own rhythm and deadlines, which the bidder must know.

Who buys and who wins

Construction is a sector of state infrastructure giants. The absolutely dominant contracting authority is the Road Infrastructure Agency (API), with contracts worth nearly €2.8 billion — almost one sixth of the entire market flows through it. After API come the National Railway Infrastructure Company (€823 million) and Bulgartransgaz (€542 million). In other words, the backbone of the construction market by value is roads, railways and the gas transmission network — the national transport and energy infrastructure. The remaining, far more fragmented half is spread across hundreds of municipalities, ministries and hospitals commissioning repairs of schools, kindergartens, administrative buildings and local infrastructure.

On the contractors’ side the picture is equally concentrated at the top, but with an important twist — consortia. The largest projects are won by joint ventures (DZZD) that pool capacity and specialisation: leading names include Avtomagistrali EAD (€296 million), Patni Stroezhi – Veliko Tarnovo (€222 million) and various consortia formed for specific railway and road sections. This is a lesson for mid-sized firms: on large projects, partnership is not a weakness but a way in — joining forces with a partner of complementary capacity is often the only way to meet the requirements for turnover, experience and technical capability.

The year-by-year dynamics also reveal the market’s cyclicality. After a modest 2023 (€94 million), construction exploded in 2024 (€1.46 billion) and remained high in 2025 (€1.22 billion), clearly linked to the absorption of European programmes and national investment plans. This cyclicality is a strategic signal — award peaks come in waves tied to programming periods, and the firm that tracks planned procedures gets a head start on the competition in its preparation.

The hidden statistic: 45% of tenders with one bidder or none

Behind the average of 2.6 bids hides a worrying fact: 45.4% of construction tenders have only one bidder or none at all. Nearly half of all procedures are, in practice, not a contest. The reasons vary — narrow requirements that few can meet; highly specific projects; short deadlines that discourage preparation. For contracting authorities this is a problem (less competition = potentially higher prices), but for the prepared bidder it is an opportunity: in nearly half of all tenders, if you are eligible, you are the favourite simply because you are the only one in the game.

This statistic reinforces the sector’s core conclusion. When competition is symbolic in such a large share of procedures, the game really is not about the most aggressive price — it is about being among the few who make it to evaluation at all. And that is decided by the documents, not by the bid amount.

Playbook for the construction bidder

Everything above points to a practical strategy.

1. Read the criteria twice. Build a checklist against every selection requirement and every standard form. With 47 documents, this is not overkill — it is the difference between admission and elimination.

2. Synchronise deadlines everywhere. The completion time must be identical to the day across the technical proposal, Standard Form No. 1 and the linear schedule. This is the most underestimated trap.

3. Check the bill of quantities to the last cent. Automate the totals; cross-check unit and total values; leave no room for arithmetic discrepancy.

4. Justify a low price in advance. If you are bidding below the average, prepare a detailed analysis of unit prices so you survive the Art. 72 check.

5. Secure the team and the capacity before submitting. Credentials, CPRB category, references — with evidence, not promises.

6. Think quality, not just price. In 45% of tenders the technical proposal earns points; a well-structured, concrete methodology wins where price alone cannot.

The process: from notice to signature

The typical construction procedure (the “Public competition”) follows a predictable path that the bidder must master. After the notice and the documentation are published on CAIS EOP, the participant registers to take part and prepares its bid in an encrypted workspace, accessed with a qualified electronic signature (QES). The bid is structured in several parts: the ESPD (European Single Procurement Document), a technical proposal, a price proposal with a completed bill of quantities, and a package of evidence for the selection criteria. On submission, the system requires two actions — signing with a QES by an authorised person and the actual submission via the “Submit” button before the deadline expires. A missed deadline or incorrect signing is irreversible.

The construction-specific selection requirements are heavy: registration in the Central Professional Register of Builders (CPRB) for the relevant category and group of works, proven turnover from similar activities over the past three years, similar completed projects of a specified value, available engineering and technical staff with the required credentials, and often a participation guarantee (cash or bank). Each of these is a potential elimination point if not evidenced flawlessly.

Regulatory traps and trends

Two articles of the Public Procurement Act deserve special attention in construction. Article 72 (“abnormally low price”) is the double-edged sword of aggressive pricing: if the offer is significantly below the average or below the estimated value, the contracting authority is obliged to request a written justification, and a weak or late justification leads to exclusion. Article 107 sets out the grounds for exclusion — non-compliance with the pre-announced conditions — and is the reason why even minor discrepancies (like the six-day gap in the completion time mentioned above) are fatal.

As for the future, three trends will shape the sector. First — green construction: criteria for energy efficiency, sustainable materials and a reduced carbon footprint are entering the market ever more tangibly, especially in EU-funded projects, and will earn points in quality-based evaluation. Second — the 2021–2027 programming period and the Recovery and Resilience Plan will sustain high award volumes in the coming years, focused on infrastructure, energy-efficiency renovation and water cycles. Third — the digitalisation of the process: fully electronic tendering via CAIS EOP is now the norm, and mastery of the platform (encryption, decryption, electronic signing) is becoming a basic condition of participation. The firms that build internal capacity across all these fronts now will hold a structural advantage tomorrow.

Conclusion

Construction is the largest market in Bulgarian public procurement — and the strictest. Here you do not lose for lack of money or motivation, but for lack of precision. The numbers are unequivocal: two out of every few bidders drop out, but not because of price. For the firm that takes a disciplined approach — complete documents, synchronised deadlines, correct calculations and a prepared team — this is actually good news. Because in a world where competitors eliminate themselves with formal errors, surviving to evaluation is half the victory.

This is exactly what our requirements ↔ documents check and bid preparation are built for — making sure you don’t drop out before you are ever evaluated.

Data: official OCDS dataset of CAIS EOP, 23,662 contracts under CPV 45, May 2023 – June 2026. Statistics: own analysis. Values in euro (BGN converted at 1.95583).