Social Contracting

1. Social Contracting Luben Panov Bulgarian Center for Not-for-Profit Law September 2007

2. The presentation will: • Discuss several basic concepts related to state funding and social contracting • Differentiate contracting from other forms of state cooperation/funding • Describe the Bulgarian situation with social contracting

3. Main Types of State Funding • Direct budget subsidies for specific organizations (most often representative organizations of people with disabilities) - resembles institutional grants • Budget grants after a competition • Contracting - for provision of services • Grant programs for financing certain public spheres e.g. culture • Municipal-level funding for NGOs

4. Social Contracting • The state (through the local authorities) delegates the provision of social services to private entities • It keeps its role in: • Funding; • Control of the spending; • Control of the quality of the services provided.

5. What Does Social Contracting Actually Cover? • Social vs. Public • Assistance vs. Services • Contracting of Services – through tender, negotiations or other (e.g. vouchers)

6. Who is Paying? • Social services are funded by the central budget and/or by the local budget • In Bulgaria the government decides every year which social services are to be funded by the central budget. The Mayor can outsource services which are funded both by the central or local budget

7. Why is Contracting Different? • Contracting vs. Grants – scope of work is given • Contracting vs. Procurement – quality, not price

8. Why are NGOs involved in social contracting? The practice shows that NGOs are involved because they are: • considered closer to the consumers • more trusted in their social activity • able to attract alternative funding which decreases the price of the offered social services • they are less bureaucratic

9. Bulgarian contracting procedure • Social Contracting in Bulgaria is possible only on a tender basis. The Law allows direct negotiations (without a tender) only if there is one candidate (but in practice, to determine that, a tender has to be organized) • Types of activities subject to Social Contracting: all kinds of social services, funded by the central or municipal budget • The Mayor is responsible for initiating the social contracting procedure

10. Stages Main stages of the tender procedure: 1. Starting the tender – with a Decree issued by the mayor; 2. Appointing an evaluation committee; 3. Evaluation of proposals and ranking of applicants; 4. Selecting the winning applicant; 5. Concluding a contract with the wining applicant. Eligible to participate in the tenders are all private social services providers, dully registered

11. Results • For 4 years there are around 40 competitions - a large part of these are organized with support from foreign donors • 2/3 of the contracted services are new and in rare cases there is real contracting of existing services • Municipalities are not ready to give up their role and prefer to continue providing services • Lack of traditions in public-private partnerships and lack of capacity of not-for-profit organizations – they are used to work on a project-by-project basis.

12. Bulgarian Center for Not-for-Profit Law (BCNL) www.bcnl.org