public procurement

Ex-Minister’s friend’s company’s software made compulsory in public institutions

It is not yet known how well the unified document management system will work in public institutions, but it is certain that the developer of the software, SDA DMS, has already made a good profit. The Digital Government Agency put out a framework contract worth HUF 82 billion for the implementation and operation of the system, and the company won the first call for tenders worth HUF 3.8 billion. SDA DMS is a company owned by a former business partner and friend of ex-minister László Palkovics. And the mandatory use of its EKEIDR document management system was decided in an unpublished government decision last year. 

The government made the use of the EKEIDR document management system compulsory for hundreds of public bodies by a non-public (i.e. secret) government decision last year, our newspaper has learned. The reason for the secrecy may be that the software was developed by SDA DMS Ltd. The company owned by a man who is a former business partner and friend of a government ex-minister, László Palkovics.

The state institutions concerned will receive the licence for the document management software free of charge, but will have to cover all other costs of implementing and maintaining the system from their own resources.

This is a huge extra cost, including for hospitals struggling with debt. The extent of this is revealed by a tender issued by the Digital Government Agency, the central IT procurement agency. The „supply package” needed to run the programme can be obtained through a public procurement procedure under a framework agreement worth HUF 82 billion.

In other words, the introduction of the document management system in the public sector could cost up to HUF 82 billion.

Under the framework agreement, five companies could in principle compete for individual calls for tender from the institutions:

  • the SDA DMS Ltd. itself,
  • Stratis Vezetői és Informatikai Tanácsadó Ltd.,
  • Kontron Hungary Ltd.,
  • Telekom Rendszerintegráció Ltd.,
  • MultiContact Consulting Szolgáltató Ltd.

In contrast, only the SDA DMS made a bid to the first 16 public contractors. Thus, it also won all the contracts worth HUF 3.8 billion.

This and several other indications suggest that the companies might be involved in a sham procedure, but none of the companies responded to our enquiries on this issue.

Our public procurement expert examined several public procurement contracts for the purchase of licences for filing systems and the implementation of the system. On the basis of these, he concluded that the mandatory Poseidon EKEIDR system may also be overpriced.


The main page of EKEIDR

It is not known exactly how much and under what conditions the SDA DMS transferred the licence to the State at the time (roughly 11-14 years ago). All the organisations and ministries concerned claim not to have the contract in question.

This is not the first time that a company/group of companies close to László Palkovics has been awarded a state contract. Between 2008 and 2022, the SDA companies won a total of 32.3 billion HUF net public procurement contracts on their own. The software was developed for the state by SDA Informatika Zrt. in 2015 for a net cost of HUF 728 million, and since then it has been mandatory for all public education institutions. In recent years, KRÉTA has brought billions of euros into their budget.

Written and translated by Eszter Katus. More detailed Hungarian version of this story can be found here and here. Photo: Ex-minister László Palkovics. Credit: Péter Lakatos/MTI/MTVA