In Madrid’s healthcare system, nearly all state procurements are made through a simplified process—without open tenders. According to a public watchdog organization, in recent years 99.5% of contracts at the regional health ministry have been processed as so-called ‘small contracts.’ This allows officials to select suppliers directly, bypassing standard procedures and competition between companies.
The law only permits this approach for small sums to speed up operations in hospitals and schools. However, in practice, these limitations are often ignored. Contracts are split into smaller parts to stay below thresholds and are then registered as separate deals. As a result, millions of euros are spent without transparency, fueling growing suspicions of corruption.
Millions unchecked
Between 2016 and 2020, Madrid’s health ministry spent over 4 billion euros on such contracts. Experts estimate that the lack of competition leads to overpayments of about a quarter above the original price. In just five years, residents of the region could have saved around 818 million euros—enough to fund dozens of new healthcare centers or create thousands of jobs for doctors.
Among the contract recipients are both large international corporations and smaller local firms. For example, one small company from Vallecas received more than 1,500 orders for repairs and maintenance from one of Madrid’s largest hospitals over ten years, totaling nearly five million euros. In the same institution, more than 44,000 similar contracts were issued in a single year.
Who benefits
Among the biggest beneficiaries are well-known pharmaceutical and technology giants. In 2020, one leading Swiss company signed nearly five thousand contracts worth around 30 million euros. A German firm supplied laboratory equipment worth 1.5 million euros in a year, splitting the deliveries into hundreds of small deals. An American medical device manufacturer secured more than 350 contracts for a similar amount during the same period.
Civic activists believe this scheme allows companies to bypass transparency and competition requirements. If a single company receives dozens of orders for the same product, but each order is for a small amount, it may indicate deliberate splitting of large procurement contracts.
Complaints with no results
Civil organizations have been trying for several years to draw attention to the problem. Complaints have been filed with the prosecutor’s office, anti-corruption agencies, and both national and regional audit bodies. However, they have not yet succeeded in prompting an investigation or any real changes. Public representatives note that officials demand concrete proof of bribery, while other appeals are simply ignored.
A similar situation has been observed in other regions of the country. In Andalucía, after a report on widespread violations in the awarding of small contracts was published, the head of the oversight body was dismissed. In Madrid, despite multi-billion euro contracts and clear signs of abuse, there has so far been no response from authorities.
New measures
The civic organization plans to submit a new report to an independent government watchdog responsible for procurement oversight. Activists are also considering taking the matter to court and even appealing to European institutions. They say that analyzing hundreds of thousands of contracts each year is extremely challenging, especially for a small group of volunteers. Nonetheless, they are determined to continue their fight for transparency and fairness in the allocation of public funds.
