The Capital City one of the leaders in poor public procurement planning

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The Capital City has been one of the leaders in poor public procurement planning for years, as it mostly copies the same plan year after year, retaining the same planned sum of about four million euros, although it has not spent that amount in any of the past years.

Irrational planning, frequent amendments and non-realization of plans are some of the central problems in the public procurement system. In 2016, large differences were observed in the planned and spent budget for public procurement for certain categories of contracting authorities, whereas the data on the total difference between planned and spent money for public procurement at the level of all contracting authorities is not publicly available, hence it is impossible to gain insight in the scope of the problem of poor public procurement planning in Montenegro.

In 2016, municipalities planned to spend a total of 55.871.205,00 € for public procurement, but they spent less than half the sum – 24.965.671,06 €. Such inadequate planning of public procurement indicates poor budget coordination and inefficient management of public finances, bearing in mind that the planned funds “are reserved” for certain procurements that do not get realized and thus remain unspent at the end of the budget year, although they could have been used for other purposes.

Public procurements are implemented according to the annual public procurement plans. Therefore, procurement authorities are obliged to prepare a public procurement plan for that year by 31 January and then procure accordingly. Also, they have the possibility to amend the plan without limitations – number of possible amendments is not legally limited, so the number of amendments adopted during year is high.

From 2015 onwards, the Capital City Podgorica has been among the leaders in view to the number of adopted amendments to the public procurement plan. During 2015, this contracting authority amended the public procurement plan for 17 times, in 2016 21 times, while for the first eight months of 2017, public procurement amount has been amended 8 times.

Also, in the previous two years (2015 and 2016), the Capital City has spent approximately 4.5 million euros on public procurement, and according to the latest amendments, it plans to spend about 4 million in 2017. The same amount was allocated by the Public Procurement Plan of the Capital City in 2016. However, in spite of 21 amendments to the plan and the fact that the plan was last amended on 30 November, immediately before the end of the year, the planned 1,281,503.63 € remained unspent.

Again in 2015, The Capital City did not plan better its procurement, 17th amendment to the Public Procurement Plan was adopted on December 15, and the difference between the planned and spent budget for public procurement amounted to almost 2 million €.

Thus, the Capital City does not actually plan its procurements, but mostly copies the same public procurement plan year after year, retaining the same final planned sum – around 4 million €, although it has not spent that amount in any of the past years.

This indicates that this procurement authority, alike many others, does not conduct an analysis of their needs, or a comprehensive market and cost analyses, before approaching the preparation of the annual public procurement plan.

Inadequate planning of public procurement indicates poor budget coordination and inefficient management of public finances, bearing in mind that the planned funds “are reserved” for certain procurements that do not get realized and thus remain unspent at the end of the budget year, although they could have been used for other purposes.

It depends on the well-developed public procurement plan whether the procurement authority will meet its needs on annual or multi-annual level, i.e. to what extent it will rationally use the funds from the budget. Therefore, this plan usually contains, or should contain, the required quantities of certain goods and services, the type of procedure to be used, the time period within which the procurement will be realized.

Ana Đurnić

Public Policy Researcher

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