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Press Release: Fifty companies earn about 250 million euro from public procurement

In 2016, 52 private companies earned more than a half of total amount spent on public procurement. On the other hand, 91.61% of the state budget for public procurement was spent by only 86 authorities, which makes 13.6% of total number of contracting authorities.

In 2016, 616 state authorities, local self-governments, public institutions and state-owned enterprises concluded 7.653 contracts with total value of 447 739 222,36 euros, which makes 11.77% of GDP.

However, most of this money “circulated” between very low number of participants in public procurement procedures – bidders and contracting authorities. Although there are 2.518 bidders registered by the Public Procurement Administration (PPA) in 2016, only 52 of them concluded contracts with total value of 240 584 655,55 euro, i.e. 53.73% of total amount spent on public procurement during 2016. According to the most recent results from 2017 published by Montenegrin Statistical Office – Monstat, there are 27.954 small, 268 middle-sized and 46 large firms registered.

Also, 91.61%, or 410.174.098,48 euro of the total budget spent on public procurement during the same year, was spent by only 86 authorities, which makes 13.6% of total number of contracting authorities.

Another discouraging number – 2.21 is the average number of bids per tender in 2016. This number is in constant decline and is twice as low as in 2011 when it was 4.34.

These data tell us three facts:

Firstly, the approach of PPA to registering bidders, which is reduced to pure “counting” Public Procurement Portal visitors, is wrong, as we have pointed out several times. Namely, visitors of the Portal are also citizens, journalists, researchers, representatives of non-governmental organisations dealing with public procurement – in short, any interested party who has ever visited the Portal, and not necessarily only bidders. Although small market is often being taken as an excuse for poor competitiveness, we do not know how many bidders there actually is, i.e. how many companies actually participate in public procurement tenders and how small or large Montenegrin market is.

Secondly, the majority share of only 52 companies in public procurement procedures as well as the low number of bidders per tender can be an indicator of the existence of corruption in public procurement, i.e. writing of “too specific” tender specifications for procurement that from the very beginning of procedure were intended for one specific company. On the other hand, the PPA received only two reports on suspicious of corruption in 2016, one of which referred to a bank guarantee, for which the person who reported it believed it was falsified, and the other related to the tender documentation, where the person who reported it believed that there has been an abuse of the principle of ensuring competition and the principle of equality.

Thirdly, in the public procurement system in Montenegro, there is a strong need for centralisation – merging of the same or similar procurement by sectors, as well as for rationalisation of the number of employees working on public procurement tasks. If 13.6% of the contracting authorities conduct more than 90% of public procurement procedures, and the remaining 86.4% implement less than 10%, then it is necessary to urgently start the process of centralisation of the public procurement system.

It is necessary to identify contracting authorities with low number of public procurement procedures that are being implemented annually. It is then necessary to map the areas in which procurement could be merged – centralised. Finally, it is necessary to rationalise the number of public procurement officers – to increase the number of employees in the contracting authorities that are procuring more, and to reduce in the authorities that procure less, as well as to merge the same or similar procurement of these authorities.

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Transparency of local transfers: How Does My Town Spend My Money?

Having in mind that local governments are not proactive in publishing data on their expenditure and more detailed analytics in their financial accounts, this research focuses on transparency of two types of expenditure – transfers for social welfare and transfers for institutions, individuals, NGOs and the public sector.

Short-term social or monetary aid is a form of social protection, but in the financial reports of local governments they are not classified as “42 – transfers for social protection” but as “43 – transfers to institutions, individuals, non-governmental and public sector”. Such budgetary classification is not in line with the provisions of the Law on Social and Child Protection, which defines short-term financial aid as aid in the field of social protection, intended for the vulnerable population.

Short-term social aid is also provided to individuals who are not in a difficult financial situation, where some local governments have allocated these funds for the purpose of sponsorships, maintaining and participating in cultural events, sports competitions. Therefore, in the first half of 2016, the Old Royal Capital Cetinje spent € 1,443 unrightfully. In the municipality of Nikšić there is no regulation of the social aid system, and while the help is given to those in difficult living circumstances, it is also given for the purposes of opening the paintings exhibition, printing books, renovating offices in local communities, etc. For such expenditures, the municipality spent € 1,685 in the first half of 2016. For sponsorships, which are documented within short-term social aid, € 9,751 has been spent in the same period. In the period from 2013 to 2015, the municipality of Bijelo Polje spent the most money on social welfare transfers, 397.987,57 €.

Analytical cards of some local governments do not include data on the purpose of payments, so it is not clear for what cause has the Capital City Podgorica spent 254,993 € in 2015, from the position “4316 – short- term social aid”. The mere word “help“ within the scope of the payment does not make this expenditure transparent. Content and forms of analytic cards are not controlled by any institution, while all municipal regulations on the allocation of short-term social aid provide the discretionary right of the president of the municipality to decide on their allocation.

Transparency and control of local transfers should be improved through municipal proactive financial reporting through the course of the year, not just prior to the elections; via harmonization of the provisions on short-term social assistance between existing acts, in order for this expenditure to be considered as social protection. In this manner, a real picture of social policy in Montenegro can be created, and discretionary decision-making on social aid can be controlled.

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Mystery Visits to Public Institutions: Piloting Service Delivery Index

Visits to public administration institutions in eight selected municipalities in Montenegro show satisfactory level of quality of informing services about procedures for obtaining documents, although specific omissions were registered, and they were common for all visits in all examined municipalities. The visited institutions in municipality of Nikšić generally rendered services of lower quality compared to other visited institutions.

Overall professionalism and kindness of employees are generally evaluated very positively in the majority of observed municipalities. Accessibility of services is evaluated less positively –primarily due to the lack of appropriate aid for persons with disabilities where they are needed – many institutions lack adequate access for persons with disabilities, and often when there is a ramp or elevator on the ground floor, the space is not adapted for people with disabilities – e.g. they are not able to access other floors. Besides that, the quality of officer’s response to specific requests was also evaluated less positively – the employees rarely asked all necessary questions in order to recognise the needs of the clients, and, in compliance with this, to tell them which documents they needed or cost of the issued documents. Therefore, although in majority of cases the examined employees were evaluated as very kind to users of their services, physical access to institutions and quality of obtained information relevant for users’ requests were evaluated less positively.

The lowest quality of work in public administration was recorded in testing the scenario of inquiring about the issuance of building permit, mainly because the employees rarely gave information directly, but they gave the visitors a paper with listed documents needed for this purpose. On the other hand, during visits to institutions in charge of registration of agricultural producers generally high quality of services was registered.

In small number of visits the employees did not greet the client at the end of conversation, they were not included in conversation and they did not provide accurate and clear information. It is worth mentioning that in almost all visits the employees greeted the client at the beginning of interaction and they behaved politely throughout the conversation. Besides that, waiting for their turn in lines in front of the windows was in satisfactory limits – up to 15 minutes.

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Perception of Public Administration – Public Opinion Survey

Citizens do not make a big distinction between state and local administration, and higher percentage of the citizens rate public administration with negative scores than positive ones. On average they rate it 5 on the scale from 1 to 10. There are no differences between the citizens who had the opportunity to communicate with public administration during the past 12 months and those who did not. More than a half of the citizens do not see any change in the quality of public services during the past 3 years. Among the citizens who state that the quality of services has changed there is a similar percentage of those who perceive improvement of the quality of services and those who think that the quality of services has worsened. Higher percentage of the citizens state that they trust public administration, among whom those with elementary education are in the lead, and the least trusting citizens are the unemployed. One in four citizens had prior experience with public administration. With the increase of educational attainment and income also increases the likelihood that the citizens had experience with state and local administration. The citizens state that they mainly had contact with municipality and police units, followed by tax administration, courts and Cadastre.

The citizens perceive as the biggest problems of public administration: irregular employment, inefficiency of public administration and corruption. They also mention inadequate work of public servants, but also the size of public servants apparatus. They see as the best solutions decrease of corruption, increase of internal control in public administration and stricter punitive measures. Nevertheless, somewhat higher percentage of the citizens think that the Government will not manage to fight these problems until 2020 compared to those who think that it will manage to do this. Majority of citizens think that the public administration budget is used for wrong purposes, whereas the citizens who had some experience with public administration during the past 12 months are more convinced in this. According to the citizens, the most important factors in finding employment are connections (family and friends), but crucial factor are political connections. Education, skills and experience of the candidate are in the third place according to the citizens.

Citizens have a moderate attitude towards the services of public administration, where similar percentage of the citizens are satisfied and dissatisfied. Dissatisfaction with the services is the result of inefficiency in solving the requests, long waiting in lines, necessity to use connections in order to solve the request and complex procedures. One in two citizens thinks that the requests are solved too slowly. As regards the prices of the services, the opinions are divided. On the other hand, the citizens mainly do not know how they could make complaints about the work of public administration, so very small percentage of them have filed complaints in recent years.

The majority of citizens are not informed about public debates organised by public administration bodies, so one in four citizens claims to have followed some public debate organised by public administration.

Just one in ten citizens visited Internet presentation of some public administration body during the past 12 months, and even smaller percentage of them visited the eGovernment portal (one in four citizens heard about this portal). Among users of Internet presentation, the percentage of citizens who are satisfied with the contents of the presentation exceeds the percentage of those who are not satisfied with it. Satisfaction is smaller only in terms of regular updating of contents of presentations. Citizens who haven’t used the websites of public administration mainly claim that they had no need for it.

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Interview for FOS media on the acts of Special Prosecution

1. Do you consider symptomatic that so far several actions initiated by Katnic (Mandic, Radunovic, Medojevic), were simply stopped by the Higher State Prosecutor Ivica Stankovic?

It cannot be said that they were stopped because only one of the series of actions foreseen in the criminal proceedings was halted. All other investigative measures and actions, if there is a need for them, are available to prosecutors.

Of course, the very act of the HSP, by which he “corrected” the Chief Special Prosecutor and suggested that he should “not be proposing detention” against the public officials Mandic, Radunovic and Medojevic, is very indicative and shakes already unstable prosecutorial organization. Formally, the law has foreseen this possibility and it is not controversial.

Essentially, this action stems from two options: either Katnić chronically makes wrong assessments of the need for detention where it is not needed, for which he should be held responsible; or Katnic is right thinking that the legal conditions for custody are fulfilled, but Stankovic intervenes under political influence. Both of them cannot be right, and the one who made the wrong assessment, and not only once, should be held responsible.

2. Do you think his power in the state weakens after these cases?

Katnic’s power derives from the law and he still has the same rights and obligations as before. His reputation and trust of citizens in the work of the Special Prosecutor’s Office are another issue and there is no simple answer as the society is sharply divided regarding all issues, including in terms of attitudes about the work of the Chief Special Prosecutor. In any case, these cases illuminate the legal chaos and serious “illnesses” that affect our judicial system.

3. Does the situation in which President Vujanović appealed to HSP in the case of Medojevic and HSP said that before the decision he had spoken with DPS President Milo Djukanovic, constitutes an interfering of politics and interference of executive and judicial branches of government and how do you comment on it?

 

There is absolutely no dilemma that it is improper influence on the work of the Prosecution how the DF deputies, the former prime minister and the current president of the state have suggested to the Prosecution how to proceed.

In the case of Medojevic, all sides sought “lowering of tensions,” but in the case of Mandic and Knezevic, one current pressed for no detention and the other for it to be ordered. Certainly this is not the first time it happens and it is no secret that our institutions are politicized and that they are not immune to the demands and comments of politicians, governing structures and opposition.

Independence, impartiality, accountability, professionalism and efficiency of the judiciary are the goals we are pursuing also with the reforms under Chapter 23 “Judiciary and Fundamental Rights” and all of these cases show how far we are from achieving the goals set.

It is interesting that in the Screening report of the European Commission for this chapter in 2012, Montenegro was recommended to “review the system of mandatory instructions within the prosecution system”, as this affects the independence of state prosecutors, which has obviously been neglected. The purpose of this recommendation is not to break the hierarchy in the prosecution but to introduce accountability, so that prosecutors are held accountable for their decisions instead of relying dependently on the formal and informal suggestions of their superiors, which is common practice in the Prosecutor’s Office.

4. After the stopped actions, one of the main affairs Katnic has initiated is Marovic case. Do you consider this case to be a fiasco of prosecution, given that Marovic is still unavailable to the authorities and has been punished with almost a minimum sentence?

The unavailability of Marovic is a major defeat of our judicial system and the state, and it best illustrates how we are not all equal before the law and to what degree are some individuals privileged.

5. To what degree has Katnic’s function and work been rendered meaningless after all this?

It is a fact that the Chief Special Prosecutor, by function, has one of the most difficult tasks – processing of organized crime and corruption at a high level. Due to this it is very likely that he faces a lot of obstacles and obstructions. However, the way in which he responds to obstacles and public pressure is unacceptable.

The most recent such situation happened yesterday, where the rights to privacy and secrecy of correspondence guaranteed by the Montenegrin Constitution of lawyer Rodic, who has not yet been indicted for any criminal offense, have been brutally violated by the Special Prosecutor’s act of publishing transcript of communication between Rodić and other individuals.

Even if the published communication undoubtedly proves that the crimes were committed, this evidence would only be valid once the court accepted it in court proceedings and it would be available to the public only if the indictment against Rodić was confirmed and then read during a public trial. Up until that moment, publishing a transcript of the lawyer is a brutal violation of his constitutionally guaranteed rights.

We had so far leaking of information from the Prosecutor’s Office and publishing of transcripts in the media, but this is the first time that the Prosecution has released for all the media evidence in the ongoing proceedings.

Interview with Dina Bajramspahic was originally published on FOS media website public trial. Up until that moment, publishing a transcript of the lawyer is a brutal violation of his constitutionally guaranteed rights.

We had so far leaking of information from the Prosecutor’s Office and publishing of transcripts in the media, but this is the first time that the Prosecution has released for all the media evidence in the ongoing proceedings.

Interview with Dina Bajramspahic was originally published on FOS media website