Although the ministries comply with the legal obligation to appoint individuals to monitor the implementation of public procurement contracts, last year they did not register any irregularities. The ministries publish reports on completed contracts within the legal deadline, but only with general information.
The implementation phase of a public procurement contract is a key indicator of whether what was requested was delivered or done as specified in the tender documentation. For many years, this phase of public procurement was the least monitored until last year when the obligation to appoint individuals to monitor contract implementation was introduced. Last year, the ministries fulfilled the legal obligation to appoint responsible individuals for monitoring the implementation of public procurement contracts, as well as the obligation to publish reports on their implementation in the Montenegrin Electronic Public Procurement System (ESJN). During this time, officials did not report any irregularities, and the reports do not provide insight into how the contract was actually implemented, as they contain only basic information about the contracting parties, prices, and deadlines. The Inspection for Public Procurement (part of the Administration for Inspection Affairs, UIP) did not focus on checking the compliance of ministries in this area last year, considering that only two inspections related to public procurement were conducted in ministries.
Monitoring contracts only over 25.000 euros
Amendments to the Law on Public Procurement (ZJN), which have been in effect since January of last year, imposed the obligation on contracting authorities to appoint a responsible person for monitoring the implementation of public procurement contracts. In addition to the obligation to control the execution of contracts, contracting authorities are required to prepare a report on contract implementation within 30 days and publish it in the Electronic Public Procurement System (ESJN), which was also an obligation under previous legal provisions.
These obligations apply to open public procurements and framework agreements, but not to simple procurements that are exempt from the application of this Law. Simple procurements are used for acquisitions valued up to 25 thousand euros for goods and services or up to 40 thousand euros for works. The Rulebook on the Manner of Conducting Simple Procurements does not specify the obligation to appoint responsible persons for monitoring contract implementation or to publish reports on implementation in the ESJN. Last year, simple procurements valued up to 25 thousand euros were predominantly conducted in the ministries.
A new mechanism, but without results so far
The purpose of the legal provision requiring the appointment of a person responsible for monitoring contract implementation is to ensure better control and greater accountability for both suppliers and institutions, i.e., contracting authorities, considering that this official would be obliged to point out any irregularities during contract implementation, which could ultimately lead to contract termination.
However, judging by the responses from 16 out of 19 ministries in the Government of Montenegro, such a situation did not occur in any ministry last year. The intention of this research was to determine whether and to what extent contract implementation is actually monitored and whether suppliers are complying with contractual obligations. All ministries provided the same response—that different individuals are appointed to monitor contract implementation depending on the area, that none of them noticed any irregularities, and that there was no need to invoke guarantees or terminate any contracts.
The Ministry of the Interior (MUP) had the most procedures last year, with 143 in total, as they informed us. Last year, 43 open procedures were completed, while 14 were annulled. This department also completed two negotiated procedures without prior invitation, one of which was annulled, and they also implemented one framework agreement. The Ministry stated that they appointed multiple individuals to monitor and implement the contracts, who did not identify any irregularities, and in accordance with the law, they published reports on implementation in the ESJN within the prescribed deadline for each procedure. Regarding simple procurements, 52 were completed, and 31 procedures were annulled.
Last year, the Ministry of Defense announced 110 procurements, of which 99 were conducted through the ESJN, while the remaining ones were based on framework agreements governed by previous legislation. In 2023, 89 public procurement procedures were completed, while 21 procedures were still ongoing. By the end of last year, 27 contracts worth a total of 1,500,253.74 euros including VAT were fully implemented. The Ministry of Defense, as they noted, assigns one or more individuals to monitor the implementation of each public procurement contract, depending on the complexity and specificity of the procurement subject. These individuals are selected from various organisational units of the Ministry and the Montenegrin Army, taking into account the scope of work of the organisational units and the relevant expertise for monitoring the specifics of each particular contract. They claim that there were no irregularities. The Ministry of Justice completed half of the 24 public procurement procedures announced last year, of which seven contracts worth a total of 514,037.87 euros including VAT were implemented. They stated that in all procedures, the chairpersons of the public procurement committees in individual procedures were appointed to monitor contract implementation, who did not identify any irregularities during implementation.
The Ministry of Public Administration conducted 17 public procurements last year, of which 11 were completed last year, two more from 2023 were completed in January this year, and five contracts worth a total of 4,055,535.74 euros including VAT were implemented. They stated that they appointed different individuals for these contracts depending on the procurement subject, and that no irregularities were registered in any case. The Ministry of Human and Minority Rights announced two open procedures last year, and different individuals were appointed for both contracts, who did not identify any irregularities.
The former Ministry of Capital Investments (MKI), whose responsibilities have been taken over by the Ministry of Maritime Affairs and Transport, formed a working team tasked with controlling the provision of services in the contract with the Auto-Moto Association of Montenegro (AMSCG) regarding road information services for which a framework agreement was signed from 2023 to 2027 worth 1.2 million euros. The framework agreement signed by the former MKI with AMSCG stipulates that if the contracting authority notices any irregularities, they must immediately inform the contractor, who is obliged to correct the shortcomings, and if they cannot be corrected, the contract may be terminated. So far, there have been no such situations. The Ministry of European Affairs, as they claim, assigns a person to monitor each contract, separately for the technical and financial parts, engaging several different individuals for this purpose. Two individuals were engaged in these activities at the Ministry of Foreign Affairs, and the situation is similar in the Ministry of Economic Development and the Ministry of Spatial Planning, Urbanism, and State Property, which also had no complaints. The Ministry of Culture informed us that they did not have any open procedures last year and that they implemented a contract for organising official travel worth 37,000 euros for which the tender was conducted the previous year, so they were not obliged to appoint a person to monitor it. However, they noted that the implementation was monitored by the finance and public procurement services through invoice payment records, and there were no irregularities.
The Ministry of Health, the Ministry of Tourism, Ecology, Sustainable Development, and Northern Development, the Ministry of Energy and Mining, and the Ministry of Sports and Youth did not have any procedures that required the appointment of an individual to monitor contract implementation.
Reports Are Published, But Without Details
Another mechanism that should contribute to the transparency of public procurement is the obligation to publish reports on the implementation of contracts within 30 days on the ESJN (Electronic Public Procurement System). Failing to publish a report within this 30-day period after the contract’s completion is considered a minor offense, for which institutions can be fined between 2,000 and 10,000 euros.
The data we obtained from the ministries, as well as from the ESJN, indicate that the ministries complied with this obligation last year. However, considering the report template established by the Ministry of Finance on June 16, 2020, this form does not require any details on the actual implementation of the contract. Apart from the information already defined in the tender documentation and contract, which are publicly available on the portal, this report only contains the date of the contract’s full implementation. Moreover, these reports are not published on the main page of the procurement process on the ESJN, where all important documentation is available, from the call to the decision and contract, but rather on a separate tab “Contracts in Process,” which can only be accessed through a targeted search.
A good practice example from the former Ministry of Capital Investments (now the Ministry of Transport and Maritime Affairs) shows that the format doesn’t have to be “set in stone.” Their framework agreement with AMSCG (Automobile Association of Montenegro) included monitoring the contract implementation through regular monthly, quarterly, and annual reports, based on the records of services provided and confirmations of services rendered. These reports are published by the Ministry on the ESJN.
The Ministry of Human and Minority Rights conducted two public procurements last year: one for the purchase of airline tickets worth 65,000 euros, for which the contract is still ongoing, and another for software procurement for the digitisation of the Albanian language worth 387,200 euros (including VAT), for which the report has been published. The Ministry of Spatial Planning, Urbanism, and State Property published reports last year for three contracts worth 185,000 euros related to the purchase of computer equipment. The Ministry of Justice reported within the legal deadline for seven procedures with a total value of 514,037.87 euros, as did the Ministry of Public Administration for five implemented contracts worth 4,055,535.74 euros. The Ministry of Defense stated that out of 27 contracts worth a total of 1,500,253.74 euros (including VAT), they published 19 implementation reports on the ESJN.
The Ministries of Foreign Affairs, Finance, Health, Energy and Mining, Tourism and Ecology, European Affairs, Economic Development, Sports and Youth, Culture and Media did not have the obligation to publish reports last year, either because the contracts have not yet been implemented or due to simple procurements for which they are not required.
Inspection Oversight
The Public Procurement Inspectorate conducted only two inspections in ministries last year concerning the aforementioned control mechanisms, according to the data obtained by Institute Alternative under the Law on Free Access To Information. We received reports on inspections conducted in the field of public procurement at the Ministry of Finance and the Ministry of Education, Science, and Innovation. In these inspections, the obligation to appoint a person to monitor contract implementation was not reviewed.
The inspection at the Ministry of Finance focused on the application of regulations in the areas of procurement planning, execution of simple procurements, concluded contracts, and publication of reports on contract implementation. The Ministry’s obligation to appoint a person to monitor contract implementation was not within the scope of the UIP’s control. During this inspection, the inspector did not find any shortcomings in this department.
On the other hand, inspectors found deficiencies in the Ministry of Education, Science, and Innovation, from which we did not receive responses to our inquiries on this topic. There was also no response from the Ministry of Agriculture, Forestry, and Water Management or the Ministry of Labor.
According to the UIP’s report dated December 21, 2023, the Ministry of Education, Science, and Innovation did not comply with the legal obligation to publish a contract with the company Bemaks for equipping the “Novka Ubović” elementary school in Tološi. This was only done after their inspection, with a six-month delay, at the end of December last year. The implementation report, despite the inspector’s order, has not been published to this day, although the deadline for the contract signed on June 28, 2023, was 30 days. This inspection was carried out following a submitted initiative for control. The obligation to appoint a person to monitor contract implementation was not part of this inspection either.
This investigative article was produced within the Project “Procurement under spotlight – Making Watchdogs Work!”, with the support of the Embassy of the Kingdom of the Netherlands in Serbia and Montenegro within the MATRA Rule of Law program. Project aims to empower and motivate watchdogs to combat corruption and undue influence in public procurement.
Using practical examples, participants were introduced to this concept of public finance management, and why gender-responsive budgeting is a public policy topic in general.
The meeting was attended by 20 representatives from various institutions: the Ministry of Finance, the Commission for the Protection of Rights in Public Procurement Procedures, the State Audit Institution, the Administration for Inspection Affairs, the Agency for Prevention of Corruption, the Higher State Prosecutor’s Office, and the Ministry of Labour and Social Welfare.