Amendments to the Public Procurement Law lack reform impetus

The Draft Law on Amendments to the Law on Public Procurement is making steps towards simplifying procedures and clarifying legal provisions that could and/or have been so far subject to different interpretations in use. While praising such procedural improvements, we note that these amendments lack reform zest, for which we have also seen the need in practice.

Therefore, at the very beginning, we will repeat the key problems that we have noticed so far in our research in the field of public procurement and for which we believe should be the subject of reforms (through amendments to the Law and/or bylaws), and which are largely compatible with SIGMA recommendations and findings in this area.

  • The need to prepare and adopt a special Law on Procurement in the Security and Defence Sector, which would respond to all the specifics of these procurement, in terms of planning, implementation, reporting, and supervision of the implementation of these procurement.
  • It is necessary to determine more stringent obligations of contracting authorities in the preparation of the Public Procurement Plan. The Plan should also include the contracting authority’s needs assessment for the previous three years, an explanation if drastic differences exist in the planned needs compared to previous ones for the same procurement, as well as a specific explanatory notes on any new procurement. Amendments to Public Procurement Plans should include mandatory explanation of the changes.
  • The Law on Public Procurement should prescribe the obligation of conducting market analysis and the relevant procedure, as well as the obligation of reporting on the conducted market analysis, to allow for equal treatment of all interested bidders, including those market actors who did not take part in the consultations but are interested in taking part in the public procurement procedure. The secondary legislation should stipulate mandatory content of the template of the Report on Conducted Public Consultations.
  • The Law on Public Procurement should prescribe the obligation of the Ministry of Finance to prepare a Methodology for defining the criteria “economically most advantageous bid”, since the price is still a key factor in choosing the most advantageous bid, as the most frequently used sub-criteria in a very high percentage of total points. SIGMA attributes this primarily to the weak capacity of contracting authorities to better define the most economically advantageous bid, so a binding and detailed Methodology/Rulebook, in addition to the existing Rulebook on Methodology for Evaluating Bids in Public Procurement (074/20), should issue rules for determining criteria, but also examples of the certain sub-criteria and models of bid evaluation. Eventually, to amend the existing Rulebook on the Methodology for Evaluating Bids.
  • It is necessary to amend the template of the Report on the performance of public procurement contracts, so that it must contain: • data on the execution of contracts for procurement of goods, services and works on all essential characteristics of the subject of procurement (quality, dimension, shape, safety, performance, labelling, expiration date, measurement unit, quantity, etc.) and requirements regarding the manner of execution of the subject of procurement, including any requirements related to environmental protection, energy efficiency, social protection and / or protection and transfer of intellectual property rights, as stated in the the technical specification of the selected bid, as the basis for the contract; (Article 87 of the Law on Public Procurement, requirements regarding the implementation of the subject-matter  of procurement and requirements regarding the execution of works – Article 89 of the Public Procurement Law); • data on deadlines and methods of payment, with accompanying supporting documentation; evidence of acceptance of goods (delivery note signed by an authorised person), delivery of services or execution of works (proof of the existence of the final product, photo and/or video documentation, report of the legal person in charge of supervising the implementation of works); Also, the report should contain a conclusion on whether the contract was executed in full compliance with the contract (and amendments to the contract – concluded annexes); if not, the report must contain information on whether the appropriate procedure has been initiated to compensate and remedy any harmful consequences of non-execution of the contract. The report should also contain the signature of the responsible person so that all the information stated in the report is correct.
  • Improve legislation in the area of conflicts of interest in public procurement, by considering the model of involving the Agency for Prevention of Corruption and networking of databases at its disposal with the Montenegrin Electronic Public Procurement System (CEJN). This to enable contracting authorities to automatically access databases so that they can perform adequate verification of the accuracy of statements on the absence of conflicts of interest (prevention), and involve the Agency in the part of the investigation into the already existing conflict of interest (repression). It is necessary to introduce the obligation to publish statements on (non)existence of conflicts of interest of all persons involved in the public procurement procedure in the Electronic Public Procurement Gazette. Also,  compiling and publishing, with regular updating, the lists of business entities with which the heads of the contracting authority may not conclude a contract due to the existence of a conflict of interest, that is a certain private interest, which in addition to Croatia, also exists in Bosnia and Herzegovina.

Our comments concerning the Draft Law on Amendments to the Law on Public Procurement submitted during the public debate can be found at the link below:

Comments, objections and suggestions of the Institute Alternative to the Draft Law on Amendments to the Law on Public Procurement

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