IA recommendations for improvement of simple and centralised procurement

We have submitted recommendations to the Ministry of Finance on the Draft Decree on Centralised Procurement and the Draft Rulebook on Manner of Implementation of Simple Procurement. Our recommendations are aimed at overcoming problems mapped within our recently conducted research on these specific procurement.

Some of our key proposals in regard to the Draft Decree on Centralised Procurement are the following:

Ministry of Finance to prescribe specific form for the Centralised Public Procurement Plan, which will be an integral part of the Decree;

The Plan should clearly state the contracting authority for which the Central Public Procurement Authority (Property Administration) conducts procurement and the exact amount of planned resources dedicated to each specific contracting authority. Currently, the Property Administration’s Plan only states the cumulative data –  the subject of the procurement and total planned budget for it.

This way, it would be much easier to keep track on the implementation of these procurement, whether they are in line with the resources allocated to contracting authorities by the Budget Law, as well as the timeliness of the requests for implementation of centralised procurement delivered to the Property Administration by individual contracting authorities.

Draft Decree currently does not prescribe an obligation of providing specialised form for centralised procurement plan. In that case, these procurements would be planned through the same form used for planning individual contracting authorities’ procurement, which does not take into account the specifics of centralised procurement.

To prescribe an obligation of publishing framework agreements and other public procurement contracts concluded by the Central Public Procurement Authority (Property Administration;

Alternatively, the Property Administration should be obliged to deliver all the concluded framework agreements and contracts, including their amendments, to the Ministry of Finance, for publishing in the Electronic System of Public Procurement (ESJN), in accordance with the article 44, paragraph 1, item 10 of the Law on Public Procurement.

It is necessary to provide maximum transparency for centralised procurement, in particular through publishing all the  concluded framework agreements and public procurement contracts.

In the part of the Draft Decree which refers to reporting (subtitle IV article 15 of the Decree), which provides an obligation for contracting authorities to report to the Central Public Procurement Authority (Property Administration) on the implementation of the contracted centralised procurement, it should be specified that the report must be submitted by the January 31 of the current year for the previous; also for the second half of the previous year, when it comes to semi-annual reports.

Currently, the Draft Decree does not clearly state the reporting period, but solely the deadline for submitting the report.

We wrote about the problems identified through our research on centralised procurement in our publication „(Non)Centralised Procurement in Montenegro: The Beginning of a Long Road“, on which we base our recommendations.

When it comes to Rulebook on the Manner of Implementation of Simple Procurement, some of our key proposals are the following:

To prescribe the obligation for the contracting authorities to prepare, submit to the Ministry of Finance and publish online the Simple Procurement Plan , as well as an obligation for the Ministry of Finance to prepare the form of  the Simple Procurement Plan on, which would be an integral part of this Rulebook;

Since the Article 23 of the Law on Public Procurement prescribes that „this law is not applicable to procurement from the Article 26, paragraph 1, points 1, 2 and 3 of this law (hereinafter: Simple procurement).“, neither does the Article 84 of the same Law which prescribes an obligation of the contracting authorities to prepare and publish the Public Procurement Plan.

The Regulatory Impact Assessment Report on this Rulebook, prepared by the Ministry of Finance, states that  one of the key objectives of the adoption of this Rulebook is „to acquire greater transparency and legal certainty through adoption of the comprehensive unique document applicable to all the contracting authorities which will improve the efficiency of planning and implementing simple procurement“. However, planning of simple procurement is not at all regulated by the Draft Rulebook, which is why it should be  amended.

To prescribe obligation of publishing invoices for procurement of goods, services and/or works with the estimated value equal to or less than 5.000,00 euros, directly contracted between the contracting authority and the bidder;

The invoice, contract or other document  based on which the payment is being made needs to be published in the Electronic System of Public Procurement (ESJN), i.e. on the contracting authorities’ webpages or Public Procurement Portal until the ESJN becomes fully functional.

To delete the possibility for the contracting authorities to deliver the request for submitting the bids to less than three bidders when „because of the technical specification of procurement item, market competition does not exist”.

We believe the contracting authorities must always tend to obtain a minimum of three bids. When sending request for submitting the bid to at least three bidders is not possible, for any reason, the contracting authorities should make the request public and allow every interested bidder to apply.

We believe that proposed formulation leaves too much space for discretionary assessment and potential  abuses. It remains unclear how the contracting authorities would assess and objectively explain that the „market competition does not exist“. This is particularly important if we bear in mind that, in accordance with the Law on Public Procurement, the market analysis, which could help with the rationale in this case, is not at all obligatory.

Therefore, requests for submitting the bids should be published in the ESJN and/or web page of the contracting authority, whenever the contracting authority is unable to send the request three specific bidders’ addresses.

These and other of our recommendations sent to the Ministry of Finance with are aimed at improving the transparency and competitiveness of simple procurement (term in use in the currently applicable legislation: low value procurement). We base our recommendations on the research results compiled in our publication “Low Value Procurement in Montenegro: Without Transparency and Competition”.

The new Law on Public Procurement has been adopted in December 2019, came into force 8 days later, but with delayed implementation – six months after coming into force. It is expected to start implementing on July 7 2020. The Law has envisaged preparation and adoption of at least 36 new by-laws, forms, instructions, manuals etc, to be adopted by the Government and/or Ministry of Finance. The deadline for its adoption is also July 7.

So far, the Ministry of Finance – Directorate for Public Procurement Policy has prepared and published for consultations two of these envisaged acts – Draft Decree on the Centralised Procurement and Draft Rulebook on the Simple Procurement. We expect the Directorate and the Government to consult the public on all the other acts, by-laws etc before their final adoption.


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