Procurement planning did not unfold “according to the plan”

In practice, public procurement planning is meaningless, especially at the local level, by multiple and unexplained changes of public procurement plans, which results in spending slightly more than half of the planned expenditures for these purposes on an annual basis.

A large number of contracting authorities are waiting for the Budget Law so that they can plan procurement for the current year and fulfill their legal obligations in that regard. The Ministry of Finance and Social Welfare has suggested planning only those procurement necessary for the smooth functioning of these contracting authorities. However, procurement planning did not go smoothly in previous year, even when the adoption of the budget was not delayed.

That procurement are planned inadequately is also shown by the fact that at the end of the year, municipalities and ministries have millions of deviations in the planned and realised funds for public procurement. Municipalities have not spent approximately 40 percent of the planned amounts for public procurement in 2019 (about 48 million of the planned 81.7 million euros were spent).

The Municipality of Ulcinj especially stands out. This Municipality did not realise the budget for procurement in the amount of 93% (about 355 thousand euros of the planned 5.5 million euros were spent). It is followed by the Royal Capital Cetinje with only 29% of realised procurement budget (out of the planned almost 8 million, only 2.2 million euros were spent). The Municipality of Budva has not spent more than half of the planned funds, ie almost 54% (out of the planned 12.2 million euros, Budva spent about 5.6 million euros on procurement).

In 2019, the ministries in the total amount did not realise 7.2% of the planned funds for public procurement (out of the planned over 60 million, more than 55.5 million euros were spent). However, looking individually at the ministries, this difference is more pronounced. For example, we have the Ministry of Interior (Mol), which “broke“ the planned budget for procurement by about 36% (22 million was planned, and more than 30 million euros were spent). On the other hand, the Ministry of Labor and Social Welfare has spent a little over 40% of the planned budget (about 3 million euros were spent and it was planned almost 7.4 million). The Ministry of Defense did not implement about 30% of the planned procurement budget (planned amount was 13.5 million and slightly less than 9.5 million euros were spent).

Data on the total difference at the level of all contracting authorities are not publicly available, so it is impossible to gain insight into the scope of the problem of poor public procurement planning in Montenegro. Public procurement reports provide a comparative overview of planned and realised funds for only some categories of contracting authorities (ministries, municipalities, and in the last report administrations), and in a number of reports there was no data, so it is impossible to follow the trend by year.

We remind that for implementation of public procurement procedure, it is necessary to be included in the Public Procurement Plan, which must be prepared by each contracting authority, and that financial resources has to be secured for it.

The Royal Capital Cetinje amended its Public Procurement Plan 18 times for the last year. Beside serving as indicator of poor public procurement planning, this case illustrates the poorly regulated public procurement planning procedures: the Law allows for plans to be amended as many times as desired and without rationale. Although the most drastic example, Cetinje was not an exception, as almost all institutions and municipalities amended their public procurement plans several times during the year.

On average, 24 analysed municipalities amended their public procurement plans 6.4 times per year. Along with Cetinje, it was most often done by the municipalities of Žabljak (11 times), Berane, Pljevlja and Petnjica (10 times), and the least frequently municipalities were Budva, Andrijevica, Mojkovac and Herceg Novi (twice).

Ministries, 17 of them, amended their plans less frequently than municipalities, on average 2.8 times during 2020.  The plan was most frequently amended by the Ministry of Justice (eight times).

Apart from the frequency, an indicator of poor planning is the period where amendments of plans were adopted. Almost a third of municipalities has amended their “plans“ at the end of 2020, while only the Ministry of Finance and the Ministry of Justice had amendments in November.

One of the total number of amendments in each municipality and ministry referred to the mandatory harmonisation of public procurement plans with the new Law on Public Procurement and the procedures it requires.

Dragana Jaćimović
Project Associate

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