Institute Alternative’s analysis on implementation of the new Public Procurement Law
The Royal Capital of Cetinje amended its 2020 Public Procurement Plan as many as 18 times and the Municipality of Ulcinj executed only 7% of its public procurement budget in 2019.
Those are just some of the examples of poor planning that Institute Alternative pointed out in it’s analysis.
Besides serving as an illustration of poor procurement planning, this case (Cetinje) illustrates the poorly regulated procurement planning procedures: the Law allows for the Plans to be amended as many times as desired and without any rationale. Although the most drastic example, Cetinje was not an exception, states in the findings.
On average, the 24 municipalities covered by this report amended their Public
Procurement Plans on 6.4 occasions during a single year. The ones that resorted to this most frequently, besides Cetinje, were Zabljak (11), Berane, Pljevlja and Petnjica (10), while the ones that amended their Plans the least were Budva, Andrijevica, Mojkovac and Herceg Novi (twice).
Analysis „Implementation of the New Public Procurement Law: A Chance to Leave the Vicious Circle“, focused on the work of municipalities and ministries, was prepared by Ana Đurnić and Dragana Jaćimović.
The 17 ministries changed their Public Procurement Plans less frequently than the municipalities, on average on 2.8 occasions in 2020. The Ministry of Justice amended its Plan most frequently (eight times). The Ministry of Interior had six rounds of amendments; the Ministry of Sustainable Development and Tourism and the Ministry of Public Administration carried out amendments on average almost once in two months, or five times during the year.
The Ministry of Labour and Social Welfare, Ministry of Human and Minority Rights, Ministry of Science and Ministry of Health amended their respective Plans only once during 2020.
The new Public Procurement Law (PPL) was adopted on 17 December 2019 and its implementation began on 7 July 2020. It was adopted with the aim of further harmonisation with the EU Directives within the accession negotiation process between Montenegro and the EU. Harmonisation of the national framework with the EU acquis communautaire is one of the three closing benchmarks for Chapter 5 – Public Procurement.
The European Commission 2020 Montenegro Report noted limited progress in this area, with the adoption of the new PPL and the Law on Public-Private Partnerships.
It further stated the need for consistent implementation of these laws, along with the adoption of relevant secondary legislation, it is stated in the analysis. Institute Alternative reminded on the European Commission’s assessment from 2015, which noted good progress on the back of the PPL amendments from late 2014; the subsequent implementation, however, failed, and the 2016 Report noted limited progress. The 2018 Report noted a backslide.
Inadequate procurement planning is illustrated also by the large differences between the planned and executed procurement budgets of contracting authorities. However, the data for the individual categories of contracting authorities, such as ministries and municipalities, are available and suggest that the problem of inadequate planning is particularly present among municipalities.
During 2019, the municipalities spent only some 60% of the budget planned for public procurement: €48,114,198.99 out of the planned amount of €81,703,241. The Municipality of Ulcinj executed only 7% of its public procurement budget in 2019,16 followed by the Royal Capital of Cetinje at just 29%,17 and the Municipality of Budva at close to one half of
the planned budget, almost 54%, stated Đurnić and Jaćimović. Dana for 2020 are not yet available and the issue of poor planning at the level of all contracting authorities is impossible to measure. Neither the Ministry of Finance nor its predecessor the Public Procurement Administration publishes the total difference between the planned and spent procurement budget as the aggregate amount for all of the contracting authorities, just for some of them such as ministries and municipalities.
According to the data collected by Institute Alternative, in 2019, Municipality Ulcinj spent spent a bit more than 350.000,00EUR, against the originally planned amount of 5,5 milions EUR. Overall, the ministries executed 93% of the funds planned for public procurement in 2019.19 Individual ministries were flagged up as examples of poor planning: one-half and one-third of the respective planned budgets remained unspent in the cases of the Ministry of Labour and Social Welfare20 and Ministry of Defence, while the Ministry of Interior spent €8 million more (€30,230,903.72) than originally planned (€22, 211,729.21), it is stated in the IA’s analysis.
Institute Alternative recommends that more stringent obligations should be defined on the part of contracting authorities concerning the development of Public Procurement Plans. According to them, such Plans should include the contracting authority’s needs assessment for the previous three years, explanatory notes in case the envisaged needs differ radically from the past ones, and specific explanatory notes on any new procurement. Amendments to the Public Procurement Plan should include mandatory explanations.
Croats constantly conduct market analysis
The PPL introduced market research in the course of developing a Public Procurement Plan or when launching a public procurement procedure. It is prescribed as a possibility, not an obligation, and only provided that it does not jeopardise the principle of market competition, prohibition of discrimination and transparency.
In practice, there are no indications or evidence that the contracting authorities from the category of ministries and municipalities implemented such analyses. No findings of a market analysis were included in Public Procurement Plans, Tender Documentation, procurement notices or reports on implemented procedures i.e. Decisions on the selection of the best tender, they stated.
The IA points to the example of neighbouring Croatia, an EU member state, market analyses are implemented as a rule prior to launching a public procurement to prepare the procurement and inform economic operators about the contracting authorities plans and requirements and are mandatory also prior to launching an open or restricted procedure for the purchase of works or procedures of large value purchases of goods or services. the contracting authority is required to prepare and publish a report on endorsed and rejected comments and suggestions.
Author: Miloš Rudović, Vijesti
Text is originally published in the Daily Newspaper Vijesti, and also on the portal Vijesti.