Public procurement in Montenegro is not efficient, and the challenges in this area are multiple. Despite the fact that Montenegro meets all the requirements of the European Union, public procurement as part of the system must be viewed in the Montenegrin context. We must have a focus on this area, especially from the aspect of high risk for corruption, even after the announced closure of the chapter.
These are some of the main conclusions from the final conference of the project “Public Procurement under Spotlight – Making Watchdogs Work!”, which is being implemented by Institute Alternative with the support of the Embassy of the Kingdom of the Netherlands.
President of the Managing Board of Institute Alternative (IA), Stevo Muk, announced that there was a need to put the topic of public procurement in focus, and that the main goal of the project was to empower and motivate the watchdogs of the budget to fight against corruption and improper influence in public procurement.
“Where there is the most money, the challenge of corruption is the greatest. In public procurement, two principles collide, the principle of legality – which includes procedures, transparency, protection of rights, and therefore time as a factor and consequence. On the other hand, the principle of efficiency – that goods, services and works are carried out on time, that they reach the citizens when they are needed (in quality and quantity as planned and promised)”, said Muk.
Muk emphasized that “if we were to conclude from the official data on the reported conflict of interest, reported suspicions of corruption, annulled contracts, indictments and verdicts – there is no illegality, no corruption.” It is hard to believe that in a country where corruption is widespread, almost traditionally based, there is no corruption in the procedures in which the largest part of the budget funds are distributed, over 600 million euros per year”.
“It is necessary to ensure the proactive cooperation of all independent supervisory institutions, and the highest level of guarantees and rewards for sources of information from the system,” Muk concluded.
First Secretary of the Embassy of the Kingdom of the Netherlands in Serbia and Montenegro Corwin van Strien pointed out that the issue of corruption in public procurement is an important topic.
“The rule of law is one of the main priorities of the Netherlands and that is the reason why we are providing support in the implementation of this project.” We have serious projects to eradicate corruption in public procurement. People are silent about corruption, and silence means approval. I remind you that uncovering corruption helps achieve the rule of law so that society starts to believe in institutions,” said van Strien.
The conference participants were also presented with a new database on public procurement available on the Mojnovac.me. The database provides an overview of all public procurement contracts concluded since 2021, and it is possible to search by bidders and contracting authorities.
During the panel “On the way to closing Chapter 5 (Public procurement) – what should be changed in the system?“, expert in the field of public procurement Daniel Ivarsson announced that in the last 10 years, progress has been made in the legislative and institutional sense in this area.
“You need to take into account the subject of the procurement, as well as the possibility of fraud and corruption, which is why it is extremely important to be transparent and keep records of all decisions at an early stage. It is the management’s responsibility to ensure and take steps to make the right decision in the procurement process,” underlined Ivarsson.
According to him, public procurement should take place on a competitive market. “What needs to be addressed in particular is whether there really is a competitive approach in terms of competitive offer, conditions and quality, or whether it is still a competition of privileged bidders who are in contact with decision makers,” Ivarsson pointed out.
The chairman of the Senate of the State Audit Institution (SAI) Nikola Kovačević announced that the SAI, at the proposal of Institute Alternative, controlled the implementation of simple procurements in 14 state and local institutions.
The audit of the regularity of the implementation of simple procurements in the public sector for 2023 showed that they are not implemented in accordance with the law. Of the 14 observed, 12 subjects of supervision did not report more than one and a half million euros spent through simple procurement. Only the Railway Administration and the Ministry of Health did not observe any irregularities.
As stated in the report, the SAI has placed a special focus on the way of carrying out simple procurement of goods, services and works, the annual value of which does not exceed 8 000 euros. The audit showed that most entities did not list all procurements in the report, that their procurement plans were unrealistic and were often changed, a large number of procurements were not carried out, procurement items were shared, and a large number of entities spent over 8,000 euros on direct procurements, without conducting the procedure through the electronic system.
The auditors also determined that more was paid for certain procurements than was agreed upon, and there were goods and services that were not even provided for in the contract. There were no contracts for certain procurements, the value of which was between four and eight thousand euros, while the deadlines for the delivery of goods, provision of services or performance of works were not respected. In addition, the public procurement commissions judged the offers of the bidders as correct, even though they did not meet all the conditions, and they were late in delivering the notification about the outcome of the procurement.
Kovačević suggested that work should be done on amending the Law, and that the recommendations were published as part of the audit report.
Melida Suljević, a member of the Commission for the Protection of Rights in the Public Procurement Process, pointed out that there was a significantly higher number of complaints than in previous years. She added that the Commission decided on all appeals in a timely manner, within the legal deadline.
Suljević said that a small number of complaints were filed about the procedural procedure of public procurement, which indicates that the Montenegrin Electronic System of Public Procurement (CEJN) made it easier for the contracting authorities to carry out the procedure with as few errors as possible. She added that the complaints mainly refer to wrongly established factual situation and wrong application of material regulations.
“Additional improvement of CEJN, through the introduction of automatic determination of the deadline for appeals, and automatic rejection of untimely appeals, would significantly contribute to the efficiency of the Commission’s work.” Additionally, it would be of particular importance for the Administrative Court to act more effectively in our cases,” she said.
General Inspector for Public Procurement Ivan Milićević announced that the challenges in the field of public procurement are multi-layered, first of all regarding the legislation, as well as the way in which procurement is carried out by direct acceptance of the invoice.
“From the point of view of the inspection, the biggest problem is that the misdemeanor provision for failure to comply with the Rulebook for the implementation of simple procurements was deleted from the Law.” In connection with the part of the SAI’s findings on non-declaration of procurement costs, we do not have a misdemeanor provision for records on simple procurements. “Even if we discover irregularities, we cannot penalize violators for that,” Milićević pointed out.
Speaking about the procurement of works, he recalled that he had access to a document from 2020, when the director of the Public Works Administration sent the Ministry of Sustainable Development a list of bidders who performed poorly on capital projects, with a proposal to revoke the license. “We see that the same bidders from the list are awarded contracts even today,” he concluded.
General Director of the Directorate for Public Investment Management and Public Procurement Policy in the Ministry of Finance, Jelena Jovetić, pointed out that according to the latest reports of the European Commission, one of the most fulfilled chapters is Chapter 5 (Public Procurement), and that we expect it to be closed by the end of the year.
She added that with regard to the closure of Chapter 5, all the requests of the EC have been implemented, including the last one from April, which limited the consumption of direct purchases on an annual level to 100,000 euros.
“The public procurement system in Montenegro should be more efficient. Public procurement lasts an average of 77 days and is not efficient. The procurement of works takes an average of 86 days. From the perspective of the public sector, it is a waste of public money, administrative capacities of the administration and economic entities,” said Jovetić.
“For the improvement of the public procurement system, it is crucial that we have substantive appeals procedures with serious allegations.” Unfortunately, we are currently constantly dealing with technical details rather than the essentials. We should be part of the EU and the public procurement system should respond to what the EU expects from us,” concluded Jovetić.
During the event, the UNCAC Resolution on promoting transparency and integrity in public procurement in order to support the goals of sustainable development, which was adopted by the Conference of States Parties to the United Nations Convention against Corruption in December 2023, was presented.
