E-procurement in the Republic of Serbia

Danijela Bokan

Public Procurement Office, Republic of Serbia

dbokan@ujn.gov.rs

E-procurement forum, December 2015, Vienna, Austria

LEGISLATIVE FRAMEWORK

Public Procurement System was set up in Serbia byadoption of Public Procurement Law in the year 2002.

Existing legislative framework for the publicprocurement system in Serbia is based on the PublicProcurement Law (“Official Gazette of the RS” No.124/12, 14/15 and 68/15, hereinafter: the PPL), whichentered into force in January 2013, and on relevantsecondary legislation.

The latest amendments to the PPL (“Official Gazette ofthe RS” No. 68/15), came into force in August, 2015.

2

PUBLIC PROCUREMENT OFFICEwww.ujn.gov.rs

The Public Procurement Office (PPO) is a special organizationwhich performs the following main activities: monitors the application of the PPL;

adopts bylaws and participates in drafting regulations in the PP area;

runs the Public Procurement Portal;

prepares reports on public procurements and proposes improvementmeasures;

manages the affairs related to public procurement officials;

provides professional assistance to CAs and bidders,

performs all necessary activities related with negotiations on accession to theEU in the domain of public procurement…

The administrative capacities of the PPO are 23 staffmembers.

3

LEGISLATIVE FRAMEWORK OF E-PROCUREMENT

The legislative framework governing e-procurement areacomprises the PPL and other sectoral laws with theirrespective implementing bylaws, such as: Law on electronic signature (“Official Gazette of the RS” No.

135/04)

Law on electronic document (“Official Gazette of the RS” No.51/09)

Law on personal data protection (“Official Gazette of the RS” No.97/2008, 104/2009 – second Law, 68/2012 - Decision of theConstitutional Court and 107/2012)

Law on Electronic Trade (“Official Gazette of the RS” No. 41/2009and 95/2013).

4

PUBLIC PROCUREMENT PORTAL

The PPL has established the single, central PublicProcurement Portal (Portal) in the Republic of Serbia, asunique instrument for improving transparency andinformation-access for CAs, bidders and other stakeholders.

Management of the Portal, pursuant to the PPL, is aresponsibility of the PPO.

Publishing tender notices and other documents on the Portalby CA is free of charge.

Search of the published contents is allowed for all interestedpersons without any prior registration and free of charge.

5

PUBLIC PROCUREMENT PORTAL

In accordance with the PPL the following contentsare published on the Portal:

Public procurement notices and decisions, such as:

prior indicative notice,

invitation to submit bids and applications,

notice on initiation of negotiated procedure withoutinvitation to bid,

notice on awarded public procurement contract,

notice on cancelling of public procurement procedure,

notice on request for the protection of rights,

decision on modifying public procurement contract etc.

6

PUBLIC PROCUREMENT PORTAL

Tender documents, changes and amendments of tender documents, answers to the questions of bidders, additional information or clarifications;

Opinion of the PPO on the justifiability of applying the negotiated procedure without invitation to bid;

Public procurement plan and any modifications - it is foreseen that pp plans are going to be published on the Portal as of January 1, 2016;

Aggregated quarterly reports on conducted procedures and concluded public procurement contracts - on the basis of the delivered quarterly reports of CAs;

Decisions of the Republic Commission.

7

PUBLIC PROCUREMENT PORTAL

CA is obliged to use names and designations from the CommonProcurement Vocabulary when defining public procurementsubjects in public procurement notices which is in accordance withthe corresponding vocabulary in the EU - the CPV.

All CAs, from both classical and „utility sector“ (areas of watermanagement, energy, transport, postal services) publish on thePortal all public procurements, including low value procurements.

Low-value public procurements - estimated value of the same-kindprocurements at the annual level ranges between RSD 500,000(EUR 4,166) and RSD 5,000,000 (EUR 41,666) , or in „utility sector“RSD 10,000,000 (EUR 83,333).

8

SITUATION IN PRACTICE

PP PORTAL ACCORDING TO THE LAW FROM 2008

• Fully operational between January 2009 and

April 2013

PP PORTAL ACCORDING TO THE LAW FROM 2012 –NEW PORTAL

• Operational since April 2013, when the application of the new PPL started

9

SITUATION IN PRACTICE- New Portal/2012-

LATEST KEY DATA*:

• Registered users at CAs: 8,875 (representatives of CAs)

• Published public procurements: 140,175

• Published opinions of PPO for negotiated procedure: 6,529

• Decisions of Republic Commission: 4,599

• Published large-value contracts from quarterly reports ofCAs: 312,322 (‘’old’’ and ‘’new’’ Portal)

• Average number of published public procurements

daily: 145

• Average number of daily visits: 4,834

*Source: Public Procurement Portal: http://portal.ujn.gov.rs10

PUBLIC PROCUREMENT PORTAL :http://portal.ujn.gov.rs

www.ujn.gov.rs

11

12

13

E- PROCUREMENT

Besides the Portal, the PPL also provides for thefollowing possibilities:

submission of bids in electronic format

introduction of electronic auction

application of dynamic purchasing system

There is no defined deadline for the implementationof these options by CAs, only available option.

Despite the already established legal provisions, theseelectronic tools have not been applied in practice yet.

14

FURTHER DIRECTIONS OF DEVELOPMENT

PUBLIC PROCUREMENT DEVELOPMENT STRATEGY OF THE REPUBLIC OF SERBIA FOR THE PERIOD 2014 – 2018:

In accordance with the Strategy, it is foreseen to achievefull harmonization of legislation governing e-procurements with the EU Acquis, namely, with Directive2014/24/EU and Directive 2014/25/EU, by the end of2017.

Action Plans for Implementation the Strategy will beadopted annually and will define the measures andspecific activities for further development of the Portaland the e-public procurements in Serbia.

15

ACTION PLAN FOR IMPLEMENTATION OF THE STRATEGY FOR DEVELOPMENT OF PUBLIC PROCUREMENT IN THE

REPUBLIC OF SERBIA FOR THE PERIOD 2014-2015

Public Procurement Portal was upgraded with new options:

possibility for CAs to publish procurement plans

improved search function

setting up register of public contracts

English version of Portal

development of the statistic and reporting system

16

ACTION PLAN FOR IMPLEMENTATION OF THE STRATEGY FOR DEVELOPMENT OF PUBLIC PROCUREMENT IN THE

REPUBLIC OF SERBIA FOR THE PERIOD 2014-2015

Two basic analyses were conducted in 2015, as follows:

1. The Analysis of the Existing Legislative and Institutional Frameworks for Applying Electronic Procurements in the Republic of Serbia (е-communication, е-submission of bids, е-auction, е-dynamic purchasing system, е-catalogues);

2. The Analysis of Technical Solutions and Options either existing or being developed in EU Member States in the area of е-procurements.

17

FURTHER ACTIVITIES

In the coming period, continual efforts will be made to further develop the transparency and availability of information provided by the Portal, including in particular:

Introduction of a unified bidder registration system under specific codes contained in the CPV and their automatic notification on any supply they may be interested in;

Improvement of the call center providing support to Portal users;

Improved training for all Portal users (contracting authorities, bidders, civil society...).

18

FURTHER ACTIVITIES

Further activities will mainly be focused on development of a system for electronic submission of bids through the following stages:

Selection of an optimum legal, institutional and technical model of е-procurements suitable for application in the Republic of Serbia;

Preparation of technical solutions in accordance with the selected optimum model;

Development and launching of a new e-procurement platform.

19

FURTHER ACTIVITIES

The ultimate goal is the establishment of the single electronic platform for public procurement that will cover е-tendering , е-communication and e-submission of bids.

This platform would develop gradually, from a pilot project to a fully operational system.

Throughout the development of e-procurements an intensive user training program will be conducted,including practical workshops, development manuals and guidelines, in accordance with future annual action plans for implementing the Strategy.

20

REPORT ON PUBLIC PROCUREMENTS IN THE REPUBLIC OF SERBIA

FOR THE PERIOD 1.1.2015 – 30.06.2015

CAs deliver to the PPO quarterly reports on conducted public procurement procedures and awarded public procurement contracts.

For this purpose, CAs use the application of the PPO –APPLICATION SOFTWARE FOR KEEPING RECORDS ON PUBLIC PROCUREMENT.

The PPO prepares and publishes semi-annual and annual reports on public procurements in Serbia on its website.

In the report, the PPO also submits proposal for improvement measures of the PP system.

21

REPORT ON PUBLIC PROCUREMENTS IN THE REPUBLIC OF SERBIA

FOR THE PERIOD 1.1.2015 – 30.06.2015

In the first half of 2015, reports on public procurement were submitted by 5,033 CAs.

Registered value of public procurements was

RSD 135,3 billion (EUR 1,1 bilion)

The average value per awarded contract was

RSD 2,7 million (EUR 22,5 thousand)

The public procurements’ share in GDP decreased from 7.7% in 2014 to 7,3% in the first half of 2015.

22

HIGH VS. LOW-VALUE PROCUREMENTS

The share of low-value procurements in the total value of public procurements increased from 8% in the first half of 2014 to 10% in the first half of 2015.

23

TYPES OF PROCEDURES

The share of open procedure in the first half of 2015 reached 86%, at the same level as in the same period in the previous year. This tells us that the share of open procedure has settled at this high level since the PPO began issuing prior opinions on justifiability of negotiated procedure.

24

OPEN PROCEDURE

Observing the entire thirteen-year period of application of the PPL, one may conclude that 2014 and 2015 witnessed the record-high share of open procedure (86%).

25

COMPETITION

In the first half of 2015 competition intensity increased, only slightly, comparing to 2014, the year in which it has been at its lowest level over the past five years.

26

Average number of bids per awarded contract

in public procurement procedures

2011 2012 2013 2014First half

of 2015

3.2 2.7 2.7 2.6 2.7

SINGLE SUBMITTED BID

Data show continued increase in contracts concluded in procedures with only one bid submitted during the first half of 2015.

Therefore, an apparent priority in the coming period is to identify and remove obstacles to greater participation of bidders in public procurement procedures, especially the bidding of small and medium-sized enterprises.

27

The share of contracts with a single submitted bid (in %), by years

Year 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015

1H

% 13.8 18.1 27.2 26.9 28.6 31.3 30.7 34.6 39.7 41.8 36.8 42.6 43.6

REGISTER OF BIDDERS

The Register of Bidders was launched on 1 September 2013 and is administered by the Business Registers Agency (BRA). The Register’s benefits for bidders are demonstrated by the latter’s huge and increasing interest to register.

Up to 30 June 2015, there were 7,234 bidders registered; this registration not being mandatory. 28

OUTCOMES OF PROCEDURES

The overview of outcomes of public procurement procedures in the first half of 2015 indicates that 89% of launched procedures was successfully completed.

29

GROUNDS FOR SUSPENSION

Overview reveals that each second procedure has been suspended due to having received no adequate and acceptable bid (48%) . The second most relevant reason for suspending procedure (23%) was that none of bidders submitted any bid.

30

PROCUREMENTS EXEMPT FROM THE APPLICATION OF THE LAW

*Values are expressed in RSD thousand

Procurements exempt from the application the PPL increased their share in the total contract value, from 30% in 2014 to 45% in the first half of 2015.

31

Overview of all procurements in the Republic of Serbia in the first half of 2015

Type of

procurement

Total number of

contracts

Total contract

value*

Share in all procurements

By number,

in %

By value, in %

Large

procurements28,701 122,095,463 13 50

Small

procurements21,178 13,234,739 9 5

Exempted

procurements180,138 108,683,472 78 45

Total 230,017 244,013,674 100 100

OTHER RELEVANT DATA

The number of amendments per concluded contract – 3%

The share of centralized procurements – 7%

The share of contracts concluded through framework agreements – 10 %

The share of procedures which applied the criterion of the lowest price – 77%

32

NEW PERFORMANCE INDICATORS

In the forthcoming period, PPO will focus on better monitoring the following areas:

Duration of the procurement procedure

Contracts concluded through framework agreements and centralized procurements

The participation of small and medium-sized enterprises

Participation of social, green and innovative procurement

Changes and execution of concluded contracts

33

SOFTWARE APPLICATION FOR PP PLANNING AND RECORDS OF CONCLUDED CONTRACTS

CAs can download the application from the website of PPO.

Desk-top application, free of charge

It consists of three interrelated modules:

I. Financial plan

II. Procurement plan

III. Concluded contracts

34

SOFTWARE APPLICATION FOR PP PLANNING AND RECORDS OF CONCLUDED CONTRACTS

There are clearly visible all the key points of the process of spending public funds through public procurement:

The exact amount of funds in the budget or financial plan provided for certain procurement

Estimated value of certain procurement

The value of the concluded contract

The value of the modified contract

The value of the final completion of the contract

35

SOFTWARE APPLICATION FOR PP PLANNING AND RECORDS OF CONCLUDED CONTRACTS

Application provides CAs many statistical overviews in order to monitor and control their spending of public funds through public procurement procedures.

CAs should record other important information on procurement such as: subject of procurement, type of procedure, tentative date for initiating the procedure, awarding and implementing the contract etc.

Instrument of contract management in public procurement

Contribution to strengthening the financial discipline

36

THANK YOU FOR YOUR

ATTENTION!