Dear Sirs,

In the field of public procurement, a new Public Procurement Law has been adopted (Official Gazette of Montenegro, 42/11), which entered into force on eighth day as of its publication in the Official Gazette of Montenegro, and it has been implemented as of 1 January 2012.

The Public Procurement Law (Official Gazette of Montenegro, 42/11)[1] has been harmonized with the Directive 2004/17/EC of European Parliament and Council, regulating procurement procedures of the entities operating in areas of water management, energy, transport and postal services, Directive 2004/18/EC of European Parliament and Council on coordination of procedures for award of contracts for public procurement of goods and public service contracts, Directive 2007/66/EC of European Parliament and Council, amending and complementing the Council Directives 89/665/EEC and 92/13/EEC regarding the improved efficiency of review procedures related to award of the public procurement contracts, Commission Regulation (EC) no. 213/2008, amending the Regulation (EC) no. 2195/2002 of European Parliament and Council on the Common Procurement Vocabulary (CPV) and Directive 2004/17/EC and 2004/18/EC of European Parliament and Council on changes of the CPV, Commission Regulation (EC) no. 1564/2005, establishing standard forms for publication of notices related to public procurement procedures, according to Directives 2004/17/EC and 2004/18/EC of European Parliament and Council.

Simultaneously with the Public Procurement Law, the implementing regulations1 were adopted: Rulebook on standard forms in public procurement procedures (Official Gazette of MNE, 62/2011), Rulebook on methodology of expressing  subcriteria into an appropriate number of points, manner of evaluation and comparison of bids (Official Gazette of MNE, 63/2011), Rulebook on method of keeping and content of records on violation of anti-corruption rules (Official Gazette of MNE, 63/2011), Rulebook on records on public procurement procedures (Official Gazette of MNE, 63/2011).

The text of the Public Procurement Law and secondary legislation was published at the internet page of the Public Procurement Administration www.ujn.gov.me and on the internet page of the State Commission for Control of Public Procurement Procedures, www.kontrola–nabavki.me. The Law is available both in English and in Montenegrin.

The area of public procurement is one of the most important components of the whole European integration process. Public procurement is not only one of the foundations of the EU internal market, but it is also foundation of the system of integrity and responsibility, that is necessary for consolidation of the rule of law and functioning of democracy. This is one of the most challenging areas in the process of membership negotiations.

In that regard, the solutions envisaged by the new Public Procurement Law will ensure a complete application of the EU rules and requirements in terms of ensuring free flow of goods, people and capital, pursuing continuity in realization of open market freedom principle, which is in accordance with the Article 76 of the Stabilization and Association Agreement.

Adoption of the new Law resulted primarily from the Work Program of the Government of Montenegro for 2011, as well as from the undertaken commitments envisaged by the National Program of Integration of Montenegro into EU.

Ratio legis of the new Law is removal of deficiencies observed in the practice up to now, clearer definition of responsibilities of the persons conducting public procurement procedures, more efficient mechanisms for prevention of abuse in public procurement by strengthening the system of managing contracting authorities, bidders, categories and contracts (in order to avoid any ambiguity, the word ‘’managing’’ is not to be interpreted as ‘’Big Brother’’ managing, because it is not so. Managing in this context of the Law is a necessary function and each public procurement officer must be aware of all participants related to or involved in the public procurement procedure, aware of his/her needs and his/her expertise in the field of managing those relations in order to increase the value of the contract concerned), strengthening of control by significant increase of publicity in the procurement procedure – inspection control, the emphasis has been put on a more coordinated obligation of cooperation work of the competent authorities, more systematic capacity improvement and work of all the public procurement stakeholders.  

Apart from the above, the Law also includes some changes that significantly improve implementation of basic public procurement principles: transparency, competition, equality of bidders, efficiency and cost-effectiveness, which are particularly reflected in the following:

–       Contracts concluded in public procurement procedures will be available at the PPA Portal, and there was also established an obligation of contracting authorities to submit the contract to the PPA in three days as of the day of contract conclusion in purpose of its publication at the PPA Portal,

–       Requirements for conducting of negotiated procedure without prior publication of contract notice are more restrictive, and the percentage for additional quantities of goods, works or services that could be procured on basis of the original contract was reduced to 15% of the contract value,

–       Public procurement procedure by shopping method my be conducted once a year for the same subject matter of public procurement, and within the value scales envisaged for this type of procedure,

–       Also, the contracted value of public procurement contained in the decision on selection of the most favourable bid may not exceed the estimated value of public procurement determined by the invitation to public tender and tender documents, and the price stipulated by the public procurement contract may not exceed the price contained in the decision on selection of the most favourable bid, the decision on selection of the most favourable bid where the price of the most favourable bid exceeds the estimated value shall be null and void, and the contracting authority that adopts such a decision shall be liable for misdemeanor,

–       The Law envisages that the decision on selection of the most favourable bid, or the public procurement procedure is subject to mandatory review performed by the PPA and the Commission,

–       The rules on exemption of the application of the Public Procurement Law are defined more clearly,

–       There is a clear distinction and positioning of the institutions competent for performance of tasks in the public procurement area,

–       Clearer and more complete definition of certain procedures for conducting of principal procurement procedures (there are special rules for restricted procedure),

–       Establishing an obligation each contracting authority to adopt a Public Procurement Plan with a rationale,

–       Introduction of the Common Procurement Vocabulary for defining the subject of procurement that will be regularly updated and published at the PPA Portal,

–       Institutionalization of professional training and development in the public procurement area,

–       Certification and taking a professional examination in accordance with a special bylaw,

–       Simplification of procedure in terms of submission of proofs on fulfillment of conditions for participation in public procurement procedures,

–       More precise definition of a joint bid and fulfillment of requirements in case of its submission,

–       Identification of a possibility for the establishment of a central public procurement body at the level of state authorities and local self-government units,

–       Possibility of delegating tasks of conducting public procurement procedures to another contracting authority,

–       There is also set a strict obligation to keep the records on public procurement as well as to submit reports on public procurement,

–       Better cooperation between the institutions responsible for the detection and prosecution of criminal offenses,

–       Liability issues,

–       The anti-corruption rules and their observance have been additionally accentuated as well as the conflict of interest policy,

–       As already mentioned, the Law also deals with the environmental protection issues through introduction of mandatory environmental criteria,

–       The Law additionally improves and encourages the e-procurement process.

The process of harmonization of legislation in the public procurement area with the EU rules was included within the IPA 2007 Project – ’’Further Development and Strengthening of the Public Procurement System in Montenegro’’, that was actively monitored by the EU Delegation to Montenegro with their experts.

When it comes to the Public Procurement Administration, it will be a key stakeholder in the public procurement procedures with a clear responsibility of managing and supervising the procurement procedures in Montenegro. The PPA is a Government’s institution and it represents a leading force in public procurement.  The novelty is that the Administration will organize and conduct professional training of the staff and that it will organize professional exams for performance of tasks in public procurement area.

It is important to stress that the new software solution provides great opportunities reloated to transparency of procedures, that is, all information regarding public procurement are available at the Portal and these are: Public Procurement Plan linked to the Contract notice, Decision on selection of the most favourable bid and the Contract.

In the reporting period, there has been developed a Strategy for development of the public procurement system in Montenegro for the period 2011-20151 and the Action Plan for implementation of the strategic document, and these acts were adopted at the Government’s session of 22 December 2011. The Strategy comprises the following development components in the period 2011-2015: legislative framework, institutional framework, improvement of the public procurement system (that implies the following: monitoring of public procurement procedures, raising of awareness by education and training at all levels, relations with the NGOs, development and strengthening of electronic communication in public procurement with guidelines for creation of an Action plan for development and introduction of e-procurement, degree of savings, reporting on public procurement, cooperation wih bodies and institutions of Montenegro, cooperation with international institutions and study experiences, environmental and social aspects of public procurement, equal opportunities, proposed approach to organizational structure), professional training in the public procurement area and strengthening of administrative capacities, public procurement in the process of EU accession, prevention of corruption in public procuremnet system, development and strengthening of electronic communication in public procurement and protection of rights in public procurement procedures. At the same time, the Government, at its session of 22 December 2011, adopted a Decision on establishment of a Coordinating body for monitoring and implementing the Strategy of public procurement.

The project ideas for IPA National program for 2012-2013 were prepared and submitted. These ideas primarily refer to improvement of institutional framework and strengthening of administrative capacities of the Public Procurement Administration, merge procurement or conducting the public procurement procedures by another contracting authority, as well as the solutions aimed at introducion of electronic public procurement system, which is expected through the mentioned assistance programs. In that regard, the Public Procurement Administration and the State Commission for Control of Public Procurement Procedures will need the support from the European Commission, through pre-accession instruments, IPA, TAIEX, TWINNING etc.

INSTITUTIONAL FRAMEWORK

For the purposes of Law’s implementation, the institutional framework has been provided by establishing  the Public Procurement Administration and the State Commission for Control of Public Procurement Procedures.

New Rulebook on internal organization and job classification of the Public Procurement Administration was adopted at the Government’s session of 17 November 2011. This Rulebook provided for increase in the number of employees and improvement of the professional structure especially regarding trainings, monitoring of the procedures, information technologies and reporting.  In accordance with the new Rulebook, four organizational units were envisaged within thePublic Procurement Administration – Department for monitoring implementation of regulations and inspection control, Department for monitoring of public procurement procedures and managing electronic public procurement, Department for professional training and education and international cooperation in the public procurement area and Department for general affairs and finances, by which the number of employees was increased to 18. All necessary information can be found at the web page www.ujn.gov.me.

TRAININGS

In cooperation with the Office for Development of Small and Medium Eenterprises, with reference to the Act on Small and Medium Enterprises (Small Business Act – SBA), representatives of the Public Procurement Administration provided the assessment of indicators with accompanying comments in the public procurement field within the Report on conducting 8 remaining SBA principles.Representatives of the Public Procurement Administration attended the Second Conference of the Program ’’National Convention on European Integration of Montenegro’’, realized with support from the Ministry for Foreign Affairs of Republic of Slovakia and SLOVAKAID, and with participation of the Government and the Parliamnet of Montnenegro. Representatives of the Public Procurement Administration attended the Conference on Public Procurement organized by the European Bnak for Reconstruction and Development, whose aim was the presentation of the Assessment Report on Public Procurement systems in countries where the EBRD has a role of an active promoter of reforms and a donor in numerous projects. This assessment was conducted in 2010, having as its objective to reflect the status of efforts put into the public procurement reform in the countries of the EBRD operations, as well as to encourage, influence and provide guidelines for an ongoing reform within the public procurement sector (more information at the Public Procurement Administration website).

The Public Procurement Administration, on basis of a signed memorandum on cooperation with the Commission for Prevention of Conflict of Interest and the Administration for Anti-Corruption Policy, actively participated during the whole year at the seminars on anti-corruption policy and prevention of conflict of interest, intended for public officials.

Workshop with a topic ‘’Framework Agreement and Centralized Procurement’’ in European Union and Croatia was organized by the Public Procurement Administration and SIGMA. On basis of SIGMA study on centralized procurement and examples provided by the Administration for Centralized Procurement of Croatia, the purpose of the Workshop was the exchange of experiences and free discussion on various aspects of framework agreement as well as on practical functioning of centralized procurement bodies. The goal was acquiring better understanding on how to start awarding of framework agreements and how to successfully develop and organize centralized procurement bodies. Apart from representatives of the Public Procurement Administration of Montenegro, the active participation at the Workshop was taken by the representatives of state authorities, joint stock companies, audit institutions, chamber of economy and others. About 30 attendees participated at the seminar.

In cooperation with the representatives of SIGMA, there had been organized a workshop with a topic ‘’Implementation of the Utility Directive – Legal and Practical Aspects’’.

By modernization of the system for electronic publication of notices as well as by the legislative reform, one of the global goals has been achieved. That primarily refers to the implementation of EU internal market requirements in the public procurement field as well as fostering of efficiency and transparency in use of public funds. In that regard, the trainings related to use of the new Public Procurement Portal were organized. These trainings were organized for smaller groups of about 15 participants.

Within the Multi-Beneficiary Project IPA 2009 ‘’Training in Public Procurement for Western Balkans and Turkey’’, the Public Procurement Administration has a role of a ’’central institution’’, in purpose of presenting the project at national and regional levels, including representation of the Project in its activities. Within the indicated project, the training of the first group of trainers was conducted, and by the end of February it is necessary to select candidates for national trainers that will attend the second phase of the Training of Trainers in both English and native tongue.

STATISTICAL DATA

The contracting authorities have the obligation to submit to the Public Procurement Administration a report on conducted public procurement procedures and contracts concluded during the previous year, no later than 28 February of the current year. Statistical data on conducted public procurement procedures for the previous year, 2011, in accordance with the Law, will be submitted to the Government for adoption until 31 May of the current year, at the latest.

Representatives of SIGMA accentuated the practical solutions from the aspect of application of framework agreement and facilitation of its use, as well as the development of the centralized public procurement system.

Director Mujević pointed out that the Articles 32 and 33 of the new Law stipulated establishment of a centralized body for public procurement and he also presented possibilities of implementation of these new solutions, without bringing our economic system into a blockade. The common views on both positive and negative sides of the centralized system were expressed, especially in terms of participation of small and medium enterprises in tenders in Montenegro.

Representatives of SIGMA were very much interested in the new software solution and, after all questions they had asked the PPA, they agreed that the level of transparency of procedure achieved by this solution is a very high one.

The Public Procurement Administration underlined the good cooperation achieved so far, as well as the need for new forms of support by SIGMA that would be very desirable when it comes to trainings on the manner and extent of use of framework agreement, in order to encourage the contracting authorities to use that procedure as much as possible.

Also, the PPA informed SIGMA on its need for support in the process of professional training and development both of contracting authorities and the bidders, and in the activities towards assistance to the services of printing the technical literature, bulletins, manuals on public procurement, since it is a very useful literature for building of a sustainable public procurement system in Montenegro, compatible with the EU public procurement system.

The Minutes drawn up by:

Sanja Poleksić

Svetlana Tomović

Ljiljana Nikolić

Director of the PPA

Mersad Z MUJEVIĆ