Innovations and effects of the implementation of the draft Law on public procurement prepared by Serbian Progressive Party

Key innovations of the draft of Law on Public Procurement prepared by the Serbian Progressive Party include:
•    compliance with EU directives (2004/18/EC, 2004/17/EC and 2007/66/EC and 2009/81/EC);
•    simpler and more complete definition of the customer;
•    reducing the number of exemptions from the implementation of law and more stringent conditions for the implementation of exemptions in accordance with EU directives;
•    new procedure - competitive dialogue and new forms of existing procedures - dynamic purchasing system and the framework agreement;
•    mechanism of the previous control of the implementation of negotiating procedure without announcing the public call;
•    mechanisms for preventing conflicts of interest, corruption and violation of competition in public procurement;
•    special form of control of the largest procurement through the civil supervisor;
•    partial centralization of procurement;
•    clearly defined way and procedure of procurement planning;
•    control of requirements for non-implementation of laws;
•    encouragement and, in certain circumstances, requirement for the application of electronic procurement;
•    general vocabulary of the acquisition, such as the CPV in the EU;
•    publication of the advertisement in the Official Journal of the EU (Tenders Electronic Daily); the Government is the one that has to determine thresholds (EU thresholds are not applicable, as Serbia is not a member) - implementation of provision is deferred up to the period of three years after the law coming into force;
•    reduced use of public procurement of lower value, which is determined in a way that ensures transparency and competition;
•    obligation to publish tender documents;
•    specified mandatory conditions and simplified procedure of their approval through the register of suppliers, or through the public notary;
•    effective regulation of disclosure and prescription of mandatory contents of the ads on public procurement;
•    the environmental standards, as a possible part of the technical specifications, have been set up;
•    contracts reserved for people with disabilities, provided that the provisions of law are implemented;
•    specified method of calculating the estimated value;
•    clearly prescribed manner and deadlines for concluding the contract;
•    clearly and restrictively regulated options for possible changes of the contracts;
•    concessions regulated in accordance with the directive of the European Union ;
•    provisions on public procurement in the utility sector comply with European Union Directive of utilities (2004/18/EC)
•    regulated procurement of defense and security (Directive 2009/81/EC) in a way that prevents the possibility of nearly every purchase in this area declared as confidential;
•    changed composition and functioning of the Republic Commission for the Protection of Rights, the list of arbitrators has been introduced;
•    special power has been given to the Republican Commission as the body responsible for the audit in accordance with Directive 2007/66/EC; the imposition of fines to the clients; rescission of contract; proceedings in case of breach of contract; proceedings for the determination of invalidity;
•    system of protection has been made more efficient by simplifying the procedure on one side, and through the prescription of new features on the other;
•    violations for nearly all infringements of law have been envisaged, and the penalties are more severe on one side, and ranked according to the seriousness of the offense on the other;
•    deadline on limitations of violations has been increased to the period of three years, and protective measures have been imposed - ban on performing certain tasks for responsible parties along with the public announcement of the verdict;

The draft law has total of 182 articles and three extensive reports specifying certain provisions of laws related to advertising, subject of procurement and implementation of centralized procurement and framework agreement.

In the process of implementation, this law offers efficient use of public resources through the prevention of corruption, conflicts of interest and ensuring the competition, and by reducing the cost and time frame of the proceedings. These objectives are achievable through:
1.    strict and effective control of procedures in all its phases: planning, contract appointment procedure, implementation of the contract;
2.    number of measures and mechanisms for preventing corruption and conflicts of interest;
3.    reducing exemptions and application of certain groups of procurement in accordance with the Law on Public Procurement (procurement in the area of defense and security, granting concessions for work in a line of specific procurement in the utility sector), on which the current law is not applicable;
4.    prescribing new procedures and ways of their implementation, in order to emphasize the importance and usefulness of the framework agreements in the European Union that are frequently used (about 40% of contract value in the European Union allocated by the central or joint procurement body has been allocated through the Framework Agreement);
5.    encouraging use of electronic procurement, and in some cases, mandatory use of electronic procurement that reduces costs, increases transparency and competition; (it is estimated that in the EU electronic procurement increases the number of bidders and achieves savings of up to 5%);
6.    partial centralization of procurement, used for reducing the number of procedures, thereby reducing costs and providing better control. We made sure that the centralization of procurement is limited to the state level according to the subject of procurement and contracting authorities (less than 35% of the total value of public procurement - state bodies and institutions), as the increment of procurement caused by the centralization, as well as framework agreements, is leading to reduced participation of SMEs in public procurement procedure, because centralization should be introduced gradually;
7.    quick and efficient review of the proceedings before the Republic Commission, which has the power to order provisional measures, fines, void the contract and start infringement proceedings;
8.    tightening of monetary penalty and prescribing safeguards for responsible parties.
According to an estimate made by the Serbian Progressive Party, the implementation of this law would achieve savings of 600 million euros a year (62,492,600,568 dinars) , and only on the level of registered procurements .
Additionally, the implementation of this law would achieve savings in the procurements non-applicable to this law, and unjustified outside of it (purchase and lease of realties , a number of procurement in the area of defense and security that are unjustifiably declared confidential, technical equipment for the radio production and TV programs, etc.). Since the state does not have a unique record of the procurements, we can not accurately determine their total value, but the estimate shows not less than ½ of registered public procurements, therefore according to our methodology (which we apply to public procurement) based only on the reduction of corruption and increment of competition in procurements that are currently exempt from the application of the law, the savings amounted up to 34 billion dinars.
Total savings, achieved through a long-term implementation of the draft of the law on public procurement made by the Serbian Progressive Party , by reducing corruption and increasing competition, would amount up to 97 billion dinars , or nearly one billion euros per year.