Direct procurement in Montenegrin municipalities represents a significant source of non-transparent spending and potential abuses, often used to avoid tenders and exceed legal thresholds.
Audits by the State Audit Institution (SAI) confirmed systemic irregularities and abuses with hundreds of thousands of euros spent due to lack of integration into the central public procurement system, which opens up space for corruption and conflict of interest.
Although the Ministry of Finance has amended the rulebook to restrict such procurements, the problem persists, especially since conflict of interest rules do not apply to such procurements.
The value of direct procurement has been growing in recent years, from around 65 million euros in 2023 to almost 69 million euros in 2024. Semi-annual data for 2025 show some decline, but until the full 12-month report is available, it is not possible to say for sure whether this trend will continue.
Direct procurement is intended for simple purchases of goods and services of small value up to 8.000 euros. It allows contracting authorities to choose their own supplier, without conducting a competitive procedure. However, as shown, for example, by research by the Institute Alternative (IA), it is often used in practice in a way that reduces transparency and opens up space for abuse and conflict of interest. This mechanism is often abused by dividing procurements into multiple invoices in order to keep the individual amount below the legal threshold, especially when it comes to infrastructure works.
MORE THAN A MILLION EUROS OF WORKS WITHOUT TENDER IN KOLAŠIN, IN MOJKOVAC AND PROCUREMENT OVER 8.000 WITHOUT PROCEDURE
In 2023, the Municipality of Kolašin contracted infrastructure works worth a total of around 850.000 euros without a tender. According to the available documentation, certain private companies were chosen more often than others to carry out the works. Thus, “Boter CO” was engaged in individual direct contracts for works worth a total of 92.184 euros. “Vujisić Company” charged the Municipality 44.661 euros, “NV Group” 42.186 euros, and “Moki Cranes” 38.117 euros.
The Municipality of Kolašin has not provided "Vijesti" with data on money spent on direct procurement for infrastructure works during 2024 and 2025, even after several requests. They have been refusing to share this information with councilors for months.
"We have searched for data on the funds spent on municipal road maintenance without results. In some years, over half of all works are carried out by direct agreement with the contractor, the works are purposefully 'splitting' in order to avoid a tender, and the total value of the works carried out in this way for the mandate of this authority exceeds one million euros. It is clear that we are talking about 'patterns of corruption'. Such patterns are not entered into without reason. The Public Procurement Law is not avoided without reason. I will not talk about the corruption of anyone from the municipality until I have clear evidence of it, but I will publicly point out the models of behavior and the avoidance of all mechanisms that have been developed to prevent corruption," he says. Bojan Zekovic, councilor of the opposition Movement "Together We Build Kolašin".
One of the direct procurement cases resulted in an indictment against M. R., Municipal employee, for the criminal offense of forging an official document. According to the prosecution, he "entered false information into an official document in his capacity as a supervisory authority". Namely, the employee signed the documentation, according to which work was carried out on a bridge in the village of Mušovića Rijeka, for which 9.160 euros were allegedly spent, although the structure was not even on site.
The total value of direct procurement of infrastructure works carried out by the Municipality of Mojkovac in the period from 2023 to 2025 amounted to more than 61 thousand euros including VAT, according to data provided by the Office of the Mayor.
According to this data, in 2023 the value of direct purchases with VAT amounted to 18.519,70 euros, in 2024 it was 14.613,17 euros, while in 2025 such work by contractors amounted to 27.921 euros, a total of 61.053 euros. More than half of that amount, or 34.573 euros, was paid for various works over three years to the company "Šavon", registered for wholesale trade in wood, construction materials and sanitary equipment.
During 2023, infrastructure works, implemented through direct procurement, were carried out by six companies. That year, the company “Šavon” charged a total of 13.068 euros for two invoices for land excavation, preparation, reinforcement and concreting of the slab for the woodshed, as well as for filling and construction of sidewalks. The following year, “Šavon” carried out works on the bridge worth 9.585 euros and the construction of the embankment on Štitarica in the amount of 2.420 euros. “MK Tara” carried out two roof repairs on the Cultural Center (792,55 euros and 1.815 euros).
During 2025, four companies carried out the work. “Šavon” was hired to clean the Štitarica riverbed for 9.500 euros. That year, construction work worth 5.087,50 euros was carried out by the company “Buba Home” from Mojkovac, while “NN Design Group” from Podgorica was hired to “uncover the facility” for 2.783 euros.
As she said Jovana Tomović, a public procurement officer in the Municipality, "economic entities are engaged based on an assessment of their professional and technical capabilities to perform the works, previous experience in similar jobs, as well as the availability of the necessary machinery and labor."
The audit, which was conducted after the State Audit Institution (SAI) adopted the IA proposal and was conducted for 2023, found that the Municipality of Mojkovac carried out certain procurements above 8.000 euros by accepting supplier invoices. This means that for these procurements, it did not implement simple procurement procedures through the EPP system, as prescribed in Articles 26 and 27 of the Public Procurement Law and the Rulebook on the Method of Implementing Simple Procurements.
Thus, as stated in the audit report, an amount of 17.121 euros was paid for the adaptation of offices, a registry office, a buffet and a hallway in 2023, and 28.277 euros for the construction of a lumberyard in Tutići. In the same way, an amount of 10.149 euros was paid for security, physical and technical protection.
ALMOST 580.000 EUROS "DIRECTLY" IN ULCINJ, MORE THAN 360.000 UNREGISTERED IN BERANE
The audit also found that the sampled contracting authorities, including three municipalities, failed to declare over 1,5 million euros spent through these procurements. The audit showed that procurements were carried out by direct acceptance of invoices, that the same procurement subject was divided into multiple procedures to avoid legal restrictions, and that the total value of invoices exceeded the permitted amounts.
For example, according to the audit report, the Municipality of Ulcinj conducted direct procurements worth at least 577.947 euros in 2023, which accounts for as much as a fifth of the total procurements conducted that year.
As determined, the Berane local government did not report in the report on direct procurements the same year purchases worth around 361.330 euros including VAT, with the amount of 175.061,64 euros relating to the transfer of funds to local communities for completed works, while the amount of 186.269,15 euros relating to other purchases.
These two municipalities did not provide data on the amounts spent on direct procurement for 2024 and 2025.
The only coastal municipality that responded to "Vijesti"'s questions was Herceg Novi, and in addition to Mojkovac, when it comes to northern municipalities, data on direct procurement for infrastructure works was submitted by five more local governments.
In the Municipality of Herceg Novi, a total of 217.625 euros have been spent in the past three years through 33 direct procurement procedures for, as they claim, the improvement of local infrastructure. The value of direct procurement during 2023 was 121.848 euros, a year later 70.307 euros. The least, a total of 25.470 euros, was spent on direct procurement last year.
The municipality of Rožaje has had 106 direct procurements for infrastructure works over the past three years and has spent close to 172.000 euros through this mechanism. The main contractors were the local utility company and several private companies.
The Municipality of Žabljak implemented 36 direct procurements worth 175.939 euros, with DOO “Komunalno i vodovod” Žabljak as the main contractor (29 contracts).
Bijelo Polje implemented 29 direct procurements worth 138.669 euros.
The Municipality of Plužine conducted seven procurements for 45.170 euros, mostly engaging a local utility company.
The municipality of Šavnik had at least three procedures, totaling around 19.165 euros, without engaging local private companies.
JAĆIMOVIĆ: THE PROBLEM IS THAT THE RULES ON CONFLICT OF INTEREST DO NOT APPLY TO DIRECT PROCUREMENT
Significant problem in direct procurement, says Dragana Jaćimović from the IA, is that the rules on conflict of interest do not apply to direct procurement, because they are not carried out through the Electronic Public Procurement System (EPPS).
"Direct procurement was established to facilitate the procurement process up to a certain value, but in practice it is often a space for non-transparent spending and potential conflicts of interest. This type of procurement is one of the least transparent procedures, because it allows you to choose who you will purchase something from. Key problems include the fact that in practice, contracting authorities do not report to the Ministry of Finance on all concluded direct procurements, which was confirmed by the State Audit Institution (SAI), as well as the fact that conflict of interest provisions do not apply to these procurements," she says.
The Ministry of Finance amended the Rulebook governing these procurements in 2024, precisely to limit spending on these procurements on an annual basis. Montenegro has committed through the Reform Agenda to reduce the share of direct procurements in the total value of procurements to two percent by December 2026.
"Speaking of abuses, our analyses have shown that there were numerous abuses by contracting authorities. However, what happened in practice was that some contracting authorities abused it, i.e. had individual invoices for a specific procurement up to that amount, while on an annual basis the total amount significantly exceeded the legal threshold. This was confirmed through several studies conducted by the IA, which concerned the application of direct procurement in ministries and municipalities in previous years," explains Jaćimović.
The IA indicates that one of the problems is precisely that direct procurements are not carried out through the EPPS, so the Ministry of Finance cannot automatically calculate direct spending, but rather relies on reports on direct spending submitted by contracting authorities.
The Public Procurement Inspectorate, which operates within the Ministry of Finance, is responsible for control and supervision. The Public Procurement Inspectorate's report for 2025 shows that they conducted 13 inspections of local government units, but it is not possible to conclude from it to what extent irregularities were identified or sanctioned in municipalities, and whether any of them related to direct procurement. The draft amendments to the Public Procurement Law, for which a public debate has recently been completed, envisages the abolition of the Public Procurement Inspectorate and the assumption of supervision by the Ministry of Finance.
Under the current legal framework, there is no obstacle to direct procurement contracts with conflicts of interest, since these provisions only apply to procurements conducted through the EPPP. Since direct procurements are not conducted through the EPPP, this is where the greatest scope for potential conflicts of interest lies.
As Jaćimović reminds, during the public debate on amendments to the Public Procurement Law, which lasted until the end of February this year, the IA proposed that anti-corruption measures be extended to simple and direct procurement, along with misdemeanor measures. However, the Ministry of Finance believed that this could not be the subject of the Public Procurement Law, but of a separate rulebook that could define the above.
Extending anti-corruption measures to direct procurement would certainly significantly reduce the scope for abuse. In addition, timely and complete reporting to the Ministry of Finance, with clearly defined sanctions for and violations of the rules, would ensure more responsible spending of public money, and greater public availability of data would enable citizens to monitor the details of the entire direct procurement mechanism.
This article was created as part of the project “Speak Up: for a Corruption-Free Montenegro” implemented by the Center for Monitoring and Research CeMI, with the support of the INL Office of the US Embassy in Montenegro. The article was funded by a grant from the United States Government. The views, findings, and conclusions expressed are solely those of the author and do not necessarily represent the views of the United States Government.
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