Although the share of direct procurements under 8.000 euros has fallen from 16,8 to 8,1 percent, or halved in four years, it is still too high and requires strengthening control over this type of procedure.
This is stated in the draft Strategy for Improving Public Procurement Policy and Public-Private Partnership for the Period 2026-2030. The document emphasizes that Montenegro, within the framework of the Reform Agenda 2024-2027 for the EU Instrument for Reforms and Growth, has committed to reducing the share of simple procurements below 8.000 euros to two percent of the total value of public procurement by the end of 2026.
The Ministry of Finance believes that the data shows that the entire system is moving towards greater transparency, but also that the share of direct procurement, as a non-transparent procedure, makes up 60 percent of all simple procurements.
According to the document, the area of public procurement in Montenegro has undergone significant normative improvements and harmonized legislation with the European Union (EU) Directives, and the European Commission assessed it as well aligned with the EU acquis in its 2024 report. 8.373 contracts were concluded through the Electronic Public Procurement System (CeJN) last year, with a total value of around 847,6 million euros. "After the pandemic year of 2021 (219,7 million euros), the total value of contracted public procurement increased by 131 percent in 2022 (506,9 million), then increased by an additional 33 percent in 2023 (675,2 million) and another 26 percent in 2024... The cumulative growth in three years is 286 percent," the Ministry of Finance document shows.
Last year, there were 695 parties obliged to apply the Public Procurement Law, of which 131 were state bodies, 41 local government units, 502 public services or companies, one association or organization, and 20 sectoral contracting authorities.
The number of public procurement payers, the Ministry of Finance claims, is growing steadily and has increased by five percent in the last three years. They remind that the law applies to public procurement of goods and services with an estimated annual value equal to or greater than 25.000 euros, or 40.000 euros for public procurement of works, while procurements with an estimated value below these thresholds are carried out in accordance with a special rulebook.
"In the period 2021 to 2024, the value of public procurements conducted using public procurement procedures almost quadrupled (from 154,9 to 731,1 million), while simple procurements grew significantly slower in value (from 64,7 to 116,5 million). The increase in the share of public procurement procedures in the total contracted value of public procurements also suggests that contracting authorities have increasingly larger budgets, which requires them to plan and implement public procurement procedures in accordance with the Law," the strategy assesses.
The total value of contracted public procurement increased by 286 percent compared to 2021.
The law, they argue, offers a wide range of public procurement procedures - open, restricted, competitive procedure with negotiations, competitive dialogue, innovation partnership, negotiated procedure without prior publication of a call for competition and negotiated procedure with prior publication of a call for competition, while clearly defining the conditions for their application. However, they point out that in practice, a highly formal approach to the implementation of public procurement procedures prevails, as contracting authorities mainly rely on simple and already known solutions - open procedure and simple procurement through CeJN.
The Ministry of Finance claims that the open procedure is recording constant growth, while simple procurement through CeJN is decreasing in its share in the total number of procedures, from a dominant 69,2 percent in 2021 to 54 percent in 2024, which suggests that CeJN, regulatory changes and increased controls encourage contracting authorities to primarily opt for procedures that allow for the widest competition and greatest transparency.
"The negotiated procedure without prior publication of a call, which is considered a non-transparent and non-competitive procedure, is continuously declining in the total number of procedures, from 2,88 percent in 2021 to only 1,03 percent in 2024. This trend indicates the importance of the Ministry of Finance's prior opinion mechanism, which limits the unjustified use of this procedure and thus strengthens the integrity of the public procurement system," the department indicates.
They say that it is worrying that the restricted procedure, as well as other more flexible, but also more demanding procedures such as competitive with negotiation, competitive dialogue, innovation partnership and negotiated procedure with prior publication of a call for tenders, are not applied at all. These procedures, the Ministry reminds us, allow for greater flexibility, open up space for negotiations and dialogue with bidders and create conditions for achieving better value for money, while facilitating the incorporation of green and social aspects as well as innovative solutions.
It is particularly concerning that no dynamic procurement system has been established since the beginning of the implementation of the current law.
"The application of these models indicates a lack of practical guidelines, instructions and education on their benefits and proper application. The development of these tools, along with the promotion of good practices and strengthening the capacities of contracting authorities, would be a key step towards modernizing and increasing the efficiency of the public procurement system," the document states.
Although Montenegro provisionally closed Chapter 5, which deals with public procurement, in June, the European Commission gave the country three recommendations in its recent progress report. The EC believes that further changes to the regulations are needed to broaden the definition of corruption in public procurement, introduce direct misdemeanor liability and controls by the budget inspectorate, as well as further improve the electronic system, which would also introduce warnings for various irregularities during the procedures.
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