Changes in Public Procurement in Serbia

Changes in the public procurement system

A while ago, at the session held on 23 December 2019, the National Assembly of the Republic of Serbia adopted the new Law on Public Procurement (“the Law”), published in the “Official Gazette of the Republic of Serbia” No. 91/19 of 24 December 2019.

The Law entered into force on 1 January 2020, and shall apply from 1 July 2020, except for the provisions:

  • which regulate the material independence of the President and members of the Republic Commission, which shall apply from the day this Law enters into force;
  • which regulate the obligation of the organization responsible for the registration of economic entities to enable economic entities to be entered in the register of bidders in accordance with this Law, which shall apply on 1 March 2020;
  • whose application is conditioned by the day of accession of the Republic of Serbia to the European Union.

The Law on Public Procurement regulates the following issues:

  • rules of public procurement procedure;
  • activities and form of organization of the Public Procurement Office;
  • competence, regulation and other issues related to the scope of work of the Republic Commission for the Protection of Rights in Public Procurement Procedures;
  • the procedure of protection of rights in public procurement procedures and other cases in accordance with the law and
  • other issues of importance for public procurement.

The most important novelties of the new Law on Public Procurement are the following:

  • New thresholds for the application of the Law

While the previous limits for the application of the Law were uniform for all types of public procurement and amounted to RSD 500,000, the new Law on Public Procurement introduces new thresholds below which the Law does not apply.

  • For goods and services, the limit is 1,000,000 RSD;
  • 3,000,000 RSD for works;
  • For thresholds for the needs of diplomatic missions and diplomatic-consular missions, as well as for performing other activities of the Republic of Serbia abroad, higher thresholds have been set, namely 15,000,000 RSD for goods and services, and as much as 650,000,000 RSD for works;
  • Social and other special services are transferred to a special public procurement regime, so the Law does not apply to the procurement of social and other special services whose estimated value is less than 15,000,000 RSD when the procurement is conducted by the contracting authority, or less than 20,000,000 RSD when the procurement is conducted sectoral contracting authority.
  • The category of European thresholds is introduced, but it is not important for determining the obligation to apply the law, but for certain rules in the procedure.

European thresholds are value limits, defined in three EU directives related to public procurement, namely: Directive 2014/24 / EU (the so-called classical directive), Directive 2014/25 / EU (the so-called sectoral directive) and Directive 2009 / 81 / EC (Defense and Security Directive).

  • Manner of proving the criteria for qualitative selection of an economic entity

The statement on fulfillment of the criteria is a formal statement of the economic entity that it meets all the required criteria and that it is not in any of the situations due to which it is excluded or can be excluded from the public procurement procedure.

This statement shall be submitted in the offer or request to participate and shall serve as preliminary evidence instead of excerpts and certificates issued by the competent authorities.

  • New criteria for awarding contracts in the public procurement procedure

The contract is awarded to the most economically advantageous bid on the basis of price or price-quality ratio, ie costs and quality.

  • New public procurement portal

One of the most important innovations brought by the new Law on Public Procurement is certainly the use and application of the new Public Procurement Portal.

The following actions are performed through the Portal:

  • submission of bids;
  • opening of bids;
  • communication with the contracting authority regarding the necessary changes and clarifications of the tender documentation;
  • The request for protection of rights can be submitted in electronic form.
  • Innovation Partnership

A new public procurement procedure is introduced – an innovation partnership that contracting authorities can implement if they have a need for innovative goods, services or works, which cannot be realized by procuring products, services or works that are available on the market.

  • Equalization of the public procurement procedure with regard to the value of the procurement

The same public procurement procedures will be applied regardless of the value of the procurement, provided that longer deadlines for submission of bids and applications for participation apply for procurements of higher values.

The draft law on public procurement no longer envisages a qualification procedure, as well as a small value public procurement procedure.

  • Collateral

For the first time in the public procurement system in the Republic of Serbia, the Law on Public Procurement precisely identifies the means of security that contracting authorities may require in the tender documentation from economic entities.

The ordering party may request from the economic entity to provide him with a means of security:

  • for the seriousness of the offer – it can not be higher than 3% of the value of the offer without value added tax.
  • for fulfillment of contractual obligations – can not be higher than 10% of the value of the public procurement contract without value added tax.
  • for elimination of deficiencies within the warranty period – it can not be higher than 10% of the value of the public procurement contract without value added tax.
  • from liability for damage caused if it occurred in connection with the performance of a certain activity;
  • for refund of the advance – it must be in the amount of the advance

 

  • Electronic catalog

The contracting authority is given the opportunity to request or allow tenders to be submitted in the form of electronic catalogs or for tenders to contain electronic catalogs.

The electronic catalog is compiled by the candidate or tenderer in accordance with the technical specifications and in the form specified by the contracting authority.

The electronic catalog must comply with the requirements applicable to electronic communication tools, as well as with all other additional requirements specified by the customer, in accordance with the provisions of the law on electronic communication.

  • Legal protection:

There are two deadlines:

  • one which refers to the requests for protection of rights, the submission of which challenges the actions of the contracting authority in connection with determining the type of procedure, the content of the public invitation and the tender documentation, and
  • others related to requests for protection of rights whose submission disputes the actions of the procuring entity taken after the deadline for submission of bids or applications, and which are submitted after the publication of the procuring entity’s decision on the Public Procurement Portal, or after receiving the decision in cases where publication on the Public Procurement Portal procurement is not provided by this law;
  • the bidder who has been awarded a public procurement contract has been given the opportunity to state his / her opinion on the allegations contained in the submitted request for protection of rights;
  • extended active legitimacy for filing requests for protection of rights;
  • the obligatory suspensive effect of the submitted request for protection of the right to further proceedings is reintroduced;
  • it is prescribed that when submitting a request for protection of rights to the ordering party, the applicant is obliged to submit proof of payment of the fee, otherwise such a request will be rejected by a decision without first inviting the applicant to supplement the request;
  • the deadline for initiating an administrative dispute against the decision of the Republic Commission was reduced from 30 to 15 days.

With the entry into force of this law, the Public Procurement Directorate will continue to operate as the Public Procurement Office.

Supervision over the work of procuring entities will be performed by the Public Procurement Office in order to prevent, detect and eliminate irregularities that may occur or have occurred in the application of the Law on Public Procurement.

The Ministry of Finance will supervise the execution of public procurement contracts.

 

In this way, efforts are made to ensure greater transparency in public procurement procedures, reduction of administrative burden as well as increase of competition in public procurement procedures.