HUP’s “Reform of the public procurement system”: A process which will enable a publicly procured, legalised robbery of the century
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Translation: Matea Matić
With the arrival of the new government one of the first more serious initiatives of intervention into the legislative system was the initiative of the Croatian Employer’s Association (CEA/HUP) which has led the process of intervention in the Public Procurement Act. Even though the initiative itself already presents a conflict of interest (a group of actors who draw material benefit from public procurement procedures (HUP), initiate and lead the process of changing the Act), the fact that the “reform of the public procurement system” is already being greatly discussed without any of the key actors for the protection of public interest in public procurement receiving a draft of amendments of the Act, i.e. the new Public Procurement Act, makes this procedure one of the precedents in the legislative process, with a great danger for corruption in public procurement to simply become legal, for the needs of HUP.

The contraposition of the declared reasons and needs for the amendments of the Public Procurement Act, with, for now, colloquial suggestions of solutions which are being talked about in public, suggests that what is wanted is for public procurement to simply be adjusted to financial and business elites without any reference to the protection of public interest in public procurement. The alleged reasons for the “reform of the public procurement system” stated by the representatives of HUP, the Minister of economy and even the Prime Minister himself are that public procurement is a “disaster”, that the Act is being harmonised with the new EU directive, that corruption in public procurement is enormous, that transparency of public procurement in Croatia is insufficient…Although most of these statements do have a foothold in some of studies and even attitudes of the EU Commission on public procurement, the solutions that are being proposed for now have nothing in common with the stated problems.

Namely, one of the solutions, for which we received a confirmation from the actors, that will be included in the “reformed” system is also raising the thresholds of public procurement in accordance with the new directive. Citizens should know that raising the thresholds in its self means less transparency.  Namely, such a solution in the Act stipulates that the amount of money that is necessary to implement public procurement procedures will increase. For example, for the procurement of goods and services from the current threshold which is already high and is 200,000 HRK, the new threshold will be 1.029.416 HRK. So, the procurement of goods and services up to the  value of over a million HRK will be out of the mandatory procedures of implementing the public procurement procedure, i.e. it will be subjected to simplified procedures for petty public procurement, which more or less means that it will also be possible to make agreements in a way of agreement between public authorities and the tenderer if in the end we allow such a solution. Along with all of this, due to the fact that it’s about petty public procurement, such procedures and contracts won’t be available to the public equally as they are in the case of procedures in the value above the threshold.

Allowing non-transparent and generally disorderly spending to public authorities in the amount of a million HRK per contract, generally means a corruption Eldorado, and according to everything available at the moment, these are the solutions advocated by the “reform of the public procurement

system”. That this is so is confirmed by the statement of the Minister of economy that the new Act is expected in May of 2016. Less than 60 days from today. And at the same time, the draft of the new Act, as we have said already, hasn’t been seen by any of the key actors, which means that the new government, by this new Public Procurement Act, will put us in front of a fait accompli. The confidentiality of the document, the confidentiality of the process and public statement of the actors suggest that at this moment a process is taking place which will enable a publicly procured legalised robbery of the century, because all other resources must have already been spent so the new government, hungry for money, was only left with this possibility.

We tried to get information from the Ministry of Economy on who initiated these amendments and what the content of the “reform of the public procurement system” was. We received an answer, in the wake of this text, an answer which continues to hide/cover up all the key facts on the amendments of the Act which is, after the Constitution, maybe one of the fundamental ones in protecting public interest:

According to the Statistical report on public procurement in the Republic of Croatia for the year 2014, the total amount of public procurement was 42,1 billion HRK. Of that amount, 9,2 billion fall on the so called petty procurement (up to 2000.000 HRK for goods and services and up to 500.000 HRK for works) to which the Public Procurement Act doesn’t apply to; each contracting authority/entity regulates the procedures for such procurement by their own act. The contracting authorities/entities are required to adopt such an act and act according to it and they have the possibility to publish the procedures of petty procurement on their websites or as part of a specially developed module in the Electronic Public Procurement Classifieds of the Republic of Croatia for petty procurement. Also, public contracting authorities/entities have a legal obligation to publish annual plans of procurement on their websites in which they have to put all of the planned procurement going above 20.000 HRK.

As for the reform of public procurement, we emphasise that the Ministry of Economy is in the final stage of developing the new draft of the proposal of the Public Procurement Act to harmonise it with the new EU directive on public procurement (2014/24 / EU and 2014/25 / EU). Also, we emphasise that via writing, we invited all of the key stakeholders in the system of public procurement, including HUP too, to submit their observations regarding the difficulties they encounter in the application of the current Public Procurement Act and to submit their proposals for improving the legal framework.

So, in addition to it being secret, the content of the response is untrue, because for now, the key actors haven’t received any draft of the document, i.e. any platform for debate on the proposed solutions, and as we’ve said, the ne Act is expected by the end of May this year.




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