Analysis Summer 2017 / Issue 54 Public Procurement Monitoring Report Highlights Source: Center for Civil Communications, Monitoring of Public Procurements in the Republic of Macedonia Report no. 28 (July–December 2016), May 2017. 1 Since 2008, the Centre for Civil Communications (CCC) has continuously monitored the public procurements process in Macedonia. Their analysis aims to assess the implementation of public procurement in light of the new Law on Public Procurement (2014) and the principles of trans- parency, competitiveness, equal treatment of economic opera- tors, non-discrimination, legal proceedings, cost-effectiveness, efficiency, effectiveness and ratio- nal public spending, commitment to obtain the best bid under the most favorable terms and condi- tions, as well as accountability for public spending. Their most recent report is based on a randomly selected sample of 60 public procure- ment procedures carried out by contracting authorities on the national level, for which bids opened between July-December 2016. Aleksandar Narashanov, AmCham Macedonia KEY CCC FINDINGS & RECOMMENDATIONS 23% of tender procedures in 2016 were fully or partially annulled, a 3% increase compared to 2015. Large-scale tenders were more frequently annulled com- pared to small-scale ones. Moni- toring activities recorded a series of tender annulments that could be considered problematic. CCC recommendation: The Bureau of Public Procurement should be obliged to develop and publish an annual review of annulled tender procedures and identify the contracting authori- ties with the highest number of annulments. 1 22 Full report available at: http://www.ccc.org.mk/images/stories/i28e.pdf. AmCham Macedonia Magazine Bureaucratization of public procurement procedures, includ- ing a Council on Public Procurement approval process, remains intense. In 2016, contracting authorities addressed the Council with 16,067 applications for their approval, costing them total of 1.8 million EUR. CCC recommendation: Implement European Union and SIGMA1 recommendations to assess the Council’s benefits, can- cel it and reallocate its resources to other institutions. Nearly 1 in 3 tenders launched in 2016 received only 1 bid. In 2016, this situation was primarily due to low competition observed in the first half of the year; competition increased slightly in the lat- ter half of the year. CCC recommendation: Introduce oversight and control of the overall public procurement process to: prevent and sanction illegal spending of public funds; ensure implementation of procedures in compliance with the Law on Public Procurements; and verify per- formance in compliance with signed contracts. E-auctions were conducted in only 54.5% of monitored pro- curement procedures. Institutions rushed the introduction of e-procurements. In 2016, as many as 48% of procurements were implemented with full use of electronic means enabled by the e-procurement system, thus exceeding the legal minimum of 30%. CCC recommendation: In the period 2017-2018, the Bureau of Public Procurements should organize a cycle of free training for microenterprises across the country to facilitate their participation in mandatory e-auctions. e-Auctions should no longer be manda- tory and their implementation should be modified. In 2016, 605 procurement contracts were signed without pre- viously-announced calls for bids; their value amounted to 34.8 million EUR (20% higher compared than in 2015). The most expensive procurement contracts signed in this way belonged to JSC Macedonian Power Plants and concerned excavation of coal and slag for the RU Mines, MEC Bitola, to the tune of about 5.8 million EUR. CCC recommendation: The legal obligation to obtain approval for bypassing the usual bidding process should remain in effect, regardless of whether the Council on Public Procurement remains. The Bureau of Public Procurements should be obliged to develop and publish annual analyses of “direct award”, including a list of all contractors in such cases. Among 18,444 tender procedures carried out in 2016, com- panies lodged just 557 appeals (3% of cases), while contract- ing authorities lodged 43 appeals against decisions taken by the Council on Public Procurement. CCC recommendation: Make an effort to raise awareness among companies of available legal remedies available to them in public procurement proceedings.