SHORT REPORT: MONITORING PUBLICATION OF ANNEX CONTRACTS

Case studies of , , Mitrovica South and Kamenica Dështimet E Kuvendit Në Funksionalizimin E Agjencisë Për Informim Dhe Privatësi

Short report:

Monitoring publication of annex contracts Case studies of Prizren, Ferizaj, Mitrovica South and Kamenica Title: Short report “Monitoring publication of annex contracts - Case studies of Prizren, Ferizaj, Mitrovica South and Kamenica”

Year of Publication: January 2021

Published by: Lëvizja FOL “Andrea Gropa” No.35 10000 Prishtinë, Republic of [email protected] +386 (0)49 131 542

Copyright © 2020. FOL Movement. All rights reserved. No part of this publication may be reproduced, stored in a retrieval system or transmitted, in any form or by any means, electronic, mechanical, photocopying, recording or otherwise, without the prior written consent of the publisher.

This short report been prepared by Lëvizja FOL and supported by USAID through the Transparent, E ective and Accountable (USAID TEAM) activity. The views expressed in this publication do not necessarily reflect the views of the United States Agency for International Development (USAID) or the Government of the United States of America. Contents

2 Key findings

3 Introduction

4 Methodology

4 Legal base of annex contracts

5 Data Analysis

7 Municipality of Prizren

8 Municipality of Ferizaj

9 Publication of annex contracts Key findings

Publication of contracts and annex contracts in e-Procurement platform is a legal obligation. But the report findings shows that this is not fully implemented in some municipalities

Lëvizja FOL monitored the number of annex contracts published during the period January - June 2020. During this six-month period only the Municipality of Prizren and the Municipality of Ferizaj have signed annex contracts. The Municipality of Prizren has signed three annex contracts, while the Municipality of Ferizaj has signed four annex contracts.

Annex contracts of the Municipality of Ferizaj during the monitoring period were not published either on the ocial website of the municipality or in the e-Procurement. The contracts were provided in person by the Municipality, following requests for public information.

The Municipality of Prizren published all annex contracts in e-Prokurimi and on the municipal website.

To provide a comparison, Lëvizja Fol also looked at the number and type of annex contracts for 2019, but not if they were published or not. The data shows that the Municipality of Prizren had 13 annex contracts, the Municipality of Ferizaj had 19, the Municipality of Kamenica had 6 annex contracts, while the municipality of Mitrovica did not have any annex contracts.

Levizja Fol also looked at the publication of contracts for 2019 in e-Prokurimi. There are 4,212 signed contracts, while in e-procurement only contains 3,486, which means that 726 are not published at all on this platform.

2 Introduction

Lëvizja FOL (FOL Movement) with the support of USAID in Kosovo, through the Program for Transparent, E ective and Accountable Municipalities (TEAM) has designed and built the Open Procurement Transparency Portal (OPTP), as a platform for open public procurement contracts, based on the model of Transparency International in Slovakia. This portal consists of the current data published by the Public Procurement Regulatory Commission, more specifically the contract award announcements. Since its launch, the Portal has generated data on more than 18,300 contracts signed by 262 public contracting authorities with approximately 3,453 suppliers or economic operators. The portal is updated automatically with the data received from the Public Procurement Regulatory Commission (PPRC).

The OPTP as a platform running parallel to E-Prokurimi (e-procurement portal), has resulted in a major shift in transparency and the opening of public procurement. As of September 2018, the PPRC has made mandatory that all contracts must be published on the E-Prokurimi platform, thus making it easier for the migration of the Open and Transparent Procurement Portal.

Obtaining data for signing contracts through the PPRC and the government portal Open Data, exceeds the main purpose of the existence and operation of the Open Procurement Portal. As a result, FOL with the support of USAID in Kosovo, respectively the Program for Transparent, E ective and Accountable Municipalities (TEAM) is continuing to monitor public procurement and enrich the portal with new contracts. The objective of the Open Procurement Portal is to provide information to institutions, journalists and civil society representatives in order to gather the information on how the state budget is spent. At the same time, research in the field of public procurement obliges public institutions to continuously improve the transparency and become more accountable of the public funds.

Meanwhile, an important part remains the publication of contracts in the e-Procurement portal by all contracting authorities, and consequently the publication of annex contracts. Levizja FOL, during the process of monitoring the publication of contracts for 2019, based on the Regulation and Operational Guideline of Public Procurement A01, noticed that not all contracts are published in e-Procurement. In the lists of PPRC there were 4212 signed contracts, while in e-procurement platform there only 3486 contracts, which results on 726 contracts that are not published at all on this platform.

Furthermore, Lëvizja FOL monitored the data related to the number of annex contracts published during the period January - June 2020 for the four (Prizren, Ferizaj, Mitrovica and Kamenica), and analyzed the costs arising from the signing of these contracts. Consequently, during the monitoring period, data were collected regarding the number and type of these annex contracts, the date of signing, the date of completion of the foreseen works, their value, as well as data on whether or not they were published on e-Procurement platform.

This monitoring was triggered as a result of the preliminary monitoring of the construction process of the highway Prishtina - - Dheu i Bardhë, which was followed by numerous irregularities and which cost the state budget 88,618,511.95 euros. Hence, a large amount of the government budget funds are spent through the negotiated procedure without publishing a contract announcement, which includes annex contracts. Only in 2019, 514 contracts were signed through this procedure, worth nearly 56 million euros. Meanwhile, as mentioned above, the need to publish annex contracts remains important, as provided by the Regulation and Operational Guideline for Public Procurement.

1 Amended and Supplemented Regulation and Operational Guideline of Public Procurement (A01), 2018 2 FOL Movement. 2019. Headless Road - Construction Monitoring of the Prishtina-Gjilan-Dheu i Bardhe Highway.

3 Methodology

According to the Regulation and Operational Guideline of Public Procurement, all contracting authorities must publish contracts on their websites and in e-procurement, including annex contracts. Considering this, Levizja FOL aimed to monitor annex contracts, starting initially with four municipalities of Kosovo (Prizren, Ferizaj, Mitrovica and Kamenica), in order to establish a monitoring base for other remaining Kosovo municipalities, in relation to the reasonableness of signing annex contracts, their type of contract, as well as the costs arising from the conclusion of these contracts.

Initially, Levizja FOL analyzed the legal basis for annex contracts, including the recommendations provided in the Auditor General's reports. While analyzing the Audit Reports, no remarks or suggestions were found regarding the annex contracts for year 2019, signed by the municipalities, that have been the attention of the monitoring. Among other things, special focus was given to the municipal Justification Document regarding the need to sign annex contracts during the monitoring period. It should be noted that with the functioning of the Contract Management module through the electronic platform, an easier approach will be created for monitoring annex contracts in relation to the elements that Levizja FOL has already considered during the monitoring process for these four municipalities.

Legal base of annex contracts

The contracting authority may use the negotiated procedures without prior publication of a contract notice for conducting public procurement activities (known as annex contracts), meeting the conditions set out in the Law on Public Procurement.

Negotiated procedures without the publication of a contract notice are regulated in Article 35 of the Law (No. 04 / L-042) on Public Procurement in the Republic of Kosovo. This article specifies all the conditions to be met and the cases in which the contracting authority may use such procedures to carry out procurement activities. The contracting authority must notify the Public Procurement Regulatory Commission within two days of the decision to use this procedure. This is provided in paragraph 1 of article 35 of this law.

Pursuant to paragraph 2 of this Article, such procedures may be used for the exercise of the procurement activity for the purpose of awarding any public contract - when for various reasons the contract must be awarded to a particular economic operator, if for reasons of protection of the intellectual or industrial property rights the contract may be awarded only to a certain economic operator, and if due to extreme emergencies caused by unforeseen events the contracting authority cannot provide the time required for exercising any other procedure set forth in this law; for the purpose of awarding a supply contract - for certain additional deliveries to the original supplier, or if the relevant contracting authority is a public service operator; when they are intended to award a service contract - following a design contest exercised through open or restricted procedures, to be awarded to a contracting authority which under a legislative act enjoys an exclusive right to provide the service such; as well as for the award of a contract for services or works - aimed at implementing additional services or works that were not included in the initial conception of a previously awarded works project, for new works or services that are part of the repetition of similar works or services.

Paragraph 2 of Article 35 states that the execution of a negotiated procedure without the publication of a contract notice in no way relieves the contracting authority of its obligation to play an active role in determining the terms of the contract, in particular as regards with prices, acceptance deadlines, quantities, technical characteristics and warranties, ensure that the contracted price is not higher than the relevant market price, and carefully assess the quality of the product, service or work in question.

3 Ocial Gazzete of the Republic of Kosovo. The Law (No. 04 / L-042) on Public Procurement in the Republic of Kosovo, article 35. 4 Ibid. par.2.

4 Data Analysis

Initially, Levizja FOL has extracted general data for 2019 regarding annex contracts for contracting authorities from excel sheets published by PPRC, for the Municipalities of Prizren, Ferizaj, Mitrovica and Kamenica. The data are as follows:

ANNEX CONTRACTS FOR THE YEAR 2019

Number of Contracts Work Services Supply

20 19

15 13 13 10 10 6 6 4 5 2 1 2 0 0 0 0 0 0 0 Municipality of Municipality of Municipality of Municipality of Prizren Ferizaj Kamenica Mitrovica

Graf 1: Annex Contracts for the year 2019

The data documents that the Municipality of Prizren implemented 13 annex contracts, the Municipality of Ferizaj 19, the Municipality of Kamenica 6 annex contracts, while the municipality of Mitrovica did not implement any annex contracts. Whereas the total amounts of annex contracts for these three municipalities, excluding Municipality of Mitrovica, are as follows:

The amount of annex contracts for 2019 Municipality of Prizren € 252,171.85 Municipality of Ferizaj € 971,450.85 Municipality of Kamenica € 43,558.32 Municipality of Mitrovica € -

Table 1: The amount of annex contracts for 2019

5 Monitoring period January - June 2020

During the monitoring period, only the Municipality of Prizren and the Municipality of Ferizaj signed annex contracts. The Municipality of Prizren signed a total of three annex contracts, while the Municipality of Ferizaj signed four annex contracts. All the signed annex contracts were work related. Considering the files of these annex contracts, only the Municipality of Ferizaj consisted the date of completion, while the Municipality of Prizren did not include in any of the annex contract the date of completion of additional works.

NUMBER OF ANNEX CONTRACTS JANUARY - JUNE 2020

4 4 3 3

2

1 0 0 0 Municipality of Municipality of Municipality of Municipality of Prizren Ferizaj Mitrovica Kamenica

Graf 2: Number of annex contracts for the period January - June 2020

The total amount of annex contracts contracted by the Municipality of Prizren is 56,109.93 euros, while for the Municipality of Ferizaj, it is 106,782.18 euros.

THE AMOUNT OF ANNEX CONTRACTS

€120,000.00 €106,782.18 €100,000.00

€80,000.00 €56,109.93 €60,000.00

€40,000.00

€20,000.00 € €

Municipality of Municipality of Municipality of Municipality of Prizren Ferizaj Mitrovica Kamenica

Graf 3: The amount of annex contracts for the period January - June 2020

6 It should be noted that the Municipality of Prizren for all annex contracts also had an announcement to the Public Procurement Regulatory Commission or a Justification Document, based on Article 35.2 of the Law on Public Procurement, and all annex contracts, in addition to being published on its website, are also published in e-Procurement. Meanwhile, only in one file of the annex contract of the Municipality of Ferizaj is the Justification Document, which has neither a stamp nor a signature. Whereas in the files of the four annex contracts of this municipality, among others, there were the requests for additional work from the Director of Infrastructure addressed to the Manager of the Procurement Oce. The annex contracts during the monitoring period were not published either on the website of the Municipality of Ferizaj nor in the e-Procurement. During the receipt of the physical files of the annex contracts by the Chief Procurement Ocer of this municipality, Levizja FOL understood that the municipality does not publish these contracts on the website of the municipality.

No Procurement Contracting Economic Type of Signing Termination Value of Publication of Publication of Document of annex contract annex reasonabless Number Authority/ Authority Contract Date Date Contract contract at for annex at e-prokurimi Municipality Municipalities contract Web-pages

1 656-20-1929-5-2-5 Municipalify of Rahovica Comerce Work 26.05.2020 08.06.2020 44,584.10 No No Yes Ferizaj Sh.P.L

2 656-20-2074-5-2-5 Municipalify of Berisha Company Work 20.05.2020 01.06.2020 14,586.60 No No No Ferizaj Sh.A & Arlindi Shpk

3 N/A Municipalify of Berisha Company Work 19.05.2020 29.05.2020 13,133.98 No No No Ferizaj Sh.A 4 N/A Municipalify of Quality Asphalt Work 20.05.2020 01.06.2020 34,477.50 No No No Ferizaj Shpk & NM Company Zuka Comerce

5 522-19-9634-5-2-5 Municipalify of TOP Projekt ShPK Work 09.01.2020 N/A 30,851.94 YES YES YES Prizren

6 622-20-1817-5-3-5 Municipalify of Edi Bau ING Shpk Work 12.05.2020 N/A 9,563.60 YES YES YES Prizren 7 622-20-21-75-5-2-5 Municipalify of Fortesa OP & Work 27.05.2020 N/A 15,694.39 YES YES YES Prizren Fortesa SHPK

Municipality of Prizren

The Municipality of Prizren signed a basic contract for the construction of a primary school in Krajk on 08/01/2019. According to the Justification Document, during the implementation of this contract, unforeseen additional work occurred which were not included in the specifications of the main project. This municipality and "Top Projekt" LLC have signed an annex contract on 01/09/2020, with the same conditions as in the primary contract, for the construction of the annex of the primary school "Mit'hat Frashëri". The price of additional works is a total of 30,851.94 Euros, or 9.8% of the value of the primary contract, which was 313,267.68 Euros.

Regarding the "Construction of sewerage in i Ri", the Municipality of Prizren signed a contract with "Edi Bau ING" for the implementation of this project in the amount of 97,336.64 Euros, on 06/29/2019. Based on the Notification addressed to the PPRC, or the Justification Document, during the execution of this contract, some unforeseen work occured. Therefore, the signing of the annex contract was approved on 05/12/2020, with the foreseen value for about 9.5% of the original price, or 9,563.60 Euro.

The Municipality and “Fortesa” OP & “Fortesa” LLC have signed a contract for the construction of local roads with concrete elements in the amount of 159,987.60 Euros on 11/08/2019. Based on the justification document, some additional work was presented during the implementation of the project, which were not foreseen in the primary project or its parameters. As a result, the parties have entered into an annex contract on 05/27/2020 for the continuation of additional works in the amount of 15,694.39 euros or the value of 9.5% of the primary contract.

7 Municipality of Ferizaj

The Municipality of Ferizaj on 06/15/2017 signed a contract with the company NT "Rahovica Comerce" for the project "Asphalting of alleys in the city of Ferizaj" (LOT IV - from the street 'Brahim Ademi' to the street 'Enver Topalli'). According to the request from the Director of Infrastructure, the works that started in 2017, were stopped at the end of that year due to atmospheric reasons, but continued in 2018 and 2019. During the implementation of works, citizens had di erent requests for route extension, as well as asphalting of some alleys which were not included in the original project. Through the annex contract signed on 05/26/2020 between the Municipality of Ferizaj and the Economic Operator “Rahovica Comerce” LLC, the parties agreed to continue the above works. The value of this contract for additional works is 44,548.10 Euros, which is 9.79% after the bill of quantities provided by the supervisory body for additional works and unit prices respected by the original o er with a price of 454,572.66 Euros.

The municipality of Ferizaj signed a contract with the Consortium "Berisha Compani" JSC & "Arlindi" LLC for the project "Asphalting of roads in the village Talinoc of Jerlive". In the request of the Director of Infrastructure addressed to the Head of the Procurement Oce, it is emphasized that the works started on 08/16/2017, although they were a priority, were stopped at the end of that same year (2017), due to atmospheric conditions, to continue later in 2018 and 2019. During the implementation of works, due to the situation on the ground and various problems with the sewerage network, it was concluded that some interventions should be made in the existing sewerage network as well as in the preparation of the road base. 70% of the works foreseen under the contract have been completed, but it was not feasible to continue with the rest of the works, without an annex contract. This annex contract was concluded on 05/20/2020 between the Municipality of Ferizaj and the Economic Operator Consortium "Berisha Company" JSC and "Arlindi" SH.P.K. This contract is 14,586.60 Euros, which is 9.94% of the original contract amount of 146,670.35 Euros.

In addition, the Municipality of Ferizaj, entered into a contract with the company "Berisha Company" on 09/17/2018, in the project "Asphalting of the road 'Zenun Beqa' and replacement of the water pipe in the alleys that have access to the road 'Zenun Beqa' - Ferizaj. In the meantime, according to the request of the Director of Infrastructure, there was a need for connection to the new water supply network for the alleys "Alishefik Spahiu", "Arsim Zeqiri", "Ali Asllani", "Fehmi Lladrovci ”And“ Lidhja e Prizrenit ”, and at the same time the construction of sidewalks on the streets “Ali Asllani” and “Zenun Beqa ”. As a result, on 05/20/2020 an annex contract was signed between the Municipality of Ferizaj and the Economic Operator "Berisha Company" JSC, and both parties agreed on the above works. The value of this annex contract for additional is 13,333.11 Euro, which is 10% of the value of the original contract, where its value is 133,333.98 Euro, all according to the bill of quantities provided by the supervisory body for additional works and unit prices respected by the original o er in which the primary contract is concluded.

Annex contract concluded on 05/20/2020 between the Municipality of Ferizaj and the Economic Operator Consortium "Quality Asphalt" LLC & NM "Company Zuka Comerce" in accordance with the performance of the implementation of the foreseen works. This contract is 34,477.50 Euro, which is 9.34% of the value of the basic contract, all according to the bill of quantities provided by the supervisory body for additional works and unit prices respected by the original o er with which the primary contract is concluded. The Municipality of Ferizaj entered into a contract with the company "Quality Asphalt" LLC & "Zuka Comerce" LLC for the project "Asphalting of roads in the village of Nerodime e Epërme". The works started on 08/09/2018, but during their implementation, there was a need for asphalting other auxiliary roads. The primary contract, with a term of 3 years, was in the amount of 369,129.00 Euros.

8 Publication of annex contracts

In addition to the publication of annex contracts on the websites of municipalities which Levizja FOL has monitored in e-Procurement, in order for the data to be as accessible as possible to the public this remains a very important step for them to be published on the OPTP. Regarding the publication of annex contracts in this Portal, Levizja FOL considers that thus far there are two possibilities for their publication. One option is that these contracts can be found under the most similar name and become part of the original/primary contract; the other option is through the functionalization of the API, which will ensure the introduction of annex contracts automatically on the portal, which remains the most convenient and functional option.

Besides the above mentioned options of publication of annex contract at the OPTP, based on the findings during the monitoring of the annex contracts, FOL Movement recommends the following points:

The Municipality of Ferizaj, has not published annex contracts either on the website or on the e-Procurement website. The contracts were provided in person by the Municipality, following requests for public information. As a result, it is mandatory that all contracts and annex contracts to be published on the websites of all municipalities as well as in e-Procurement.

Considering our findings, the Justification Document of the annex contracts could only be found in one file of these annex contracts at the Municipality of Ferizaj, which had neither a stamp nor a signature. Nonetheless, in each file of the annex contracts, there must be a Justification Document, on the basis of which the contract was signed.

Considering the files of annex contracts, only the Municipality of Ferizaj consisted the date of completion, while the Municipality of Prizren did not include in any of the annex contracts the date of completion of additional works. In order to better monitor the implementation of contracts from contracting authorities, we recommend that each signed contract should have the end date.

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