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BENCHMARKING PUBLIC PROCUREMENT

BENCHMARKING PUBLIC PROCUREMENT In Prishtina/Priština, /Djakovica, Vushtrri/Vućitrna, /Gnjilane and / Peć

May 2018

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GJILANI

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VUSHTRRIA

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BENCHMARKING PUBLIC PROCUREMENT In Prishtina/Priština, Gjakova/Djakovica, Vushtrri/Vućitrna, Gjilan/Gnjilane and Peja/ Peć

May 2018

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PEJA

GJAKOVA

VUSHTRRIA

PROJECT TITLE: Exposing corruption through active monitoring and comparison of five municipalities DATE OF SUBMISSION: May 2018 PREPARED BY: Isuf Zejna and Rrita Ismajli

This report been prepared by Democracy Plus (D+) and supported by USAID through the Transparent, Effective, and Accountable Municipalities (USAID TEAM) activity. The author's views expressed in this report do not necessarily reflect the views of the United States Agency for International Development (USAID) or the government of the United States of America. 3 BENCHMARKING PUBLIC PROCUREMENT

4 BENCHMARKING PUBLIC PROCUREMENT CONTENTS

ABBREVIATIONS...... 1 TRANSPARENCY...... 23 EXECUTIVE SUMMARY...... 2 Why transparency?...... 23 PRISHTINA/PRIŠTINA...... 24 INTRODUCTION...... 10 GJILAN/GNJILANE...... 24 METHODOLOGY...... 12 PEJA/PEĆ...... 24 GJAKOVA/DJAKOVICA...... 25 LIMITATIONS ON DATA GATHERING...... 14 VUSHTRRI/VUĆITRN...... 25

IMPLEMENTATION OF LAW...... 15 COMPETITION...... 25 What does this mean?...... 15 Why competition?...... 25 PRISHTINA/PRIŠTINA...... 16 PRISHTINA/PRIŠTINA...... 26 GJILAN/GNJILANE...... 16 GJILAN/GNJILANE...... 26 PEJA/PEĆ...... 16 PEJA/PEĆ...... 27 GJAKOVA/DJAKOVICA...... 17 GJAKOVA/DJAKOVICA...... 27 VUSHTRRI/VUĆITRN...... 17 VUSHTRRI/VUĆITRN...... 28

GOOD PRACTICES...... 17 CIVIC ENGAGEMENT...... 28 What are good practices?...... 17 How can People get Engaged in PRISHTINA/PRIŠTINA...... 19 Public Procurement?...... 28 PEJA/PEĆ...... 19 PRISHTINA/PRIŠTINA...... 29 GJAKOVA/DJAKOVICA...... 19 GJILAN/GNJILANE...... 30 GJILAN/GNJILANE...... 20 PEJA/PEĆ...... 30 VUSHTRRI/VUĆITRN...... 20 GJAKOVA/DJAKOVICA...... 30 VUSHTRRI/VUĆITRN...... 30 IMPLEMENTATION OF RECOMMENDATIONS OF THE CONCLUSION...... 31 OVERSIGHT INSTITUTIONS...... 21 PRISHTINA/PRIŠTINA...... 22 Bibliography...... 33 GJILAN/GNJILANE...... 22 PEJA/PEĆ...... 22 GJAKOVA/DJAKOVICA...... 23 VUSHTRRI/VUĆITRN...... 23

5 BENCHMARKING PUBLIC PROCUREMENT

ABBREVIATIONS

ACA Anti-Corruption Agency

CA Contracting Authority

CPPA Central Public Procurement Agency

CSOs Civil Society Organizations

D+ Democracy Plus

EO Economic Operator

NAO National Audit Office

PPL Public Procurement Law

PPRC Public Procurement Regulatory Commission

PRB Procurement Review Body

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EXECUTIVE SUMMARY

Following the ‘’Baseline Report’’1 prepared by Democracy The municipalities were compared and analyzed based on Plus (D+) in December 2017 for five targeted municipalities the following indicators, for which the reasoning/impor- of , D+ has since then been designing a set of bench- tance is further explained in the report: marking indicators, cooperating with municipal procurement officials and preparing the first cycle of the ‘’Benchmark- ing Report’’ to better assess the performance of Prishtina/ Priština, Gjakova/Djakovica, Vushtrri/Vućitrna, Gjilan/Gn- 1 Implementation of law jilane and Peja/ Peć in public procurement. 2 Good Practices The report covers the period from January 2017 - February 2018, focusing and highlighting best practices, irregularities, violations and the main developments in public procurement Implementation of the 3 at the local level. The aim is to assess to which extent the mu- recommendations from oversight nicipalities are operating according to the law, as well as to en- institutions courage officials to share good practices of public procurement.

Indicators and research methods were set according to our 4 Transparency methodology regarding the monitoring process of public procurement. In order to identify irregularities and munic- ipalities’ best practices in the most accurate of ways, D+ 5 Competition prepared a questionnaire for procurement officials to assess performance in public procurement (see Annex 1). 6 Civic engagement

The aim of the ”Benchmarking Report” is twofold. It first of all shows comparable data on municipal public procurement practices and performances across five municipalities, and also provides insightful information not only for the public, but in particular for private companies and procurement reg- ulatory bodies such as the National Audit Office (NAO), Public Procurement Regulatory Commission (PPRC), Procurement Review Body (PRB) and the Anti-Corruption Agency (ACA).

The findings in this report were collected through the qual- itative and quantitative questionnaire, individual interviews and general discussions related to public procurement sys- tem in Kosovo, secondary sources from the independent public procurement institutions and private companies.

1 Baseline Report via D+ website 7 BENCHMARKING PUBLIC PROCUREMENT

IMPLEMENTATION OF LAW

Implementation of law indicator includes other sub-indi- during procurement activities. The second highest score is cators such as ‘’Complaints to the Contracting Authority’’, observed at the Municipality of Peja/Peć, scoring 9 points ‘’Complaints in the PRB’’, ‘’Findings from the Auditor’s of- out of 28. The Municipality of Prishtina/Priština scores 5 fice’’ etc. Based on our analysis, the Municipality of Vushtrri/ points and the last two least performing municipalities are Vućitrn scores the highest performance with 14 points out of the Municipality of Gjakova/Djakovica and Gjilan/Gnjilane, 28. This is due to it regularly respecting the legal framework each scoring 4 points out of 28 for this indicator.

GJAKOVA/ 01 4 28 DJAKOVICA

GJILAN/ 01 4 28 GNJILANE

PEJA/PEĆ 01 9 28

PRISHTINA/ 01 28 PRIŠTINA 5 FIGURE 1. Represents the points for each municipality for ‘’Implementation of law’’ VUSHTRRI/ 01 28 VUĆITRN 14 indicator.

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GOOD PRACTICES

For the 2nd indicator known as “Good Practices”, the highest municipality is the Municipality of Gjakova/Djakovica scoring performing municipality is Prishtina/Priština. This Munici- 15 points, and the Municipality of Gjilan/Gnjilane scored just pality has been found to offer higher standards of market under Peja/Peć with 10 points. Although the Municipality of research, better management of tender specifications’ re- Gjakova/Djakovica scored 15 points due to some less ad- quests and has an Integrity Plan in place. The second one is vanced practices, it did score just as high as the Municipali- the Municipality of Vushtrri/Vućitrn, which is also one of the ty of Vushtrri/Vućitrn, which executes payments within the most disciplined municipalities in regards to executing pay- legal deadline. ments within the legal deadline. The third best performing

GJAKOVA/ 01 15 49 DJAKOVICA

GJILAN/ 01 10 49 GNJILANE

PEJA/PEĆ 01 11 49

PRISHTINA/ 01 49 PRIŠTINA 24

FIGURE 2. Represents the points for each municipality for ‘Good VUSHTRRI/ 01 49 VUĆITRN 23 Practices’’ indicator.

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IMPLEMENTATION OF THE RECOMMENDATIONS FROM OVERSIGHT INSTITUTIONS

The implementation of the recommendations of the regu- are better addressed and dealt with in the Municipalities of latory institutions indicator includes various sub-indicators, Prishtina/Priština, Vushtrri/Vućitrn and Peja/Peć and Gja- such as the National Audit Office (NAO), the Internal -Au kova/Djakovica. However, the Municipality of Gjilan/Gnjilane dit Office of the municipalities, the Anti-Corruption Agency still has to work more to accomplish the implementation (ACA) and direct orders from the Public Procurement Re- of recommendations and opinions, for them to boost their view Body (PRB). Within this indicator, recommendations performance in this aspect of procurement activity. and opinions issued by these aforementioned institutions

GJAKOVA/ 01 19 DJAKOVICA 11

GJILAN/ 01 19 GNJILANE 7

PEJA/PEĆ 01 11 19

FIGURE 3. PRISHTINA/ 01 19 PRIŠTINA 11 Represents the points for each municipality for ‘’Implementation of the VUSHTRRI/ 01 19 recommendations of the VUĆITRN 11 oversight institution’’.

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TRANSPARENCY

The other important indicator looks at transparency around va/Djakovica also has shown great efforts to ensure transpar- procurement activities in these municipalities. During our ency in this sector. Further improvements are deemed to take data analysis and questionnaire assessments, D+ identified place in public procurement, but as of now, this Municipality that the Municipality of Prishtina/Priština does not only share stands 3rd in terms of transparency. The Municipality of Peja/ good practices of transparency but also has an ‘’Open Data’’ Peć is in the same category, as it’s also aiming to improve its platform in place. This initiative indeed helps the citizens of transparency level and efforts in public administration. The Prishtina/Priština to be better informed, as well as grant the Municipality of Gjilan/Gnjilane could further improve its score private sector the confidence to apply for public tenders. The in this indicator, by allowing citizens to have better access to Municipality of Vushtrri/Vućitrn is also scoring high in trans- public information and improving its website, particularly the parency indicators, thanks to their commitment towards open '’procurement section’’. and accountable local governance. The Municipality of Gjako-

GJAKOVA/ 01 13 DJAKOVICA 9

GJILAN/ 01 13 GNJILANE 6

PEJA/PEĆ 01 9 13

PRISHTINA/ 01 12 13 FIGURE 4. PRIŠTINA Represents the points for each municipality for ‘‘Transparency ’’ indicator. VUSHTRRI/ 01 13 VUĆITRN 11

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COMPETITION

The 5th indicator looks at the fairness of competition in public fectively and at pace. The Municipality of Gjilan/Gnjilane has procurement. The should imple- good practices in place, but more could be done in improving ment all the necessary procedures to ensure that com- the number of bids and ensuring that activities are carried petition is not undermined by political affiliations, but only out by a number of different companies rather than engaging ruled by meritocracy and fair bidding. Regarding this, the same companies simultaneously. This could definitely boost Municipality of Prishtina/Priština scores the highest points the performance in these municipalities, as well as increase in comparison with other municipalities. The Municipalities competition in the private sector. The Municipality of Peja/ of Vushtrri/Vućitrn and Gjakova/Djakovica are also not far Peć did not score particularly high in this section, because behind in this section, as they also share sustainable and it requires more commitment and a coherent strategy for good practices to ensure that competition is carried out ef- competition in public procurement.

GJAKOVA/ 01 13 DJAKOVICA 11

GJILAN/ 01 13 GNJILANE 10

PEJA/PEĆ 01 9 13

PRISHTINA/ 01 13 PRIŠTINA 13 FIGURE 5. Represents the points for each municipality for ‘’Competition’’ VUSHTRRI/ 01 13 indicator. VUĆITRN 11

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CIVIC ENGAGEMENT

The last indicator of this tool relates to civic engagement municipalities should all establish a method to interact more in the public procurement cycle. It is important that the with the public and ensure that the citizens are interested municipalities play an important role in society as a social and informed of the public works. All of these municipalities regulator and as a purchaser in the market. Citizens, CSOs do not score significantly different from one another. How- and the media hold great scrutiny power over the public pro- ever, the Municipalities of Peja/Peć and Prishtina/Priština curement process, and it is within their rights to be informed play a better role in informing their citizens, but more could and to be in touch with public activities. In general, these be done to improve in other municipalities.

GJAKOVA/ 01 18 DJAKOVICA 6

GJILAN/ 01 18 GNJILANE 5

PEJA/PEĆ 01 7 18

PRISHTINA/ 01 18 FIGURE 6. PRIŠTINA 9 Represents the points for each municipality for ‘Civil Engagement’’ indicator. VUSHTRRI/ 01 18 VUĆITRN 5

13 InBENCHMARKING order to comprehend PUBLIC PROCUREMENT the situation of public procurement report as, whilst preparing the research methods, limitations in Kosovo, this report will first offer an overview of the public were faced during the data gathering process. The latter is procurement system, commenting on the main developments important to be emphasized in order to help incentivize the and areas that require further assistance. The third and the public authorities to be more open in sharing public information fourth section will explain the methodological aspects of this and documents.

PRISHTINA/ GJILAN/ GJAKOVA/ VUSHTRRI/ PEJA/PEĆ PRIŠTINA GNJILANE DJAKOVICA VUĆITRN

Complaints to the CA 0 0 2 0 0 Days until decision 3 2 2 3 3 INDICATOR I Approved Appeals from CA 2 1 2 1 3 Complaints in PRB 0 0 2 0 4 Implementation of law Approved Appeals in PRB 0 1 1 0 2

Findings from the auditor’s office 0 0 0 0 2

Sub-Score 5 4 9 4 14

Warranty of products/works 4 1 0 1 5 Market research 0 0 0 0 2 Consultation with the private INDICATOR II sector in planning 0 0 0 0 0 Good Practices Handling requests for changes to tender specifications 2 0 3 0 3 Confiscation of execution of contracts insurance 4 0 0 0 5 Implementation of quality criteria 4 4 2 2 0 Efficiency in making payments 4 1 2 5 5 Institutional Integrity 2 0 0 3 2 Revision of projects 0 0 3 3 0 Managing Contracts 4 4 1 1 1

Sub-Score 24 10 11 15 23

Number of recommendations of the Internal Audit Unit 0 0 0 0 0 Opinions of the National Audit 1 1 1 1 1 INDICATOR III Office Implementation of NAO Implementation of the Recommendations 3 3 3 3 4 recommendations Orders from PRB 4 0 4 3 4

ACA Opinions 3 3 3 3 2

Sub-Score 11 7 11 10 11

14FIGURE 7. Represents the points of each municipality for all the sub-indicators Ultimately, the first cycle of the “Benchmarking Report” still has to be done in termsBENCHMARKING of ensuring PUBLIC fair PROCUREMENTcompetition, provides a clear overview of the public procurement structure transparency and accountability in procurement activities. In in the Municipalities of Prishtina/Priština, Gjakova/Djakovica, order to get a general overview of municipalities’ performance Vushtrri/Vućitrna, Gjilan/Gnjilane and Peja/ Peć. It can be on this questionnaire below is a scorecard that shows all the argued that there have been efforts in developing and sustaining indicators, sub-indicators and results accordingly. a better public procurement system, but a great deal of work

PRISHTINA/ GJILAN/ GJAKOVA/ VUSHTRRI/ PEJA/PEĆ PRIŠTINA GNJILANE DJAKOVICA VUĆITRN

Requests for access to official documents 3 2 3 3 3

INDICATOR IV Allowing access to official documents 5 3 3 3 4 Transparency

Website of the municipality 4 1 3 3 4

Sub-Score 12 6 9 9 11

Number of bids 5 2 3 2 2

INDICATOR V Origin of bids 4 3 3 4 4 Competition

Equality in treatment 4 5 3 5 5

Sub-Score 13 10 9 11 11

Transparency in tender evaluation 5 1 4 2 0

INDICATOR VI Transparency in bid opening 2 2 2 2 2 Civic engagement Consultations on drafting procurement plans 2 2 2 0 2

Monitoring in phases after the award of the tender 0 0 0 0 1

Sub-Score 9 5 8 4 5

TOTAL POINTS 74 42 57 53 75

Percentage 53% 30% 41% 38% 54% 53+47O 30+70O41+59O38+62O 5415+46O BENCHMARKING PUBLIC PROCUREMENT INTRODUCTION

This report’s primary purpose is to assess and outline the By answering the aforementioned questions, D+ believes that performance of public procurement at the local level through this report will serve as an informative tool to gain a holistic various benchmarking indicators. In the pursuit of this goal, approach to the local situation in public procurement, and this project draws on comparative analysis: primarily, by fo- contribute to the existing debate on tackling corruption in cusing on five targeted municipalities, and secondly, through public procurement in Kosovo. Let us consider the current identifying irregularities of procurement trends across mu- political and public will for anti-corruption debate on public nicipalities. This section will provide a comprehensive view procurement. Apart from civil society and the media’s inter- of public procurement in Kosovo, as well as the anti-corrup- est in this topic, efforts in addressing corruption in this sector tion fight in this part of public administration. It should be are hardly in existence. Shifting the debate on the technical noted that the other important aspect of this project activity aspects of transparency, such as launching the e-procure- is to engage municipalities in sharing public information with ment platform, is indeed a great start. However, exposing the general public, and in particular with civil society orga- corruption in this sector requires even more efforts both from nizations (CSOs). Providing such incentives could help boost civil society and private businesses. The e-procurement plat- cooperation between these two stakeholders, as well as form has had issues during the implementation and even help mitigate corruption risks that doing business with the today this platform is not yet fully implemented, as a result private sector present. of which the companies have the option of submitting offers physically. It is not granted, indeed, that regulating the way public au- thorities work and purchase goods and services is critical to The Anti-Corruption Agency and other respective authorities creating a level-playing field for all businesses.2 That being could also strengthen their efforts in preventing corruption, taken into consideration, D+ is seeking to initiate that pub- but also most importantly in tracking cases, reviewing them lic authorities ensure a more citizen-and business-friend- and punishing accordingly. The reason why this is crucial is ly public procurement system. The latter has proven to be because it significantly affects the process of public procure- slightly more difficult to establish, as many private busi- ment at the local level. As the OECD Monitoring Report for nesses have been more reluctant to share information and 2017 states, an institutional framework for public procure- further discuss issues when working for the public sector. ment is in place but with weaknesses in the performance Nevertheless, some local businesses have shared valuable of the tasks required for it.3 Therefore, integrating a level insights with our team and have assured further coopera- of control mechanisms and anti-corruption discipline could tion, although the number of these companies is very limit- help positively change the performance of procurement ed. Given this dilemma faced by company managers as well activities at the local level. Public procurement makes up as other civil society organizations, D+ will seek to address approximately one seventh (1/7th) of Kosovo’s GDP and is one the following questions: of the major drivers of its economy.4 It is concerning that the main elements required for an effective framework in public How transparent are public procurement activities in Kosovo? procurement that demonstrates the “value for money” to To what extent is competition promoted and enforced by the taxpayer continues to be less advanced. As a result of these municipalities? this, civil society and other important stakeholders should Are the private sector and the general public involved in continue to push for a transparent public procurement sys- public procurement planning? tem in order to achieve efficient allocation of resources through increased transparency and fair competition.

2 World Bank Benchmarking Public Procurement Report ‘’Assessing public procurement systems in 180 economies’’, 2017, pg 22. 3 OECD Report ‘’The Principles of Public Administration’’ 2017 edition, pg 1-106. 4 PPRC Report ‘’National Public Procurement Strategy for 2017-2021’’ January 2017, pg 1-41. 16 BENCHMARKING PUBLIC PROCUREMENT METHODOLOGY

Based on our “Baseline Report”5 conducted at the beginning search’’, ‘’Institutional Integrity’’, ‘’Transparency in Bid Open- of this project, we have analyzed the main findings and irreg- ing’’, ‘’Opinions of National Audit Office (NAO)’’, ‘’Orders from ularities in the target municipalities. However, the main pur- Public Procurement Review Body (PRB) ’’, ‘’Anti-Corruption pose of the Benchmarking Report aims at not only exposing Agency (ACA) Opinions’’, ‘’Request for Access to Official Doc- irregularities or errors during the procurement activities, but uments’’, ‘’Number of Bids’’ and ‘’Origin of Bids’’. to also identify best practices managed by these municipal- ities. Therefore, after consulting a considerable amount of D+ ensured that the data given by the municipalities were research methods and various interdisciplinary schools of correct by validating it with the main stakeholders such as thought, D+ designed a unique set of benchmarking indicators private companies, public independent institutions such as to assess the performance of the municipalities, as well as NAO, PRB, PPRC and ACA. D+ also requested official informa- to identify good practices. tion by using its legal rights of accessing public documents to these municipalities and simultaneously analyzing if the As opposed to the previous methods used for the report, access to documents was provided within the legal deadline. which were mainly based on the analysis of secondary sourc- The rationale and background of this research are also based es such as annual reports and statistical data, the Bench- on secondary research. Secondary research was deemed marking Report has a rather different approach. D+ prepared appropriate for this report because of its easy accessibil- a qualitative and quantitative questionnaire for municipalities ity; its low cost and the availability of general background to answer on different aspects of procurement activities such information regarding methods used to tackle corruption as: Implementation of law, good practices, recommendations in procurement at the local level. Other methods also in- of the regulatory bodies, fair competition, transparency and clude individual interviews with five procurement officials civic engagement. Moreover, this questionnaire included and five officials from the public information center in each sub-indicators whereby municipal officials were able to as- municipality and private companies, in order to gain a holis- sess the level of efficiency, transparency depending on the tic approach of the procurement situation at the local level indicator from 0-5, where 0 represents the weakest perfor- mance to 5 representing the highest. A BREAKDOWN OF THE DATA GATHERING WAS The performance of municipalities in public procurement was CONDUCTED AS FOLLOWS: measured based on our levels of scores. Each sub-indicator has a maximum of 5 points and a minimum of 0 points. These Benchmark indicators and questionnaire preparation; points then are all calculated together, thereby leading to a Analysis of questionnaire answers and data validation; ranking, with the best performing municipality or the weak- Data collection from secondary sources available such as est one. Low municipal scores indicate a weak performance annual report from NAO, PRB, ACA, and PPRC for 2017; in public procurement and vice versa. The “Benchmarking  Discussions with PPRC officials to review in more detail Tool” altogether consists of 6 main indicators and 14 sub-in- the monitoring of the PPRC; dicators. The total number of points is explained in order in Interview with the President of PRB Mr. Blerim Dina; this report in accordance with each indicator. For example, Discussions with public procurement officials in the five the first sub-indicator (Implementation of law) consists of target municipalities; 28 points and the best performing Municipality is Vushtrri/ Analysis of all the complaints from the economic operators Vućitrn scoring 14 points. However, it should be noted that addressed to contracting authorities and the PRB for 2017; some indicators have a maximum of 3 or 4 points such as the Analysis of ACA’s opinions on the annulment of activities following sub-indicators: ‘’Days until decision’’, ‘’Market Re- in municipalities.

5 Baseline Report via D+ website 17 BENCHMARKING PUBLIC PROCUREMENT

Limitations on data gathering

Gathering data for public procurement activities is not an been slow. All five municipalities have limitations when it easy task. That is firstly due to the economic importance comes to providing access to public information to other it has for both public officials and private companies, and organizations, institutions as well as companies. secondly due to the potential illicit activities that take place in procurements. The main problem during data gathering It is fair to argue that throughout this research report, public and analysis was the municipalities’ response on the given procurement institutions and the targeted municipalities in questionnaire. Not all municipalities responded promptly af- Kosovo should not only be able to provide access to informa- ter the given deadline and the answers to the questionnaire tion and other public documents, but to publish Open Data were rather restrictive. whether or not anyone has requested it. Increasing access to information to large amounts of government data will Non-disclosure of public information has been a trend since open the door for new tools to be developed to aid CSOs, the establishment of public procurement in Kosovo. Despite private companies and the public at large in identifying and the introduction of a culture to release public information preventing corruption. and pressure from the international community to be open and transparent in public procurement, the progress has

Non-disclosure of public information has been a trend since the establishment of public procurement in Kosovo. Despite the introduction of a culture to release public information and pressure from the international community to be open and transparent in public procurement, the progress has been slow.

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What does this mean?

IMPLEMENTATION OF LAW

ased on this criterion, all five management, as well as to assess the municipalities are compared in six effectiveness of the complaints’ management Bindicators including: complaints to process by the private sector.The data analyzed contracting authorities, effectiveness in for these indicators showed moderately low reviewing complaints, number of approved levels of law enforcement, and a relatively large complaints, complaints at the PRB, number number of irregularities were identified. In the of complaints approved at the PRB and implementation of the law, municipalities have findings of the NAO. The purpose of measuring had a weaker performance. However, data these indicators is to assess the level of show that there are different scores and results implementation of the Public Procurement depending on the municipalities. Law (PPL) and other laws related to financial

19 BENCHMARKING PUBLIC PROCUREMENT IMPLEMENTATION OF LAW

Complaints to the CA 10 2 3 4 5

Days until decision 1 2 3 4 5

Approved Appeals from CA 1 2 3 4 5

Complaints in PRB 10 2 3 4 5 PRIŠTINA

PRISHTINA/ Approved Appeals in PRB 10 2 3 4 5

Findings from the auditor’s office 10 2 3 4 5

Complaints to the CA 10 2 3 4 5

Days until decision 1 2 3 4 5

Approved Appeals from CA 1 2 3 4 5

Complaints in PRB 10 2 3 4 5

Approved Appeals in PRB 1 2 3 4 5

GJILAN/GNJILANE Findings from the auditor’s office 10 2 3 4 5

Complaints to the CA 1 2 3 4 5

Days until decision 1 2 3 4 5

Approved Appeals from CA 1 2 3 4 5

Complaints in PRB 1 22 3 4 5

PEJA/PEĆ Approved Appeals in PRB 11 2 3 4 5

Findings from the auditor’s office 10 2 3 4 5

Complaints to the CA 10 2 3 4 5

Days until decision 1 2 3 4 5

Approved Appeals from CA 1 2 3 4 5

Complaints in PRB 10 2 3 4 5 GJAKOVA/ DJAKOVICA Approved Appeals in PRB 10 2 3 4 5

Findings from the auditor’s office 10 2 3 4 5

Complaints to the CA 10 2 3 4 5

Days until decision 1 2 3 4 5

Approved Appeals from CA 1 2 3 4 5

Complaints in PRB 1 2 3 4 5 VUĆITRN VUSHTRRI/ Approved Appeals in PRB 1 2 3 4 5

Findings from the auditor’s office 1 2 3 4 5

Illustrates the score of each municipality based on the grade, for all six indicators. Points of municipalities FIGURE 8. are evaluated from 0 up to 5 maximum. Some indicators may be evaluated on a maximum point basis of less20 than five, depending on the importance of the indicator. See Annex 1 of the report for more information. BENCHMARKING PUBLIC PROCUREMENT

The Municipality of Vushtrri/ Vućitrn had the best 5/28 4/28 performance out of the other four municipalities, PRISHTINA/ GJILAN/ due to the low number of PRIŠTINA GNJILANE complaints at PRB it showed. Vushtrri/Vućitrn indeed Prishtina/Priština scored only 5 points Gjilan/Gnjilane together with Gjakova/ had only two complaints at in Implementation of law indicator. Djakovica have received the lowest the PRB, which shows an As part of this section, there are score regarding the sub-indicators effective complaints’ review sub-indicators such as complaints at for Implementation of law. This is due the municipal level for tenders, the to the large number of complaints at the first instance. Although efficiency of complaints review, com- and the ineffectiveness of complaints from a budget perspective, plaints in the PRB, the municipality's review system at the municipal level. Vushtrri/Vućitrn has less success in winning cases in the PRB, In reviewing complaints at the first financial means to spend and finally the findings of the auditor's level, the municipality received 2 through procurement, again office. In this regard, the Municipality points and 1 point in the case of rep- the number of procurement of Prishtina/Priština received fewer resentation at the PRB. points due to the large number of activities during 2017 complaints both at the municipality has been 207, a number level as well as in the PRB. In addition, significantly higher than Prishtina/Priština had numerous vio- Gjilan/Gnjilane, which had lations in the auditor's report. Within only 43, Prishtina/Priština these indicators, the municipality with 150, Peja/Peć with 142 has only taken into account the effi- and Gjakova/Djakovica with ciency of the complaints reviews at the municipal level and the number 6 117 activities. of complaints it has approved at the municipal level. This shows indeed that the municipality has seriously reviewed the complaints at the first level. On the other hand, no point was scored in the other indicators.

6 Annual report on public procurement contracts for PPRC, Municipality of Vushtrri/ Vućitrn 2017.

/28 21 BENCHMARKING PUBLIC PROCUREMENT 9/28 4/28 14 /28 PEJA/ GJAKOVA/ VUSHTRRI/ PEĆ DJAKOVICA VUĆITRN

The Municipality of Peja/Peć scores The municipality of Gjakova/Djakov- The best performing Municipality better in this set of indicators. It also ica, similarly to Gjilan/Gnjilane, has in this indicator is Vushtrri/Vucitrn, performs better than Prishtina/Prišti- received a low number of points. The scoring 14 points out of 28. Hence, it na, Gjakova/Djakovica and Gjilan/ only two indicators where this munic- can be said that this municipality has Gnjilane. This municipality received ipality has received points are those a satisfactory level of implementing points almost in each indicator, ex- related to the effectiveness of review- the law. The Municipality examined cept for the sixth indicator related to ing complaints at the municipal level. first-instance complaints rather the findings of NAO, in which Peja/Peć This Municipality indeed reviews fast and within the legal deadlines, also had a large number of findings. In complaints within 48 hours, and there approved a number of complaints, all four sub-indicators, the municipal- is one case where the complaint was which proves that the first-instance ity has received only 2 points, which found to have valid grounds. complaint review effectively works. represents an average score, espe- Moreover, during our monitoring cially in the review of complaints. In phase, only two complaints were relation to the approval of complaints filed at the PRB. However, in both at the PRB, Peja/Peć scored only 1 cases, the complaints were grounded point, which means that the munici- and the procurement activities were pality has lost many cases at the PRB. re-evaluated. Comparing complaints with the number of procurement ac- tivities in this municipality, only two complaints indicate that companies do not have significant dissatisfaction with this municipality.

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What are good practices?

GOOD PRACTICES

ne of the most important pillars of this which mainly measure the will of municipalities report is the dissemination of good to improve contract management, cooperation Opractices, which implies more than legal with the private sector to ensure equal obligations that municipalities apply to increase conditions, and increase institutional integrity. procurement quality. Ten indicators of municipal performance have been included in this aspect,

23 BENCHMARKING PUBLIC PROCUREMENT GOOD PRISHTINA/PRIŠTINA GJILAN/GNJILANE PRACTICES

Represents the scores of FIGURE 9. each municipality for the ten indicators of good practices’ sharing. Municipalities’ points are evaluated from 0 up to 5 maximum. Some indicators may be evaluated on a maximum point basis of less than five, depending on the importance of the indicator. See Annex 1 of the report for more information.

Warranty of products/works 1 2 3 44 5 1 2 3 4 5

Market research 10 2 3 4 5 10 2 3 4 5

Consultation with the private 10 2 3 4 5 10 2 3 4 5 sector in planning

Handling requests for changes to tender 1 2 3 4 5 10 2 3 4 5 specifications

Confiscation of execution of 1 2 3 44 5 10 2 3 4 5 contracts insurance

Implementation of quality 1 2 3 44 5 1 2 3 4 5 criteria

Efficiency in making 1 2 3 4 5 11 2 3 4 5 payments

Institutional Integrity 1 2 3 4 5 10 2 3 4 5

Revision of projects 10 2 3 4 5 10 2 3 4 5

Managing Contracts 1 2 3 44 5 1 2 3 44 5

24 10

24 BENCHMARKING PUBLIC PROCUREMENT PEJA/PEĆ GJAKOVA/DJAKOVICA VUSHTRRI/VUĆITRN

10 2 3 4 5 11 2 3 4 5 1 2 3 4 55

10 2 3 4 5 10 2 3 4 5 1 2 3 4 5

10 2 3 4 5 10 2 3 4 5 10 2 3 4 5

1 2 3 4 5 10 2 3 4 5 1 2 3 4 5

10 2 3 4 5 10 2 3 4 5 1 2 3 4 55

1 2 3 4 5 1 2 3 4 5 10 2 3 4 5

1 2 3 4 5 1 2 3 4 55 1 2 3 4 55

10 2 3 4 5 1 2 3 4 5 1 2 3 4 5

1 2 3 4 5 1 2 33 4 5 10 2 3 4 5

1 2 3 4 5 11 2 3 4 5 11 2 3 4 5

11 15 23

25 BENCHMARKING PUBLIC PROCUREMENT

24/49 11/49 PRISHTINA/ PEJA/ PRIŠTINA PEĆ

Within the implementation of good The Municipality of Peja/Peć received practices aspect, this municipality a lower grade in the implementation stands out with the best score, com- of good practices. This is because pared to the other four municipalities. this municipality, according to the Prishtina/Priština has received points monitoring data, does not have an for contract management, efficiency Integrity Plan, nor does it have an in seizure of contract performance, efficient contract management sys- insurance in cases of non-perfor- tem in place. There are furthermore mance of the contract, payment complaints from economic operators efficiency, use of most economically about the efficiency of payments, lack advantageous tender criterion, and of market research, private sector requests for product or work warran- consultation and request for warran- ties in procurements. On the other ties on products. On the other hand, hand, the municipality has had weak- the municipality has received points er results in the area of project revi- in the revision of the projects, seizure sion, market research, private sector of contract performance insurance consultations for drafting plans and and handling requests for changes in technical specifications. technical specifications.

/4926 BENCHMARKING PUBLIC PROCUREMENT

15/49 10/49 23/49 GJAKOVA/ GJILAN/ VUSHTRRI/ DJAKOVICA GNJILANE VUĆITRN

Gjakova/Djakovica also has a modest Identifying good practices in the Mu- Ranking very close to Prishtina/Prišti- result compared to Prishtina/Priština nicipality of Gjilan/Gnjilane was chal- na in terms of good practices is the and Vushtrri/Vućitrn. This is because lenging. This municipality has many Municipality of Vushtrri/Vućitrn. This in 4 out of 10 sub-indicators, this problems with the functioning of the municipality has very well adjusted municipality has received 0 points. Procurement Office due to problems the requirement for warranties in This municipality has not provided with the suspension of a large num- each tender dossier analyzed by D+. sufficient data to show that it con- ber of procurement officers, as a Also, the municipality has provided ducts market research, does not have result of criminal investigations and data supporting the fact that it does private sector consultations during trials. The Municipality of Gjilan/Gn- basic market research, especially procurement planning and has not jilane did not receive points in market with regards to pricing. In addition, confiscated contract performance research, private sector consulta- this Municipality has applied fines insurance. However, Gjakova/Dja- tions, handling requests to change in case of delays from companies kovica scored some points regarding technical specifications and seizure to complete obligations. However, its efficiency in executing payments of contract performance insurance. so far there was no need to confis- for companies. The municipality but When implementing the contracts, cate insurances for the execution also the economic operators ex- the municipality received 4 points, be- of contracts. The municipality could pressed their satisfaction with the cause it did not report any issue with organize better consultations with effectiveness of payment execution, the execution of contracts. However, the private sector which, besides with some exceptions when it was this data has yet to be verified. This strengthening the relationship with required to execute payments with a municipality has received 4 points companies, could also help the mu- private enforcement agent. The Mu- for the use of the most economically nicipality design better tender plans nicipality of Gjakova/Djakovica also advantageous price criterion. This and specifications. The municipality has an Integrity Plan and for this it criterion indeed, if used carefully in should also examine the possibility has received 3 points. However, there practice, ensures greater quality of of reviewing the projects, as this en- is no data on how much this plan is products or works than those of the sures that the measures, forecasts being implemented and what are its lowest price criterion. and plans are in line with the needs of effects. For the revision of the proj- the market. ects, the municipality had a separate contract in 2017, but there is no data on how the projects were revised.

27 BENCHMARKING PUBLIC PROCUREMENT

D+ aims to encourage municipalities to implement as many recommendations as possible and to publish the internal audit reports.

28 BENCHMARKING PUBLIC PROCUREMENT

What are the Recommendations of the Supervisory Institutions?

IMPLEMENTATION OF RECOMMENDATIONS OF THE OVERSIGHT INSTITUTIONS

n Kosovo, there are a large number of the efforts of municipalities to implement the oversight mechanisms that control the recommendations of these public institutions. Imanner in which public institutions spend This is because in Kosovo, in general, public money. Some of the most important the recommendations of the supervisory ones include: 1. the Internal Audit Unit; 2. institutions are not adequately addressed. the National Audit Office; 3. the Procurement Through this measurement, D+ aims to Review Body; and 4. the Anti-Corruption Agency. encourage municipalities to implement as many For each oversight institution, a sub-indicator recommendations as possible and to publish the was created, for the purpose of emphasizing internal audit reports. 29 BENCHMARKING PUBLIC PROCUREMENT IMPLEMENTATION OF RECOMMENDATIONS

Number of recommendations 1 2 3 4 5 of the Internal Audit Unit 0 Opinions of the National 1 2 3 4 5 Audit Office 1 Implementation of NAO 1 2 3 4 5 Recommendations 3

PRIŠTINA Orders from PRB 1 2 3 4 5 PRISHTINA/ 4

ACA Opinions 1 2 3 4 5

Number of recommendations 1 2 3 4 5 of the Internal Audit Unit 0 Opinions of the National 1 2 3 4 5 Audit Office 1 Implementation of NAO 1 2 3 4 5 Recommendations 3 Orders from PRB 10 2 3 4 5

GJILAN/GNJILANE ACA Opinions 1 2 3 4 5

Number of recommendations 1 2 3 4 5 of the Internal Audit Unit 0 Opinions of the National 1 2 3 4 5 Audit Office 1 Implementation of NAO 1 2 3 4 5 Recommendations 3 Orders from PRB 1 2 3 44 5 PEJA/PEĆ

ACA Opinions 1 2 3 4 5

Number of recommendations 1 2 3 4 5 of the Internal Audit Unit 0 Opinions of the National 1 2 3 4 5 Audit Office 1 Implementation of NAO 1 2 3 4 5 Recommendations 3

GJAKOVA/ 1 2 3 4 5 DJAKOVICA Orders from PRB 3

ACA Opinions 1 2 3 4 5

Number of recommendations 1 2 3 4 5 of the Internal Audit Unit 0 Opinions of the National 1 2 3 4 5 Audit Office 1 Implementation of NAO 1 2 3 4 5 Recommendations 4

VUĆITRN 1 2 4 5 VUSHTRRI/ Orders from PRB 3 4

ACA Opinions 1 2 3 4 5

Represents the scores of each municipality for the five indicators of the part for the implementation of the FIGURE 10. recommendations of the supervisory institutions. Points of municipalities are evaluated from 0 up to 5 maximum.30 Some indicators may be evaluated on a maximum point basis of less than five, depending on the importance of the indicator. See Annex 1 of the report. BENCHMARKING PUBLIC PROCUREMENT

11/19 7/19 PRISHTINA/ GJILAN/ PRIŠTINA GNJILANE

In implementing the recommenda- The report shows that the Munici- tions of the supervisory institutions, pality of Gjilan/Gnjilane also did not the Municipalities of Prishtina/ receive a large number of points in Priština, Vushtrri/Vućitrn and Peja/ the implementation of the recom- Peć have the best performance. The mendations of the supervisory in- Municipality of Prishtina/ Priština only stitutions. The main reasons for this failed to receive points in the first are the non-implementation of some indicator related to internal audit re- decisions of the PRB for procurement ports. This is due to its lack of a func- activities and failure to publish the tional unit of internal auditing and its report of the Internal Audit Unit. The failure to publish reports. This is im- municipality, on the other hand, had portant because it further promotes a solid opinion of the auditor, which transparency and it could also serve gave unmodified opinions with an as a comparison tool with the NAO’s emphasis on the matter. While partial annual report. However, the munici- implementation of the recommenda- pality has gained significant points in tions was above average, there were the level of addressing NAO recom- a small number of recommendations mendations, where it has shown a addressed entirely.7 remarkably high level of implementa- tion of recommendations.

7 National Audit Office, Annual Regularity Au- dit Report of Gjilan Municipality for 2016, pg 12. /19 31 BENCHMARKING PUBLIC PROCUREMENT

11/19 11/19 11/19 PEJA/ GJAKOVA/ VUSHTRRI/ PEĆ DJAKOVICA VUĆITRN

The implementation of the rec- Gjakova/Djakovica stands very close The Municipality of Vushtrri/Vučitrn ommendations of the supervisory to three other municipalities, Prishti- also showed a good score in the group institutions gave the Municipality of na/Priština, Peja/Peć and Vushtrri/ of sub-indicators for implementing Peja/Peć a score of 11 points, hence Vućitrn. The difference with the three the recommendations of the supervi- placing it on equal footing with Vush- previous municipalities lies in the sory institutions, thereby scoring 11 trri/Vućitrn and Prishtina/Priština. number of recommendations ad- points. Vushtrri/Vucitrn only failed to The Municipality did not publish the dressed in the NAO reports. Unfortu- implement 2 recommendations out of Internal Audit Unit's report and in nately, the Municipality of Gjakova/ 17. For the number of recommenda- this sub-indicator, did not receive Djakovica did not take any action to tions addressed, the municipality has any points. However, this document address 8 out of 18 recommendations scored an extra 4 points compared has not been published by any of the from the Auditor, but on the other to any other municipality. Also, the monitored municipalities. The munic- hand, did not disregard any order of municipality has implemented all ipality has received maximum points the PRB. orders of the PRB. Moreover, in one for the implementation of the PRB’s of the 2 complaints from EO, the Mu- decisions and has received a good nicipality has agreed with the PRB’s assessment of the implementation of expert recommendation. This shows the NAO recommendations. a very constructive approach from the Municipality in relation to PRB, as it avoids delays in procurement activities.

32 BENCHMARKING PUBLIC PROCUREMENT

Why transparency?

TRANSPARENCY

t is important to measure how open the municipalities publish or offer access to tender municipalities are in relation to the public, documentation. Firstly, it should be noted that Iin order to assess their will for accountable all municipalities have been resistant and slow local governance towards their citizens. in providing public procurement data and have Oftentimes, municipalities that have greater exceeded the legal deadline, which indicates transparency also have better management. that none of the five municipalities are fully Transparency often makes the officials aware complying with the standards of access to that in the event of irregularities or unjust information and documents. However, some expenditures, the media and civil society will municipalities are more efficient than others hold them accountable. D+ has measured the and do more often publish documents on their three main indicators of municipal transparency websites, despite having any legal obligation to in public procurement to assess how these do so.

33 BENCHMARKING PUBLIC PROCUREMENT TRANSPARENCY

Requests for access to 1 2 3 4 5 official documents 3

Allowing access to 1 2 3 4 5 official documents 5 PRIŠTINA PRISHTINA/ Website of the municipality 1 2 3 4 5

Requests for access to 1 2 3 4 5 official documents 2

Allowing access to 1 2 3 4 5 official documents 3

Website of the municipality 1 2 3 4 5 GJILAN/GNJILANE

Requests for access to 1 2 3 4 5 official documents 3

Allowing access to 1 2 3 4 5 official documents 3 PEJA/PEĆ Website of the municipality 1 2 3 4 5

Requests for access to 1 2 3 4 5 official documents 3

Allowing access to 1 2 3 4 5 official documents 3 GJAKOVA/ DJAKOVICA Website of the municipality 1 2 3 4 5

Requests for access to 1 2 3 4 5 official documents 3

Allowing access to 1 2 3 4 5 official documents 4 VUĆITRN VUSHTRRI/ Website of the municipality 1 2 3 44 5

FIGURE 11. Represents the points of each municipality for the three transparency measurement indicators. 34 BENCHMARKING PUBLIC PROCUREMENT

12/13 6/13 PRISHTINA/ GJILAN/ PRIŠTINA GNJILANE

Prishtina/Priština has received points The Municipality of Gjilan/Gnjilane in in all indicators of transparency, very these sub-indicators of transparency closely approaching the maximum has not received a good number of score of this indicator. The reason for points. This is because the municipal this result is the Open Data platform website does not contain data on of the municipality, which is well public procurement and access to equipped with documents, including the documents of this municipality is those in regards to public procure- very difficult. The two websites of this ment (Prishtinaonline.com). Access municipality, Smart City and the one to public documents is well regulated developed by the Ministry of Public through this website and reports Administration, do not provide data show that access to documents was on public procurement activities for provided to all parties. 2017.

/13 35 BENCHMARKING PUBLIC PROCUREMENT

9/13 9/13 11/13 PEJA/ GJAKOVA/ VUSHTRRI/ PEĆ DJAKOVICA VUĆITRN

Peja/Peć has scored 9 points in trans- One of the municipalities, which had Despite the fact that there is no Open- parency sub-indicators. However, a a high level of transparency but has Data or special public procurement large number of documents remain not continued this trend in 2017 is portal, Vushtrri/Vučitrn is the only yet to be published, including con- the Municipality of Gjakova/Djakov- Municipality among the targeted five tracts and procurement plans, which ica. This municipality developed the that has published the Procurement are currently published by very few GjakovaPortal, a website dedicated to Plan online. This plan is a very import- institutions. On the website neverthe- the city in general, where a consider- ant document that enables the private less, there is data regarding contract able amount of data on procurement sector to prepare for activities that will notices, contract signature notices can be accessed8. Apparently though, take place during the year. Similarly, in and some other documents, which after 2016, the publication of these case of non-publication, it could en- are also made public on the e-Pro- documents has not continued. To able businesses to use their social ties curement portal. sum up, the Municipality of Gjakova/ to receive inside information hence Djakovica does not score poorly in this leading to corruption. Therefore, the category, but it failed to maintain its municipality should increase the num- leading position on the path for trans- ber of published documents online, parency. regulate access to information and ensure that the new municipal website contains sufficient public documents.

8 Gjakova Portal Wesbite: http://gjakovaportal.com/al/ 36 BENCHMARKING PUBLIC PROCUREMENT

Why competition?

9

COMPETITION

ompetition is one of the principles of economic operators. In those municipalities public procurement legislation. Through where the number of bids is smaller, this Cthis principle, it is ensured that regardless represents a red flag or an indicator of of the origin of the bidders, they will be treated potential corruption. In Kosovo, according to equally. The number of bids for procurement the PPRC annual reports, the average of bids activity best reflects the sustainability of public at the national level is above 5 bids for each procurement in a municipality. In other words, procurement activity, which reflects a moderate the greater the number of bids, the more open competitive market in the private sector.9 the municipality is towards contracting with

9 Public Procurement Regulatory Commission, Annual Work Report for 2016, pg 38. 37 BENCHMARKING PUBLIC PROCUREMENT COMPETITION

Number of bids 1 2 3 4 55

Origin of bids 1 2 3 4 5 PRIŠTINA PRISHTINA/ Equality in treatment 1 2 3 4 5

Number of bids 1 2 3 4 5

Origin of bids 1 2 3 4 5

Equality in treatment 1 2 3 4 55 GJILAN/GNJILANE

Number of bids 1 2 3 4 5

Origin of bids 1 2 3 4 5 PEJA/PEĆ Equality in treatment 1 2 3 4 5

Number of bids 1 22 3 4 5

Origin of bids 1 2 3 4 5 GJAKOVA/ DJAKOVICA Equality in treatment 1 2 3 4 55

Number of bids 1 22 3 4 5

Origin of bids 1 2 3 4 5 VUĆITRN VUSHTRRI/ Equality in treatment 1 2 3 4 55

FIGURE 12. Represents the points of each municipality for three indicators measuring competition. 38 BENCHMARKING PUBLIC PROCUREMENT

13/ 13 10/13 PRISHTINA/ GJILAN/ PRIŠTINA GNJILANE

From the annual reporting data for In 2017, the Municipality has conduct- procurement activities, the Munici- ed 48 open procurement activities pality of Prishtina/Priština has had an for which there were 191 bids, or 3.9 average of 5.9 bids for a procurement bids on average for each procurement activity, exceeding the average of activity. The number of bids in this Kosovo. This is also influenced by the municipality is significantly below fact that the Municipality has a higher Kosovo's average, however it still is budget and the interest of the opera- evidence of a satisfactory competi- tors to bid is higher. A higher number tion climate in public procurement. of bids also shows that in principle, This municipality also received offers the municipality has an open access from businesses that are registered to businesses. In addition, bids in this outside the Municipality of Gjilan/ municipality come from businesses Gnjilane, with a number of them be- that are registered outside the terri- ing awarded with contracts. In this tory of the Municipality of Prishtina/ Municipality, it is evident that local Priština and a significant number of companies are being favored, and in them are rewarded with contracts. particular in the tenders for heating However, this Municipality has limited installations in some public buildings. competition within some contracts, In the tender dossier, it was request- for which it has entered into direct ed that radiators should come from contracts with public enterprises, Radiator Factory in Gjilan/Gnjilane, or without an open process in accor- equivalent. This practice is not legally dance with the PPRC interpretation prohibited, but however indicates a and case law of PRB. favorable approach to a local compa- ny. On the other hand, the municipali- ty declares that it has open access to private and public companies without any favor.

/13 39 BENCHMARKING PUBLIC PROCUREMENT 9/13 11/13 11/13 PEJA/ GJAKOVA/ VUSHTRRI/ PEĆ DJAKOVICA VUĆITRN

Peja/Peć had 142 procurement activi- Gjakova/Djakovica has an average of In 2017, this Municipality has carried ties in 2017, for which there were 701 3.4 bidders per procurement activity. out 207 procurement activities, for bids, or on average 4.9 bids per pro- This is considerably lower than the which there were 740 offers to bid, curement activity. The number of bids Kosovo-wide average, but the figure or on average 3.5 offers per activity. is close to Kosovo's average. Also, the still reaches a satisfactory average for The high number of procurement origin of bids is mixed, including the public procurement competition. But activities shows that the tenders of number of companies that are regis- what makes this Municipality different this municipality have been of smaller tered outside this municipality, which from others is that it has a very open values, and this may have caused a in some cases are rewarded with approach to the private sector in rela- lower interest of companies to bid. contracts. Peja/Peć Municipality has tion to the public enterprises. This Mu- However, despite this bid average attempted to initiate an open con- nicipality had open calls for each con- being lower than Kosovo’s average, it tract for telephone services, but was tract, hence giving the chance to both still represents a solid number of av- blocked by the complaint of Kosovo public and private sector companies. erage bids. The number of bids from Telecom in the PRB. Afterwards, the Moreover, in the case of a tender for businesses that are not registered in PRB requested from the municipality telephone services, the contract was this Municipality exceeds 30%. As for not to publish a tender, but to rather awarded to the private operator IPKO. open competition, this Municipality use Article 9.4 of the PPL and sign a Kosovo Telecom lodged a complaint at respects the decisions and interpreta- contract without an open call.10 the PRB, accusing the Municipality of tions of the PPRC and the PRB. violating Article 9.4 of PPL. The Munici- pality of Gjakova/Djakovica successfully defended and won its case before the PRB, explaining how this contract saves the budget of the taxpayers in Gjakova/ Djakovica and offers more favorable conditions for the municipality. Also, the Municipality has a very open access to companies that are not registered in this municipality, as the majority of contracts are awarded to operators of other municipalities. This shows great efforts to ensure equal treatment to all companies regardless of their origin. This is important, as it indicates that the Municipality appreciates the quality of the products, works or services rather than the origin of the companies.

10 Public Procurement Review Body, Decision no. 280/17. 40 BENCHMARKING PUBLIC PROCUREMENT

How can people get engaged in public procurement?

CIVIC ENGAGEMENT

itizens should be an integral part of implementation process. Although this area public procurement, as procurement is not regulated by legislation, it is important Cprojects are done in their interest and to see how many municipalities enable their most importantly with their money. Based on citizens to engage in planning, reviewing this principle, citizens should ensure that the bidding, awarding contracts and monitoring projects that are being implemented are in their implementation in practice. As a matter of their best interest. This part is not regulated fact, if citizens are more informed and engaged by sufficient legislation, so the civil society in public spending and in particular public in Kosovo should make maximum efforts procurement, it could help all municipalities to engage in public procurement activities, receive higher public trust and even feedback by participating in observations, in the for procurement activities. evaluation of tenders, and even in the contract

41 BENCHMARKING PUBLIC PROCUREMENT CIVIC ENGAGEMENT

Transparency in tender 1 2 3 4 5 evaluation 5

Transparency in bid opening 1 2 3 4 5

Consultations during the planning 1 2 3 4 5 of procurement activities 2 PRIŠTINA PRISHTINA/ Post contract monitoring 10 2 3 4 5

Transparency in tender 1 2 3 4 5 evaluation 1

Transparency in bid opening 1 2 3 4 5

Consultations during the planning 1 2 3 4 5 of procurement activities 2

GJILAN/GNJILANE Post contract monitoring 10 2 3 4 5

Transparency in tender 1 2 3 4 5 evaluation 3

Transparency in bid opening 1 2 3 4 5

Consultations during the planning 1 2 3 4 5 of procurement activities 2 PEJA/PEĆ

Post contract monitoring 10 2 3 4 5

Transparency in tender 1 2 3 4 5 evaluation 2

Transparency in bid opening 1 22 3 4 5

Consultations during the planning 1 22 3 4 5

GJAKOVA/ of procurement activities DJAKOVICA

Post contract monitoring 10 2 3 4 5

Transparency in tender 1 2 3 4 5 evaluation 0

Transparency in bid opening 1 22 3 4 5

Consultations during the planning 1 2 3 4 5 VUĆITRN of procurement activities 2 VUSHTRRI/

Post contract monitoring 11 2 3 4 5

FIGURE 13. Represents the points of each municipality for four indicators measuring civic engagement. 42 BENCHMARKING PUBLIC PROCUREMENT

9/18 5/18 PRISHTINA/ GJILAN/ PRIŠTINA GNJILANE

Prishtina/Priština scored 9 points out Similarly with the other aspects of of 18. This Municipality has a good this report, this Municipality has a low reputation in engaging the citizens score regarding the engagement of and the CSOs in procurement activ- citizens in public procurement ac- ities. This is because it has enabled tivities. Based on the data collected, the continuous monitoring of the this Municipality, besides declaring tenders’ evaluation. Moreover, there that it allows access to the tender were some instances where organi- evaluation commissions, has not zations in the past participated in the had any external monitoring from observations of tender evaluation. citizens or CSOs. The same situation The municipality also allows citizen is to be found regarding the opening participation in bids opening and of bids, apart from some businesses, reading of prices, but there is a lack which participate in these sessions of public interest to participate in bid where bids are being opened and opening sessions. Regarding the con- read. Regarding consultations for the sultation on the drafting of procure- drafting of procurement plans, for the ment plans, this Municipality does first time at the end of last year, the not consult with the private sector or Municipality initiated internal consul- with the citizens. After the division tations with departments and some of the projects, there is no regulated external partners in order to draft the form on how citizens can get involved Procurement Plan, which represents in tracking the implementation of the a positive step towards further contract, besides them being allowed transparency. On the other hand, the access to official documents. municipality has no similar mecha- nism like other municipalities through which to involve citizens in the moni- toring of contract implementation.

/18 43 BENCHMARKING PUBLIC PROCUREMENT

7/18 6 /18 5/18 PEJA/ GJAKOVA/ VUSHTRRI/ PEĆ DJAKOVICA VUĆITRN

Peja/Peć is one of the municipalities The Municipality of Gjakova/Djakovica At the end of 2017, on December 20, that allows CSOs access to monitor has a similar approach than that of there was a switch of the political the procurement activities, but only Peja/Peć. CSOs are allowed to moni- party that governed the Municipali- if the organization is professional, tor public procurement, but under the ty. The power was passed from the and after signing a Memorandum of condition of signing a Memorandum Democratic Party of Kosovo to the Understanding. The municipality also of Understanding. This has not been Democratic League of Kosovo. Among states that it allows the monitoring tested so far by any other NGO. The other things, the Mayor of Vushtrri/ of opening of bids. Regarding the consultation part of drafting the Pro- Vućitrn replaced the Procurement consultations for the drafting of the curement Plan remains an internal Director, who is a political staff in Procurement Plans, the Municipality process with professional partners, this municipality. Inclusion of citi- of Peja/Peć also conducted this con- since there is no involvement of cit- zens can guarantee protection of the sultation within the departments and izens or the private sector. Also, the public interest, prevent corruption with the Municipality’s partners. involvement of citizens in monitoring and increase accountability of the the implementation of contracts has Municipality in relation to the public not been done so far. procurement. Other practices of this Municipality remain similar to the other four municipalities measured in this report. However, in this Munic- ipality, a slight difference was found when it comes to the contract imple- mentation process: the Municipality tries to inform the public regarding the progress of contract implemen- tation through a public consultation process that takes place twice a year.

44 BENCHMARKING PUBLIC PROCUREMENT

CONCLUSION

D+ will be conducting the next cycle of this “Benchmarking It is evident that the Municipality of Vushtrri/Vućitrn is one Report” and assess if these municipalities have improved of the best performing municipalities in the first cycle of their public procurement performance. Nevertheless, so far, the “Benchmarking Report”. This Municipality has done ex- as a result of our monitoring process and municipalities’ ceptionally well in the ”Implementation of law” indicator, assessments, it can be concluded that building skills and ”Good Practices”, ”Implementation of recommendations experience of these five contracting authorities is crucial from the oversight institutions” and “Civic Engagement”. to ensuring sustainable public procurement. Identifying The second best performer is the Municipality of Prishtina/ irregularities or best practices is a good approach to en- Priśtina, scoring the highest for the following indicators:”- courage municipalities and develop better procurement Good Practices”, “Transparency” and “Competition”. Where- activities from planning to contract management. Sharing as, the third municipality is Peja/Peč, scoring particularly good examples and cases of “what works” would also in- well for “Implementation of law”, ”Civic Engagement” and crease cooperation between these organizations and further “Implementation of recommendations from the oversight strengthen anti-corruption efforts in this sector. In relation institutions”. to this, the municipalities should make the public sector an attractive market for all economic operators to participate Gjakova/Djakovica Municipality was also very close to the in, by excluding barriers such as unequal treatment of bid- Municipality of Peja/Peć with only a 5-point difference. Gja- ders, discrimination and inefficiency of public funds. kova/Djakovica has scored particularly well in the “Compe- tition” indicator, which is crucial to having a strong public In respect to the performance of these municipalities, D+ procurement and also for initiating “good practices” in this found that there was a correlation between “good practices” sector. In regards to Gjilan/Gnjilane, D+ is aware of all the and “implementation of recommendations from the over- recent changes and challenges this Municipality is currently sight institutions” indicators. In other words, where there facing. Given the new staff and the transitioning process, this was a higher number of implemented recommendations Municipality would have to work more in order to reinforce a from a municipality, there were also better practices con- better and more sustainable procurement system, as well ducted during contract managing, in the case of Prishtina/ as catch up with other municipalities Priśtina, or more advanced institutional integrity in the case of Gjakova/Djakovica. A similar correlation was evident be- . tween “transparency” and “competition”. For instance, the municipalities that scored better in transparency were more keen to award bids to companies outside of their local areas, this way enabling an open, fair and competitive procedure for companies. However, D+ found that there was little cor- relation between legal implementation and transparency indicators. Although a municipality could be more open and transparent in the conduct of its activities that did not entail that those activities were carried out according to PPL.

45 BENCHMARKING PUBLIC PROCUREMENT

BIBLIOGRAPHY

1. Municipality of Prishtina "Annual Report on Signed Public Contracts" (Kosovo, Prishtina 2017)

2. Municipality of Peja "Annual Report on Signed Public Contracts" (Kosovo, Peja 2017)

3. Municipality of Gjilan "Annual Report on Signed Public Contracts" (Kosovo, Gjilan 2017)

4. Municipality of Gjakova "Annual Report on Signed Public Contracts" (Kosovo, Gjakova 2017)

5. Municipality of Vushtrri "Annual Report on Signed Public Contracts" (Kosovo, Vushtrri 2017)

6. Municipality of Vushtrri "Work Report for Fiscal Year 2018" (Kosovo, Vushtrri 2018)

7. Public Procurement Regulatory Commission, "Annual Report on Public Procurement Activities in Kosovo for the 2016 '' (Kosovo, 2016) https://krpp.rksgov.net/krpp/PageFiles/File/Raportet%20Vjetore/2017/ Raporti%20vjetor%202016-sq.pdf

8. Public Procurement Regulatory Commission, " Performance monitoring and compatibility of the system of public procurement in Kosovo "(Kosovo, Prishtina 2015) https://krpp.rksgov.net/krpp/PageFiles/File/ Raportet%20Vjetore/2016/Raporti%20i%20matjes%20se%20performances%202015.pdf

9. OECD, Monitoring Report: ‘’The Principles of Public Administration’’ (France, Paris: OECD-SIGMA 2017) http:// www.sigmaweb.org/publications/Monitoring-Report-2017-Kosovo.pdf

10. World Bank, ‘’Benchmarking Public-Private Partnerships Procurement’’ (Washington, DC: World Bank 2016) http://pubdocs.worldbank.org/en/437191522432201265/BenchmarkingPPP2017FullReport.pdf

11. National Audit Office '' Annual Audit Report '' (Kosovo, Prishtina 2016) http://www.zka-rks.org/wp-content/ uploads/2017/08/RVA-2016-Shqip-Print.pdf

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