Presentation by D. Vilytė, Lithuania (ENG), Eighth SIGMA Regional IPA Conference on Public Procurement, Montenegro, June 2018.

1. © OECD
Panel discussion on the key priorities for developing the
framework and sound foundations of public procurement
system
The public procurement reform in Lithuania:
implementation of the new EU public procurement
directives and structural reforms
Ms. Diana Vilytė,
Director of the Public Procurement Office of Lithuania
Bečići, Montenegro
13-14 June 2018

2. • Country profile
• New legislation implementation
• Some practical cases
• Procurement reform in Lithuania
national defence system
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2.205 kmm

4. LITHUANIA
• Population 2,8 mln.
• GDP ~37,2 billion EUR
• Intependence restored 11 March 1990
• Admited to NATO 29 March 2004
• Joined the EU 1 May 2004
• Lithuania become a 36 –th
member of the OECD 3 May 2018
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5. Institutional system
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Ministry of Economy
Public Procurement
office (PPO)
Central Purchasing
Organisation (CPO)
The Competition
Council
The National
Audit Office
(NAO)
Special
Investigation
Service
Chief Official Ethics Commission | Lithuania

6. Institutional system
Ministry of Economy is in charge of the
definition of the public procurement policy and
legislation but does not participate in the
implementation or control of public
procurement
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7. Institutional system
The Public Procurement office
implements the public procurement policy and
supervises compliance with the law and the
implementing legislation. The PPO’s functions:
 providing methodological assistance
 administering the central e-procurement portal
 preventing infringements
 controlling contracting authorities’ compliance
with the law and coordinating
 monitoring public procurement procedures
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8. Institutional system
The Central Purchasing Organisation
conducts centralised procurement on behalf of
contracting authorities, including the central
administration and its territorial branches, as
well as local authorities. It negotiates framework
agreements for a wide range of products,
services and public works, which contracting
authorities can browse and order online using an
e-catalogue.
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9. Institutional system
The Competition Council investigates possible anti-
competitive practices from both contracting
authorities and bidders. The Competition Council
ensures compliance with competition regulation.
The National Audit Office is the supreme audit
institution of Lithuania and aims to foster an
efficient management of State property.
Special Investigation Service is the main law
enforcement institution to investigate fraud or
corruption related crimes. 8

10. Public procurement statistics
• Number of contracting authorities – 4 000
• Number of suppliers – 21 000
• 12% of GDP is the amount spent in Lithuania on
public procurement
• The value of Procurements 4-5 MM EU
• Low value procurements 949,5 MM EUR, #
procedures – 801 000
• 3,1 % number and 7,5% by value awarding
contracts by foreign companies
• E-procurement uptake reached approximately
99,3% of total procurement value in 2016
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11. Remedies and review system
• Precondition for judicial review - a
compulsory complaint to the contracting
authority
• Independent three-instance path of judicial
review.
• Applies to contracts above and below the
EU thresholds
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12. Courts System
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Ordinary courts
(civil and
criminal cases)
Administrative
Courts
(administrative
cases)
The
Constitutional
court
(constitutional
cases)
Third instance The Supreme
Court of Lithuania
Second instance The Court of
Appeal of
Lithuania
Supreme
Administrative
Court of Lithuania
First instance District courts District courts The
Constitutional
Court

13. THE EU SINGLE MARKET SCOREBOARD
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5 green
2 yealow
2 red

14. THE EU SINGLE MARKET SCOREBOARD
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15. Legal system
The new regulation of
public procurements
came into force on
1 July 2017,
Concessions –
1 January, 2018
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Public
procurement
Utilities
Concessions
Defence
Remedies

16. The main objectives of the legal reform
• Set up simpler, more modern, more flexible
but, at the same time, more transparent
purchasing procedures
• Reduce administrative burden
• Increase the efficiency of public spending
• Create better conditions for combating
corruption, unauthorized supplier agreements
in public procurement
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17. Summarizing the most important changes
Business Changes
• Supplier Verification Procedure. Options for „self
cleaning"
• A new approach to bid evaluation
• Possibility of direct payment to subcontractors
• Splitting of the procurement object into lots
Changes to contracting authorities
• Preliminary market consultations
• Supplier Verification Procedure
• Shorter terms
• Options for changing contracts
• Blacklisting
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18. Fighting distortion of competition
The contracting authority will have to remove the
supplier from the procurement procedure if:
• the supplier has concluded agreements that distort
the competition between the suppliers involved in the
procurement and
• she has compelling data for this: the same mistakes,
similar records, etc. The reason for examining
whether there is an unauthorized agreement could be
the withdrawal of a supplier's offer without a good
reason
• The Competition Council will provide advice and
methodological assistance on issues related to the
identification of unauthorized suppliers
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19. Sanctions for violations of procurement
rules
Manager of contracting authority
For other people - for their work
Amounts of administrative penalties:
• from 140 Eur to 3,000 Eur
• for repeat misconduct –
from 3 000 EUR to 6 000 EUR
In the past: administrative penalties for violations of the
Public procurement law from 144 euro to 724 euro.
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20. Larger application fee
Differentiated and increased application fee in
public procurement cases:
• Low value purchases - 300-350 Eur
• Simplified purchases - 1000-2000 Eur
• In international purchases - 3000-5000 EUR
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21. Remains some tasks…
• Improperly planned funds and time
• Inadequate deadlines for submission of
tenders and applications for the procurement
object;
• One bidder
• Application of price-quality ratio
• Publication of contracts and confidentiality
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22. Transparency
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23. Lithuania 41st / 137 Global Competitiveness
Index 2017-2018 edition
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25. Transparency tools. Obligations to
publish
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Publication of every awarded contract
Annual report on small value procurements
Reports on every public procurement procedure and contract award
Optional: Technical specifications on every procurement
Procurement plans until March 15

26. Free data. Municipality of Vilnius
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http://www.freedata.lt/vpt/

27. OECD project in Lithuania
Improvement of the Lithuanian public
procurement system though professionalization
of the national workforce and streamlining of
R&D tendering
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28. OECD project in Lithuania
The general objective of this Project is to
improve the efficiency of the national
procurement system by raising the level of
competency of the public buyer at the central
and local level, and rationalize the system for
public procurement R&D services in order to
achieve higher economic impact in Lithuania.
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29. Prevention
Exploit the strong data collection system to
improve risk management systems to better
target oversight efforts.
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30. Data analysis and Publications
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31. Data analysis and Publications
• Participation of foreign companies in
Lithuanian and Lithuanian companies - foreign
public procurement for 2011-2016.
• One bidder 2014 -2016
• Information Technology Services Public
Procurement 2011-2015
• Construction works 2014 and 2015-2016
• Purchases of food and catering services for
2013-2015
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34. Success story: splitting of the
procurement object into lots
• The Fund for European Aid to the Most
Deprived (FEAD)
• Support for 300 000 inhabitants
• Contract with one bidder – 15,6 MM Eur
• Contracts with several suppliers – 7,9 MM Eur
• Savings – 7,7 MM Eur
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35. Procurement reform in Lithuania
national defence system (issues)
• No additional personnel to handle the increase
of defence budget and the increased
complexity of projects
• Ministry and defence forces are overloaded
with acquisition functions with the duplicate
structures
• No single owner of the process, number of
interfaces and lack of clear division of
responsibilities
• Knowledge and expertise are scattered
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36. Procurement reform in Lithuania
national defence system
• Instead of 72 procurement entities, after the
transition period, as of 1st of 2019 it will remain
55 and only the single one – Defence Materiel
Agency – will execute all the centralized
procurement procedures, which will comprise 95
% of all the defence procurements (by value).
• The tasks are assigned now to the single Agency
and duplicated structures are eliminated - the
process became more simple.
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37. Procurement reform in Lithuania
national defence system
The procurement experts from 5 different
institutions are consolidated in the single Agency
(consolidation of knowledge and expertise) –
better quality with the same resources. Less
people are involved in the procurement process
– more easy to control.
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38. Procurement reform in Lithuania
national defence system
• In contrast to the old system all the activities are
regularly measured now against Key Performance
Indicators (KPI). The recent results of KPIs in
centralized defence procurement (periods - 1Q
2017 and 1Q 2018) are:
• Single competitor - number of tenders with a
single competitor in 2018 1Q is reduced by 50 %
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39. Procurement reform in Lithuania
national defence system
• Open tender – number of open tenders vis-à-vis
not publicly announced in 2018 1Q is increased by
10 %
• Other KPIs: durations of procedures, exceeded
amounts, number of complaints, ad-hoc
procurements, etc. (13 in total) – minor changes
(no clear indications yet).
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40. © OECD
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