The document discusses key considerations for Croatia in developing its national public procurement system to align with EU legislative frameworks, based on the country's experience. It notes the influence of EU directives, other national laws, and political pressures. It emphasizes the importance of transparent and inclusive public consultations, careful translation and understanding of EU requirements, and flexibility versus restrictiveness in national rules. The overall goal is to establish an efficient procurement system and demonstrate solid implementation at all levels.

1. © OECD
A joint initiative of the OECD and the European Union, principally financed by the EU
Seventh IPA Regional
Public Procurement Conference
Regulatory Development in the Context of the European Integration Process: the Croatian Experience
Teja Kolar, SIGMA expert, Croatia
Vlora, Albania, 9 - 10 September 2014

2. A joint initiative of the OECD and the European Union, principally financed by the EU
Legislative development
•Cornerstone of development of efficient national public procurement system
•Influenced by
EU legislative framework on public procurement
national general legislative system
•different laws related to budgeting, auditing, etc.
national political framework
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3. A joint initiative of the OECD and the European Union, principally financed by the EU
National political framework
•Politicians want quick solutions and successful projects
•Lack of understanding of EU legal requirements and real implementation state-of-play
Croatian experience – everyone knows everything about public procurement
•for example, state officials that were previously active at local government level
hard to impose real expertise to political levels, especially if there is no adequate momentum of general EU accession process at specific moment
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Media and public opinion
•Transparency paradox - as system gets more advanced and transparent there is increased public opinion that is corruptive
for example, publication of tender documents ensures availability of information – but also more media attention
•Croatia – many high value procurements followed by media article on corruption
•Important for competent institutions to put additional efforts in changing general opinion that “anyone that works in public procurement is corrupted”
never-ending, continuous process
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EU public procurement framework
•Complex and quite different in structure and wording than national legislation in some countries
difficult to understand some provisions and transpose them into wording that is understandable to all levels of national stakeholders
•Important help of expert colleagues from EC, MSs, OECD/SIGMA in clarification of specific provisions
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Overall approach
•Advice not to go extensively beyond what is defined in EU public procurement directives
if needed, better to be regulated in subordinate legislation as it allows easier and faster amendments
Croatian experience – number of provisions that were introduced nationally had increased the complexity of award procedures and were abandoned in time
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Directives’ translation
•Number of misunderstandings and mistakes in transposition were result of wrong or low quality translation
•Additional efforts has to be put in additional expert cross checking
special focus on terminology not existing in current national system
use cooperation mechanisms with colleagues on specific wording and terminology in order to structure adequate national wording
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Public consultations
•Quite demanding, but they represent key step in adopting public procurement legislation
•Usual obstacle – political pressure for urgent adoption of new laws (amendments), not taking into account consultations with different stakeholders
in order to minimize this risk it is important to have daily communication/discussion with different stakeholders – “continuous testing” of possible amendments
•Important to involve different interested groups
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Public consultations
•Crucial to provide detailed elaboration of positive, but also negative sides of proposed legislative provisions
•Listen to practitioners – they have vast day-to-day experience
small fine tuning of wording can solve number of problems in practical implementation of legislation
•Useful to identify supporting groups when introducing some significant novelties
Croatia – introduction of direct payment to subcontractors supported in media by associations of SMEs
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Decisions to make
•Single or separate laws?
•Which optional clauses for MSs to transpose into national legislation?
•How to regulate low value procurements under EU thresholds?
Value of national thresholds?
Same or different rules?
•More restrictive or flexible rules?
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11. A joint initiative of the OECD and the European Union, principally financed by the EU
Single or separate laws?
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Single law?
Separate laws? How many laws?
Public sector
Concessions
Defence
Remedies
Utilites

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Single law
•Single drafting and adoption procedure – less procedural steps
•Easier to amend it if required – one procedure
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Pros
•Specific sectoral issues (e.g. utilities) are “lost in the crowd”
Public consultations – not noticed and commented by interested stakeholders
Implementation – available options are not used by designated users
Cons

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Optional clauses for MSs
•Detailed assessment and analysis of implementing models existing in different MSs
•Advice - don’t restrain allowed flexibility if not really necessary and justified
Although some options are not used in practice at specific moment, it doesn’t mean that wont be appreciated by some contracting authorities in future
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Procurement under EU thresholds
•EU Treaty principles have to be applied
Croatian experience – not adequate to define only general provision on application of public procurement principles
•need for definition of more detailed implementing rules
•Detailed assessment and analysis of implementing models existing in different MSs
•Same or more simple rules for low value procurement?
same rules – complex procedures for lower values, but contracting authorities don’t have to be familiar with different sets of rules
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Flexible or restrictive rules?
•Don’t draft laws with thought “everyone dealing with public procurement is a criminal”
number of irregularities are consequence of lack of knowledge and experience, not intention
practice shows that restrictive and bureaucratic provisions don’t decrease risk of irregularities, fraud, corruption
•as system develops, procurements that are corrupted are usually fully in line with all procedural requirements
not easy to achieve due to political and public pressure
something has to be done and changing the law is perceived as the only solution for fighting the irregularities
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16. A joint initiative of the OECD and the European Union, principally financed by the EU
Flexible or restrictive rules?
•Focus on those that try to correctly implement public procurement rules
introduce safety mechanisms that can be implemented, with real influence, not representing only additional administrative burden
different approach to irregularities that are caused by lack of experience or expert knowledge than to those that are mainly related with fraud and corruption
dealing with fraud and corruption is usually covered by other laws and institutions
•Criminal Law, criminal police, State Attorney
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17. A joint initiative of the OECD and the European Union, principally financed by the EU
Flexible or restrictive rules?
•Approach changes over time - as public procurement system develops, shift to less bureaucratic and flexible provisions is possible
•Competent institutions have to recognize adequate timing and foster new developments
close cooperation with practitioners - it is crucial to recognize when overall public procurement system, but also general public, is ready for some significant developments
•better to introduce less extensive, but implementable amendments than ideal ones not to be accepted in practice
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Implementation track-record
•Crucial requirement of EU integration process – ensuring sound implementation of legislation at all levels
•Competent institutions have to provide convincing track-record on implementation level
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Implementation track-record
•No simple and straightforward method for providing required track-record
•Various indirect information gathering and assessment methods
for example, change in complexity of advice required by contracting authorities/economic operators
•as system develops there is a shift from basic to more complex problems
number of trainings, number of review procedures, etc.
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20. A joint initiative of the OECD and the European Union, principally financed by the EU
Implementation track-record
•Need for careful interpretation of available information and data
for example, increased number of identified serious breaches of public procurement rules can mean
•increase of irregularities and lower implementation level
or
•increased efficiency of competent institutions in charge for various control mechanisms
•All data have to be supported with relevant elaborations
for example, increased number of misdemeanours as result of activities taken by PPOs or State Attorney
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21. A joint initiative of the OECD and the European Union, principally financed by the EU
Implementation track-record
•Competent institutions (PPOs) have to be familiar with problems and obstacles identified at implementing level
timely and adequate response through proper instructions, tailor-made trainings and eventually legislative amendments directly reflects in overall implementation improvement
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Efficient implementation
•Legislative development is just one of the cornerstones of efficient public procurement system
•Directly correlated with:
institutional development
strengthening administrative capacities
control mechanisms
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Balance between prevention and supression
Training, instruction, manuals, guidelines
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Other national laws
Other developments (e-business, etc.)
Legislative development
Institutional development
Strenghtening administrative capacities
Control mechanisms
Market state-of- play
PP SYSTEM
National political framework
EU framework
Media and public opinion

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Efficient implementation
•Additional efforts required for promotion of some mechanisms introduced in legislative framework
Croatian experience:
•low usage of restricted procedure
–procedural issues (longer deadlines) and wrong understanding that it restricts market
•specific mechanisms and opportunities are not at all recognised and used
–qualification system and negotiated procedure with prior notice by utilities
–contract options
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25. © OECD
A joint initiative of the OECD and the European Union, principally financed by the EU
Thank you!
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