Lawyer Sasa Varinac, has served as chairman of the Republic
Commission for the Protection of Rights in Public Procurement Procedures
and is one of the most prominent lawyers dealing with this topic and an
expert on the project “EU Support for Improving Business Environment”.
As part of his engagement on the project, Attorney Varinac provides
training to civil servants on public procurement and has written a Study
on the Participation of Micro, Small and Medium-Sized Enterprises
(SMEs) in Public Procurement Procedures, with recommendations to
increase their participation. Attorney Varinac is the author and
co-author of several articles, publications and studies on the topic of
public procurement and is a certified international consultant in this
field.
We met Sasha Varinec in his office in early November, when we discussed
the topic of the Study he wrote, five one-day trainings through which
the study was presented, as well as the topic of the Proposal of the new
Law on Public Procurement, which is in the Parliamentary procedure. and
what changes that law makes.
What is the current situation regarding the regulation of public procurement procedures in Serbia?
– We expect the adoption of the new Public Procurement Law by the end of
this year. The law should bring about a number of new solutions, many
of which will be of great importance for increasing the participation of
SMEs in public procurement.
Why is SME’s involvement in public procurement significant?
– Increasing the participation of SMEs in public procurement will, above
all, contribute to greater competition in public procurement
procedures. This is especially important given that the level of
competition in public procurement in the Republic of Serbia is still
significantly below that at EU level, and according to the Public
Procurement Administration in 2018, the average number of tenders per
procurement procedure was only 2 , 5, the lowest level in the past five
years.
What do you expect that will concretely change with the adoption of the
new law in terms of participation of SMEs in public procurement?
– Let’s start with the document that precedes the bill. Namely, in the
Strategy of Public Procurement Development of the Republic of Serbia for
the period 2014-2018. It is stated that better access to SMEs will be
facilitated, through the design of public procurement by lot. The
subdivision of the procurement subject by lot is of the utmost
importance as it involves small tenderers who can submit a tender for
smaller parts of the procurement. Partitioning is possible both by
quantity and by the specificity of the subject matter of the contract
for individual parties, which may correspond to the specialization of
SMEs or by geographical representation, for example by region. Until
now, it has been the practice that large bidders are favored and they
have hired subcontractors who have not been able to contact the
contracting authority directly for payment and often run the risk of not
being paid after the work has been completed. The draft new law
provides that the contracting authority may directly pay the
subcontractor for the service performed, for example. Also, the
procedure for protection of rights (appeal procedure) has been changed
in favor of the bidder and opens more possibilities for appeal. This
procedure will take place as well as court proceedings, which means that
both parties (contracting authority and tenderer) are informed about
the course of the procedure, about all the facts on which the decision
will be based, which was not the case earlier.
In your Study, you devoted the entire section 3 to the situation
in the European Union and within that section you addressed the
situation of SMEs in the EU and public procurement. So, what is the
practice in the EU?
– The 2014 EU Procurement Directives, and in particular Directive
2014/24 / EU, have as one of their objectives the incentive for MSMEs to
participate in public procurement procedures, through various
mechanisms that are in line with EU rules and principles. Specifically,
EU directives offer individual solutions in line with the
recommendations given in the Small Business Act adopted in the EU. These
decisions relate, in particular, to: Rules regarding the distribution
of public procurement by lot; How to prove the conditions for
participation in public procurement procedures; Proportional
determination of conditions for participation in public procurement
procedures and the possibility of direct payment to subcontractors under
concluded contracts. These solutions have also been implemented in the
Proposal for a New Law on Public Procurement in the Republic of Serbia,
which is expected to begin implementation on July 1, 2020.
So most of the solutions of the 2014 EU directive have been
implemented in the Proposal for a New Public Procurement Law expected to
be adopted at the beginning of the year?
– That’s right. The adoption of the new Law on Public Procurement is
also important in view of the further process of negotiations with the
EU. Namely, public procurement is covered by Chapter 5 in these
negotiations (together with public-private partnerships and
concessions). One of the benchmarks for completing negotiations on this
chapter is to further align our regulations with the EU acquis in this
area.
Please conclude by summarizing the recommendations you have made
in your Study to increase the participation of SMEs in public
procurement in our country.
– First of all, there is a development of guidelines for contracting
authorities, in order to give more detailed guidance on good practices,
it means in situations in which it is justified to design public
procurement by lot and explanation how to do that, in order to enable
SMEs to participate in the public procurement process. Then conduct
targeted training regarding the use of the new Public Procurement Portal
for the needs of SMEs, which will encourage their greater
participation in procurement processes. It is also important that after
the entry into force of the new Public Procurement Law, the existing
models of bidding documents should be upgraded with solutions from the
new law, and models of bidding documents for those items in which the
most frequently submitted tenders are submitted by SMEs, ie in those
segments where SMEs operate to the maximum extent, whereby the competent
ministry or the Serbian Chamber of Commerce would submit the
information to the Public Procurement Office. These changes must be
accompanied by continuing education and it is necessary to organize
trainings for contracting authorities and SMEs, in order to present
practical solutions and opportunities regarding participation in public
procurement procedures and the preparation of tenders. It is also
suggested to establish a permanent contact (telephone line, etc.)
through which representatives of SMEs can provide daily answers to
situations they face in practice, as well as to establish mechanisms for
monitoring the performance of SMEs in public procurement and developing
mechanisms and good practices. practices aimed at reducing the negative
impact of centralized public procurement on SMEs. These would be the
recommendations explained in more detail in the Study itself. I have to
add that the preparation of the Study was preceded by meetings with
focus groups of 20 participants – representatives of contracting
authorities and tenderers, who helped to look at all the shortcomings of
public procurement procedures, and in terms of the extent of
participation of SMEs in those procedures.
My last question is about the trainings about public procurement
that you are holding as part of our project, let’s inform us briefly
what is the curriculum of the training, how many participants you have,
and I will be present on your next training, according to our agreement
– So the trainings are carried out in cooperation with NAPA, we train
the contracting authorities, ie civil servants. The aim of the training
is to support public procurement employees and contracting authorities
in attracting SMEs to participate in public procurement procedures in
the Republic of Serbia, especially with regard to micro-enterprises,
both by presenting obstacles to the participation of SMEs in public
procurement and , in particular, by making recommendations for
increasing the participation of SMEs in public procurement. So far,
there have been 5 one-day trainings and 20 participants each. The training contains both theoretical and practical part.
Thank you for this interview and see you in training.
We attended the training at the Palace of Serbia on November 15, 2019 on the topic of increasing the participation of SMEs in public procurement, held by Sasa Varinac to representatives of state institutions. On this occasion, we spoke with an official of the Ministry of Youth and Sports, in charge of public procurement of goods and services. In his opinion, this training was very useful because it contains many practical examples that he will apply in his work in the future. The tax administration trainee also said that what matters most to her is that the lecturer delivers case studies and that the training is interactive because everyone is actively involved, can share their knowledge and hear other experiences. “The lecturer is an expert in the subject and we have really learned a great deal from him, but we have learned about changes to the regulations in this area that have yet to be adopted,” she concluded.