Organized by: AmCham Slovenia, Committee for Public Procurement and Corporate Lawyers Association of Slovenia

FIRST PART

EFFICIENCY AGAINST COMPLETE RIGIDITY OF THE PUBLIC PROCUREMENT SYSTEM – EXPERIENCES FROM SLOVENIA AND ABROAD

Zlatko Bazianec, Director A.T. Kearney Svetovanje d.o.o. (A.T. Kearney Consulting Ltd.) – experiences of multinational companies in Slovenia and abroad

Mojca Brezigar Baš, Senior Contracts and Negotiation Specialist
Country Operations Business Unit Advisor Slovenia, IBM – experiences of multinational companies in Slovenia and abroad

Dr Hans-Joachim Priess, Partner at Freshfields Bruckhaus Deringer, Germany- implementation of EU directives in Germany, the practical consequences of urgent or discretionary exclusion of tenderer

Moderated by Dejan Jasnič, M.Sc., President of Corporate Lawyers Association of Slovenia

TRANSPARENCY, OVERSTANDARDIZATION, CORRUPTION IN OPPOSITION TO THE COMPREHENSIVE PUBLIC PROCUREMENT

Vesna Cukrov, Former President of the Revision Commission and Court Expert on Law Public Procurement

Goran Klemenčič, M.Sc., President of the Commission for the Prevention of Corruption

Sašo Matas, Director of the Public Procurement Agency

Dr Igor Šoltes, President of the Court of Audit of the Republic of Slovenia

Miriam Ravnikar Šurk, President of the Revision Commission

Moderated by Aleš Avbreht, Partner at Avbreht, Zajc and Partners Law Firm and by Andrej Drapal, Counselor, Consensus Ltd.

Enclosed: Starting Points for the Public Procurement Conference

The aims of the conference were in confronting the European practice of public procurement (through good and bad practice) and the Slovenes in position of having the strongest impact within their own institutions on the procurement practice. We wished to define the current challenges of these practices in Slovenia and within the range of possibility create starting points for managing the field.

Note: The recorded conclusions do not represent the quotes or direct statements of individual participants, but the summary conclusions made by the organizers of the conference.

During the first part of the conference the speakers clearly showed that the legal frameworks do not represent a sufficient basis for the effective implementation of public procurement. The consequences of consenting to legal frameworks as only objective safeguard of public procurement apparently assure a clean image of procurement holders however we thus remain without response regarding the question about public procurement efficiency. The discussions clearly indicated that the procurement is a complex process which has to balance the requirements of efficiency, transparency requirements and requirements for protecting the competitiveness within the market of tenderers. Furthermore the analysis clearly showed that all the three demands are almost impossible to be met altogether or at least not in an equal measure, which brings the complexity into the procurement process itself from the very starting point.

The need for substantive reflection is already suggested in each of the three requirements themselves. Thus the efficiency as a criterion differs from the economy if we measure the economy in different time intervals. Green procurement is in a short term definitely less economic than ordinary procurements, however the situation becomes most likely reversed if the economy is measured in a longer period of time. Therefore the decisions are already at this level subject to advance decisions (professional, political…), the consequences of which usually lead to exclusion of certain tenderers in advance which may be seen as controversial either at the level of efficiency or economy, as well at the level of protection of the competitive market of tenderers. This example indicates clearly that the procurement can not be implemented outside advance value determination. Creating a feeling that it is possible to achieve a legal objectified public procurement is therefore prejudicial.

Among many topics the question of innovations and valuations throughout the entire period of duration of an ordered product or service may be exposed. Directing to the offering price as the main criterion definitively blurs the judgment about the input of the innovation into the product or offer and also about how much is the estimation of expenses of entire lifetime duration integrated into the offer. It is namely known that the life cycles of particular products are quickly shortening and that therefore the inclusion of innovation which increases the price of offered product or service should be practically part of every public procurement.

SECOND PART

In the second part of the conference the participants agreed that the current problems exist in the fact that we deal during public procurement procedures mainly with the procedures instead of procurements themselves, that regularity is more important than expediency, that the majority of public procurement contractors resort to the institute of the lowest price either because of hiding from decision making, or merely out of fear or for easier concealment of bad decisions. They also agreed that there is a chronic shortage of experts who would be familiar with the market for specific procurements at local, let alone at global level, for which hiding behind formal criteria is a logic, yet extremely harmful consequence. They came to a conclusion that the European legislation is not implemented but is at times only poorly translated. It was also exposed that the Slovene system of public procurement should pay regard to the fact that we are representing a miniature economy for which it would be logical that the values of Slovene public procurement and at the same time its aims and procedures somehow differ from those deriving from larger economies. Due to smallness of economy and for the fact that it is impossible for individual substantive judgments obtain already abroad let alone here the independent experts (whom we definitely need for the substantive judgment), the speakers found a solution regarding the conflict of interest in the consistent turn to advantage of the institute of proactive transparency. They also noted that the large part of current problems exists owing to the fact that in the past we often tried to solve the past problems with the new legislation which is of course valid for ahead; even worse is that there were attempts of trying to resolve other issues through the changes within the procurement system.

Agreeing on the assessment of the situation has brought quite a few answers for the future. It is necessary to introduce training for operators of public procurement, devoted to substantive rather than procedural questions. It is necessary to increase the responsibility of the holders of public procurement. The majority also agreed with the conclusion that the procurement system being extremely complicated should be simplified to a radically different concept – in deregulation, as only in this way it may lead to the increase of responsibility and to the focus on substantive issues and questions on efficiency. Also a question was raised at the end whether it is not the public procurement institute problem in itself. One also has to ask oneself if it was ordering by public institutions probably more efficient, more transparent and fair at the time before the regulation of public procurement. Finally it was agreed that they would as experts from various fields prepare the starting-points for changes in the public procurement system and present them to the executive committee for further proceedings.