TIRANA, April 17 – Albania’s central and local government institutions slightly increased the number of public procurements with limited competition in 2017 when public tenders were suspended for about four months prior and after the June 25 general elections, according to a report by the Public Procurement Agency.
The report shows state-run institutions concluded about a third of total contracts for the supply of public goods and services under ‘negotiations without prior notice of the contract,’ a procedure limited to a few economic operators invited by the contracting authority.
Some 2,234 such procedures, representing 31.8 percent of the number of public tenders were carried out in 2017, representing a 2 percent increase compared to 2016.
When it comes to their value, ‘negotiations without prior notice of the contract,’ were worth 7.6 billion lek (€58 million) in 2017, accounting for 8.3 percent of the total tenders, only 0.1 percent lower compared to 2016 when Albania procured more, about 8 billion lek (€61.7 mln) under such contracts.
About three-quarters of such procedures were carried out in the first quarter of the year, mainly in extensions to existing contracts by up to 20 percent value.
As a rule, negotiations without prior notice of the contract are carried out to meet year start needs at an amount of 20 percent of the previous contract, in case contracting authorities have not had their budgets disbursed yet or due to prolonged procurement procedures because of appeals with the Public Procurement Commission.
The Procurement Agency has earlier warned such negotiations lead to limited competition and discrimination of operators.
“In most cases contracting authorities use this procedure claiming they are under emergency procurement conditions, but do not justify the envisaged circumstances leading them to inability to plan their needs in time and meet these needs under competitive procedures under legal provisions,” the Public Procurement Agency said in 2016 report.
“Being held in a written form and limited to a few economic operators invited by the contracting authority, the use of negotiation without prior notice of the contract leads to lack of competition and discrimination of candidates,” it added.
Some 4,790 public procurement contracts worth 83.5 billion lek (€642 mln) were signed in 2017, down 4.4 percent compared to 2016, representing about 6 percent of the country’s GDP.
Albania suspended public procurement for about four months from June to early October 2017 as the country held general elections and some technocrat caretaker ministers proposed by the opposition Democrats remained in office until a new government by re-elected Socialist Party Prime Minister Edi Rama took over. Only emergency purchases necessary for the institutions’ operation were allowed during this period.
Surveys show public procurement continues to remain one of the main doing business concerns for investors in Albania due to perceived limited competition and discriminatory criteria although the country has been offering e-procurement procedures for about a decade now in a bid to reduce corruption and increase transparency.
About 40 percent of Albanian households and businesses believe political connections are the key to factor behind success, according to an EBRD survey.
The Public Procurement Commission said it received about 1,100 complains in 2017, down a fifth compared to 2016, with the overwhelming majority of complaints in public procurement and only about a dozen others in concession and mining permit procedures. About half of complaints were filed by companies engaged in security services and money transport.
The Commission said it upheld about half of complaints, the majority of which related to tender procedures held by the General Transport Directorate, the Albanian Post and the General Prisons Directorate.
The Procurement Commission has earlier warned the determination of discriminatory or technical specifications has a direct or indirect impact on the creation of conditions for avoiding competition or favoring specific operators, this way violating the fundamental principles of public procurement law,
The watchdog’s decisions are corrective and can be challenged with the Administrative Court.
The e-procurement system in Albania is mandatory, including for low-value procurement of more than 100,000 lek (€770). A central public procurement portal is in place and all tender documents are available in e-form.
