At the conference “Towards good quality at affordable price and increased efficiency” Zeljko Ozegovic State Secretary at the Ministry of Public Administration said making public sector more cost-effective was a strategic goal of Serbian Government, along with strengthening of administrative capacity.

Ozegovic said yearly value of public procurement in Serbia amounted to some EUR3 billion or nine per cent of GDP, and Serbia’s strategic goal was to make the conduct of public procurement more cost-effective and efficient in compliance with rules and procedures.

“It is necessary to improve professional capacity of public servants and functioning of institutions in the process of public procurement,” said Ozegovic and added he believed necessary conditions were met to open the chapter dealing with public procurement within the negotiations with the EU.

Steffen Hudolin of the EU Delegation to Serbia said responsible spending of tax payers’ money was a sign of a modern democracy.

“Quality of goods and services is extremely important, as well as being responsible in public spending,” Hudolin said and added the EU had changed its rules on public procurement on which it spent some EUR2.3 trillion.

He said that thanks to new EU rules, contractors were required to offer more than the lowest price. New criteria focus on the most cost-effective offers and best quality at an affordable price in compliance with ecology standards and social aspects.

“Public procurement occupies a special chapter within EU-Serbia negotiation process and I am happy to know that screening has shown Serbia was ready to open chapter 5,” Hudolin said.

“EU Member States have to agree on whether to open the chapter, but I am optimistic about the chapter being opened in near future,” he said.

Hudolin, however, cited the part of October 2015 EC Report on Serbia, which stated that “in the area of public procurement Serbia is moderately prepared due to risk of corruption.”

He also reminded that Serbia had previously benefited from a project on public procurement worth EUR1.5 million, that is EUR2.5 million from IPA funds.

US Ambassador Kyle Scott said the way in which a country managed its supply of goods and services for public use, that is the way in which it spent public money, was the essence of good governance.

“The money spent wisely and fairly, in an open and transparent manner, increases citizens’ trust,” said Scott.

“If the lowest price is seen as the most important factor, then we have a case of corruption. What might seem as the cheapest offer at the beginning, sometimes turns out to be the most expensive one in the long run. Products which fail to meet standards thus become more expensive over time as they require more frequent repairing or even replacement,” said American Ambassador.

Corruption is an issue in the entire region. An American non-profit organisation found that in the period between 2004 and 2013 some USD40 million of unpaid taxes had been “laundered” in Serbia, the conference concluded, whereas “data show that in the past three months eight per cent of citizens have given some sort of bribe,” said Scott and noted that corruption increases costs of public procurement by 25 per cent.

Deputy Head of OSCE Mission to Serbia Michael Uyehara said in Serbia, more than 3 000 public servants were engaged in public procurement procedures and added that in 2015 public procurement amounted to some EUR3 billion.

Between 10 and 20 per cent of the value of public procurement is lost to corruption which is a large amount of money, said Uyehara. Lowest price criterion is simple but not necessarily the best one as public procurement should also include the criteria of quality and longevity of goods and services, he said.

Head of World Bank Office Tony Verheijen said the price cannot be the only criterion and added they were happy to know public procurement procedures in Serbia correspond to World Bank framework.

The system could not be changed for the past ten years but this year, we will finally create a new framework based on the principles of transparency and best value for money, meaning we will move away from thinking that price is all that matters, he said.

This year, World Bank approved assistance programme worth USD75 million aimed at modernisation and optimisation of public administration, said Verheijen.

“Office for Public Procurement and World Bank have agreed to achieve three goals: accelerate procedures, increase public procurement framework and increase certification of people in charge of public procurement,” he said.