During the ban on all types of public procurement that do not involve protection from the coronavirus, earthquake recovery, funds from EU funds, and procurement of goods and services for the normal functioning of institutions financed from the state budget, one segment of procurement continues to successfully operate 'under the radar'.
This concerns simple procurement items, which began a golden age six years ago when the Milanović Government raised the threshold amount up to which it is not necessary to follow the usual procedures for public tenders. This threshold was raised from 70 to 200 thousand kuna for goods and services and s 200 to 500 thousand for works. This decision made sense in that it simplified and accelerated the bureaucratic process; however, it also created an 'El Dorado' for contractors, both small and large. Namely, simple procurement items are not subject to the Public Procurement Act, and if any irregularities occur, they are not under the State Commission for Control of Public Procurement Procedures but are under the jurisdiction of the State Audit Office which, even if it finds irregularities, does not impose sanctions.
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Every contractor in Croatia, whether small or large, using funds from the state or local budget has the right to conduct simple procurement based on internal regulations. Larger contractors have several such items annually, so several million kuna can be 'turned over' through simple procurement.
The official Statistical Report on Public Procurement for 2018, published by the Ministry of Economy, states that through simple procurement, ten billion kuna (excluding VAT) was spent, or 21 percent of over 46 billion kuna, which was the total value of procurement in 2018.
In that year, only 14 percent of the results of simple procurement competitions were published. This means that we have no information about 86 percent of the jobs awarded through simple procurement, amounting to 8.6 billion kuna of public money. Likewise, comparing the number of published competitions that contractors published in EOJN with the number of competitions within simple procurement (published exclusively on the contractors' websites), in 2018, almost half of the procedures, i.e., 48 percent, were published as simple procurement. Therefore, there are no transparent data on 48 percent of competitions that make up 21 percent of total public procurement or ten billion kuna (excluding VAT).
The only three institutions that have jurisdiction over control and legal protection in simple procurement procedures are the State Audit Office, DORH to which the audit sends its reports, and the Administrative Court which resolves disputes. They all submit their reports to the Croatian Parliament. None of these three institutions keeps a special record of public and simple procurement items.
What is most concerning all this time is that the existing situation obviously suits everyone (everyone except the bidders who expect a fair market competition). It is evidently not in anyone's interest to overwhelm very busy public officials with procurement items for toner or painting schools. However, item by item, and here we are at ten billion kuna, at a round figure financed by taxpayers filling the state and local budgets.
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