After seven years of discussions on whether and how much the Public Procurement Act needs to be changed, the second Draft Proposal for amendments to the Public Procurement Act has seen the light of day on e-Consultations, or the first serious one if we exclude the cosmetic changes from 2022. The professional public has praised some provisions, but part of them has faced sharp criticism. Whether these changes will increase the efficiency of procedures will be shown by practice, but some institutes will certainly open new avenues for complications.
I remember when the new Public Procurement Act was adopted in 2016, which came into force on January 1, 2017. It marked a radical change in the existing legal framework, bringing a series of novelties and uncertainties, questions, and procedural ambiguities.
It took several years for certain institutes to settle, and public procurement procedures financed from EU funds were a particular challenge. At that time, we were already conducting procurement for construction works on the Pelješac Bridge (which had started under the provisions of the old law) and many other financially burdensome procurements where there was a risk of irregularities and consequently financial corrections. For information, corrections in such cases would be measured in hundreds of millions of then kuna.
New Legal Uncertainties
Over the years, stakeholders have practiced certain phases of procedures, identified problematic areas, and discussed what and how to change. Practice has grown, decisions from the State Commission for Control of Public Procurement Procedures have somewhat shaped it, and the High Administrative Court has also been involved. There were disagreements, opposing opinions, and misunderstandings, but also smart proposals.
Now, the proposal has come to the fore, which, viewed positively, has clarified and sharpened certain institutes, but has also opened some new questions. The good news is that the thresholds for simple procurement have been raised, but at the same time, a provision has arrived stating that all procedures with an estimated value of 15,000 euros or more must be conducted within the Electronic Public Procurement Bulletin, with the justification that it is a higher level of transparency. This question deserves a separate comment, but here is a simple conclusion: the entire public procurement in Croatia constitutes about 20% of the annual GDP, with simple procurement accounting for about 14%.
