Activity Report 2004 of the Public Procurement Office under the Government of the Republic of Lithuania

ACTIVITY REPORT 2004 OF THE PUBLIC PROCUREMENT OFFICE AT THE GOVERNMENT OF THE REPUBLIC OF LITHUANIA

Mision and stategic objectives

Mission – to create legislative and economic environment favourable for public procurement in order to ensure free movement of supplies, services, labour force and capital as well as rational and efficient utilisation of public funds.

Strategic objective – to improve the system of public procurement, to seek for more favourable legislative and economic environment for public procurement in order to ensure free movement of supplies, services, labour force and capital as well as rational and efficient utilisation of public funds.

When implementing the above objective, in 2004 the Public Procurement Office shared in drawing up drafts of a new edition of the Law on Public Procurement and the Law on the Amendment of the Law on Public Procurement, which provisions are to be harmonised with the provisions of EU directives in the field of public procurement, as well as secondary legislation, methodological recommendations, standard procurement documents. In addition, the PPO conducted prevention and control, rendered training to contracting authorities and suppliers, and carried out other functions delegated to the Public Procurement Office. The PPO successfully implemented a measure set forth in paragraph 86 of the Measure Plan of the Government of theRepublic of Lithuania for 2001 – 2004, i.e., “To create public procurement information system providing for gradual translocation of public procurement into electronic media opportunities in compliance with the practice of the EU member states”. First-stage works in formation of the Central Portal of Public Procurement have been accomplished. The mentioned activities have been assigned LTL 1 million from the national budget. Public procurement monitoring information system (PPM IS) has been subject to further modifications. Joint efforts of the PPO staff and PHARE experts resulted in preparation of an application to receive funding from the EU structural funds for translocation of public procurement into the electronic media.

Legislative provisions on public procurement enable proper monitoring and control of public procurement, development of the public procurement information system and increase of procurement efficiency.

DESCRIPTION OF PROGRAMME “IMPLEMENTATION OF LAW ON PUBLIC PROCUREMENT, CO-ORDINATION AND SUPERVISION OF PUBLIC PROCUREMENT OPERATIONS AND IMPROVEMENT OF THE PUBLIC PROCUREMENT SYSTEM”, AS NAMED IN THE STRATEGIC ACTIVITY PLAN OF THE PUBLIC PROCUREMENT OFFICE”

Programme - implementation of the Law on Public Procurement of the Republic of Lithuania, co-ordination and supervision of procurement operations, improvement of the system of public procurement.

The programme is continued. It was started in 2001. In 2004 the PPO, which then employed 38 staff members, was assigned LTL 2884,5 thousand for implementation of the mentioned programme, whereas LTL 1713,7 thousand was for assigned to cover expenses, including LTL 1106,1 thousand for wages. LTL 1170,8 thousand was assigned for acquisition of assets. Source of funding – the national budget of the Republic of Lithuania. There were no other sources of funding.

The programme was designed for implementation of the following priorities of the Government:

• to ensure further improvement of the environment for business development;
• to develop the information and knowledge society.

The programme being implemented by the Public Procurement Office in 2004 was intended for 4 objectives:

• Regular improvement of the public procurement system through sharing in drafting of legislation and harmonisation thereof with EU directives and requirements of the PPO;
• Control of processes of public procurement, employment of preventive measures to minimise the number of infringements of the Law on Public Procurement;
• Satisfaction of the needs of state authorities and public for information relating public procurement, preparation for e-procurement;
• Training and qualification improvement of public procurement professionals.

The following tasks have been raised for implementation of the aforesaid programme:

Task (code 01) – transposition of the provisions of EU directives and PPO requirements into the national law. The task was implemented through employment of two measures:

• drafting of amendments to the Law on Public Procurement, new edition thereof and secondary legislation; initiation of adoption thereof (measure code 01);
• analysis of valid legislation and draft legislation made by other authorities; submission of recommendations for improvement thereof (measure code 02).

Implementation of the task was evaluated on the basis of the following quantitative criteria:

• the number of drafted amendments to the law, other drafts of legislation and methodological recommendations;
• the number of analysed legislation and legislation drafts.

In implementation of the above-mentioned task, in 2004 the Public Procurement Office drew up 13 legislation drafts (amendments to the law, secondary legislation, methodological recommendations), analysed 5 legislation drafts. The strategic activity plan provided for making up 13, and analysis of 5, legislation drafts.

Accordingly, both task measures had been implemented and the task was executed.

Implementation of the task covering transposition of the provisions of EU directives into the national law is directly linked to governmental priority of the Republic of Lithuania, i.e., “To seek for harmonious development, to ensure further improvement of the environment for business development …” (code 3).

Task (code 02) - Minimisation of procurement organisation costs by means of methodological measures.

Implementation of this task was ensured by one measure: drawing up of standard procurement documentation, methodological literature and recommendations for contracting authorities (measure code 03).

The number of developed standard procurement documents for individual types of supplies and services constitutes a criterion for evaluation of implementation of this task.

The task has been implemented. 11 standard procurement documents (recommendations for general and special conditions of public procurements contracts for supplies and services) have been elaborated for individual types of supplies and services as well as for IT facilities (plan 10). The mentioned documents will enable minimisation of public procurement organisation costs, will shorten a pre-procurement period and simplify application of the Law on Public Procurement.

Implementation of this task is directly linked to PHARE light twinning project “Preparation for implementation of public procurement Acquis”.

Task (code 03) – institution of administrative proceedings against the detected violators of the Law on Public Procurement.

Implementation of this task was ensured by one measure: inspection of activities of contracting authorities in the field of public procurement (measure code 04).

The number of conducted control checks serves as a criterion for evaluation of implementation of this task. In 2004, the Public Procurement Office conducted 15 control checks (planned – 15 control checks) thus implementing the measure, which ensured execution of this task.

In addition, in 2004, the detected violations of the Law on Public Procurement were documented at the Public Procurement Office in 26 protocols of administrative violations of law and consequently 23 liable persons were punished.

One of the preconditions for successful implementation of EU Acquis is proper monitoring and control of public procurement. Therefore, more active application of administrative sanctions to law breakers are expected on a year-to-year basis.

Task (code 04) – Prevention of likely violations of the Law on Public Procurement.

Two measures were provided for implementation of the task:

• to assess ready-made procurement documents in the preventive procedure (measure code 05);
• to assess lawfulness of decisions of contracting authorities by issuance of consents specified in the Law on Public Procurement (measures code 06).

Implementation of the task was evaluated on the basis of the following quantitative criteria:

• the number of documents inspected and assessed in the preventive procedure;
• the number of analysed applications for issuance of the consents specified in the Law on Public Procurement.

In 2004, implementation of this task included preventive inspection and assessment of 354 procurement documents (plan 290) and analysis of 490 applications to issue consents (plan 120) to contracting authorities not to suspend procurement procedure, to reject all tenders and to terminate procurement procedure in cases specified in the Law. This task has been implemented.

Task (code 06) – Collection, accumulation, analysis and delivery of information about public procurement.

There were two measures provided for implementation of this task:

• modification and development of Public Procurement Monitoring Information System (measure code 08);
• computerised processing and compilation of information about public procurement (measure code 09).

Implementation of the task was evaluated on the basis of the following quantitative criteria:

• the number of new implemented functions of the Public Procurement Monitoring Information System;
• the amount of accumulated data.

Taking into consideration new provisions of public procurement directives adopted by the European Parliament and the European Council on 31 March 2004, requirements imposed on contemporary information systems as well as in order to satisfy the needs for transmission, compilation, processing and management of information of public procurement entities, development of the Public Procurement Monitoring Information System operating in the PPO was subject to further implementation in 2004.

In development of the Public Procurement Monitoring Information System, the PPO put into practice 3 new functions thereof (announcements, procurement documents, reports) in 2004 (planned – 3 functions). Information conveyed in 76400 documents was exposed to computerised compilation and processing (planned – 75000 documents). This task has been fully implemented.

Task (code 07) – Increased efficiency of public procurement through application of information technologies. The only measure ensuring implementation of this task was creation of public procurement information system that would provide for opportunities to gradually transpose public procurement into electronic media in compliance with the practice of the EU member states (measure code 10).

Implementation of the task included development of the measure enabling electronic transmission of documents of 8 types through application of information technologies (planned – 8 types of documents).

In 2004, LTL 1 million was assigned from the national budget for implementation of the mentioned measure. The mentioned funds were used for accomplishment of first-stage works in formation of the Central Portal of Public Procurement (CPPP).

The PPO worked out the terms of reference of the PHARE project and shared in preparation of an application for support. The application was submitted for evaluation of the Central Project Management Agency as well as for receipt of required funding from the EU structural funds for gradual translocation of public procurement to the electronic media making use of EU member states’ practice.

Task (code 08) – Preparation of the necessary number of qualified public procurement professionals, ensuring of their qualification improvement and provision of consultations on issues related to public procurement organisation and implementation.

There were two measures provided for implementation of this task:

• to draw up and implement training programmes and qualification improvement programmes for public procurement professionals (measure code 11);
• to render consultations on public procurement to contracting authorities and suppliers (contractors), and to disseminate experience of EU member states (measure code 12).

Implementation of the task was evaluated on the basis of the following quantitative criteria:

• the number of trained professionals;
• the number of drawn up training and qualification improvement programmes;
• the number of contracting authorities provided with consultations;
• the number of given consultations;

The task has been implemented. Training has been rendered to 398 public procurement experts (panned – 350), 4 training and qualification improvement programmes have been drawn up (planned – 4), 4050 contracting authorities have been consulted (planned – 3900), while the number of consultations amounted to 12550 (planned – 12500).

The Public Procurement Office is offering series of seminars on public procurement. The seminars are attended by representatives of concerned contracting authorities, suppliers and other authorities. All the participants are requested to fill in questionnaires. Received answers are used for improvement of the quality of training and consultations. The Office has implemented a system in its intranet to point out bottlenecks in public procurement regulations and conclusive findings of analyses.

Prioritised trends planned for the nearest future activities

After Lithuania’s joining the European Union, the following eight activities are prioritised for the nearest future:

• improvement of the created public procurement system in conformity to the requirements of EU directives;
• sharing in transposition of new EU legislative requirements on public procurement into the national law;
• control of adherence to statutory requirements in performance of public procurement;
• prevention of violations of the Law on Public Procurement in order to prevent the State from damage caused by unauthorised actions of contracting authorities;
• development of the public procurement information system;
• development of application of information technologies in public procurement;
• continuing of activities enabling translocation of public procurement procedures into the electronic media;
• training and qualification improvement of public procurement professionals; drawing up of methodological literature.

Creation of the public procurement information system to enable translocation of public procurement into the electronic media constitutes one of the key measures, implementation whereof is a long-lasting and complicated process aimed at gradual transposition of public procurement into the electronic media. Implementation of this objective requires a complex of works that would create necessary legislative and technical preconditions for performance of the mentioned measure.

Development of information society and translocation of public procurement into the electronic media are related to development of modern technologies. In its turn, this conditions not only the necessity to create a sophisticated public procurement information system, but also to supply contracting authorities and suppliers with required hardware and software.

Implementation of advanced information technologies in the public procurement process is considered one of the basic conditions to increase publicity and transparency thereof, to minimise procurement organisation costs and duration of procurement procedures and, simultaneously, one of the key trends in strategic activities of the Public Procurement Office.

Further development of the public procurement information system is driven towards solution of the mentioned tasks. Implementation thereof could be impeded by inadequate funding, insufficient attention of contracting authorities to public procurement and shortage of high-quality professionals as well as other conditions.

In implementation of the tasks of the prioritised activity trends in the nearest future as well as acting in compliance with the measures to implement the programmeme of the Government of the Republic of Lithuania for 2004-2008, the Public Procurement Office provides for gradual translocation of public procurement into the electronic media in the nearest future.

Director Mr. Rimgaudas Vaičiulis