Activity Report 2005 of the Public Procurement Office under the Government of the Republic of Lithuania

Mision and straregic objectives

Mission – in co-operation with other institutions, to implement national policy in the field of public procurement and the fundamental principles thereof – equal treatment, non-discrimination and transparency;, to monitor adherence to the Lithuanian and EU regulations governing public procurement.

Strategic objective – to seek for implementation of the Law on Public Procurement (hereinafter referred to as “the Law) and other legislation related thereto by means of improving and co-ordinating the system of public procurement.

In pursuance of the said objective, in 2005 the Public Procurement Office (hereinafter referred to as “the Office”) shared in drawing up a draft of a new edition of the Law on Public Procurement, which provisions are in agreement with the provisions of EU directives in the field of public procurement, as well as secondary legislation and methodological recommendations. In addition, the Office conducted prevention and control, rendered training to contracting authorities and suppliers, and carried out other functions delegated to the Public Procurement Office. Weighty contributions were made to the implementation of a measure set forth in the Measure Plan of the Government of the Republic of Lithuania for 2004 – 2008, i.e., “To develop public procurement information system used for gradual translocation of public procurement into electronic media on the basis of the practice of EU member states”. This is one of the most important trends to be followed in implementation of the strategic information technologies in public procurement.

In 2004 the Public Procurement Office conducted public procurement of the service “to create the Central Portal of Public Procurement” (CPPP). The Central Portal of Public Procurement was put into operation in 2005. It serves for implementation of new public procurement opportunities for entities of public and private sectors. The following functions are designed for contracting authorities: 1) suppliers’ polling by means of performing procurement pursuant to usual commercial practice (all suppliers registered with the CPPP may be polled); 2) publishing of procurement documents in electronic media (each contracting authority may publish its procurement documents and additional documents in electronic form on the portal).

The following functions are designed for suppliers (whether legal or natural persons): 1) possibilities to receive information about public procurement (subscription to public procurement announcements, receipt of procurement documents; 2) possibilities to register on the CPPP, to place information about their activities, range of offered supplies, services or works and to participate in public procurement by means of usual commercial practice.

At the moment there are 342 suppliers’ organisations and 768 contracting authorities registered on the CPPP. Every day about 800 unique visitors visit the CPPP (about 20809 files are sent). 25 new suppliers’ organisations are registered every month on the average. It’s worth noting that registration with the CPPP and all other services available on the portal for contracting authorities, suppliers and other visitors are for free.

Yet, the key objective of the CPPP is to become a place for electronic performance of national public procurement using all the types of public procurement envisaged in the Law. To this effect, on 12 October 2005 a trilateral agreement was signed on the implementation of project ‘Development of the Public Procurement Information System’ funded from the resources of the ESF.

DESCRIPTION OF PROGRAMME “IMPLEMENTATION OF THE 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. This programme also includes implementation of the mentioned project ‘Development of the Public Procurement Information System’ funded from the resources of the ESF.

The programme is continued. It was started in 2001. In 2005 the Office, which then employed 42 staff members, was assigned LTL 2234,7 thousand for implementation of the aforesaid programme, whereas LTL 1899,4 thousand was assigned to cover expenses, including LTL 1248,0 thousand for wages. LTL 335,0 thousand was assigned for acquisition of assets. Source of funding – the national budget of the Republic of Lithuania and EU structural funds.

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

• 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 2005 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;
• Monitoring 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 to public procurement, for getting ready to 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; initiating adoption thereof (measure code 01);
• analysis of the valid legislation and/or 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 2005 the Public Procurement Office drew up 6 legislation drafts (amendments to the law, secondary legislation, methodological recommendations), analysed 8 legislation drafts. The strategic activity plan envisaged making up 4, and analysis of 7, legislation drafts.

Accordingly, both task measures and task implementation evaluation criteria have been implemented.

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 ensure further improvement of the environment for business development …” (code 4).

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

Implementation of this task was ensured by two measures: (1) drawing up of standard procurement documentation, methodological literature and recommendations for contracting authorities (measure code 03), and (2) analysis and assessment of a possibility to establish a procurement agency enabling centralised implementation of public procurement (measure code 04).

Drafting of standard documents for particular types of goods and services as well as elaboration of procurement agency establishment feasibility study were postponed to the year 2006 due to delayed adoption of the new Law on Public Procurement.

Due to this reason the task was implemented only in part. Draft guidelines of public procurement procedures were prepared together with Finnish experts to contain recommendations for general and special conditions of public procurements contracts for supplies and services as well as for preparation of technical specifications of computers and for technical requirements specified in procurement documents, etc.

Task (code 03) – Representing the Office in EU and other international organisations in the fields attributed to the competence of the Office.

Implementation of this task was ensured by one measure: attending, in the manner prescribed by the Government of the Republic of Lithuania, meetings and sittings held by EU and other international organisations (measure code 05).

Participation of Office experts at obligatory events held by EU authorities and other international organisation serves as a criterion for evaluation of implementation of this task. In 2005, 16 sittings were planned, but only 12 of them were held, because the European Commission carried some sittings forward to the year 2006. The experts of the Office attended all the above-mentioned sittings.

Task (code 04) - Institution of administrative proceedings against the detected violators of the Law on Public Procurement.

Two measures were provided for implementation of the task: (1) to inspect activities of contracting authorities in the field of public procurement (measure code 06) and (2) to organise and conduct hearing of administrative proceedings concerning violations of the Law on Public Procurement, institution of administrative proceedings against the detected violators of the Law on Public Procurement (measure code 07).

The number of conducted control checks serves as a criterion for evaluation of implementation of this task. In 2005, the Public Procurement Office conducted 17 control checks (planned – 15 control checks) and heard 22 administrative cases concerning violations of the Law on Public Procurement (it was planned to hear 100% of administrative cases concerning violations of the Law on Public Procurement). In addition, in 2005, the detected violations of the Law on Public Procurement were documented at the Public Procurement Office in 22 protocols of administrative violations of law and consequently 22 liable persons were punished. Accordingly, the Office has implemented both measures implementing this task.

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

Task (code 05) – 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 08);
• to assess legitimacy of the decisions of contracting authorities upon issuance of consents specified in the Law on Public Procurement (measures code 09).

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 2005, implementation of this task included preventive inspection and assessment of 368 procurement documents (plan 300) and analysis of 526 applications to issue consents (plan – analysis of 100% of the applications) to contracting authorities not to suspend procurement procedure, to reject all tenders and to terminate procurement procedure in cases specified in the Law. All the applications of contracting authorities had been analysed and the task was accordingly implemented.

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

There were two measures provided for implementation of this task: (1) modification and development of Public Procurement Monitoring Information System (measure code 10), and (2) computerised processing and compilation of information about public procurement (measure code 11).

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;
• timely entering of the received data;
• submission of expected reports to the European Union.

In development of the Public Procurement Monitoring Information System, the Office put into practice 2 new functions thereof in 2005 (planned – 2 functions). All the received documents and information contained therein were computer-processed (plan – 100%). All the expected reports were presented to the European Union. 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 is 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 12).

Evaluation criteria for this task:

• the number of procurement procedures transposed to the electronic media. 2 procurements procedure were envisaged to be transposed in 2005. The plan has been fulfilled;
• the number of contracting authorities using the Public Procurement Information System. The system is used by 450 contracting authorities (plan – 400);
• the number of suppliers using the Public Procurement Information System. The system is used by 100 suppliers (plan – 50).

Within the framework of implementation of task 07 of the Strategic Activity Plan 2005-2007, in 2005 the Office implemented the Central Portal of Public Procurement, which integrates a part of the functions of the public procurement monitoring system, places catalogues of goods, provides for technical possibilities to publish procurement documents in the electronic media and performance of simplified procurement procedures under usual commercial practice in the electronic media. Implementation of this task is linked to priority of the Government of the Republic of Lithuania ‘Development of information and knowledge society…’ (code 9).

Task (code 08) – Training of public procurement professionals, ensuring improvement of their qualifications, provision of consultations on issues related to public procurement organisation and implementation, and achievement of high-quality consulting.

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 13);
• to render consultations on public procurement to contracting authorities and suppliers, and to disseminate experience of EU member states (measure code 14).

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

• the number of professionals having attended training;
• the number of positive responses about the quality of training, as obtained after questioning of the participants of the training held by the Office, at least %;
• the number of drawn up and improved training and qualification improvement programmes;
• the number of positive responses of contracting authorities and suppliers about the quality of consultations, at least %;

The task has been implemented. Training was attended by 225 public procurement professionals (panned – 200), 4 training and qualification improvement programmes were drawn up (planned – 4), positive opinion of contracting authorities and suppliers about the quality of consultation amounted to 97% (planned – 87%), while positive opinion about the quality of training amounted to 96% (planned – 85%).

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 for the nearest future activities

There are the following prioritised activity trends envisaged for the nearest future after adoption of the new edition of the Law on Public Procurement and following the provision in the 2004-2008 Programme of the Government of the Republic of Lithuania ‘To Improve the Law on Public Procurement and to Amend the Procedure for Organisation of Public Procurement’:

• Implementation of the new edition of the Law, including inter alia implementation of all necessary organisational measures;
• Adoption of all secondary legislation falling within the ambit of the Office and necessary for implementation of the new edition of the Law on Public Procurement;
• Development of the public procurement information system by means of gradual translocation of public procurement into the electronic media and to this effect implementing the project ‘Development of the Public Procurement Information System’;
• Improvement of the planning and organisational methods of public procurement;
• Strengthening of institutional capacities of the Office;
• Control of adherence to the Law in performance of public procurement;
• Prevention of violations of the Law in order to prevent the State from damage caused by unauthorised actions of contracting authorities;
• Training and qualification improvement of public procurement professionals; drawing up of methodological literature.

Acting in compliance with the measures intended for implementation the programme of the Government of the Republic of Lithuania for 2004-2008, the Office provides for gradual translocation of all the types of public procurement set forth in EU directives to the electronic media in the nearest future. To this effect, the Office, as a responsible implementing authority, envisages to implement the project ‘Development of the Public Procurement Information System’ funded from the EU structural funds.

In order to strengthen institutional capacities necessary for implementation of the new functions set forth in the Law, the Office will implement restructuring of its organisational structure in 2006. This will ensure implementation of the objectives raised in respect of the Office.

Director Mr.Rimgaudas Vaičiulis