Report on Activities of the Public Procurement Office under the Government of the Republic of Lithuania in 1998

Introduction

Public Procurement Office under the Government of the Republic of Lithuania (hereinafter referred to as “the Office”) - is one of the newly established state institutions starting the second year of its functioning in Lithuania. The Office was established as a result of implementation of provisions of Law No I-1491 on Public Procurement of the Republic of Lithuania adopted on August 13, 1996.

A decision to establish the Office was adopted by the Government of the Republic of Lithuania by its Resolution No 1473 of December 19, 1996. The Director of the Office was assigned on June 16, 1997 and Provisions of the Office were consequently approved by Resolution No 773 of the Government of the Republic of Lithuania.

Currently the Office employs 31 staff member with appropriate knowledge, qualification and, in most cases, experience, which is vital for proper implementation of tasks given to the Office.

When implementing the Government policy in regard with issues on public procurement, the Office complies with provisions of Law on Public Procurement, secondary legislation related to implementation of the Law and other enactments of the Republic of Lithuania. Along with Law on Public Procurement, the Provisions of the Office specifying key rights and obligations of the Office, as set forth by Law on Public Procurement, is also an important instrument.

Drafting of Law on Public Procurement which is currently in force has been started in 1995, with the help of consultations provided by experts of the World Bank, International Monetary Fund and other international organisations. The mentioned experts have also consulted drafters of analogue laws in many other countries of Eastern and Middle Europe. The Law was drafted applying a model adopted by United Nations Committee for International Trade Law “UNCITRAL”. The Law was drafted taking into account experience of neighbouring countries, which had also adopted analogue laws, consulting international organisations and institutions dealing with issues on public procurement. The drafters tended to avoid insufficiencies noticed in laws of other countries.

Preparation of a package of enactments required for implementation of Law on Public Procurement was in progress on the basis of the aforesaid Law. A part of the enactments has already been drafted, approved and complied with in organisation of the process of public procurement in the Republic of Lithuania. A list of main secondary enactments regarding the issues on public procurement is indicated in Table 1.

Within the process of integration of Lithuania into the European Union and harmonisation of national enactments with legislation framework of the European Union, on September 6, 1996 the Government adopted Resolution No 1049 approving “Program for Harmonisation of National Law”.

Implementation of this Program resulted in a new version of Law of the Republic of Lithuania on Public Procurement in compliance with Directives of the European Union. The draft Law is currently in the process of consideration in the Seimas (the Parliament) of the Republic of Lithuania. Adoption of this Law will require amendment of the existing secondary legislation by the Office of Public Procurement and other institutions, as well as drafting of new secondary enactments.

In addition, the Office shall continue the training process of ministries, other state-owned institutions as well as responsible staff members of supplying and contracting entities, taking into consideration provisions of the existing enactments and the new Law, when the latter will be adopted. It will be necessary to look for opportunities of wider participation in seminars and other training events arranged abroad, to organise meetings, conferences and seminars on the national, regional and ministerial levels more often.

Major tasks will be faced in reconstruction of the system of complaint reviewing along with deliberate reinforcement and improvement of control and prevention activities.

Key tasks of the office

The key tasks of the Office are defined in the Activity Program of the Government of the Republic of Lithuania for 1997 - 2000, approved by Resolution No VIII-28 of the Seimas on December 10, 1996, Law on Public Procurement, enforced on January 1st, 1997, provisions of the Office approved by the Government as well as other normative enactments. The above mentioned key instruments legalised the functioning principles of the system of public procurement in the Republic of Lithuania.

As the world practice shows, almost one third of total public funds is used for public procurement. Meanwhile merely all public procurement of goods, works and services of higher value, funded out of the budget and other public funds, are carried out in compliance with Law on Public Procurement. Since January 8, 1998, as the Government adopted Resolution No 8 on the basis of which principal requirements of Law on Public Procurement shall be additionally applied in procurement of companies and closed companies where the state holds a controlling interest, a part of the state-controlled procurement out of the funds of the mentioned companies has almost doubled. Therefore, a role of the Office in rational and economical utilisation of funds assigned for public procurement is constantly increasing.

Implementing the functions of supervising Law on Public Procurement, along with other control institutions, the Office plays an important role in supervision and control of utilisation of the funds assigned for public procurement as well as adherence to the Law in this area. In the new version of the Law presented for consideration to the Seimas the role of the Office is significantly expanded and becomes even more important.

The key tasks of the Office, defined in the above mentioned enactments, are as follows:

• Formation and implementation of the national public procurement policy;
• Co-ordination of activities of ministries, other state and municipal institutions related to procurement of goods, services and works as well as control of following the requirements of Law on Public Procurement and secondary enactments on the national level;
• Preventive evaluation of procuring activities in the companies where the state holds a controlling interest;
• Within the limits of its competence, taking care of economical and reasonable utilisation of funds for public procurement out of the Lithuanian state budget and other public funds;
• Drafting and issue under delegation of the Government of secondary legislation, standard procurement documents, instructions and other documents regulating procurement-related activities;
• Accumulation of information on procurement activity and its presentation to the state (municipal) institutions and public;
• Analysis of the system for and activities in organisation and management of public procurements as well as preparation of proposals to the Government in regard with their improvement;
• Controlling whether procurement subjects reasonably applies established methods of public procurement;
• Organisation and provision of training of officials responsible for execution of public procurement;
• Consulting and instructing procuring subjects as well as suppliers and contractors on issues related to public procurement;
• Provision of methodological and information support in the field of public procurement to ministries and other organisations;
• Maintenance of permanent contacts with institutions in other countries, EU, WTO and other international organisations in regard with settlement of public procurement issues;
• Evaluation of regulations, drafts of other enactments prepared by ministries and other institutions in regard with issues of public procurement, and provision of own conclusions;
• Review of complaints and statements on public procurement matters and adoption of appropriate decisions under the established procedure;
• Seeking for prevention of law infringements, in particular in cases when damages is incurred to the state or its reputation due to disallowed acts of procuring subjects or suppliers (contractors).

In compliance with Law on Public Procurement and principles of the Provisions of the Public Procurement Office at the Government of the Republic of Lithuania, the Office defined the following priority trends in its activities in 1998:

• Implementation of the provisions of Law on Public Procurement;
• Co-ordination and monitoring of procurement activity; complaint review;
• Development of public procurement system in harmonisation of the national legislation framework with Directives of the European Union in the filed on public procurement;
• Training of officials responsible for execution of public procurement.

Key activities in 1998

Taking into consideration the above-mentioned priority tasks, the Office implemented the following key activities in 1998:

• Issues on Implementation of Provisions of Law on Public Procurement
• The issues of the mentioned character are attributed to the competence of Methodological Department.
• The approved list for staff members in the Department provides for 5 officials. Currently there are 4 staff members in the Department with university degrees in economy or engineering.

Within a reported period, in co-operation with other structural units of the Office, the Methodological Department:

• in co-operation with other ministries and state organisations prepared the new draft of Law on Public Procurement, contributed to its adjustment with the Seimas committees and other institutions. Adoption of the new, improved Law on Public Procurement, its accelerate implementation is quite an important preconditions in the process of Lithuania’s integration into the European Union. Inasmuch as the Office is responsible for implementation of the above-mentioned Law, it simultaneously becomes involved in the integration process. Since in the Office there is no subdivision for integration into Europe, these functions are delegated to the Methodological Department.

Preparation of the new Law draft as well as related documents in 1998 became one of the most significant and complicated tasks of the Department. For example, some of the key elements of this work were as follows:

• preparation of comments, recommendations as drafts of amendments to the Law for variants of the Ministry of Economy in regard with the draft Law;
• formation of the essential comparisons and differences of the existing Law and the new draft Law, preparation of comments to the new draft Law;
• preparation of the list of documents required for implementation of the new Law, classification and analysis of the material required for preparation of the mentioned documents;
• preparation of responses to the comments of SIGMA consultants in regard with the draft of the new Law.

Along with problems related to drafting of the new Law on Public Procurement, during the reported year the Methodological Department simultaneously carried out other activities covered by its competence:

• preparation of missing enactments, required for the currently existing Law on Public Procurement, standard procurement documents and other methodological instruments which may be used in drafting new secondary legislation for the new Law;
• analysis and evaluation of enactments prepared by other organisations on the issues of public procurements, provision of related comments;
• preparation of a draft resolution of the Government concerning amendments of the Provisions of the Office;
• edition and adjustment of provisions of all department of the Office as well as official post instructions for the staff members;
• preparation of new forms of reporting on procurement procedures, procedure of filling in the report and the list of procurement subjects bearing codes corresponding classifiers acknowledged in the European Union;
• preparation of common scheme of procurement procedures, corresponding the provisions of the new Law;
• drawing up of the list of the existing enactments covering issues on public procurement which is systematically supplemented and modified;

preparation of sketches of the following documents required for implementation of the new Law on Public Procurement:

• Procedure for complaint review at Independent Committee for Public Procurement Complaints (ICPPC);
• Procedure for remuneration for work of the staff members to ICPPC and covering of costs for complaint review at the Committee;
• Requirements for the staff members to ICPPC and making of the list of the members to the Commission;
• Provisions of Public Procurement Committee;
• Declaration of Impartiality;
• Confidentiality Agreement;
• Methodology for establishment of public procurement value;
• Recommendations for evaluation of qualifications of suppliers (contractors);

In regard with issues on integration into Europe:

• preparation and submission of a Project on ‘Improvement of Public Procurement System’ to be included into PHARE 1999 program;
• submission and improvement of NAAP according to the forms and requirements of EC;
• analysis of the procedure for filling in TAIEX harmonogram as well as preparation for filling it in;
• preparation of report on implementation of NAAP and its presentation for the European Committee, VEIK and other institutions;
• preparation of recommendations concerning consulting according to TRANFORM 1999 program (Program for Consultations of the Government of the Federal Republic of Germany);
• preparation of proposals concerning co-operation with the Kingdom of Denmark and other countries of the European Union in the field of regulations for public procurement;
• participation in seminars organised by the EC and the Ministry of External Affairs in the filed of PHARE programming, preparation of NAAP and filling in of harmonograms as well as in other events concerning public procurement.

During 1998 some defined tasks in the field of implementation of provisions of Law on Public Procurement were failed to be achieved. Drafting and adoption of the new Law on Public Procurement was delayed. Some important secondary enactments have not been made for the currently existing Law on Public Procurement adopted on January 1st, 1997, since it was expected that the new improved Law will come into force in the second semester of 1998 or in the beginning of 1999. For the time being, when some secondary enactments, methodological instructions and standard procurement documents are missing procuring entities, suppliers and contractors often ambiguously apply provisions and requirements of the Law. Besides other reasons, this conditions frequently face infringements of the La, conflict situations among subjects involved in procurement activities, too immense flow of complaints and inquiries.

Acceleration of adoption of the new Law on Public Procurement is vital. This would enable essential improvement of the process of public procurement activity, ensure harmonisation of this important instrument with enactments of the European Union.

Issues on Co-ordination and Supervision of Procurement Activities

Properly organised system of co-ordination and supervision of public procurement activities is very important in order to ensure economical and rational utilisation of budget and other public funds assigned for public procurement.

Need for these issues to be settled resulted in establishment of Department for Control and Prevention in the Office. Currently there are 7 persons employed in this Department. The key task of the Department is control of adherence to Law on Public Procurement and secondary legislation in the national level, taking care of prevention of public procurement and preparation of its perspective (future) programs.

In 1998 complaint review and preparation of related decisions accounted for the major workload of the staff members in this Department. It should be noted that until now the procedure for complaint reviewing has not been legally regulated, which caused particular problems and confusion in different stages of complaint submission, analysis and decision making. In order to regulate this important function from the pint of view of legislation, the Depatment drew ‘Provisions for the Procedure of Complaint Review of Suppiers (Contractors) Concerning Infringements of Law on Public Procurement’, which were approved by Resolution No 1475 of the Government on December 22, 1998.

This secondary legislation is based on standards and requirements of Law on Public Procurement, it specifies regulations for investigation of likely infringements of the Law and procedures in all stages of complaint reviewing. A decision form required for legal engrossment of decision adopted by the Office regarding support or denial of a complaint is enclosed to the approved provisions.

A scheme for complaint reviewing was prepared and currently applied in compliance with the requirements of the approved provisions. The scheme includes regulations, procedural and other actions starting with the receipt of a complaint until adoption of the final decision. It is expected that the scheme for complaint reviewing will be improved following adoption of the new Law, taking into consideration the provisions and the Law and experience of practical work.

In 1998 the Office received 118 complaints concerning public procurement. The complaints have been reviewed in compliance with the procedure and schedule established by the Law. 63 complaints did not have sufficient grounds and, therefore, procuring subjects were permitted to proceed with procurement procedures. In 19 cases the Office cancelled results of tenders, while in 22 cases procuring subjects were offered to additionally discuss tender results 14 complaints have not been reviewed since they were filed after signing of contracts.

In the terms of an object of procurement, in 1998 procurement of contractual works accounted for the major part of complaints, i.e., 44 (37,7 per cent of the total amount of complaints), procurements of medical equipment and medications - for 18 complaints (15,2 per cent), procurement of computer equipment and software - 13 complaints (11,0 per cent), procurement of fuel - 9 complaints (7,6 per cent), procurement of means of communication - 5 complaints (4,2 per cent), procurement of transport means - 5 complaints (4,2 per cent), other procurement - 24 complaint (20,5 per cent).

Taking into account methods of public procurement regulated by Art. 17 of the Law, proportion of the received complaints is as follows: open tender - 112 complaints (94,9 per cent), closed tender - 3 complaints (2,5 per cent), negotiated tender - 2 complaints (1,7 per cent), request for quotations - 1 complaint (0,9 per cent).

All received complaints have been reviewed by the Office and appropriate decisions have been made taking into consideration results of the reviews. It should be noted that none of the decisions of the Office concerning complaint review has ever been appealed against in court in the established procedure.

Analysis of the basic trends of complaints allows for definition of the key factors giving rise to complaints. These are as follows:

• terms of a tender and evaluation criteria are insufficiently clearly set forth by a procurement subject. In these cases suppliers (contractors) differently approach or understand requirements of the procurement subject in regard with the goods (services, works) to be procured by it;
• despite criteria of evaluation are quite clearly defined in the terms of the tender, suppliers (contractors) still think their bids should be evaluated most favourably, because the offered the lowest price. However, not all requirements of the terms of the tender are fulfilled in the submitted bid.
• in cases of large and complicated procurement the procuring subjects fail to apply pre-qualification specified in Art. 5 of the Law, although it is quite obvious from the very beginning that analysis of the bids of some potential suppliers (contractors) will leave no actual perspectives for them to win the tender;
• a complainer fails to indicate grounded motives of the complaint and files the complaint usually seeking to impair his potential competitors;
• a supplier (contractor) thinks that the procuring entity evaluates the bids subjectively;
• subjects of procurement infringe requirements of Art. 14 of Law on Public Procurement, indicating exact brands of the goods in the terms of the tender or announcement;

As the data of the reported period shows, tenders for construction contracts and acquisition of complicated medical, computer and communication equipment accounts for the major part of all complaints. Reviewing the mentioned complaints, the Public Procurement Office faces a problem, when evaluation specific tender documents, qualification requirements, evaluation criteria and their application as well as evaluation of particular tender bids become complicated without experts of different profiles being employed in the Department for Control and Prevention. This problem is partially solved with the help of consultations of relevant ministries (Health Care, Environment, Transport) and specialists and experts of other organisations.

Practice of establishment of interdepartmental committee for complaint review in cases of complicated tender of large scope proved itself. One of such positive examples could be review of the claim concerning the tender for works in a watering place in Antaviliai, Vilnius City. Results of one of the largest open tenders invited by Vilnius City Municipality and UAB “Vilniaus Vandenys” in 1998 were appealed against by two companies of foreign capital (Danish PURITEK A/S and German “Kriuger A/S”, represented by UAB “Baltijos konsultacine grupe” (BALTIC Consulting Group). In order to review this complaint, the Office established the interdepartmental committee, which in co-operation with specialists in project expertise deliberately and qualifiedly reviewed the essence of the complaint, all filed and additional documents and presented its conclusions on the basis of which the Office made its decision.

In its future activities the Office should focus more on control of reasonability of the evaluation criteria established by the subjects of procurement, improvement of the procedure and organisation of complaint review. We assume that introduction and application of a significantly improved system for complaint review set forth in the new draft of Law on Public Procurement will have a positive affect this field of activity.

In 1998 the Office paid much attention at creation and improvement of a system of prevention in public procurement activities. In the process of implementation of Decree No 9 of the Government of the Republic of Lithuania of January 8, 1998 the Department for Control and Prevention organised examination, analysis and evaluation of information on public procurement provided by the subjects of procurement.

Quite a part of organisations, private and public companies in particular, had insufficient understanding of the provisions of the Law and requirements for organisations and execution of procurement tenders which were improperly applied in their practical activities. Some facts were disclosed when such organisations would submit information and data for evaluation in disagreement with the requirements of the Law. Procurement committees would evaluate the submitted bids in non-compliance with the criteria and their specific meanings specified in the tender documents.

When evaluating the submitted information and, if required, additional documents, the Office provided the subjects of procurement with the related conclusions and recommendations. Explanations of the Law, constant consulting and instructing resulted in much more systematic and qualified information submitted by the subjects of procurement, cases of infringements of the Law have decreased.

A structural subdivision for preventive activities in the Office started functioning on March 1st, 1998. Within this period 720 applications of the procurement subjects were received concerning evaluation of the procedures of procurement. 643 procurements have been evaluated. In 38 cases infringements of the Law have been accounted, in 122 cases - facts of non-adherence to the provisions of the Law of procedural nature and deviation from the requirements of the Law.

Issues on Organisation of Training and Improvement of Information System

For normal functioning of the public procurement system, creation and organisation of appropriate training mechanism shall be vital. In order to organise and co-ordinate processes of training and professional development of officials, the Office established Training Department, which currently employs 6 experts. In 1998 the staff members of the Department participated in a number of different short-and-medium-term seminars and workshops in Lithuania and abroad.

Three standard training programs prepared by the Department included 8 - 160 and 480 hours training. Preparation of an outline for the training of trainers in public procurement has also been started. Today we have Part I of the mentioned outline: ‘Principles and Institutional Bases’. On the basis of SIGMA training methodological material there was prepared a standard project for the training program in public procurement. A test for a candidate to the members of Independent Committee for Complaint Review in the field of public procurement is in progress. Preparation of the procedure has been started covering the issues on qualifying of public procurement experts and issuing of trainers’ licences.

In 1998 the Office:

• organised interdepartmental conference in Vilnius on “Problems of Public Procurement: a System and Uncertainties”;
• organised interdepartmental seminar on “Modernisation of Basic Commercial Laws of Lithuania. Public Procurement: the Law and Practice” (the event arranged in co-operation with the Ministry of Economy);
• participated in 18 seminars, conferences, discussions and similar events in different regions of Lithuania and abroad.

Events organised by the Office were attended by 1200 persons, which positively approached the results and benefit of the events in practical activities. Staff members of the Office made speeches or provided information merely in all events of the mentioned type. In addition to the aforesaid activities in the field on training, the Office:

• prepared information on the practice of public procurement in the European Union;
• is preparing and publishing in the Gazette (“Valstybes Zinios”) (in its specialised annex “Information Bulletins”) responses to the most actual and popular questions on public procurement;
• developed and is constantly updating the list of secondary legislation of public procurement;
• prepared about 50 visual means of training (transparencies) concerning the most actual issues of procurement.

The Office is co-operating and exchanging experience with foreign organisations for public procurement, receiving useful methodological and information material from these countries.

One of the most important tasks of the Office is provision of consultations (in a written and oral form) for ministries, state organisations, municipalities and other persons involved in the process of public procurement concerning the issues on applying the Law and secondary legislation as well as organisation of procurement.

Inquiries from the subjects of procurement, suppliers and contractors are mainly related to practical issues of procurement organisation. In 1998 such inquiries amounted to approx. 3200. The Training Department arranged accounting of inquiries and given responses. This enables the Office to summarise and analyse subjects of the received inquiries and make conclusions concerning the fields requiring improvement of legislation standards. Summarised information on inquiries and likely solutions, characteristic to the most of persons involved in the process of public procurement has been started publishing in the Gazette. This work will be continued in the future.

It is forecasted that adoption of the new Law on Public Procurement will result in increased demand for training in public procurement. Therefore, it would be reasonable to organise seminars and workshops providing training on public procurement of the permanent basis. In addition, it is planned to prepare methodological literature and select speakers able to give lectures on the most actual subjects of procurement. Studies of legislation framework of the European Union on the issues of public procurement shall be particularly emphasised.

Issues on Reporting and Analysis

Accumulation of information on activities of public procurement and its further circulation for state (municipal) organisations and public - is one of important functions of the Office. Analysis and evaluation of public procurement activities require particular and reliable data, which would sufficiently adequate reflect the status of the system. Big part of the required information is the data indicated by the subjects of procurement in a report on procurement procedures, as specified in Art. 9 of Law on Public Procurement. Adoption of Resolution No 9 of the Government of the Republic of Lithuania as per January 8, 1998, resulted in increase of the number of organisations carrying out public procurement in compliance with Law on Public Procurement. Public companies with the state-owned controlling interest also started filing the report on the procurement procedures.

For the time being not all organisations carrying out procurements under Law on Public Procurement timely file the report on the procurement procedures. In addition, there are mistakes in filling in the reports, not all required data is presented. In 1998 the Office delivered 428 applications to the procuring subjects with the request to submit missing data. In order to optimise the quantity of the received data, improve their quality and simplify drawing up of the reports, new forms of reports have been developed for the procedures of public procurement. These forms were approved by Order No 59 of the Office on December 15, 1998 and put into implementation since January 1st, 1999. Toady, in cases when information on a public procurement tender was submitted to the Office, as specified by Decree No 9 of the Government of the Republic of Lithuania of January 8, 1998, only additional data is added to the report after final procedures of procurement. Rearranged classification of the data and their coding will enable more rational application of the received data.

In 1998 the Department for Reporting and Analysis started operating an experimental computer database for reporting on the procedures of public procurement. This database was prepared on the basis of ‘Microsoft Access 95’database program.

Since January 1st, 1999, as new forms of reports have started being applied, modification of the structure of reporting database, procedures of data entering and processing is inevitable. It is important to modify the structure of the database in such a way, that a code of the procurement subject indicated in the Register of Economic Entities would serve as an identification parameter of the entity instead of its name.

Since 1998 summarised information on public procurement is presented in the Gazette (“Valstybes Zinios”) on a quarterly basis. Information on the public procurement within 1st quarter was published in “Valstybes Zinios” No 54 on June 12, 1998, within 2nd quarter - in “Valstybes Zinios” No 72 of August 14, 1998, within 3rd quarter - in “Valstybes Zinios” No 93 of October 23, 1998. It should be noted that publishing of information concerning public procurement within relevant quarter is followed by quite a number of delayed submission of reports: 111 delayed reports on the public procurement within 1st quarter, 209 delayed reports on the public procurement within 2nd quarter and 190 delayed reports on the public procurement within 3rd quarter.

The Public Procurement Office received 6006 reports on the procedures of public procurement within 1998. 103 reports indicated that procurement failed due to a number of different reasons. Value of 582 procurements was not established at the moment of signing of contracts and the reports do not indicated the reason for non-inclusion of the mentioned value in the gross value of the reported procurement.

The received reports indicate that total value of 5321 public procurement in 1998 amounted to LT 2199426.8 thou. Major funds (LT 736201,9 thou) were utilised for the public procurement in 2nd quarter of 1998 (see Figure 1). (nuoroda neveikia)

By the utilised funds, the total value of public procurement in 1998 consists of the following:

• LT 696503,9 thou of the state budget funds (2066 procurements);
• LT 165595,9 thou of municipal budget funds (744 procurements);
• LT 12670,2 thou of the State Social Insurance budget funds (60 procurements);
• LT 485248,5 thou of other state funds (1636 procurement);
• LT 294507,8 thou of loans received on behalf of the state (85 procurements);
• LT 90801,7 thou of state guaranteed loan funds (63 procurements);
• LT 11143,9 thou of charity and sponsorship on behalf of the state (24 procurement);
• LT 398675,2 thou of funds out of business activities (619 procurements);
• LT 44279,7 thou of other funds (24 procurements).

Public procurement values for goods, services and works in 1998 are indicated in Figure 2, while the values and quantities of the mentioned procurement in 1 - 4 quarters of 1998 - in Figures 3 and 4 respectively. Procurement of machinery, mechanical equipment, electricity equipment and their component accounts for the major part of the procurement value of goods and amounts to LT 232746,8 thou (341 procurements). Repair, reconstruction and renovation of roads and other transport facilities account for the major part of procurement value of works and amount to LT 403023,4 thou (749 procurements).

Values and quantities of public procurement by different methods of procurement are indicated in Figures 5 and 6. Goods were mostly procured (940) by an open tender (total procurement value - LT 584050,6 thou). Works account for 569 public procurement of the mentioned type (total procurement value - LT 885002,7 thou).

Work procurement by closed tenders accounts for 1039 procurements (total value - LT 184771,7 thou). This method of procurement was mostly applied in cases of service procurement - 305 times (total value of such procurement - LT 16732,1 thou).

Method of negotiated tenders was mostly applied for procurement of works (268). Total value of the mentioned procurement - LT 42402,5 thou.

Request for quotations was mostly applied for procurement of works (763; total procurement value - LT 138085,5 thou) and goods (858; total procurement value - LT 42594,6 thou).

Single source procurement was applied 143 times for the procurement of goods (total procurement value - LT 95995,4 thou), 116 times for services (total procurement value - LT 89738 thou) and 68 times - for works (total procurement value - LT 15799,5 thou).

Value of procurement by different procurement subjects in 1998 is indicated in Figure 7. State institutions accounted for procurement of services, goods and works amounting to LT 315362,3 thou (983 procurements), LT 136163, 3 thou (529 procurements) and LT 636060,7 thou (1130 procurements) of the total procurement value, respectively.

Municipal institutions mostly procured works (1039). Their total procurement value amounts to LT 310502,8 thou.

State enterprises mostly procured goods (344; total procurement value - LT 108816,3 thou) and works (122). Total procurement value of works amounted to LT 92297,7 thou.

As for municipal enterprises, value of 25 procurements of works accounts for the major part of the total procurement value (LT 12254,2 thou).

Companies and close companies mostly procured works (314) (total procurement value - LT 181749,9 thou and goods. Total value of 261 procurement of goods amounted to LT 234494,2 thou.

Public institutions mostly procured goods (160) (total procurement value - LT 68200,4 thou).

Currently the database stores the data of the received reports, which are consequently managed and analysed by computers. It is necessary to create the information system of public procurement, which implementation would provide users with information received using the data from the mentioned Dbases, i.e.:

• Dbases of announcements published in “Information Announcements” annexed to “Valstybes Zinios”;
• Dbases of information presented for evaluation;
• Dbases of reports;
• Dbases of claims;
• Dbases of Resolutions of the Government of the Republic of Lithuania on ‘Consent to Execute Public Procurement by a Tender other that Open Tender’.

In 1998 level of computerisation in the Office was improved. The Office acquired 20 computers, 12 printers and 2 modems. In December two working places were created for the work in Internet. All staff members of the Office are provided with access to e-mail.

Staff members of the Department for Reporting and Analysis provide regular consulting for the procurement subjects in regard with reporting issues, carry out supervision of the existing computer equipment, consult their colleagues on the issues related to software and hardware usage.

Public procurement announcements by the procurement subjects published in “Information Announcements” annexed to “Valstybes Zinios” are regularly monitored. Compliance of the content of announcements with the requirements of Law on Public Procurement is checked; the text of announcements is edited.

Organisational Structure of the Office and its Staff

Organisational structure of the Office and its staff were approved on March 27, 1998. However, formation of the staff proceeded for more than a semester due to insufficient area for official premises.

The structure of the Office and list of staff members were developed taking into consideration official post tasks and functions set forth by Law on Public Procurement and provisions approved by the Government as well as particular workload established for each structural unit.

In compliance with the above-mentioned principles, 4 functional departments and 2 independent units for finance and economic services have been established in the Office:

• Methodological Department;
• Department for Control and Prevention - 9 staff members (the Department includes a sector for prevention);
• Training Department - 6 staff members;
• Department for Reporting and Analysis - 6 staff members;
• Finance and Accounting Sector - 2 staff members;
• Administration and Economy Sector - 5 staff members.

There are 35 staff units forth for the Office in total. In 1997 - 1998 the staff apparatus of the Office was formed by tender procedure, in separate stages, taking into consideration provision and equipment of official area.

At the beginning of 1998 there were only 13 staff members employed at the Office. Following acquisition and equipment of official premises in Algirdo 31, an additional tender was invited in order to proceed with completion of the staff. At the end of April there were 24 staff members employed at the Office, on July 1st - 28, on October 1st - 30 and on January 1st, 1999 - 31. All experts of the Office are either university graduates with degrees in economy, engineering or law, or completing their studies at universities. Two staff members have degrees of Doctor of Social Science.

Current organisational structure of the office and established number of the staff units practically provides an opportunity for normal implementation of the tasks delegated to the Office. Within the limits of budget assignments, the Office acquired inventory required for working places, computer equipment, other organisational - technical means, accomplished refurbishment of the premises.

In the future, after adoption of the new Law on Public Procurement and following secondary legislation, improving the system for organisation of public procurement, broadly developing contacts with international organisations and institutions of other countries regulating public procurement, it will be necessary to partially rearrange the organisational structure of the Office as well. Strengthening of preventive and control activities in public procurement, application of new methods and forms of training shall be of vital importance.

The tables, schemes and diagrams bellow are enclosed to the Report.

Table 1 LIST of Enactments on Public Procurement of the Republic of Lithuania, Approved by January 25, 1999