Ensuring fair and effective competition is a key element of public procurement system that functions soundly. To this end, potential supplies of all sizes should have access to procurement opportunities, i.e., a level playing field must be provided. However, specific challenges linked to public procurement – such as slow payment cycle, the complexity of the rules and procedures, excessive technical and financial requirements, myriad documents required – discourage certain groups of suppliers from participating in public procurement markets. These challenges are often considered to limit the access, in particular, of smaller businesses to procurement opportunities with governments.
The Western Balkans have adopted various approaches to facilitate suppliers’ participation in public procurement – ranging from specific legal and regulatory provisions to those measures to reinforce the capacity of contracting authorities and suppliers. In fact, all of them allow procurement contracts to be divided into lots. In particular, dividing large and heterogeneous contracts into lots in an effective manner could allow businesses with relatively low capacity to participate in tenders, thus increasing competition. However, whereas in many OECD countries, especially the EU members, the division into lots is mandatory (when not divided, justification needs to be provided), it remains largely optional in the Western Balkan region. Some exceptions could be found in North Macedonia and Serbia where their laws on public procurement contain the provision on the mandatory division into lots in line with the EU public procurement directives. In addition, the public procurement regulatory frameworks in the region include a number of provisions to facilitate SME participation including limits on the minimum economic and financial requirements and on tender and performance securities.
Furthermore, in order to support the implementation of policies and various measures, Western Balkan governments also organise training and workshops (67%), and these trainings are supported through donor contributions to the region. Participation in the public procurement market requires not only information on procurement opportunities but also technical and legal knowledge. In this light, suppliers can benefit from capacity-building exercises that reflect their needs and capacity gaps.
The main challenges to fair access – especially inefficient and inappropriate tender design and choice of procedures, and size of contracts – imply weak assessment of the needs and of the market structure. Constant and regular engagement with stakeholders is central to close the information gap between the public and the private sectors and shape mutual understanding of the government’s needs and the market. At the same time, these engagements should be designed and organised in a way that does not favour certain groups of suppliers and mitigates the risk of corruption, collusion, etc. OECD countries commonly organise dialogues between contracting authorities with suppliers and/or business associations on a regular basis. However, only North Macedonia in the Western Balkans region reports to hold regular dialogues with the private sector. In particular, the Public Procurement Bureau of North Macedonia held an “Open door day” where any economic operator or contracting authority who wished to participate came together to discuss their experiences with the public procurement system. While market research and stakeholder engagement in general remain weak in the region, some developments on private sector consultation should be noted. For instance, Serbia is engaging with the private sector on important developments of the public procurement system through discussions, events and workshops.
