Public Procurement in Lithuania

Executive summary

In Lithuania, public procurement accounts for 9.4% of GDP and 25.1% of total general government expenditures in 2021, below the OECD average of 12.9% and 33.1%, respectively. Given its economic size and impact, Lithuania recognises public procurement as a strategic tool to support the government’s broad strategic goals to contribute to the country’s economic growth and recovery. Currently, Lithuania has an ambitious target of 100% for green public procurement since 2023 and 20% for innovation procurement by 2030.

Lithuania has been actively implementing public procurement reforms to increase the efficiency of its public procurement system through centralisation and professionalisation of public procurement function.

Key findings and policy recommendations

Centralisation reform

Lithuania started its unprecedent centralisation reform of public procurement to respond to the centralisation of public procurement function required by the Amendment to the Law of the Government of the Republic of Lithuania and the amendments to the Law on Public Procurement, which was adopted by the Parliament in October 2021 and entered into force in January 2023.

The amendments require contracting authorities to procure goods, service, and works via the e-catalogue of CPO LT, the largest national central purchasing body (CBP) in Lithuania, for procurements above EUR 15 000. In addition, starting from 2023, CPO LT has been gradually taking over the procurement of the health sector and some other contracting authorities at the central government level, based on the performance assessment of each contracting authority. As of June 2023, 79 CPBs exist in Lithuania. 74 of these 79 CPBs are regional CPBs, most of which were established after January 2023 in response to the requirement of public procurement centralisation at the regional level. During the second quarter of 2023, centralised public procurement accounted for 34.6% of the total procurement volume, marking a significant increase from 10.0% in 2020. It is expected that the share of centralised public procurement will increase further in the coming years.

The ongoing centralisation reform requires more capacity and capabilities from CPO LT, as it needs to take over procurement procedures from contracting authorities at central level and requires close co-ordination with the 74 regional CPBs. For this purpose, and in collaboration with the OECD, Lithuania prepared a measurement framework composed of 77 indicators for measuring the performance of CPBs; however, its implementation will require close monitoring.

To address the challenges of the centralisation reform, the report proposes several actions. Namely, Lithuania could benefit from:

• Reinforcing CPO LT to respond better to the needs arising from centralisation reform by improving:

  • its capacity and the capabilities of its workforce related to the provision of (i) health sector procurement and/or recruiting category specialists of the health sector and (ii) high-quality procurement agent services of strategic procurement such as innovation procurement; and

  • its organisational strategy to be more competitive in the labour market by (i)  analysing the current uptake of its services by each client, (ii) considering increasing the number of the positions related to client relations, and (iii) considering improving its performance bonus system;

• Ensuring the maximum benefits of centralisation at regional level by:

  • continuing to regularly monitor the performance of 74 regional CPBs based on the scoreboard and the performance indicators of CPBs;

  • considering reinforcing a national CPB network to co-ordinate and exchange centralised purchasing practices;

• Introducing the performance measurement framework of CPBs by:

  • Improving the availability of data in digital format to calculate key performance indicators by prioritising data related to socially responsible public procurement (labour, gender consideration etc); and

  • Fine-tuning its methodology of calculating savings from centralised public procurement in collaboration with a knowledge centre.

Professionalisation reform

In recent years, the government of Lithuania has taken important steps to professionalise the public procurement workforce, through close co-operation between the Ministry of Economy and Innovation (MoEI) and the Public Procurement Office (PPO). Lithuania approved its action plan (2019-2022) to professionalise the public procurement workforce in March 2019 to implement the recommendations proposed by the OECD. By the end of 2022, Lithuania had already achieved several objectives of this action plan, including: (i) the establishment of its first-ever national certification framework in July 2022, (ii) the development of training materials, standard templates, and methodological tools, (iii) the establishment of the masters programme on public procurement through a collaborative approach with knowledge centres, and (iv) the establishment of excellence award scheme.

Building on its recent achievements, and to further strengthen the professionalisation reform, Lithuania could benefit from:

• Considering improving the certification system (e.g., improving the quality of exam questions, shortening validity term, setting additional certification level) based on the feedback received on the current model;

• Examining the benchmarking exercise results carried against the ProcurCompEU competency matrix and updating the corresponding competences (e.g., risk management including integrity aspect) on a regular basis;

• Updating the study guide for the certification framework “Checking the knowledge of procurement specialists” on a regular basis to reflect all existing lecture videos and guidelines.

• Reinforcing the capability-building initiatives for the areas such as innovation procurement, sustainable procurement, and risk management.

• Improving the quality of the guidelines for innovation procurement by: (i) enriching the case examples implemented inside and outside the country and (ii) accompanying the guidelines with the templates of tender documents of innovation procurement procedures such as innovation partnerships and pre-commercial procurement.

• Expanding outreach to young people to raise awareness of public procurement as a career option.