Public Procurement Law (PPL) was passed by the Serbian National Assembly on 4th of July 2002 and entered into force on 13th of July 2002, enacted as a part of law and economic reforms on the path to free-market economy, democratic society with low level of corruption. The Law is largely based on the EU public procurement directives.

PPL consists of a comprehensive set of rules on public procurement providing at the same time the means for its verification in practice. Its provisions are focused on procurement procedures embracing the whole process of awarding public contracts starting with decision on public procurement and ending with the conclusion of the contract. The process of planning and financing public procurement is outside the scope of the Law and is subject to finance law, as well as the execution of concluded contracts which are subject to civil law.

Open tendering is the basic procurement procedure under the PPL as it is the most transparent, objective and competitive method of selecting the best offer, whilst other procedures may only be applied in special cases and the conditions for their application are defined in the PPL. Apart from the provision of the Article 6 allowing domestic preferences only related to subcontractors and inclusion of certain quantity or value of domestic goods and services, the PPL does not allow any kind of domestic preferences in the procurement procedures, giving the absolute prevalence of economic criteria.

The Law ensure compliance with the rules: it affords protection by giving the right to complains to any supplier or contractor who claims that his rights have been injured in the procurement procedures, invalidating procurement contracts that are not in accordance with the law procedures, imposing at the same time the penalties on contracting authorities for nominal breaches of the Law the spectrum of which is wide enough to cover almost any breach. Suppliers and contractors as having an economic interest are the best monitors of the procurement process.