• the participation in drafting the implementing regulations guidelines, manuals pertaining to the public procurement sector,
• providing consulting services to contracting authorities and bidders,
• training of public officials and capacity building,
• organizing workshops, seminars and conferences with discussions on public procurement matters,

• Legal Department
• Department of Analysis
• The Group for Training Public Officials and Capacity Building
• Administrative Section

• Regulation on Tenders Opening Procedure
• Regulation on Criteria for Establishing Public Procurement Committees
• Regulation on Standard Form for Keeping Records of Procurement Proceedings and Awarded Contracts

• Model Tender Documents
• Model Notices on Public Procurement
• Regulation on Law-Value Public Contracts Procedure

• preparation of the Law on Protection of Tenderers Rights
• work on amendments to the Public Procurement Law
• second cycle of seminars that will, besides procuring entities, include also tenderers

The Public Procurement Office (PPO) drafted in the first half of 2003 three secondary regulations and four internal acts. All seven documents were published together with comments and illustrations given in the form of practical examples in two books: 1) “Public Procurement – Secondary and Internal Regulations – Comments with Examples” and 2) “Model Tender Documents”. All these documents can also be found on the PPO's web-site.

Secondary Legislation and Internal Acts

Secondary regulations

In the first quarter of 2003, the PPO prepared the following secondary regulations:

“Regulation on Standard Form for Keeping Records on Public Procurement”, Official Herald of the Republic of Serbia No. 9/2003, dated February 12, 2003;

”Regulation on Tenders Opening Procedure and Standard Form for Keeping Records on Tenders Opening”, Official Herald of the Republic of Serbia No. 9/2003, dated February 12, 2003, and

”Regulation on Criteria for Establishing Public Procurement Committees”, Official Herald of the Republic of Serbia No. 39/2003, dated March 6, 2003.

Under the Public Procurement Law (PPL), procurement entities have an obligation to keep records of data on all awarded public procurement contracts. The Regulation on Standard Form for Keeping Records on Public Procurement defines that procedure in detail.

This secondary regulation is of great importance for a number of reasons. Firstly, for the first time ever it laid down an obligation for procuring entities to keep records on all contracts they concluded in public procurement procedures, whether they are open, restricted or negotiated. Not only that: procuring entities are legally bound to submit data recorded in that manner to the PPO; failure to submit those records is punishable by fines.

Records are kept according to the following:

- the value of the procurement (high-value contracts and low-value contracts - forms A and B)

type of contract (goods, services and works)

type of procedure (open, restricted or negotiated procedure).

Reports compiled in this manner make possible detailed analyses of all awarded public procurement contracts, enabling direct insight into the effects of the PPL, particularly establishing reliably the savings achieved through the implementation of the said law. They make possible insight into the type of procedure used by procuring entities to award public procurement contracts - whether they opted for an open procedure (by which, the PPL stipulates, public procurement contracts shall be awarded as a rule) or an exception (negotiated procedure). Procuring entities also have an obligation to list the tenderer to whom they awarded the contract, enabling close scrutiny on which bidders are awarded the most lucrative contracts and the incidence of bidder-contractor correlation.

Finally, reports conceived in this manner make possible the compilation of a data base on all awarded public procurement contracts in the Republic of Serbia, which will be described in more detail in the section on the PPO's information system.

Until the adoption of the regulation, most tenderers' complaints referred to possible tampering with bids before their opening and claims that in some cases some bidders were informed about their competitors' offers before the scheduled bid-opening date. This made the public procurement procedure meaningless, and privileged bidders (those who knew their competition's offers) adjusted their own offers in collusion with the procuring entities, and won the contracts.

This regulation puts an end to such practices in two ways. Firstly, the opening of tenders takes place immediately after the expiry of the time limits for the submission of tenders. To give an example, should the submission deadline be noon on June 20, the tenders are to be opened at 12:15 on the same date. The short period of time between the time limit for submission of their tenders and that for their opening reduces considerably prospects for any secret deals between procuring entities and a potentially privileged tenderer. Secondly, tenders are opened publicly and may be attended both by the bidders and the general public, which also reduces chances for any manipulation.

Finally, this regulation contains as an integral part the form for taking minutes of the tenders opening procedure. This record defines in a standardised manner the data which need to be recorded during the opening of the tenders, preventing any arbitrary record-keeping by the procuring entity. The minutes are also important because they contain a record whether all offers fulfilled all the requisite conditions, wherein all which do not shall be rejected immediately, while subsequent professional assessment of the bids deals solely with those which comply fully with those conditions.

Under the Regulation, every procuring entity's public procurement commission is in charge of three sets of activities:

co-ordinating work on drafting tender documents,

performing all activities in connection with advertising a tender, receiving and opening bids, and

performing professional assessment of the offers and proposing to the procuring entity the choice of the most favourable bidder.

Furthermore, every procuring entity's public procurement commission must be made up of at least three members: a president and two others, one of whom must be a law graduate. This provision is very flexible, which is good, as it defines a minimum number of members for the commission but allows more members, which will be the most likely case, particularly where more complex procurements are concerned. The law-graduate requirement is also very beneficial because by law some commission business may only be transacted by a person holding that qualification - this concerns in particular the tender opening procedure, which is subject to strict procedural rules requiring knowledge of the law.

Another important provision of this regulation is contained in Article 4, which stipulates that a procuring entity's public procurement commission may not include persons employed by a legal entity which could appear as a tenderer for that type of public procurement or in a legal entity commissioned for drawing up technical documentation for that type of procurement. This provision prevents potential conflicts of public and private interest and guarantees the principle of equal treatment of contractors.

Internal acts

In the first quarter of 2003, the PPO prepared two of a total of four internal acts needed to supplement secondary regulations and eliminate any doubts, thereby facilitating implementation of the PPL:

1) “Model Public Procurement Notices” and

2) ”Regulation on Awarding Low-Value Contracts”

Model notices (public announcements) have been prepared for the following:

prior notice

award of a public procurement contract in an open procedure (separately for goods, services and works)

award of a public procurement contract in a restricted procedure (separately for foods, services and works)

announcements on awarded public procurement contracts (separately for goods, services and works)

qualification of the tenderer (separately for goods, services and works)

periodical information (separately for goods, services and works) and

competition.

In this manner all public announcements have been standardised, and procuring entities simply need to apply the models to concrete procurements. Practical examples of notices as they should be published in the public media have also been drafted on the basis of the models. These documents are accessible on the PPO's web-site.

Low-value public procurement contracts are regulated by Articles 123 through 125 of the PPL. But the law also allows all procuring entities to adopt their own regulations more precisely defining this area.

At the very beginning of its work, the PPO drew up its own internal regulation on the awarding of low-value public procurement contracts, which could also be used by procuring agencies as a model in designing their own internal regulations. Practice has shown that most procuring entities in the Republic of Serbia have adopted this regulation as a model and adapted it to their own requirements. This internal act thereby achieved manifold positive effects, as the great majority of procuring entities drafted their own regulations without deviating from statute.

The regulation is divided into two parts:

part one regulates low-value public procurement in the so-called «regular» procedure, and

part two regulates low-value public procurement in the so-called «accelerated» procedure (public procurement by «requisition order» as a standardised contract).

Regular low-value public procurement procedures are similar to open procedures for high-value procurement, meaning that a public procurement commission shall be formed, tender documents prepared, tenders collected and opened, etc. However, low-value procurement does not require public notice, and the time limits for collecting, opening and assessing bids are at the discretion of the procuring entity.

Low-value public procurement under the «accelerated» procedure has been simplified even more: only one person is in charge of the entire procurement process - the procurement agent. The procurement agent is in charge of collecting tenders, assessing them and executing the contract for the required goods or services by requisition form. Given that the internal act limits the value of public procurement contracts performed by requisition order to a maximum of 50,000 dinars, they cannot cover works, as their value is as a rule far higher.

Practice has shown that this internal act has proved very useful for procuring entities, especially small and medium-sized ones (which are the majority), serving as a model in the drafting of their own internal regulations.

The following internal acts were prepared and made public in June:

3) ”Model Tender Documents: Open Procedure – Goods”

4) ”Model Tender Documents: Open Procedure – Services”

Drafting tender documents is one of the most complex and demanding phases in the public procurement process. The problem most often recorded among procuring entities in practice is discriminatory and inexact definition of conditions and criteria, failure to apply the proper standards and norms, and the use of provisions contravening the PPL. Drawing up tender documents properly will decide to a large extent whether the procuring entity receives the offers it expects or be forced to annul the procurement procedure because it received inappropriate bids.

Aiming to help procuring entities to avoid potential problems caused by ill-prepared tender documents, the PPO drafted model tender documents for the procurement of goods and services in an open procedure whose share in the overall value of public procurement in 2002 was over 80%. The models “cover” the great majority of all public procurement deals in Serbia. The availability of standardised tender documents serves to considerably simplify work on preparing tender documents and save procuring entities both time and money.

The PPO prepared two tender document models for the open procedure – one for the procurement of goods (passenger motor vehicles), and the other for services (physical and technical security services). The models contain:

explanations, supported by concrete examples, of the manner of drafting tender advertisements,

detailed explanations to tenderers how to draw up their bids,

instructions for determining tender-assessment criteria, and

a set of forms which can, with appropriate adaptation, be used in a large number of cases which commonly appear in practice.

Much attention in the preparation of model tender documents was focused on selecting, defining and determining the manner of applying criteria, which will determine how economically acceptable the bids are. This is also one of the most complex tasks in the procedure of preparing tender documents.

The criteria in the standardised models have been defined in such a manner as to elicit the most economically acceptable offers, while its other elements (financial, technical and personnel), defined as conditions in the tender documents, prove the capacities and qualifications of the tenderer.

In a desire to make the model tender documents as widely accessible as possible, in cooperation with the Public Administration Development Agency (PADA), the PPO has printed a run of 5,000 copies of the models, which the Agency will forward to all major procuring entities through its distribution network. The models are also accessible on the PPO's web-site.

Opinions

Beside drawing up regulations pertaining to the public procurement sector, the PPO is also heavily involved in issuing opinions. In the January 15 through June 19 period in 2003, the Office issued a total of 3,370 written opinions, which is about 674 a month or 30 a day. As a comparison, the Slovenian Public Procurement Agency, which has a permanent staff of 8, issues on the average 300 opinions a year, or about one a day.

An analysis of the process of issuing opinions for the said period performed by the PPO has shown the following:

there were 752 requests for issuing opinions,

the legally-prescribed period for issuing opinions: 7 days from the date of receipt of the request,

the time taken by the PPO's Normative Activity Sector to issue opinions:

immediately (75 opinions) = 9.97%

2 days (298 opinions) = 39.62%

3 days (228 opinions) = 30.31%

4 days (96 opinions) = 12.76%

5 days (37 opinions) = 4.92%

6 days (13 opinions) = 1.72%

4. the average time taken to process a requests and issue an opinion: 2.66 days from the date of receipt of a request.

The PPO instructs both procuring entities and tenderers that they should preferably submit their requests in written form. Receiving an average of 35 requests a day, the PPO responds to them within two-and-a-half days, although the legal limit is seven days.

The Public Procurement Office issues opinions on the following:

implementation of the award of contract by negotiated procedure without prior publication of contract notice (Article 23 §§ 1.1 and 1.2 of the PPL),

implementation of the restricted procedure (Article 22 § 2 and § 5 of the PPL),

opinions in connection with other provisions of the PPL.

The PPO also issues its approvals in the following cases defined by the PPL:

shaping public procurement in separate lots (Article 33 of the PPL),

invitation for submitting tenders for consulting services directly to tenderers (Article 102 of the PPL).

The PPL determines in Article 23 § 2 that procuring entities shall seek a prior opinion from the PPO in the award of public procurement contracts by negotiated procedure without prior publication of contract notice on grounds determined in Article 23 §§ 1.1. and 1.2, if, as follows:

for objective reasons or for reasons connected with the protection of exclusive rights, public procurement may be effected only by particular goods suppliers, service providers or contractors, and

for reasons of irregular circumstances, that is, unforeseen events, a procuring entity was unable to observe the time limit for the open and restricted procedure.

The obligation to seek an opinion from the PPO in connection with the award of public procurement contracts by negotiated procedure without prior publication of contract notice is fully justified, given that it is an exceptional procedure to be applied only in cases defined by the PPL. Although the PPL prescribes an obligation to seek an opinion from the PPL which is in itself not an approval, practice has shown that in most cases procuring entities do not deviate from the opinion acquired in connection with the implementation of the said procedure.

Besides the possibility of awarding public procurement contracts by negotiated procedure without prior publication of a contract notice as defined by Article 23 § 1 of the PPL, in exceptional cases procuring entities may award contracts in the said procedure if the following conditions have been fulfilled: those prescribed by Article 87 (procurement of goods), Article 92 (works) or Article 100 (services). These articles define and regulate the terms «additional deliveries», «additional works» and «additional services» for which procuring entities may act in accordance with regulations defining the procedure of awarding public procurement contracts by negotiated procedure without prior publication, for the procurement of certain additional quantities of goods, works or services which can only be supplied or performed by the original supplier, contractor or servicing agency and which have for unforeseen circumstances become necessary for the performance of the initial public procurement contract.

Article 112 of the PPL defines the grounds for the application of the procedure of awarding public procurement contracts by negotiated procedure without prior publication, but without an obligation to seek a prior opinion from the PPO. These provisions apply only to procurement in the areas of water-resources management, power production and distribution, telecommunications and transport. These sectors, hence also procurement linked with them, are clearly of special importance to the economy of every country, and it is therefore understandable that in specific cases procuring entities acquiring goods, services or works connected to those sectors have been granted more leeway to apply the procedure of award of public procurement contracts by negotiated procedure without prior publication of a contract notice.

Under Article 22 § 3 of the PPL, procuring entities seeking to award contracts by restricted procedure shall before publication of a contract notice for the first phase of a restricted procedure obtain the opinion of the PPO.

The structure of the opinions issued, viewed by legal basis, is the following (Graph 1):

36% of the opinions relate to Article 23 §§ 1.1 and 1.2,

11% of the opinions relate to Article 112,

9% of the opinions relate to Articles 87, 92 and 100,

15% of the opinions relate to Article 22, §§ 2 and 5, and

29% are on other bases.

Viewed by the applicants for opinions, the structure of opinions issued is as follows (Graph 2):

88% - procuring entities

12% - tenderers

.

The low tenderer/procurer ratio can be explained on the one side by the fact that under the PPL for certain procedures procuring entities must first obtain an opinion of the PPO, and on the other that most tenderers opt for consultation by phone.

The structure of the opinions issued by the object of the procurement is as follows (Graph 3):

55% - procurement of goods,

41% - procurement of services,

4% - procurement of works.

It follows that the vast majority of opinions issued and consultations held took place in connection with the procurement of goods and services (96%), with a symbolic 4% being devoted to works.

Consultations

In the period between January 15 and July 15, 2003, the PPO held over 6,300 consultations by phone – an average of 50 a day. Consultations by phone made possible for the PPO direct contact with daily practice and first-hand information about the application of the PPL in practice.

Direct phone communication is especially important and useful where procuring entities and tenderers need to be given speedy assistance in resolving a concrete problem. In some cases, such communication is quite enough for a procuring entity to resolve a problem. At the same time, consultation by phone has also proved very useful for procuring entities in helping them to better formulate their written requests for opinions and approval, avoiding a possibility of having them returned for clarification.

Before the PPO moved to its new seat on May 16, 2003, consultative meetings were usually held on procuring entities' premises, as the PPO had no adequate space for meetings. But visits to procuring entities also proved useful, as they gave PPO experts direct insight into the situation «on the ground». The major procuring entities which consulted the PPO in the first three months of 2003 included:

The Ministry of Internal Affairs

PTT “Serbia” (Post Office)

The Federal Ministry of Foreign Affairs

The Novi Sad Municipal Construction Bureau

NIS - Gas, Novi Sad

Telecom

The Kolubara Coal Mines, Lazarevac

The Belgrade Clinical Centre

The Public Administration Development Agency (PADA)

NIS - Jugopetrol

The Pension and Disability Insurance Fund

ŽTP Beograd Railway Transport Enterprise

The Ministry of Education and Sport

The Ministry of Social Affairs

In the second quarter of 2003, consultations were organised with the following:

EPS - Electric Power Company of Serbia

NIS - Jugopetrol

Belgrade International Airport

PTT “Serbia” (Post Office)

The “Srbijašume” Forestry Enterprise

The Kolubara Coal Mines, Lazarevac

ŽTP Beograd Railway Transport Enterprise

Telecom Srbija

The “Beograd” Pharmacist Enterprise

The Republican Hydro-Meteorological Bureau

all municipal secretariats and councils of the City of Belgrade

all urban utilities of the City of Belgrade

The “Srbijašume” Forestry Enterprise

The Ministry of the Economy and Privatisation

The Ministry for Foreign Economic Relations

The Ministry of Education and Sport

The Ministry of Health

The Ministry for Natural Resources and Environmental Protection

The “Beograd” Pharmacist Enterprise

The Republican Health Insurance Bureau

The EDB “Beograd” Electric Power Company

Parking Servis, Belgrade

The Tax Administration

The Customs Administration

The Public Expenditure Administration

ZIN (the Mint), and others.

In May, the PPO organised a series of consultative gatherings with two institutions which have moved from the federal level to the republican level and are now subject to the PPL. The meetings commenced with representatives of the Ministry of Defence and focused on the organisational prerequisites for the formation of a separate public procurement bureau attached to the Ministry of defence. The PPO drew up the programme of a three-week training seminar for potential members of the defence ministry's procurement office. The PPO also assisted the ministry in drafting its own «Regulation for Awarding Low-Value Contracts».

Two consultative meetings were held with officials of the National Bank of Serbia to help that institution begin implementing the PPL.

Consultative meetings continued in June with representatives of the Ministry of Defence and the National Bank of Serbia. Meetings were also held with officials of the: Republican Health Insurance Bureau, Air Traffic Control Directorate, The Tax Administration, The Customs Administration, the Ministry for Foreign Economic Relations, EPS, the “Kolubara” Coal Mines, NIS – Gas, The EDB “Beograd” Electric Power Company, The Public Expenditures Administration, the Belgrade Central Heating Enterprise, the Treasury of the Serbian Ministry of Finance, the PADA, the RTS state radio and TV enterprise, ZIN (the Mint), The “Beograd” Pharmacist Enterprise and others.

It can be concluded that in the first half of 2003, the PPO held consultative meetings with almost all of the major procuring entities identified in the report on public procurement in Serbia. Consultative meetings were also held with procuring entities at local level (the municipal authorities of the cities of Belgrade, Niš, Novi Sad and Kragujevac and their urban utilities), as well as numerous other municipalities and their utilities.

The Public Procurement Office (PPO) took on new staff on two occasions in 2003 for the needs of the Normative and Analytical Activities sectors and the Personnel Training Group in the area of public procurement.

Vacancy notices published in daily newspapers attracted a considerable number of candidates, while many others also applied through the Republican Labour Market Bureau. This created a need for a careful selection of applicants most suited for the requirements of the Office.

The primary requirements were law or economy university degrees attained in the normal study period, an average exam grade above 8 (on a scale of 5 to 10), and good knowledge of the English language and work on computers. The applicants' CVs provided the grounds for initial elimination of those who did not meet requirements, after which a list was formed from the remaining number based on qualifications.

The candidates on this list were then tested by the Centre for Applied Psychology, the only recognised and certified publisher and distributor of all psychological tests in Serbia, and which is also specialised for educational and consultative services in the selection of applicants for employment. The Centre had previously received from the PPO a detailed description of the requisite personnel. On the basis of these requirements, the Centre drew up tests in which the candidates were psychologically assessed and their work potentials gauged.

The psychological capacity testing encompassed the following:

group testing with a set of psychological instruments – tests encompassing the assessment of the general and specific intellectual capabilities of the candidates, personality testing with a special emphasis on characteristics of importance for the type of jobs required by the Office, and

individual interviews with a psychologist.

Those candidates with the best ratings in the psychological testing were then interviewed by a commission made up of the PPO's director and two other members. Three new employees were taken on this manner in April of 2003 and another six in September.

All the new employees immediately after arrival went through a programme in which they received training for active participation in the basic activities of the PPO, in particular issuance of opinions and professional advice in the area of public procurement both to procuring entities and to tenderers. The five-week programme dealt with five main themes:

- open procedure

- restricted procedure

- negotiated procedure

- low-value procurement, and

- protection of tenderers' rights.

After the training, each new employee was assigned to a more experienced co-worker serving as a mentor.

Those with the best ratings in the group of employees which had completed training in February 2003 were given an opportunity to specialise in the following areas:

training of procuring entities in connection with the application of public procurement procedure regulations;

protection of rights in the public procurement procedures, wherein the highest-rated PPO personnel were given an opportunity to be nominated to serve on the Commission for the Protection of Rights, which is expected to be formed in the near future, and

international co-operation, which in 2003 was especially successful with the Public Procurement Office of the Republic of Slovenia, as well as with the Slovenian Public Procurement Review Commission.

The highest-rated personnel were also rewarded with promotions and received senior posts such as: Assistant Director in Charge of Normative Activities and Head of the Public Procurement Activities Personnel Training Group.

Since it began work in mid-January 2003, the PPO organised eleven major seminars and about 30 smaller ones devoted to the subject of public procurement and with different target groups - the PPL defines two groups of participants in the public procurement process: procuring entities and tenderers. In the first phase of the six-month training process, the focus was on work with procuring entities.

The first two major training seminars were organised by the PPO in cooperation with the Ministry of Health and the Ministry of Education and Sport. The seminars were specially oriented towards each of the target groups and answered their specific demands.

In cooperation with the Ministry of Education, the PPO organised a seminar assembling almost 400 representatives of educational institutions whose aim was to answer all outstanding questions and problems linked with the application of the PPL.

Urban utilities were the next target group identified by the PPO as important for the introduction of new public procurement procedures. Three seminars intended for their representatives were held in March in Niš, Kragujevac and Novi Sad. All three were very well-attended (between 150 and 200 participants in each); besides the three cities' utilities, they also assembled representatives of utilities and local governments from towns in their regions.

A one-day seminar was organised in Šabac assembling representatives of all 40 members of the Association of Central Heating Plants of Serbia. The aim of all the “regional” seminars was to assist public enterprises throughout Serbia in resolving practical problems relating to application of the PPL, as poor knowledge of various regulations had created major operational problems for in those firms.

Three seminars were organised in May: 1) a training seminar in EPS assembling over 50 participants, 2) a seminar in the Executive Council of the Autonomous Province of Vojvodina attended by over 100 representatives of secretariats, public enterprises, direct and indirect budget beneficiaries, and 3) a seminar in the Niš municipal council for about 100 participants from the local administration and those of nearby Leskovac, Vranje and Pirot.

Two seminars were organised in June. The first, in the form of a two-day workshop in NIS - Jugopetrol, focused on practical exercises in the area of restricted and negotiated procedures.

The second major forum - a three-week seminar for the Ministry of Defence of Serbia and Montenegro - began on June 27 and was scheduled to end on July 16. The very intensive training is made up of three components:

Lectures - open, restricted and negotiated procedures with or without publication of contract notice, low-value procurement contracts and protection of tenderers' rights;

Exercises - practical problems and examples linked with the lectures, and

Tests - problems aimed at assessing progress made by the participants.

After the seminar is completed, a public procurement bureau of the Ministry of Defence will be made up of the most successful participants in the seminar.

The PPO has prepared materials used for the seminars: the manual “Public Procurement – Secondary Legislation – Comments with Cases” in which all secondary legislation was published, together with detailed explanations of the provisions. The Manual also contains the model notices for all types of procedures (open, restricted and negotiated) for all three categories of procurement (goods, services, works), covering almost all cases which can appear in practice. Practical examples are also given of the form the notices should take. An appendix gives schematic descriptions of all three types of procurement procedures, intended to considerably facilitate their comprehension for both procuring entities and tenderers.

On the basis of materials contained in the manuals, the PPO also drafted special educational materials in the form of mimeographed course materials, adapted to the specific needs of different categories of users, such as: public enterprises in the water resources management, power, telecommunications and transport sectors, local governments etc. The PPO also drew up various exercises for the seminars: participants are for example asked to draw up a decision to initiate a procedure or another document needed in the procurement process. Finally, appropriate tests have also been prepared to gauge knowledge acquired by the participants.

The PPO began building up its information system soon after its inception. So far it has introduced an electronic archive, software for keeping records on awarded public procurement contracts, and a web-site of the PPO.

Electronic Archive and Electronic Register

Electronic Archive

At the time the PPO was being established, a unique opportunity arose to introduce an electronic archive for all documents received by the Office. The PPO thereby became one of the few state agencies to possess an operational electronic archive and, even more importantly, have almost all its documents stored in electronic form.

Besides the plan of work within the activities on setting up the PPO, a plan was also drafted for the information support needed for the Office to enhance the reliability, speed and efficiency of work. Assessment of the types and quantities of documents drafted inside and received from without led to the definition of document-flow procedures. For each type of document an appropriate procedure and necessary electronic support were defined in order to achieve automatic data processing. The aim was to shorten by as much as possible the journey made by each document and help upgrade the efficiency of analytical operations.

Given that preparations for introducing an electronic archive were begun as an integral component of the establishment of the PPO, its operation commenced with the inception of the PPO itself.

After receipt and register entry, documents are electronically scanned, when appropriate data are entered (receipt registration number, number of the condensed register, date of receipt, name of processing official, status, date of processing the request etc.) making possible rapid searches of the archive, of much importance for drafting analytical reports. Scanned documents are then stored in strictly pre-defined areas on the main computer (server) serving to classify documents. Back-up copies of documents are also made at this time. A data-protection system has also been introduced, defining rights of access to the electronic archive.

Scanned documents are stored in the pdf format. When needed, such documents can be placed on the PPO's web-site directly via an existing link with the site.

All workstations in the PPO have viewing access to the archive, while all alterations (changing classification data, transfers etc.) can only be performed by authorised officials.

Archive searches can be performed on the basis of one or more parameters which are attached to the document at the time of scanning:

title of applicant

seat of applicant

applicant's registration number

receipt registration number and date

number of the condensed register

subject of procurement

type of procedure

name of processing official

date of processing request

description of case

title under which the case has been filed

titles of attachments filed with the case.

The criteria can also be combined. Searches result in a list of documents found describing for each their status (completed, under processing), name of processing officer, date of receipt, date of completion etc. This has made the electronic archive very suitable for drafting individual and summary reports.

The process of defining the structure and operation of the electronic archive, acquisition of data-processing equipment, software and environment design, personnel training and preparation of detailed operating instructions, and the testing of the equipment, took a total of six weeks. The system already showed its benefits after the first month of operation, making possible easy and reliable access to a large number of documents (in January and February 2003, the PPO received an average of 300 requests for opinions a month, a number which has subsequently continued to rise). Use of the archive has been simplified as it works with standard Windows software and in an Office environment. Also working very much in favour of the system's acceptance was the fact that its operation began in line with the PPO's inception, so that there was no stock of “old” documents to scan.

In the six months that it has been operating, the electronic archive has made possible easy searches and monitoring of requests for opinion, proving of exceptional importance in the initial stage of establishment of a new public procurement practice. The electronic archive system also enabled effective monitoring of the performance of each processing official, as well as accurate insight into the current status of the requests at all relevant times: when the request was received by the PPO, is it being processed and by whom, or who and when processed it. The electronic archive system also provided an opportunity to accurately classify the structure of opinions issued according to various criteria (type of procurement procedure, subject of procurement, etc.), as well as the time needed to process the request - an important indicator of the efficiency of the PPO's work.

Electronic Register

The establishment of the electronic archive created the necessary conditions for further expansion in the form of an electronic register. Procedures and data relating to electronic filing will be an integral component of a new module to be called Electronic Register. Definition of procedures for the electronic archive was performed so that the structure of data relating to each individual document is such that it can also be used for the electronic register, which will be designed to comply fully with the Ordinance on Office Operation, while being adapted to the needs and procedures of the PPO. This module will be merged with the others employed by the PPO (like the existing module for storing data on awarded public contracts) into an integrated information system of the Public Procurement Office.

The electronic register tracks every document entering or leaving the PPO. It has been seen that practically every PPO document (from opinions to e-mail correspondence, which has official document status) can be recorded and tracked through the electronic register. Not every document needs to have a register entry number, as there also exists a number of the condensed register of the PPO under which the document would be registered. Certain data would be entered with every entry to make possible easy tracking down and possible alteration of status.

The software will be designed so as to enable linkage of the electronic register with the environment (the government information system, the PPO's web-site etc.). As in the case of the electronic archive, rights and levels of access (of PPO officials) to the electronic register will also be defined, in order to maintain data security but also support and effective division of activity among the system's users.

The Information about the Procuring Entity entries which exist in the Record of Contracts Awarded module, which is to be succeeded by the electronic register, already contain all essential data on procuring entities, and would in this form serve as a basis for creating a data base on procuring entities. If the electronic register were to contain a records of e-mail correspondence, this would automatically fill in the Questions & Answers web-page.

On entering the register, authorised users access a page with their own activity (cases, correspondence etc.). As a concrete task is completed, each function attached to it is performed automatically (for example, the document is automatically transferred to the archive or forwarded by e-mail, etc.).

The introduction of an electronic register would considerably ease the work of the PPO's personnel, and would enable senior staff easier and better insight into opinions issued, the performance of all processing officials, average request processing times, the structure of the applicants for opinions or consultations, all serving to enhance future staff training and other activities. Introduction of the electronic register in the second half of 2003 would give the PPO a powerful tool for monitoring and evaluating its work, helping upgrade the decision-making and management processes.

Awarded Public Contracts Record Software

Automatic data processing is one of the ways to modernise and upgrade the activity of every state agency. In an effort to streamline operation and the drafting of reports for the Government, the PPO commissioned software for keeping records on awarded public contracts. The main objective of this programme is to introduce an information technology system into record-keeping and statistical analysis of data on awarded public procurement contracts.

The software is based on the Regulation on Standard Forms for Keeping Records of Procurement Procedures and Awarded Contracts (Official Herald of the RS No. 9/2003) which prescribes mandatory public procurement data that must be supplied by procuring entities to the PPO by April 30 of a current year for contracts concluded during the preceding year. On the basis of the input data, the PPO drafts a summary report on awarded public procurement contracts which it then submits to the Government by July 31 of the current year.

The software was designed according to the IDEFX standard, enabling communication with the existing information system of the state administration. It operates in a Windows environment on standard PCs, and uses exclusively legally-prescribed code systematisation and that prescribed by competent state agencies.

The software makes possible easy and fast input of data from forms, which has helped reduce the burden of filling in and drafting supplementary reports and the time needed to prepare analyses. It also considerably improved the utilisation of users' data-processing equipment, attended by establishment of modern means of electronic communication.

The operating programme contains built-in help standard for Windows software. On every form, using the F1 key users access a description of tasks that can be performed on it.

The software contains the following functions:

input and alteration of data from public procurement contract forms,

input and alteration of data on legal entities and procuring entities,

input and alteration of code listings (official and internal)

search,

reports

electronic transfer of data on awarded contracts from procuring entities

recording data on selected locations or carrier media.

Standardised forms for the input of data from submitted forms are designed to mirror the layout of the forms themselves; every field has a logic control and link to the codes, where appropriate, making the input of data very simple and minimising the possibility of error.

The search function enables exploration of the legal entity data base according to various criteria (organisational form, ownership, activity, part of title, registration number, district, municipality). The Republican Statistical Bureau's legal entity data base provides identifying data and addresses, and enables classification according to a wide range of criteria, such as: activity, organisation - form and type, character of ownership, source of capital etc. Until the formation of a single data base on public authorities, data about procuring entities will be updated straight from the information provided in the forms submitted.

Transfer of data in electronic form is a function intended to make possible simplified communication between the PPO and major procuring entities which have deployed public procurement software. Early in the year, instructions were prepared for procuring entities on the manner of forwarding data in electronic form. The data are transferred in a simple manner to a holding data base, where they are verified. After they are vetted, they are transferred to the main data base. This has shortened the data-base input process for data from submitted forms from days to just minutes.

The software has made possible fast generation of a large number of complex statistical reports, which can be produced in the form of charts, tables and graphs: according to values or number of contracts, or expressed in percentages. Reports can also be produced for selected procuring entities.

Input of the date of every contract enables the PPO to draft reports for any period desired (a month, half-a-year, two weeks or any other), not just once a year, as stipulated by law. High-quality and timely information to authorised users will speed up the decision-making process and help in the adoption of correct decisions.

Selecting a year will provide an overview according to value and number of major and low-value contracts for a given year:

general overview (a summary in graphical form of the ratio of large and low-value procurement contracts by number and value, as well as annual percentage shares by value and number)

review by type of contract (overviews in table and graphical form for major contracts and for minor ones, by type of contract, as well as percentage shares by number, value and type of contract)

summary overviews by type of contract (overviews in table and graphical form of the number and values of contracts by contract type, with comparisons of high- and low-value contracts).

Selection of report periods can generate various types of reports:

Review by type of procedure

Review of procurement contracts by type of procedure and type of contract

Selected number of the biggest tenderers

Selected number of the biggest procuring entities

Selected number of the biggest contracts

Review of a selected number of objects with the biggest shares in goods, supplies or works contracts

Review by type of object

Review by type of object and groups of states

Comparative overviews of domestic and foreign tenderers

Overview of procuring entities according to procedure type

Depending on timely submitted reports, the PPO will be able to issue public procurement reports at all times, for example on the value of public contracts in a three-month period, the share of foreign tenderers in public procurement in Serbia (100 of the biggest or according to territorial criteria: the Balkan countries, Europe et.). In other words, it will be possible to monitor with a high level of precision the shape and magnitude of every procuring entity's expenditure of funds intended for public procurement. It is envisaged that the existing software will continue developing and adjusting to new reporting requirements.

In the period between February 10 and 15, 2003, officials of the Public Procurement Office (PPO) took part in a training seminar specially organised for the PPO by the Slovenian Public Procurement Bureau. Given that the Serbian Law on Public Procurement has numerous similarities with the corresponding Slovenian statute, the Slovenian Bureau's almost two-year-long experience in its enforcement has been of much practical benefit to our own PPO. The seminar also provided an opportunity for fresh insight and information helping in the process of upgrading (altering and amending) the Law on Public Procurement.

The PPO employees also visited the Slovenian Review Commission, whose jurisdiction mirrors that of Serbia's Commission for the Protection of Tenderers' Rights. In contrast to our practice, in which the Commission is attached to the PPO, the Slovenian Commission is a completely autonomous body and operates as a quasi-court of law. The entire procedure of protecting tenderers' rights, including the establishment of the Commission, is regulated by a separate law, providing for efficient protection of tenderers' rights.

Until 2002, the protection of tenderers' rights in Slovenia was regulated similarly to that defined by our Law, but this proved very inefficient, leading to the adoption of a separate procedure review law. Our Slovenian colleagues explicated why they believed it necessary that we should also scrap our existing concept of protection, which they had found unsustainable, and embrace a new one, based on European directives, under which the protection of rights should be entrusted to an independent institution. Besides explaining the review procedure law and the Regulation on the Work of the Review Commission, they also informed us about the internal organisation and manner of work of the Commission -- the entire procedure, from the moment of receipt of the request for the protection of tenderers' rights to the issuance of the final decision.

The documents made available to us and the consultations with Commission members serve as a basis for drafting a working version of a Law on the Protection of Tenderers' Rights, whose aim is to regulate the subject in a comprehensive and sustainable manner. The visit to Slovenia was wholly financed by US AID.

In April, the Slovenian Public Procurement Bureau completed a major task: drafting about 100 amendments to the 150 articles of the Law on Public Procurement, intended to rectify shortcomings detected during the two years the Law has been in force. The amendments follow European Union guidelines. In the May 6 through 8 period, the Slovenian Bureau's Director and Deputy Director informed their colleagues at the Serbian PPO about these amendments. Each amendment was discussed in detail during the three-day seminar, and the Slovenian colleagues also offered a number of very useful suggestions relating to the working version of the Law on the Protection of Tenderers' Rights drafted by the PPO in the meantime. This seminar was wholly funded by the OSCE.

Preparations are under way for a study trip to the Swedish Public Procurement Bureau (NOU), planned for September 2003, to be funded wholly by US AID. The decision to visit the NOU came as a result of the fact that the scope of its work and its organisation are quite similar to those defined by law and secondary legislation for the Serbian PPO. The success of the Swedish model is best seen in the fact that at least three other European countries are planning to establish in the very near future bodies fashioned after the NOU. Sweden has some 10,000 procuring entities, including public enterprises - about the same number as Serbia. The total annual public procurement value is about 40 billion euros.

The NOU was founded in 1993 and is an independent agency of the central government, made up of a secretariat and a board. The Secretariat is in charge of day-to-day affairs and relations with procuring entities, tenderers, organisations and individuals connected with public procurement. The NOU's tasks are as follows:

- controlling enforcement of the Law on Public Procurement and Agreement on Government Procurement within the World Trade Organisation,

- upgrading the efficiency of public procurement,

- monitoring domestic, European and WTO developments in the sphere of public procurement.

The NOU is accountable to the Government and submits annual reports on its work. Its annual budget is 800,000 euros, shared out as follows: 65% for salaries, 10% for renting office space and 25% for funding collection of statistical data, acquisition of literature, travel costs and other expenses.

Although the NOU's opinions have the force and legal significance of recommendations, as a rule participants in the public procurement process follow and implement them.

Information is disseminated by phone and written responses (general and electronic mail and telefax). One NOU legal expert is available between 09:00 and 11:30 every workday to respond to the roughly 80 telephone requests for information received per week.

The NOU collects the statistical information needed for the domestic national public procurement monitoring needs, as well as data required by the EU and the WTO, according to an agreement with the National Statistical Bureau.

The visit to the Swedish NOU should not only help speed up the introduction of new and more exacting standards in the work of the Serbian PPO, but also upgrade the process of harmonising our public procurement system with that existing in the EU.

The Public Procurement Office has from its inception sought to inform the biggest possible number of procuring entities and suppliers about the new public procurement legislation, fully aware that the procedures are completely new to all their potential users. The other reason for the PPO's powerful publicity drive was to remove numerous doubts both procuring entities and tenderers were expressing towards the novel features of the Law on Public Procurement.

The Public Administration Development Agency published in January 2003 a run of 5,000 copies of a booklet entitled Public Procurement, which was distributed by the Agency to all major state authorities and organisations. The document explains the basic principles of public procurement introduced in the new Law, the types of procurement procedures and the main elements of the public procurement procedure: time limits, opening of tenders, tender documentation etc.

Public Procurement also contained information about the PPO, a description of its activities and organisation, as well as a plan of work for the January-June 2003 period.

As soon as it had drafted secondary and internal regulations aimed at explaining and facilitating implementation of the Law, the PPO published them, with comments and practical examples, in a booklet entitled Public Procurement - Secondary and Internal Regulations - Comments with Examples. This publication, which had a print run of 2,000, was distributed at a conference devoted to public procurement held at Belgrade's Sava Centre on April 24, 2003, which had assembled officials from government ministries and other public authorities and organisations.

Media representatives present at the conference were informed by the PPO about the results of its first 100 days of work. The Office also informed the public about results achieved in the enforcement of the Law on Public Procurement Office and the savings achieved, but also the problems encountered in practice, which need to be eliminated by amending the Law. Special emphasis was placed on the poor effectiveness of the features protecting tenderers' rights, and PPO officials presented an alternative solution.

The Development Agency published in June a booklet prepared by the Public Procurement Office and entitled Model Tender Documents, in a run of 5,000 copies, again distributed by the Agency to all major state authorities and organisations.

In a number of articles in the periodical Reformator, published by the Development Agency and distributed to all major state authorities and organisations, the Office provided various information to procuring entities, in particular relating to a programme of training courses which were of especial interest to procuring entities.

Public Procurement Office officials gave numerous interviews and made a number of media appearances explaining the positive effects of the Law, focusing in particular the savings achieved, but also on recommendations for solving problems which had appeared in practice.

All secondary and internal regulations, model and other relevant documentation, as well as the more important articles and interviews, are accessible to the public on the Office's web-site, which also contains elementary data about its organisation and activities, contact information and plan of activity for the first half of 2003. The annual report to the Government will also be posted on the site.