New Rules for Public Procurement Procedures in Croatia

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Most economically advantageous offer will be the only criterion for selecting winning bids.

The most economically advantageous offer will in the future be the only criterion for selecting winning bids in public procurement procedures. That is one of changes which will be instituted by the new Law on Public Procurement, which was adopted at today’s session of the cabinet. The proposal will now go to Parliament and is expected to enter into force soon thereafter, reports Jutarnji List on November 24, 2016.

The new Law on Public Procurement in Croatia will be harmonized with the latest EU directives. The adoption of the new law is necessary for the implementation of investment projects financed with money from the European Union funds. It is expected that the new law will make public procurement procedures in the future more flexible and easier, with reduction of costs for businesses and an increase in competition. “The new law will provide legal security and a stable legal framework in public procurement procedures”, said a government source.

According to data, the value of public procurement procedures last year amounted to nearly 40.6 billion kuna, which was 12.14 percent of Croatia’s GDP, while the number of contracts in public procurement procedure last year stood at 15,485. Public procurement amounted to about 38 percent of the value of Croatia’s budget.

One of the features in the system of public procurement will be the standardization of documentation, which should enable uniformity, and therefore the law will introduce European Single Procurement Document (ESPD). It will be a part of the mechanism of protection in public procurement procedures, which includes the obligation of contracting authorities to adopt and publish procurement plans for all procurements worth more than 20,000 kuna, as well as to implement full computerization and automation of procedures.

The new law limits the possibility of contracting authorities and bidders to successively change contracts with numerous annexes. So far, this was a common practice: since the main criterion for the selection of winning bids was the lowest price, bidders would submit an offer with a low price, which would then be (often significantly) increased with annexes. Now, the increase of the original contracted price would be limited to 30 percent in total.

Perhaps the most important change is that the “lowest price criterion”, which was usually used in public procurement procedures, will be replaced with the “most economically advantageous criterion” (value for money).


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