Law on Public Procurement (“Official Gazette of the RS”, No. 91/2019)

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The National Assembly of the Republic of Serbia adopted the new Law on Public Procurement (“Official Gazette of the Republic of Serbia”, No. 91/2019, hereinafter referred to as “the Law”), at the Ninth sitting of the Second ordinary session, on December 23, 2019. The Law came into force on January 1, 2020, and will effective as of July 1, 2020.

The Law significantly simplifies the procurement process, reduces the administrative burden on both the contracting authority and the bidder side. It will significantly reduce the costs of participation in public procurement procedures for small and medium-sized companies, which will contribute to an increase in the number of bidders in public procurement procedures, and thus greater market competition and better quality and price of services or goods delivered.

The threshold for the implementation of the Law is significantly increased, and the thresholds are set separately for particular types of procurement. Thus, the provisions of the Law will not apply to the procurement of goods and services whose estimated value is less than 1,000,000 dinars, while for procurement of works this threshold has been raised to 3,000,000 dinars. For public procurement below the aforementioned threshold, two obligations for contracting authorities are prescribed. Contracting authorities are obliged to apply the principles of this Law in a manner appropriate to the circumstances of the specific procurement, and in addition they are obliged to regulate by their internal acts the manner of carrying out these procurement procedures.

The Law makes several significant innovations regarding the types of procurement procedures available to contracting authorities. Specifically, the Law no longer provides for a qualification procedure, as well as a low-value public procurement procedure, while introducing an innovation partnership procedure as a new type of procedure, which is carried out if the contracting authorities require innovative goods, services or works, which cannot be realized through the procurement of products, services or works available on the market.

Therefore, the same public procurement procedures will be applied regardless of the value of the procurement, however, for higher value procurement, longer deadlines for the submission of bids and applications for participation, etc., apply.

The Law provides different terms regarding the conditions for participation in the public procurement procedure. The Law, in accordance with EU terminology in the field of public procurement, calls the conditions for participation in the procedure qualitative selection criteria, mandatory conditions for participation on grounds of exclusion, while for additional conditions for participation it uses the term selection criteria.

The Law in this section introduces novelties regarding criminal offenses that may be grounds for exclusion of a business entity, introduces time constraints on grounds for exclusion and introduces new grounds for exclusion. The law also introduces the possibility for the contracting authority to provide the basis for exclusion with the tender documentation, which thus becomes mandatory grounds for exclusion in this public procurement procedure.

Another novelty in the Act is the possibility for the contracting authority to waive the exclusion of a business entity from the public procurement procedure for the reasons stated above, if there are overriding reasons relating to the public interest, such as public health or environmental protection.

The Law no longer provides for the lowest price offered as one of the criteria for awarding the contract. The contract will now be awarded to the most economically advantageous bid, on the basis of one of the following criteria: price or cost using a cost-effectiveness approach or price ratio.

The most significant novelty introduced by the Law is that related to the submission of bids electronically through the Public Procurement Portal, which is regulated by the provisions governing communication in the public procurement procedure. All communication and exchange of information in the public procurement process are carried out electronically on the Public Procurement Portal.

The Law contains a significant novelty in the part of the grounds for the decision to suspend the public procurement procedure – if circumstances become known which, if they were known earlier, would result in a significant change in the contents of the procurement documents.

The Law regulates in detail the reasons on the basis of which concluded public procurement contract may be amended and also makes significantly wider options available to contracting authorities in this regard.

Regarding the Law, we also point out that at the same session of the National Assembly of the Republic of Serbia the Law on Amendments to the Law on Misdemeanours (“Official Gazette of the Republic of Serbia “, No. 91/2019) was also adopted, which also starts to apply from 1 July. 2020. The aforementioned law provides for a new safeguard measure – Prohibition of Participation in Public Procurement Procedures, which may be imposed on the bidder or candidate, that is, the subcontractor who committed the offense and consists of a temporary one, which consists in prohibiting the offender from participating in public procurement procedures. This protective measure may last up to two years from the finality of the judgment.

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