The subject of this study are the procedures of public procurement of services for the design, delivery, installation of equipment and construction of a woodchip-fired boiler rooms, which were carried out by certain local governments in Serbia in 2019-2020.

These public procurement procedures are characterized by the fact that in all of them almost identical additional conditions for participation were required in terms of financial, business, technical and human capacity, and that in each procedure the same bid was selected as the most favorable in the absence of any real competition.

Namely, in 3 of the 5 mentioned procedures, in addition to the selected bidder only one other bidder participated, “Biomass Group” Belgrade, who submitted a practically “empty” bid in all three procedures: except for the completed Bid Form and Statement Form on the independent bid, “Biomass Group’s” bid did not contain any of the required evidence. Therefore, it is obvious that this bidder did not have a serious intention to participate in these procedures, i.e. they had no interest in being awarded a contract, which is why their bid cannot represent real competition in these cases. It is possible that this offer was a so called complementary or cover bid, but based on the available data, we cannot claim that.

As for the bidder to whom the contract was awarded, it is a joint bid of a group of bidders, which in most of these procedures consisted of: “Energy Construction” Belgrade, “Termomont” Belgrade, “Gilles energie – und UMWELTTECHNIK” from Austria, “Teming electrotechnology” Nis, “Porta Nova” Belgrade, “Sasa Milosavljevic pr bp consulting” Krusevac and “Iso Plus”  Belgrade. It should be noted that in Kladovo, instead of the mentioned bidder from Austria, another bidder from the same country participated, while in Majdanpek, instead of the bidder from Austria, a bidder from Lithuania participated. However, it is obvious that in all procedures it was the same group of bidders with minor variations in structure.

Given the absence of competition, the bid of the mentioned group of bidders was in all cases very close to the estimated value and was chosen as such.

The manner in which the proceedings in question were conducted indicates a clear violation of the competition principle laid down in Article 10 of the Public Procurement Law valid at the time. However, the subject procurements also indicate some of the reasons why the average number of submitted bids per public procurement procedure in Serbia is extremely low.

In that sense, we should point out the data from the Report on Public Procurement in the Republic of Serbia for the half-year period from January 1, 2019 to June 30, 2019. The report of the Public Procurement Office states, among other things: “A significant indicator of the performance of public procurement system is the average number of bids per procedure, which indicates the strength of competition. In the first half of 2019, the value of this indicator was 2.2.” So, perhaps the most important indicator of the efficiency of the public procurement system in Serbia has more than modest value. The same indicator was 3.2 in 2011 and 3.0 in 2017.[1]

On the other hand, in the same report published on the website of the Public Procurement Office, it is stated that in the first half of 2019, in 55% of cases with concluded contracts, only one bid was received. The Public Procurement Office itself stated in that report: “One of the important indicators of the intensity of competition is the participation of contracts for which only one bid was received. A higher number of received bids means a higher number of options for contracting authorities, which leads to easier realization of one of the basic goals of public procurement, which is to achieve the best value for money.”[2]

[1] “Alarm report on the state of play in public procurement in Serbia”, prepared by the Center for Applied European Studies, October 2019: https://media.cpes.org.rs/2020/11/Alarm-1-ENG.pdf

[2] Ibid.