REPUBLIC OF ALBANIA PUBLIC PROCUREMENT AGENCY Reforms in the Albanian Public Procurement System www.app.gov.al

Public Procurement system in Albania Public procurement is a very important aspect of a society, because it uses the money of the citizens (taxpayers), for procurement of goods, services and works. Public procurement, became a need in our society, after the crucial political changes of the year ’90s. Law nr 7971, dated 26.07.1995 on “Public Procurement”. From 1995 until nowadays, public procurement system in Albania has passed through several phases of change and development, according to the respective legislative changes.

Legal framework The Albanian government has undertaken and carried out several legal initiatives and activities in the area of the public procurement, on the fulfillment of the obligations deriving from the Stabilization and Association Agreement (Articles 70 and 74), also in accordance with the priorities of the Albania 2007 European Partnership, and the recommendations of the progress reports of the European Commission. Law no. 9643 dated on 20.11.2006 “On Public Procurement”, as amended. Decision of the Council of Ministers nr.1, dated on 10.01.2007 “On Public Procurement Rules”, as amended.

Objectives of Public Procurement Law in Albania a) to promote efficiency and efficacy in public procurement procedures carried on by contracting authorities; b) to ensure a better use of public funds and reduce procedural costs; c) to encourage economic operators to participate in public procurement procedures; d) to promote competition among economic operators; e) to guarantee an equal and non-discriminatory treatment for all economic operators participating in public procurement procedures; f) to guarantee integrity, public trust and transparency in public procurement procedures. All these objectives are intended to respect the public procurement procedures in accordance with the law and the requirements of the Stabilization and Association Agreement.

Institutional framework The current institutions in Albania, which deal with the supervision of the public procurement system are: Agency of Public Procurement - monitors the execution of the public procurement procedures - submits proposals for procurement regulations to the Council of Ministers; - promotes and organizes training of central and local government officials engaged in public procurement activities; - edits and issues a Public Procurement Bulletin, as described in the procurement regulations; - prepares standard tender documents to be used in awarding procedures, in accordance with the public procurement rules; - plans and coordinates foreign technical assistance to Albania in the field of PP; - on request, gives advice and provides technical assistance to CA, when launching and conducting awarding procedures; - in case of misconduct, in compliance with article 72 of the PPL, penalizes with fines or proposes to the head of contracting authorities or higher bodies disciplinary measures against the individual in the contracting authorities who committed the infringement.

Institutional framework cont’ Commission of Public Procurement It is the highest institution in the procurement field, that reviews the complaints for procurement procedures, in accordance with the current public procurement law. At the end of the review of the complaints, makes decisions that are administratively definite. Presents an annual report to the Council of Ministers. The content of this report is set in the public procurement rules.

Institutional framework cont’ Advocate of Public Procurement - Defends the rights and the legal interests of the economic operators - Monitors the procedures against irregular and illegal actions or lack of actions, caused by the CA, as provided in Articles 69 and 70 PPL.

Latest legislative changes Approval of Law no. 10170, dated on 22.10.2009 “On some additions and amendments to the law no. 9643 of 20.11.2006 “On Public Procurement” which is compliance with the EU directives 2004/17, and which, for the first time introduces: - Public Procurement procedures in the utilities sectors of service, water, energy, transport and postal services. - Framework Agreements - Commission of Public Procurement (CPP), a newly formed institution which will treat all the complaints on public procurement procedures, which formerly were handled by PPA.

Current circumstances Currently the CPP is about to begin its work and according to the law, it is a collegial institution, in the dependence of the Council of Ministers. The division of the competences between CPP and PPA, is an important step in the accomplishment of the burdens taken with the Stabilization and Association Agreement, in the framework of the European integration process.

Best case in Albania: E-procurement What is e-procurement and it’s history Currently, Albania uses e-procurement, which is a web-based application supporting the automation of tendering activities of the various line Ministries and Contract Authorities of the Albanian Government. The system of the e-procurement was created with the assistance and the support of the Millennium Challenge Albanian Threshold Agreement, administered by USAID. The system of e-procurement enables the tender offers and their assessment in an electronic way, by electronic means.

Best case in Albania: E-procurement What is e-procurement and it’s history The e-procurement system was applied for the first time in 2008, from several Contracting Authorities (CA). After the relevant legislative changes, from January 2009 and on, the e-procurement became mandatory for all the CA-s. The existing legal framework obliges the CA-s to make all the procurement procedures through electronic means, except for procedures: a) with negotiations, without prior publication of the contract notice; b) small value procedures.

E-procurement system The e-procurement system ensures: Security of system - integrity - confidentiality of the tender offers Protection of the transmitted data CA-s can view and analyze tender offers, only after the final moment of tender offers consignment.

E-procurement system The right of access in the system, which consists in: - only authorized personnel can set or changed deadlines of offers - The access in tender offers can be done only by authorized personnel, through synchronized actions. - The system automatically generates a summary report, which includes all the phases of a tender procedure

The advantages of e-procurement The e-procurement is a step toward the improvement of transparency and fight against the corruption. It provides: Higher transparency Avoidance of corruption Cost reduction Higher competition (from 2 E.O to 7) Other advantages

The advantages of e-procurement 1. Higher transparency All the tender offers are secured in the system, until the moment of their opening. Also, all the actions in the system, leave identifiable traces so that they can serve for audit purposes in the future. All the contract notices are published on the PPA’s web page, www.app.gov.al

The advantages of e-procurement 2. Avoidance of corruption This system ensures lower corruption, because E.O are not in contact with each other and also lowers their possibility to contact with CA-s personnel.

The advantages of e-procurement 3. Costs reduction E-procurement lowers the costs of realizing tender procedures, because it eliminates the paper form, all the relevant paper documents and the bureaucracies that exist with the paper form procurement system. According to statistic data, the cost of tender procedures has lowered around 15% for year 2009.

The advantages of e-procurement 4. Higher competition (from 2 E.O participating to 7 E.O) The system of e-procurement has highly increased the competition among E.O and this is noticed in the growth of the E.O participating in tender procedures.

The advantages of e-procurement 5. Other advantages - It saves public funds, due to increased competition. Public procurement, through technology of information, is more easy because the procedures are simplified. - It increases the rate of responsibility, so the money of the Albanian taxpayers are used more effectively. - As a result of higher transparency and competition, goods, services and works with better price and quality are obtained. - The system of e-procurement enables the business sector to cooperate and communicate easily with the CA-s.

Challenges faced with the e-procurement The acknowledgment of the e-procurement system for both parties, Contracting Authorities and Economic Operators, became an indispensable need, in order to fulfill procurement procedures. The PPA provided advice and support to overcome the initial technical problems encountered, to both Contracting Authorities and Economic Operators. PPA also provided training for all the Contracting Authorities, in a national level.

Facts and figures The number in total of tender offers for year 2008 was 11,786. The number in total of tender offers for year 2009 was 36,225.

Facts and figures The number of the e-procurement users in year 2009 is:

Facts and figures Actions Number Total hits 192,289,252 Average hits/day 5,272,291 Average hits/users 28,271 Users in total 199,958 Average users/day 8,995 Visitors in total 286,008 Average visitors/ day 8,520

Data about public procurement procedures realized and with an awarded contract in the system, during year 2009 Types of procedures Total number of procedures Total estimated value procured Total estimated value offered Total saved value % of the saved fund to procured fund Total 3615 60,052,705,159 51,358,000,549 8,694,704,610 15% Open procedures 1708 54,593,844,173 46,403,638,462 8,190,205,711 Request for proposal procedures 1808 4,603,835,484 4,119,891,168 483,944,136 10,51% Restricted procedures 3 56,436,433 55,832,600 603,333 1.00% Procedures with negotiations without prior publication of a contract notice 1 4,166,660 4,101,152 65,508 1.57% Consulence services 95 794,422,409 744,537,167 19,885,242 3.00%

The future A good implementation of the procurement legislation, Although the so far achievements and progress in the public procurement field, there are still priorities and goals to work for in the future, like: A good implementation of the procurement legislation, - particularly in the utilities sectors - enhancement of an independent review system, which are two new sectors in the procurement field.

The future (cont’) Further enhancement of the e-procurement system. The enforcement of the administrative capacities of the government officials engaged in public procurement activities.

Thank you for your attention Prepared by: Denisa Gugu Alma Dimo