1. Prokurimi Publik në Kosovë Public Procurement System in Kosovo Public Procurement activities for 2011 Mr. Safet Hoxha, President of PPRC Mr. Ilaz Duli, Board Member of PPRC May 2012 Tirana

2. PUBLIC PROCUREMENT LEGISLATION IN KOSOVO  Consists of: a ) Law on Public Procurement No. 04/L-042 - LPP No. 04/L-042 is approved by the Parliament of Kosovo on August 29 th, 2011, published in the Official Gazette of Kosovo No.18, on September 19 th, 2011, whereas has entered into force on October 05 th, 2011 b ) Procurement secondary legislation includes: -Procurement Regulation and Operational Guidelines - Standard Tendering Documents and Forms -Regulations for Contract Management -Procurement Code of Ethics -Documents for Diplomatic Missions of Kosovo The complete public procurement legislation is published in three languages in: http://krpp.rks-gov.nethttp://krpp.rks-gov.net

3. ORGANIZATION OF PUBLIC PROCUREMENT SYSTEM IN KOSOVO Based on LPP No. 04/L-042, in Kosovo, are established two central procurement institutions: - PUBLIC PROCUREMENT REGULATORY COMMISSION (PPRC) - PPROCUREMENT REVIEW BODY (PRB) Under the Ministry of Finance is established as a Contracting Authority: - CENTRAL PROCUREMENT AGENCY (CPA) In all contracting authorities in Kosovo are established Procurement Departments On December 31 st, 2011, in Kosovo existed 161 contracting authorities, with 489 licensed procurement officers. 3

4. PUBLIC PROCUREMENT REGULATORY COMMISSION (PPRC) Is lead by 3 Board members proposed by the Government and nominated by the Assembly, with a 5-year mandate -PPRC is competent for the overall development, functioning and supervision of the public procurement system in Kosovo -Conducts investigations of procurement activities and contract management -Performs monitoring of procurement activities in Kosovo -Prepares and publishes the complete secondary legislation on procurement -Publishes all types of notices on public procurement -Prepares training programs in public procurement -Monitors the implementation of contract by the contracting authorities -Cooperates with foreign institutions in the field of public procurement -Prepares and submits to the Government and Assembly of Kosovo the Annual Report on public procurement activities.

5. PROCUREMENT REVIEW BODY ( PRB ) Is lead by 5 Board members proposed by the Government and nominated by the Assembly, with a 5-year mandate PRB members must have same qualifications as judges. PRB has the following competencies: -Reviews all complaints addressed to the PRB regarding the possible violations of the LPP -Conducts investigation on its own initiative or upon request of any party involved in the procurement process relating to any irregularities during the performing of procurement activities. -Complaints are reviewed by the Review Panel, formed by the PRB, consisting of one, three or five members PRB prepares and submits to the Assembly of Kosovo the Annual Report on performance of procurement complaints.

6. CENTRAL PROCUREMENT AGENCY ( CPA ) CPA is established within the Ministry of Finance, as a contracting authority Executive Director of CPA is elected in the same manner as the Secretary General in the Ministries, with a 3-year mandate CPA has the following competencies: Collects procurement planning from all contracting authorities in Kosovo Manages and performs centralized contracts, for the entire Kosovo, if authorized by the Government of Kosovo Performs procurements on behalf of the contracting authorities when dealing with complex procurements (requested by the CA).

7. Classification of the contracts according the value Contracts with minimal value: - from 100 to 1.000 € Contracts with small value: - from 1.000 € to 10.000 € Contracts with medium value: a) for goods from 10.000 to 125.000 € b) for works from 10.000 to 500.000 € Contracts with a large value: a) for goods over 125.000 € b) for works over 500.000 €

8. Secondary legislation of procurement Secondary legislation of procurement according to the Law No.04/L-042, is completed. At the end of 2011 were approved 70 secondary acts by the PPRC, that deal with all tender dossier, contract notices, Procurement Code of Ethics, documents for Diplomatic Missions of Kosovo, whereas has entered into force on January 1 st, 2012. During January 2012 were promulgated 4 secondary acts: Procurement Regulation and Operational Guidelines, as well as Work Regulation of PPRC with Operational Guidelines, whereas has entered into force February 1 st, 2012. During February 2012 were promulgated 7 secondary acts that deal with the sale of assets, whereas has entered into force on March 1 st, 2012. The entire secondary legislation for public procurement consists of 81 parts that were promulgated by PPRC, in three language versions, and are published in: http://krpp.rks-gov.net.http://krpp.rks-gov.net

9. Electronic procurement Within the project for the reform of public administration of Kosovo, financed by the World Bank, a separate component is dedicated to e-procurement. The World Bank has selected the expert for drafting the terms of reference for the development of public procurement system. These terms of references are expected to be finalized until the end of July 2012, whereas the tender for the development of the e-procurement system is expected to be published by the World Bank during September 2012. The beginning of the application of e-procurement in Kosovo is expected to be made in the first quarter of 2013. During the development of the e-procurement system, Kosovo will use the experiences of the Balkan countries, especially those of Albania and Macedonia.

10. The training of procurement officers All previous laws on public procurement which have entered into force in Kosovo since 2004 until 2010, have required in a mandatory manner the training of procurement officers within 10 days. Since 2011, the Law on Public Procurement requires that the training of the procurement officers is prolonged into 15 days, by classifying the trainings in two levels: - Basic level - Advanced level During 2011, basic training have completed 489 procurement officers who obtained basic procurement license, valid for three years, whereas these officers now are attending the advanced training on public procurement. Even during 2012, PPRC in cooperation with the Kosovo Institute for Public Administration, have held a basic training on public procurement, which have attended around 50 procurement officers. Participants of these trainings are procurement officers of all contracting authorities of Kosovo, including government institutions of Kosovo, public companies and several NGOs.

11. 11 Public procurement activities in Kosovo – 2011 Public procurement activities in Kosovo are summarized in the Annual Report of PPRC which was approved by the Assembly of Kosovo on April 19 th, 2012 The number of contracts signed in Kosovo based on LPP during 2011 is = 12.310 The budget value for procurement in 2011 = 552,150,768 € The part of Morine-Merdare highway 2011 = 236,165,999 € Total budget for 2011 for procurement is = 788,316,767 € The value of contract signed “Morine-Merdare” highway is 659.813.399.88 € ( Part for 2011 = 236,165,999 € ) The value of budget for procurements in report to GDP =16.96 %

12. 12 Used procurement procedures during 2011 Open procedures = 82.80 % Restricted procedures = 1.35 % Negotiated procedures without publication = 6.21 % Negotiated procedures after the publication = 4.82 % Price quotations = 3.98 % Minimal value procedures = 0,45 % Design contests = 0,39 %

13. 13 Contracts signed according to the origin of economic operators = 2011 During 2011 the value of contracts based on origin of economic operators is: Local economic operators = 411.401.311 (52.18%) Foreign economic operators = 376.915.456 (47.82%) ================================================== Total: = 788.316.767 (100%) Note: In this percentage is included the part of the contract for “Morine-Merdare“ Highway for 2011 (236,165,999) which is signed between the Government of Kosovo and Foreign Economic Operator.

14. Complaints in public procurement during 2011 The number of received and reviewed complaints in the Review Panel of PRB for 2011 is = 386 From the reviewed complaints the following decisions were taken: Approved decisions = 190 ( 43 %) Re-evaluation decisions = 106 ( 20 %) Re-evaluation decisions = 71 ( 14 %) Rejected decisions = 8 ( 20 %) Revoked complaints = 11 ( 3 %) The percentage of complaints compared to the contract signed during 2011 is = 3.14%

15. Challenges in public procurement in Kosovo The pressure made to procurement officers during the performance of procurement activities, especially on the contract award; Non-appropriate implementation of public procurement legislation; Frequent replacing the procurement officers in Contract Authorities; Very small number of licensed procurement officers in Kosovo, comparing with budget spent for procurement. The lack of electronic procurement Insufficient training of procurement officers in the private sector;

16. Faleminderit ! 16