Definición de sub-preguntas y herramientas de análisis

If the public procurement is below the EU threshold (the expected amount for works is below 5,186,000 euros and for supplies and services below 207,000 euros), public procurement is regulated only by national law and directives. In Slovakia, we have two types of public procurement below the EU thresholds – “low amount” and “below the threshold” procurement. “Below the threshold” procurement needs to follow similar rules as the above-EU threshold procurement, except for the promo- tion in TED, and time limits slightly shorter. In any case, this procurement needs to be included on the national procurement authority website.

“Low amount” procurement (the expected amount for works is below 30,000 euros and for supplies and services below 20,000 euros) does not need to be promoted by the website of the national procurement authority, but it is recom- mended to include these types of procurement in the municipalities’ websites at least 3 days prior to the deadline for submitting a bid. Generally, contracting au- thorities need to make sure that their procurement is transparent, efficient, effective and open to every competitor in the same way.

We analysed public procurement in the central Slovakia region, in 41 small and medium municipalities. Based on our statistics, we can assume that public pro- curement below the EU limits is not properly communicated and we are missing centralised information about public procurement.

Scheme 1

Public procurement in 41 villages in the central Slovakian region in 2012

Source: own research, 2013

Only 2.44 % of all villages provide a history of procurement in their munici- pality. Also, 20 % of municipalities still do not have a website and another 60 % of them, even if they do have their own website, do not provide any information about public procurement.

Public procurement size in these municipalities is usually very low. Any addi- tional cost to promote procurement can have a zero pay-off. Also, competitiveness was low, if not non-existent (usually one bidder). How do we solve these issues if the municipalities cannot afford to hire someone to award procurement or to pay advertisements ? On the other hand, companies have minimum information about procurement; it is difficult to find it and also, they usually cannot afford to hire someone to look for business opportunities in public procurement.

We were looking for a low-cost solution, with minimum additional expenses for both the municipality and the bidder. Our main goal is to increase competitive- ness in “low value” procurement. Right now, if companies are looking for a business opportunity in “low value” procurement, they need to open the website of each mu- nicipality, as Scheme 2 shows, and find the procurement information by themselves.

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Young Public Policy Makers Case Studies “Living out of stereotypes” Scheme 2

Current situation of searching information about a tender

Source: own research, 2013

Our proposal is to create a centralised website with procurement opportuni- ties. Every registered supplier will need to provide the necessary information about the background of the company, which will qualify that company to place a bid in the awarded procurement. Everything will go through an automated website system and each municipality will be responsible for providing the correct data. Scheme 3 shows an example of a centralised procurement website.

Scheme 3

Centralised procurement website scheme

Source: own research, 2013

Websites will be connected by XML feed, which is a data format used for pro- viding users with a frequently updated content. It is an automated system with min-

imum requirements for service. A municipality will be asked to set up an XML feed on their own website and they do not need to even visit the centralised procurement system – all information will be instantly downloaded from their internet page.

Companies will need to visit only centralised procurement websites to find out about new business opportunities in public procurement and in this way, mu- nicipalities will reach more possible contractors, which will, in turn, increase the number of competitors. The final result will be a higher efficiency in public procure- ment and a better business environment for companies and boosting SMEs, which is one of the EU priorities over the next decade.

The main reason for building an XML feed in the internet page of munici- palities is to increase competitiveness and transparency. Public procurement in V4 countries has a lower procurement competitiveness level than countries in Western Europe such as Spain, the United Kingdom, Germany or France. The level of com- petitiveness in public procurement is described in Table 1.

Table 1

Average number of bids in public procurement in 2008

Country Average number of bids per procurement

Spain 8.8 Germany 7.6 UK 6.4 France 5 Czech Republic 3.7 Hungary 3.5 Poland 3.1 Slovakia 2.1

Source: Strand et al. 2011

As we can see from Table 1, Slovakia has an average number of bids in the above-EU limit procurement of only 2.1. Spain has more than 4 times more bids on average in the same type of procurement.

This example shows that even in the huge public procurement, Slovakia has the means to attract competitors. The situation in small size procurement is worse because of the lack of rules and deplorable transparency, as our research in this paper confirms.

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Young Public Policy Makers Case Studies “Living out of stereotypes”

3.  Problems and benefits

Many projects introducing the XML feed for municipalities may have several issues, which can diminish the positives and increase the risks. In this part of our case study, we will briefly mention the threats of an XML feed project.

There will not be any payoff during the next couple of years after this project begins. In the long run, the positive effect of this project can be significant and pay off is possible. Skilled risk management is crucial for the success of our proposed project, because of:

• Insufficient municipalities interested in a centralised website system; • Companies will not be interested in a centralised procurement website; • High costs and too long a payoff period;

• Missing support of the Slovakia procurement authority (UVO) or law issues. The first two risks – low interest of municipalities and companies in the project

– are manageable only if both sides will receive some benefits from a central- ised procurement website. It is questionable whether the higher competitive- ness will be welcomed by municipalities. Many authors claim that passive waste (Bandiera et al. 2008; Pavel 2013), unwillingness or resistance to any change, can be serious issues for our proposals and improvements. Also, active waste, well-known as corruption (Ackerman 1999), can be a factor, especially in V4 countries, where public officials are paid less than in Western Europe.

The costs and benefits of implementing XML feed to the websites of each mu- nicipality are questionable. IT specialists are able to prepare new websites, which will fill the needs of each municipality for approximately 500 euros (based on re- sults from the questionnaire), also including XML feed. If we are counting 3000 municipalities in Slovakia, the total costs (centralised website not included) are 1.5 million. We are unable to calculate the possible payoff, because of the non-existence of statistics regarding the small size of public procurement in Slovakia. Using XML feed should increase the efficiency of public spending, but we are not able to come up with an estimated amount because of the missing data.