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Ivančica Franjković Central Procurement Office Croatia

9 th Public Procurement Knowledge Exchange Platform Skopje 28-31 May 2013 Centralized Public Procurement in Croatia - Experiences and Challenges -. Ivančica Franjković Central Procurement Office Croatia. Content. Public procurement system in Croatia

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Ivančica Franjković Central Procurement Office Croatia

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  1. 9th Public Procurement Knowledge Exchange PlatformSkopje 28-31 May 2013CentralizedPublicProcurementin Croatia - ExperiencesandChallenges - Ivančica Franjković Central Procurement Office Croatia

  2. Content • Publicprocurementsystemin Croatia • Legal backgroundandestablishmentof CPO • Goals, resultsandchallenges • PerformancemeasurementinthecontextoftheCPO • Lessonslearned 9th Public Procurement Knowledge Exchange Platform - Skopje, 29 May 2013

  3. PP system in Croatia - legislative framework • Public Procurement Act (OG 90/11) - enteredintoforce on 1 January 2012 • Public Private Partnership Act (OG 78/2012) • Concessions Act (OG 143/2012) • Act on State Commission for the Supervision of Public Procurement Procedures (OG 18/2013) 9th Public Procurement Knowledge Exchange Platform - Skopje, 29 May 2013

  4. PP system - Institutional framework • Ministry of the Economy – Directorate for PP system • Ministry of Finance • Agency for Public Private Partnership • State Commission for Supervision of Public Procurement Procedure • StateOffice for the Central PublicProcurement 9th Public Procurement Knowledge Exchange Platform - Skopje, 29 May 2013

  5. One ofthekeyaspectsofthe PP systemtoday • ContinuoustraininginthefieldofPP • Certificates • “Training Programme” of50 hours– carried out by authorities approved by ME • Issued to more than 2700 persons • Renewingofcertificates - 2012 upgradeoftrainingsystem 9th Public Procurement Knowledge Exchange Platform - Skopje, 29 May 2013

  6. The value of public procurement in the Republic of Croatia (Source: Directorate for Public Procurement System, www.javnanabva.hr) 9th Public Procurement Knowledge Exchange Platform - Skopje, 29 May 2013

  7. EstablishmentoftheCPO Decision on procurementcategories , 1.st meetingwithclients Regulation on CPO Startingwithoperations Plan ofactivities for Central purchasing Gov.conclusion on impementationof central p PP Strategyofdevelop. ofthe PP system 9th Public Procurement Knowledge Exchange Platform - Skopje, 29 May 2013

  8. CPOin 2010 and2011 • Established by the Regulation on CPO (Official Gazette 138/09 and 78/10) • Mission: The Office shall set up an effective system of central public procurement with responsibilities towards taxpayers, the State Budget, persons subject to central procurement, and all economic operators involved in the environment of public procurement with a view to creating savings in public consumption, while bearing in mind an optimum relationship between quality and the price of procured supplies, works and services, respect of ecological and socially acceptable principles, sustainable procurement and the encouragement of SME." Number of civil servants: 17 /42 Number of procurement categories: 17 Number of clients: 35 www.sredisnjanabava.hr 9th Public Procurement Knowledge Exchange Platform - Skopje, 29 May 2013

  9. CPO structure / internalorganization 9th Public Procurement Knowledge Exchange Platform - Skopje, 29 May 2013

  10. CPO in 2012 and2013 • State Office for Central PublicProcurement (OG 31/2012) • New structure; same goals 9th Public Procurement Knowledge Exchange Platform - Skopje, 29 May 2013

  11. European vs. Croatianpractice Variousexamplesregarding to: • Institutional set up • Department withintheministry/ Gov. Office / State office • Agency • L.t.d. • Financing • Budget • Service fee (vendor/client) • Mixtureofprevious • Participation • Manadtory • Voluntary 9th Public Procurement Knowledge Exchange Platform - Skopje, 29 May 2013

  12. Procurement categories 1. office furniture 2. office supplies 3. expendable materials 4. office equipment 5. computers and computer equipment 6. TELECOM. SERVICES -MOBILE 7. TELECOM. SERVICES -LANDLINE 8. VEHICLES 9. Repair and maintenance services of vehicles 10. CAR Tyres 11. FUEL 12. ELECTRICITY 13. POSTAL SERVICES 14. insurance SERVICES 15. software licences 16. cleaning 17.maintenance of objects in the ownership of the republic of Croatia 9th Public Procurement Knowledge Exchange Platform - Skopje, 29 May 2013

  13. Keystakeholders 9th Public Procurement Knowledge Exchange Platform - Skopje, 29 May 2013

  14. Tasksofthe CPO • planning the implementation of procurement procedure; • establishing procurement requirements for products and services; • coordinating the activities among the clients; • market research; • implementing procurement procedures; • contracting; • setting up and managing the database of awarded contracts and framework agreements; • monitoring the execution of contracts and framework agreements; • analysing the efficiency of central procurement through continuous monitoring of savings made; • drawing up proposals of decisions, specifying products and services purchased through central procurement. 9th Public Procurement Knowledge Exchange Platform - Skopje, 29 May 2013

  15. Results • By the end of April of 2013, CPO has concluded FAat the amount of approx. 1.5billion HRK & savingsof 150 mil HRK in followingcategories / sub-categories: • Electricity, • Fuel, • Postal services (universal and courier services), • Cars (operational leasing of cars, purchase of vehicles for police-interceptor and operational leasing of commercial and off road vehicles), • Office supplies (toner and ink, paper); • Expandablematerial • Telecommunicationservices (mobile) • Cleaningservices • Internet accessservice • Comupterandcomputerequipment • Office equipment 9th Public Procurement Knowledge Exchange Platform - Skopje, 29 May 2013

  16. Valueof FA concludedbythe CPO in 2010 and2011 9th Public Procurement Knowledge Exchange Platform - Skopje, 29 May 2013

  17. Keychallenges • Lackofstandardization / cataloguesofsupplies • SlownessinimplementationofotherStrategies (for example Internet for all centralstate) • Need for profesionalizationofprocurementofficers(theCPO andclients) • Fluctuationsof employees • Lackofmodern IT infrastructure for the central procurement system • Inabilityfor timely completion of procedures (within 50 days of the start of the procedure) due to repeated appeals • The legal status and financing of the CPO • Justification for the certain procurement categories 9th Public Procurement Knowledge Exchange Platform - Skopje, 29 May 2013

  18. Performancemeasurementinthecontextof CPB • How to measuresucessfullnesofthe CPB? • Potential savings based on EU experience… Source: Actionplan for theestablishmentofthecentralpurchasingbodyandintroducing a systemofcentralprocurement; theGovernmentandtheMinistryofEconomy, 2009

  19. Performancemeasurementinthecontextof CPB • Measuring the Economic Efficiency – based on price • Measuring the Economic Efficiency – based on processes • Measuring the Quality of the Procurement Procedures • Measuring the Standard of External and Internal Relations and Collaboration 9th Public Procurement Knowledge Exchange Platform - Skopje, 29 May 2013

  20. Savingsbased on price • Cashablesavings • Problem withcalculatingcashablesavings – baselineprice • Some of the examples of the “baseline” prices are: • regulated prices in some markets (in the case of fuel, electricity etc.), • prices paid by other authorities(need for an access to other contracts concluded in parallel procurement procedures - for example, contracts concluded on the local levels).  • prices of “older” contracts, (if regulations on central purchasing allow the CPB to gather information on older similar contracts, it is possible to ask for information about prices and quantity of goods /services procured earlier, together with new needs expressed toward CPB). • average market prices –the most common baseline price. 9th Public Procurement Knowledge Exchange Platform - Skopje, 29 May 2013

  21. Savingsbased on price • Unitpriceanalysis • Exampleofprice comparisons of office supplies – for 5 most sold items • The comparisons showed significant economies of scale in the central FA. • The savings between different individual products tested were: 8% (toner cartridges), 19% plastic folder, 29% copy paper, 33% ballpoint pen and 37% stapler. • If the average savings across all the products within the office supplies is assumed to be 25%, the price savings from these purchases might be calculated in the same way, based on the purchasing value of the central framework agreement for this category. 9th Public Procurement Knowledge Exchange Platform - Skopje, 29 May 2013

  22. Savingsbased on processes • Annualcashableefficienciesintheprocurementfunction • Transaction cost • Administrative cost • Utilizationrate of the existing frameworks in regard to its application /usage (typical for voluntary use) 9th Public Procurement Knowledge Exchange Platform - Skopje, 29 May 2013

  23. Measuring the Quality of the Procurement Procedures • Examples of possible indicators: • The average period for planning and preparation should not exceed X days; • Competitive procedures, such as the open and restricted procedures, should be used in no less than X% of the total number of procedures; • The average participation rate in connection with open invitations during a calendar year should not be fewer than X tenderers or applicants; • The number of contracts awarded to SMEs should normally not be fewer than X% of the total number of contracts awarded during a calendar year; 9th Public Procurement Knowledge Exchange Platform - Skopje, 29 May 2013

  24. Measuring the Standard of External and Internal Relations and Collaboration • An annual Supplier Satisfaction Survey • to ensure that the majority of suppliersare satisfied with the collaboration with the contracting authority. • An annual Internal Customer Survey • to ensure that the majority of internalclients are satisfied with the services of the procurement organisation. • Reporting tools in order to avoid additional costs/quantities 9th Public Procurement Knowledge Exchange Platform - Skopje, 29 May 2013

  25. Conclusions &Lessonslearned • PREPARATION mighttakelonger time (depends on thequalityofinputdata, way how it is organizedetc) • Goodcommunicationwithclients / bidders • Knowingthemarket / needsofclients • Simple FA to use, bettercontractconditions, guidelines for clients • Flexibilityof FA • Specialisedknowledgeconnected to subjectmatterofprocurement / PPA • Introducingstandards & IT support • Stepbystepapproach 9th Public Procurement Knowledge Exchange Platform - Skopje, 29 May 2013

  26. Thankyou for yourattention! ivancica.franjkovic@sredisnjanabava.hr 9th Public Procurement Knowledge Exchange Platform - Skopje, 29 May 2013

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