Amendments to the Serbian Public Procurement Act

The most significant changes relate to:

• introducing quality rather than price as a key criterion for selecting certain services/goods,
• introducing principles of environmental protection in the awarding of public procurement and
• specifying the initiation of misdemeanor proceedings in case of illegal spending of public procurement funds.

The amendments will be applicable from January 1, 2024.

At the outset, it is worth mentioning that the amendments introduce the principle of environmental protection.  When considering the procurement of goods, services, or works, the contracting authority must choose those with minimal environmental impact.  This is according to the goals defined in the Green Agenda for the Western Balkans and other relevant public policy documents.  In this regard, it is the obligation of the Public Procurement Office (“Office“) to prescribe for which types of goods, services, and works the contracting authorities should apply environmental aspects in (i) determining technical specifications, (ii) criteria for the selection of business entities and the awarding of contracts, or conditions for the execution of such contracts.

Also, new amendments concern the composition of the Public Procurement Commission.  Specifically, suppose the estimated value of the public procurement exceeds the amount of 3,000,000 dinars.  In that case, the commission includes a public procurement official certified by the effective date of the amendments.

The amendments introduce a new provision that, for services related to (i) the development of computer programs, (ii) architectural, (iii) engineering, (iv) translation, and (v) advisory services, price may not be the main criterion for contract award.  Such changes align with EU directives that regulate the field of public procurement, aiming to procure higher-quality services, especially in cases where the quality depends on the professional qualifications of individuals engaged in executing a specific service.

With the new amendments, the Commission for Protection of Competition (“CPC“) may access the public procurement portal database.  This change is of exceptional significance, considering the CPC often conducts proceedings against bidders in public procurement processes.

The contracting authority must initiate misdemeanor proceedings with the Office within 30 days if an entity fails to provide evidence from the producer of claims paid.

The new amendments also accompany the introduction of mandatory electronic communication in the legal protection procedure.  Requests for the protection of rights and appeals against decisions must now be submitted electronically through the Public Procurement Portal.  This is a departure from the previous legal provision that permitted written submission.  Additionally, decisions of the Republic Commission will be delivered via the Public Procurement Portal.

Finally, the latest amendments explicitly empower state authorities responsible for overseeing the legality of public funds expenditure to initiate misdemeanor proceedings when, within the scope of their jurisdiction, they ascertain a violation of the Public Procurement Act that may constitute a basis for misdemeanor liability.

By Vuk Lekovic, Senior Assiociate Gecic Law