Public Procurement – Implementation of MEAT Criteria

On September 19, 2017 AmCham organized Power Breakfast “Public Procurement – Implementation of the Most Economically Advantageous Tender (MEAT Criteria)”.
The new Public Procurement Act entered into force on January 1, 2017. The Act proscribed an obligation of all public procurement procedures to be done based on the Most Economically Advantageous Tender (MEAT Criteria) as of 1 July, 2017.

During the welcome speech Ms. Doko Jelušić pointed out that public procurement amounts for approximately 20% of GDP in European Union and it is often considered to be one of the most efficient market instruments in achieving smart, sustainable and inclusive growth in Europe.

Ms. Nataša Mikuš Žigman, State Secretary, Ministry of Economy, Entrepreneurship and Crafts held a keynote. In Croatia, public procurement amounts for approximately 13% of GDP. For example, in 2016 it amounted to HRK 45 billion. Changes in the new Public Procurement Act primarily referred to the alignment with the EU Directive on Public Procurement, but also to amend shortcomings that were noted in practical implementation of the previous Act. The three key features of the new Act include MEAT Criteria as the only criterion in public procurement procedures, also efforts to achieve better efficiency through automatization and integration of the system in order to simplify the process for both contracting authorities and bidders, finally, previous counseling for both open and limited procurement procedures aimed to achieve better preparation of documentation for bidders. The goal is to achieve the best-buy value in procurement. Success of the implementation of the MEAT Criteria is dependent on engagement of all included stakeholders, besides contracting authorities and bidders, Ministry of Economy, Entrepreneurship and Crafts as a legislator and The State Commission for Supervision of Public Procurement Procedures as a controller to resolve complaints in public procurement procedures.

Mr. Matešić reflected on eight months since the new Act entered in force. The number of complaints in line with the new Act is 291, out of 678 complaints received this year. The number of complaints linked to the application of the MEAT Criteria is rather low to be properly addressed and referred to. As for the approved complaints, there were 40% of them in 2016 compared to an increase to 56% in 2017 according to new Act. Finally, there is a need to emphasize an important role the Administrative Court as an integral part in the public procurement process. It is an important institution which has a role of a controller.

Representatives on a panel discussion included Mr. Matešić, President, the State Commission for Supervision of Public Procurement Procedures Ms. Čulina, Head of department, Directorate for Public Procurement, Ministry of Economy, Entrepreneurship and Crafts Ms. Merčep, Procurement Director, HEP and Ms. Pušelj Ostroški, Member of the Board, IN2.

Ms. Čulina stated that in the very beginning of the implementation of the MEAT Criteria mistakes were made during the process of preparation of documentation, but in a very short period of time the quality of the preparation of documentation improved.

Ms. Pušelj Ostroški shared some experiences, from a perspective of a bidder, explaining that the process is complicated because the ESPD form is filled out and in addition the documentation is being submitted. Also, the implementation of the MEAT criteria in practice is hindered by procurement competitions where the weighting is set in a way that a price criterion is 90% while qualitative criterion is set in a way that 10% is only delivery date.

One of the most commonly made mistakes in procurement procedures is that ability conditions are mistaken for determining the MEAT criteria. For example, a minimum number of members of an expert team can be set as an ability condition, but not as a MEAT criterion. The MEAT criterion can be a specific expertise those team members have.

Ms. Merčep explained that HEP used other qualitative criteria (besides delivery date) such as life expectancy of the plant, related energy prices and running costs even before the obligatory use of the MEAT criteria. Furthermore, the ESPD form as a first step in the procurement procedure is sufficient. HEP only requires additional documentation in later stages of the process.

Mr. Matešić expects that DKOM will manage to keep a track record of 30-40 days for a decision upon complaints taking into consideration changes in the public procurement procedures that are a result of the new Act. Introduction of e-procurement, e- advertisement (e-oglasnik), e-offers and e-complaints should enable shortening deadlines and simplification of the process.

Ms. Čulina expects that e-advertisement (linking of the registers of the Tax Administration, the Ministry of Justice and the Gazette) and e-complaints (linking of the Gazette and DKOM) as of January 1, 2018.

Mr. Matijaca pointed out to a phenomenon in public procurement competition where all documentation is submitted in accordance to the MEAT criteria, but there is only one bidder.

Ms. Čulina confirmed that there is an almost 40% public procurement competition in which there is only one bidder.