Toshiba
Albania
ReportonBenchmarking
andDraftCapacity
Assessment
SponsoredbytheUNDPonbehalfofthe
InternationalDonorCommunity
Casals&Associates/Claro&Associates
2010
AlbaniaǦReportonBenchmarkingandDraftCapacity 2010
Assessment
PREFACE
This report presents the findings and recommendations of an assessment of Albania’’s public
procurement system. A team of international consultants (““the Assessment Team””) from Casals &
Associatesanditsstrategically,Claro&AssociatesaidedbythreelocalconsultantscontractedbyUNDP,
workingincoordinationwiththeinternationaldonorcommunityinAlbania,carriedoutthefieldͲwork
phase from March 17 through April 23, 2010. Subsequently, the Team Leader carriedͲout a followͲup
visittovalidateallfindingsandtheresultingrecommendationswiththeGOA,representedMs.Valbona
Kuko, director of the DSDC, and by Ms. Kokdiana Cankja, director of the PPA. Their comments and
suggestionswhereincorporatedintothefinalversionofthisassessmentreportasdeemedappropriate.
SubsequentlytothevalidationofthepreliminaryreportwiththeGOA,adraftwasprovidedforreview
and comments to the members of the ““Advisory Group for the Procurement Assessment”” (““Advisory
Group”” or ““AG””). The AG consists of representatives of the GOA (Director of the DSDC, Council of
Ministers and the Director of the Public Procurement Agency); UNDP; the World Bank; USͲAID; EU
Commission,andtheAustrianDevelopmentAgency(seecompletedetailsinAnnex3).
All comments and suggestions were reviewed and reflected in the appropriate sections of the
accompanying assessment report to the extent that the consulting team deemed appropriate.
Furthermore,majorchangesoccurringfromthedateoffinalizationofthefieldͲworkphaseandthedate
ofthefollowͲupmissionperformedbytheconsultingteamleaderfromJune3throughJune14,2010
werealsoreflectedinthefinalreport.
This document includes facts, observations, findings, and commentary believed to be accurate as of
today,withthecaveatthatthescopeofthereportislimitedtoasampleofinstitutionsagreeduponin
advance with UNDPͲAlbania, and that the assessment is based on interviews with and data made
available by officials working in these institutions, interviews with and data made available by local
stakeholders,otherdatamadeavailablebytheGovernmentofAlbania,aswellasdataavailableinthe
publicdomain.
The Assessment Team wishes to acknowledge the following representatives of the government of
Albania (GOA) and members of the international donor community for their kind support and
collaborationduringtheperformanceoftheassessment:Mrs.ValbonaKuko,Director(DSDC)Councilof
Ministers;Mrs.AlpinaQiriazi,DSDCCoordinator,CouncilofMinisters;Mrs.KlodianaCankja;Directorof
the Public Procurement Agency (PPA); Mrs. Gülden TürközͲCosslett, UNDP Resident Representative;
Messrs:NorimasaShimomura,UNDPCountryDirectorandArbenRama,UNDPDemocraticGovernance
Cluster Manager; and Jakob Schemel, UNDP Management Support Officer; Ms. Xhesi Mane; UNDP
DemocraticGovernanceProgramAssociate;FrancescaAcquaro,EUCommission’’sDelegationtoAlbania;
Mr.SeanHuff,USAIDProgramOfficer;Mrs.IlirianaDana,USAIDDeputyProgramOfficer;AstridWein,
Head of Austrian Development Agency Office; Mr. Knut Leipold, World Bank Procurement Specialist;
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Mrs.GretaMinxhozi,WorldBankSeniorOperationsManager,andNevilaComo,ProgramOfficer,Donor
TechnicalSecretariat.
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TableofContents
INTRODUCTION
Background,Objectives,MethodologyandScope
ObjectivesfortheAssessment
MethodologyandScope
OpportunityPresentedbyThisReview
OVERVIEWOFTHEEXISTINGSYSTEM
InstitutionalOrganization
InstitutionalCapacity
eͲGPPlatform
SupervisionandControl
MarketDevelopment
LegalFramework
MAINFINDINGSANDRECOMMENDATIONS
RESULTSFROMTHEASSESSMENTBASEDONTHEOECD/DACMETHODOLOGYFOR
PUBLICPROCUREMENTSYSTEMS(VERSION4)
DETAILEDBENCHMARKINGANALYSIS
PILLARI.––LEGISLATIVEANDREGULATORYFRAMEWORK
PILLARII––INSTITUTIONALFRAMEWORKANDMANAGEMENTCAPACITY
PILLARIII––PROCUREMENTOPERATIONSANDMARKETPRACTICES
PILLARIV––INTEGRITYANDTRANSPARENCYOFTHEPUBLICPROCUREMENTSYSTEM
PROGRESSSINCE2006ASSESSMENT
Annex1––MatrixCapacityActionPlan
Annex2––ListofProcurementEntitiesReviewed
Annex3––MeetingswiththeAdvisoryGroup
Annex4––RawstatisticaldataobtainedtoanalyzeCPIs
Annex5––ListofAlbanianLegislationReviewedfortheAssessment
Annex6ͲDispositionofcommentsreceivedfromtheAdvisoryGroup
Page
4
4
4
5
8
9
10
10
10
13
15
16
19
21
23
23
41
48
52
62
69
92
95
123
155
156
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I.
INTRODUCTION
1.
Background,Objectives,MethodologyandScope
1.1.
In 2009, the Government of Albania (GOA), represented by the DSDC, requested the United
Nations Development Programme (UNDP), to support their continued efforts to improve their
public procurement system, through the conduct of an independent assessment of it public
procurement system following an internationally recognized methodology, taking stock of the
significant improvements undertaken by the GOA since the issuance, in 2006, of the World
Bank’’sCountryFiduciaryAssessmentReport(CFA).
1.2.
This request reaffirmed the GOA’’s commitment to deepen its procurement reform and its
efforts to modernize its public procurement system, reflecting a longͲterm commitment to
promote transparency and accountability in its public financial management administration;
createanefficientmarketeconomy,increasethepublictrustintheprofessionalismofitscivil
service.ThesegoalsarealsofirmlyanchoredinitslargerEuropeanUnion(EU)accessionagenda.
1.3.
Asacountrywithclearpoliticalandlegalcommitmentstoundertakeaseriesofstepstowards
admissionintotheEU,Albaniaisawareoftheneedtofurtherharmonizeitslegislationwiththe
EU procurement directives. This harmonization process is aimed at bringing its public
procurementsysteminlinewiththestandardsoftheEUMemberStatesbeforeaccession.
2. ObjectivesfortheAssessment
2.1.
ThekeyobjectivesbasedonwhichtheassessmentoftheGOA’’spublicprocurementsystemwas
conductedwereto:
x
BenchmarkthepublicprocurementsysteminAlbaniaagainstinternationallyrecognized
bestpractices;
x
Measureprogresssinceearlierdiagnosticexercises;
x
Prepare a detailed capacity development plan that can further elaborate
implementationoftheCorporatePlan,andprovideabasisformobilizingresourcesfor
necessaryreformsandcapacitydevelopment;and,
x
Developacasestudyonthisexerciseforpublicationby UNDPontheassessmentand
developmentofacapacitydevelopmentplan.
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3. MethodologyandScope
3.1.
The assessment was conducted utilizing the OECD/DAC Methodology for Assessment of the
National Procurement Systems (Version 4, July 17, 2006). Accordingly, Base Line Indicators
(BLIs)werescorednotonlyintermsoftheadequacyoftheformalelementsthatcharacterize
the four pillars of a public procurement system, but also contemplating the actual level of
performance and compliance of the relevant elements that conform the system, through the
applicationofComplianceandPerformanceIndicators(CPIs),wheneverapplicable.
3.2.
The combination of BLIs and CPIs, along with the involvement of the broad array of
stakeholders in the private and public sector, along with the members of the international
donor community represented in Albania, provide a solid analytical foundation to support a
comprehensivediagnosisoftheGOA’’sprocurementsystem.
3.3.
Annex 4 contains a list of raw data directly obtained from the eͲGP platform, from January
throughDecember2009,plussomelimitedstatisticalinformationthatwasmanuallycaptured
bythePPAfortheyears2007and2008.ItshouldbenotedthattheeͲGPplatformdoesnot
currently have the capability of capturing all of the relevant information required by the
suggestedCPIindicators,andlacksofthecapabilitytorunadͲhocqueriesorproducestatistical
reports. However, the information available, which was downloaded into spreadsheets for
purposes of grouping and analysis, provided sufficient basis for assessing the overall
performance of the public procurement system, when considered together with the BLI
indicators.PleaserefertoAnnex1,Recommendation13forfurtherdetails.
3.4.
Accordingly,theassessmentencompassed,butwasnotlimitedto,areviewofallrelevantlaws
andregulations,previousassessmentsandreportsfromtheWorldBank,SIGMA1andUSͲAID;
as well as interviews and case reviews of a sample of contracting authorities (CAs) at the
national and municipal levels. The sample, which included 8 institutions at the national level
and2municipalitiesatthelocallevel(seeAnnex2fordetails),wasselectedbythe““Advisory
Group for the Procurement Assessment”” (““Advisory Group”” or ““AG””). The AG consists of
representativesoftheGOA(DirectoroftheDSDC,CouncilofMinistersandtheDirectorofthe
PublicProcurementAgency);UNDP;theWorldBank;USͲAID;EUCommission,andtheAustrian
DevelopmentAgency(seecompletedetailsinAnnex3).
3.5.
The assessment was performed by Casals & Associates, Inc. (““Casals””), in association with its
strategicallyClaro&Associates,Inc.(““Claro””),referredtojointlyasthe““AssessmentTeam.””
3.6.
The Assessment Team consisted of Fernando A. Fernandez, Senior Associate of Claro (Team
Leader)andAleksanderDardeli,DirectorofRuleofLawandJusticeReformProgramsofCasals,
with the expert assistance of three national consultants: Mrs. Silvana Rusi; Mrs. Zana
1
SupportforImprovementinGovernanceandManagement––AjointinitiativeoftheOECDandtheEuropean
Union,principallyfinancedbytheEU.
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Zvokopola; and Mr. Deni Guga. In addition, Mrs. Nevila Como participated in her capacity of
expertliaisonwiththeGOAandthedonorcommunity.
3.7.
The assessment consisted of three phases: i) field and home based work for information
gathering,interviewsandbenchmarking;ii)diagnosticanalysisandfindings;and,3)validation,
formulation of recommendations and development of the action plan, formulation of a case
studyandreportwriting.ThefieldworktookplacefromMarch17throughApril23,2010,and
wasfollowedbyawrapͲupmissionfromJune3throughJune14,2010.
3.8.
DuringthefieldworktheAssessmentTeamconductedinterviewswithmajorstakeholdersfrom
the public and private sectors; civil society and international donors; field reviews of tender
processes, including the review of relevant documentation of a tender sample and their
subsequent contract administration process. Annex 3 contains all notes resulting from the
reviewsoftenderprocessesandtheirrelatedcontractmanagement.
3.9.
Upon conclusion of the field work and based on the information resulting from its review of
previousrelevantassessmentreports;analysisofthelegalframeworkandapplicablerulesand
regulations for public procurement, along with the results of interviews and the analysis of a
limited number of procurement statistics, the Assessment Team proceeded to analyze the
systemintermsoftheOECD/DACmethodology.Acompletedetailfortheratingofeachpillar,
indicatorandsubͲindicatorisincludedinthisreport.
3.10.
Thethirdphaseofthework,consistingoftheformulationofagapanalysisandofacapacity
development plan, and a facilitation exercise with the major GOA’’s stakeholders and the
internationaldonorcommunity,tookplacefromJune3throughJune14,2010.Shortlyafter
completionofthisthirdphase,anduponreceivingthecommentsfromthemembersoftheAG,
the Assessment Team finalized the assessment report, which incorporates all relevant
comments or changes as deemed appropriate by the consulting team. Annex 6 contains the
finaldispositionofcommentstothepreliminarydraftreportreceivedfromthemembersofthe
AdvisoryGroup.
3.11.
Althoughthecurrentpublicprocurementsystemhasbenefitedgreatlyfromtheimprovements
ofthelegalandregulatoryframework throughthe passageoftheamendmentstothe public
procurementlaw(PPL),andtheGOA’’sdecision,sinceJanuary1,2009,tomandatetheuseof
theelectronicprocurementplatform,thereviewfoundroomforimprovementsinanumberof
areas as detailed under ““Main Findings and Recommendations”” below. These improvements
areneededtomakethesystemmoreagile;tofurtheralignitwithinternationallyrecognized
best practices and EUͲDirectives; to help develop the national procurement market through
thecreationandnurturingofastrongpartnershipwiththeprivatesector;andtomakeitmore
open,predictable,efficientandtransparent,therebyenhancingpublictrustinthesystem.The
proposed reforms wouldalso generate significant savings to the government by reducing the
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system’’stransactionandoperatingcostsand,moreimportant,bydrivinglowermarketprices
forgovernmentpurchases.
3.12.
These reforms for the most part should focus on some improvements to the legal and
regulatory framework (i.e. the PPL; Rules and Regulations; and, Procurement Manual). The
mostsignificantaspectsofthereform,however,entailamoreprofoundchangemanagement
processinherentto:
x
Integratingthepublicprocurementsystemwiththepublicfinancialmanagementsystem
by linking the eͲGP platform and the procurement plans with the budgetary system (as
partoftheongoingdevelopmentoftheIntegratedFinancialSystem);
x
viewing and formally treating the public procurement process as encompassing from
planning what, when, how, and how much to purchase to effectively implement public
strategy; through contract administration and execution; completing the public
expenditurecycle;
x
enhancingtheinstitutionalcapacityandorganizationoftheprocurementfunction;
x
strengthening the dayͲtoͲday operations of the system to achieve consistency and
predictability across the spectrum of Contracting Authorities (CAs); developing a strong
partnership with the private sector and civil society; and implementing a common and
integratedinternalcontrolframework;
x
continuing the modernization and strengthening of the internal and external audit
functions;
x
enhancing,aspartofabroadereͲGovernmentstrategy,theeͲGPplatformbothintermsof
hardwareandsoftware,includingthedevelopmentofextendedsmartquerycapabilities;
x
simplifyingandstreamliningthecurrentorganizationalsetupoftheprocurementfunction,
whichtodayentails1,700procurementunitsinvolving5,100civilservants.Thesuggested
streamlining is meant to significantly reduce the size and functions currently assigned to
the procurement units embedded within the structure of each line ministry and public
institution,andnottoaffecttheorganizationalstructureofthelineministriesandpublic
institutionsthemselves;
x
reassessingtheworkͲloadofthePPAensuringtheadequacyofitsstructure,staffleveland
budget, to enable it to properly discharge its various responsibilities as required by the
PPL;and;
x
adopting the 2010 diagnostic and the capacity development plan, as a common tool for
prioritizingandcoordinatingthesupportofalldonors.Thelatterentailsnotonlyvetting
the report with the international donor community and major stakeholders, but also
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defineadetailedactionplanwithappropriategoalsandperformanceindicatorsforeach
majortask,andagovernancestructuretocoordinateitsfinancingandimplementation.
3.13.
Moreover,mostofthereformsproposedaredesignedtoenhancetransparency,predictability
andpublictrustinthesystem,andreflectanewtrendinpublicprocurement,wherebygreater
emphasisisplacedonperformancethanonconformanceandcompliancewithformalities.This
performancefocusisespeciallyprevalentintheEUcommunity.
3.14.
This review identifies a number of relevant issues along with possible actions that, if
implemented,couldhelpimprovetheoverallperformanceofthepublicprocurementsystemof
Albania.Tofacilitatetheirconsiderationandsubsequentprioritization,allissuesidentifiedhave
been categorized according to their degree of impact in the fulfillment of the four strategic
objectivesofpublicprocurementsystems:efficiency;transparency;increasedcompetition;and
conformance with international best practices. Likewise, the possible actions identified in
connectionwitheachissue,havebeenclassifiedintermsoftheestimateddegreeofdifficulty;
cost;andtimeinvolvedintheirimplementation.Thepurposeofthismatrix,whichisincluded
as Annex 1, is to provide the GOA with a tool to assist it in deciding how to formulate a
successful strategic action plan for the next phase of the reform of the public procurement
system.
4. OpportunityPresentedbyThisReview
4.1.
Asamediumtermgoal,theGOAiscommittedtoachievingsuccessfulaccessiontotheEU,and
tomodernizingitspublicfinancialmanagementandprocurementsystems.Thisreviewprovides
the GOA as well as all major stakeholders with an insightful understanding of the issues
affectingthecurrentsystemandthepossiblewaystoconsolidatingtheimprovementsalready
achieved,whilecontinuouslyclosingthegapwithinternationallyrecognizedbestpracticesand
EUDirectives.ThisapproachisaimedatallowingtheGOAtoplotadefinedimprovementplan
sequencing the actions in terms of their expected degree of impact towards continuously
fosteringtheoverallbettermentofthesystem.
4.2.
Sincethe2006CFAperformedbytheWorldBank,theGOA,supportedbyandworkinginclose
coordination with UNDP; the EU Commission; the World Bank; USͲAID; and other relevant
members of the international donor community, has been improving the public financial
management and procurement systems. Currently, the World Bank is financing a fullͲscope
system audit of the eͲGP platform, to take stock of recent updates to implement the
recommendations resulting from a previous audit performed with the support of USͲAID, in
20082.Likewise,theEUthroughtheTwinningProgram,hasbeensupportingthestrengthening
and modernization of the internal and external audit functions, and is currently finalizing its
2
SystemsauditperformedbyKPMG.
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planstocontinuesupportingtheimprovementofthepublicprocurementsystemthroughthe
IPA2008.
4.3.
Through this assessment, conducted under the oversight of the AG, assembled by UNDP, all
major stakeholders have the opportunity to choose which actions they may wish to support
through endorsing a common diagnostic and action plan, thus further optimizing the overall
effectivenessofinternationalcooperationinAlbania.
4.4.
Endorsementbytheinternationaldonorcommunityoftherecommendedactionscontainedin
the““MatrixCapacityActionPlan””depictedinAnnex3,alongwiththeestablishmentofarobust
governance structure, similar to that established through the AG for the oversight of the
performance of this assessment, should further strengthen the ability of the GOA to
successfullyplanandundertakeacredibledetailedimplementationplan.
4.5.
Lastbutnotleast,establishmentofagovernancestructureastheonedescribedabove,should
be accompanied by a strong commitment from all international donors to pull their available
resources through a ““swap”” financing instrument such as to ease the financial reporting and
administrativeburdenfortheGOA.
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II.
OVERVIEWOFTHEEXISTINGSYSTEM
ThefollowingbrieflydescribesthemainfeaturesoftheAlbanianprocurementsystem.
5. InstitutionalOrganization
5.1.
ThePPLanditsimplementinglegislationsetsupaprocurementorganizationthatconsistsofa
centralPublicProcurementAgency(PPA),
whichislegallyresponsibleforregulation
and
oversight
functions,
and
ThePPAislegallyestablishedasa““centralbody””reporting
directlytothePrimeMinister,andfinancedbythestate
approximately
1,700
functionally
budget.ThePPAisresponsiblefor:
independentcontractingauthorities(CAs)
a) Draftinglegislationandregulationsforthe
at central and local government levels.
approvaloftheCouncilofMinisters(CoM);
Complementing this structure, the 2007
b) Monitoringprocurementactivities;
amendment of the PPL created a
Directorate
for
concentrated
c)
Producingthe““PublicProcurementBulletin””;
procurement at the Ministry of Interior
d) Promotingandorganizingthetrainingofcentral
on behalf of the Executive Branch; a
andlocalgovernmentofficialsinvolvedin
Public Procurement Commission (PPC),
procurement;
which was established by law No. 10270
e) Preparesstandardtenderdocumentstobe
and became operational in April 2010;
usedinawardingprocedures;
and a Public Procurement Advocate
f)
Assistingcontractingauthoritiesbyproviding
(PPAV), a nonͲbinding ombudsman who
advicetoensureadequateandconsistent
providesadviceandguidance3.
applicationofthePPL;
5.2.
While no official information could be
obtained to ascertain the work force
currently assigned to working in the
public procurement organization, as
describedabove,aconservativeestimate,
based on the PPL4, which calls for, as a
minimum, 3 professional staff per CA, is
of 5,100 civil servants assigned to public
procurement.
5.3.
A particular feature of the Albanian
system is that amendments to the PPL
and to the Rules and Regulations are
g)
Decidesonpenaltiesincaseofmisconductor
advisedtheheadoftheCAonpenaltiesor
punishmentofCA’’sofficialswhoinfringedthe
PPL;and,
h)
Cooperateswithinternationalinstitutionsin
mattersrelatedtopublicprocurement,and
encouragesandsupportstheuseof
internationaltechnicalstandards.
AlthoughnotspecificallystatedinthePPL,ChapterII,
Article13,paragraph2,thePPAisalsoresponsible
forestablishingandmaintaininginoperationstheeͲ
GP platform.
3
ThePPAVdirectlyconductsinvestigationsonallegationsreceivedaboutpotentialviolationsofthePPL,including
potentialcasesoffraudandcorruption.
4
PPLChapterV,Article1(b).
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passed by the Council of Ministers (CoM) through ““Decisions,”” and formally approved by the
Parliament.
5.4.
ThePPLconstitutestheprimarylegislationonpublicprocurement,complementedbytheRules
andRegulationsapprovedbytheCoM,whichareaimedatprovidingfurtherguidanceonthe
application of the Law. While a procurement manual5 exists, it is not in use since it was
developedpriortotheenactmentofthe2009amendmentstothePPL.
6. InstitutionalCapacity
6.1.
Throughthe2009amendmentsthePPLwassignificantlyoverhauled,closingthegapwiththe
EUDirectives.Thesemanychangestothelaw,coupledwiththeCoM’’sdecisiontomandateall
procurement tenders to be processed electronically through the eͲGP platform exacerbated
even further a deficient capacity of the human resources responsible for the dayͲtoͲday
operationsofthesystemthroughoutthe1,700CAs.
6.2.
While the PPA, working in coordination with the Training Institute for Public Administration
(TIPA), which controls the budget resources for the training of all civil servants in Albania,
providedtrainingintheuseoftheeͲGPplatform,thecoverageofsuchtrainingatcentraland
locallevelonlyencompassed1,600ofthe5,100procurementofficials.Itshouldbenotedthat
TIPA’’sannualbudgetamountsto$90,000ayear;andthattofulfillitsmandate,TIPAisrequired
totrain6,000governmentcivilservantsperyear.Additionally, DuringOctoberͲNovember
2009, the PPA organized trainings founded through its own resources for contracting
authorities. The total number of trained staff from contracting authorities reached 1,053
people. For 2010, the PPA has planned a repeat of the 2009 training in the use of the eͲGP
platform.However,notraininghadbeenconductedatthetimethisassessmenttookplace.
6.3.
The Department of Public Administration (DOPA), which is responsible for defining the job
descriptions and the career stream of all government civil servants does not provide for a
separatejobdescriptionandcareerpathforpublicprocurementofficials.Accordingly,thetype
of expertise and professional formation of procurement officials varies widely across the
system, and the lack of incentives coupled with budgetary constraints, hinder the ability to
attractqualifiedprofessionals.
5
FinancedthroughaUSͲAIDgrantin2007.
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7. eͲGPPlatform
7.1.
IntroductionoftheeͲGPplatformundoubtedlyhadaverypositiveeffectinreducingcorruption
and overall opacity of the public procurement system, while increasing transparency. As an
example indicative of this positive trend, the average number of offers per bidding process
increasedfrom2in2008,tomorethan6in2009;whilethenumberofcomplaintswasreduced
from1every21offersto1every33offers.
7.2.
TheeͲGPplatformwasdevelopedandimplemented(softwareandhardware)withthesupport
oftheMillenniumChallengeCorporation(MCC)andUSͲAID,in2007.AccordingtoUSͲAID,the
eͲGP platform was not designed to accommodate the volume of transactions currently being
processed. Although the eͲGP platform was upgraded during 2009 in terms of number of
servers and software, lack of a suitable archive solution coupled with the sheer number of
transactions is significantly affecting the processing capacity of the system. Unless an archive
solution is implemented soon, the ability of the eͲGP platform to keep live transactions for
morethana yearbecomesquestionable.Lackofanarchivesolutionalsoprecludesusing the
systemforauditandcontrolpurposesandaffectstherunningofqueries,giventhatmostofthe
processing capacity is absorbed by the relatively high volume of information that has to be
processedbythesystemeverytimeaqueryisrun.
7.3.
The procurement information in the tables below corresponds to manually processed
transactionsfor2007and2008,andelectronicallyfor2009.
Table1––BiddingProcessesfrom2007through2009
2007
CivilWorks
Goods
Services
Total
BelowThreshold
971
1,150
674
2,795
49.1%
OpenTenders
1,170
1,101
505
2,776
48.8%
NumberofTendersProcessed
Restricted
Other
Procedures
Procedures
8
16
11
26
3
56
22
98
0.4%
1.7%
International
OpenTenders
1
0
0
1
0.0%
Total
2,166
2,288
1,238
5,692
100%
2008
CivilWorks
Goods
Services
Total
BelowThreshold
689
1,701
1,039
3,429
42.2%
OpenTenders
738
1,839
1,852
4,429
54.5%
NumberofTendersProcessed
Restricted
Other
Procedures
Procedures
2
197
9
16
2
2
13
215
0.2%
2.6%
International
OpenTenders
7
22
5
34
0.4%
Total
1,633
3,587
2,900
8,120
100%
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6
2009 BelowThreshold
CivilWorks
Goods
Services
Total
NumberofTendersProcessed
Restricted
Other
Procedures
Procedures
4
217
7
5
3
11
225
0.2%
3.1%
OpenTenders
725
1,853
1,252
3,830
52.6%
447
1,154
1,599
3,200
44.0%
International
OpenTenders
3
5
3
11
0.2%
Total
1,396
3,024
2,857
7,277
100%
7.4.
The scope of the public procurement market in Albania for the years 2005 through 2009
(actual)and2010(estimate)inbillionsofAlbanianlekisasfollows:
INDICATORS
2005 2006 2007
2008
2009
2010 (a) 2010 (b)
1.Operation&Maintenance
24.5 22.8 25.3
28.8
31.8
32.3
37.3
2.Capitalexpenditure,ofwhich:
38.4 51.1 57.0
93.8
105.1
67.4
86.1
2.1Domesticfinanced 24.3 35.4 48.2
82.5
50.2
38.6
59.5
2.2Foreignfinanced 14.1 15.7
22.6
8.8
43.6
28.8
26.6
3.TotalO&M+Capitalexpenditure 62.9 73.9 82.3
122.6
136.9
99.7
123.3
814.8
882.2
966.7
1,087.9
1,143.4 1,242.8 1,242.8
4. GDP
5.O&M/GDP
3.0
2.6
2.6
2.6
2.8
2.6
3.0
6.Capitalexpenditure/GDP
4.7
5.8
5.9
8.6
9.2
5.4
6.9
Source: Ministry of Finance, INSTAT
(a)2010Budget(afterdeductingfrozenfunds)
(b)MacroFramework2010(Decision7January2010)
7.5.
ConsistentwiththePPA’’sviewthatitsprocurementresponsibilitiesendwiththeawardofthe
procurement contract, the eͲGP platform does not capture any information pertaining to
contract management. Consequently, vital information such as changing orders; actual
quantitiesofgoodsdelivered;actualamountspaid;andotherrelevantinformationoncontract
performance and completion falls out of the scope of the PPA, and rests solely within the
purviewofeachgovernmententity.Furthermore,theeͲGPplatformisnotlinkedtothebudget
system,forwhichautomaticverificationoftheavailabilityoffundscannotbeeffectedthrough
the eͲGP platform as a preͲcondition for initiating a tender process. Although the primary
responsibilityforensuringproperavailabilityoffundspriortoinitiatingapurchaseorderrests
withtheappropriatelineministryorpublicinstitution,theeͲGPplatformoughttobecomethe
primarycontrolforensuringthesufficiencyofbudgetfunds7.
6
Opentendersrepresentedapproximatelyfrom90%Ͳ93%ofthetotalprocurementvalueduringtheyears2007––
2009,whilesmallvaluepurchasesrepresentedapproximately6%Ͳ7%duringthesameperiod.
7
Oneoftheobservationsresultingfromthereviewofprocurementtransactionsreviewedrevealedserious
deficienciesinthemanagementandcontrolofbudgetaryappropriationswhicharesubsequentlychanged
followingtheapprovalofthepurchaseorder.
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7.6.
FollowinganindependentauditoftheeͲGPplatformconductedbyKPMGin2008,withaUSͲ
AID grant, the PPA commissioned an overhaul of the eͲGP platform in 2009 to implement
severalcriticaldeficienciesaffectingdataaccessandsecurity.AhighͲlevelassessmentoftheeͲ
GPprocessesandsystemswillbeconductedearlyin2010byanindependentconsultingfirm
contractedunderthefinancingoftheWorldBank.
7.7.
BasedoncurrentPPA’’sestimate,thesheervolumeoftransactionalinformationresultingfrom
2009 procurement processes has almost fully utilized the storage capacity (i.e. archiving
capacity).Furthermore,theexistingplatformhasverylimitedquerycapabilitiesanddoesnot
take advantage of its ability to store live data to produce information to support decision
making. Consequently, along with further improvements to the software to modernize its
platformandmakeitmoreuserfriendlyandabletofeedthestrategic planninganddecision
makingprocess,itisvitaltoseekamediumͲtermsolutionforthearchivingofdata.Thisinturn,
wouldallow forappropriatequantities ofdatatobestored,permitting dataͲminingtooccur,
and relieving computer processing resources that are currently absorbed in the processing of
transactioninformation.
7.8.
Inthisregard,theupcomingauditoftheeͲGPplatformmentionedabove,shouldprovideGOA
with the required information to guide the decision making process with regards to future
upgradesormodificationsofthecurrentsoftwareandhardwareplatforms.
7.9.
Connectivity,whilerelativelygoodatthecentrallevel,itisnotyetconsistentintheinteriorof
Albania,whichhinderstheuseofthesystem.Thisisanissuethatshouldbeconsideredaspart
of a broader eͲGovernment strategy. However, the consulting team did not find evidence
indicating that connectivity in the interior of Albania ––while spotty at best –– resulted into
potentialbiddersbeingexcludedfromparticipatinginpublicprocurementbiddings.
7.10.
When the eͲGP platform was designed, its security setup contemplated two profiles only,
contracting agency, and PPA. Although according to PPA the eͲprocurement platform has a
profileforinternalandexternalauditors,suchprofile––whichhasbeenmodeledaftertheaudit
law––canonlybeaccessedoncetheauditorshavecommunicatedandobtainedauthorization
fromtheheadoftheinstitution.Consequently,theSSAauditorshavetorequestspecificaccess
tothetendersselectedfromtheheadofeachinstitutiontheywishtoaudit.Thisconstitutesan
overly cumbersome process and contradicts the practice that both internal and external
auditors should have unrestricted access to all transactions (except for the information
maintainedinthelockboxcorrespondingtoongoingtenders,duetoconfidentialityreasons)8.
8
AdoptionofanunrestrictedaccessprofileforSAAauditorswouldnecessitateamodificationoftheexistinglaw
creatingtheSSA,whichrequirestheSSAtoobtainpermissionfromeachlineministryandpublicinstitutionit
wantstoaudit,toaccesstheirsystemsandtransactions.Revisionofthelawishighlyrecommendedtoeliminate
aninherentlimitationinthescopeoftheSSAaudits,andshouldspecifythatthePPAshouldguarantee
unrestrictedaccesstoSSAauditorsforthemtoproperlydischargetheirprofessionalresponsibility.
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8. SupervisionandControl
8.1.
As part of its commitment to modernizing its public financial management and procurement
systems, on November 6, 2009, the CoM approved the ““Policy Paper and Action Plan for the
PublicInternalFinancialControlfor2009––2014””(PIFIC).
8.2.
ThePIFCrecognizestheneedtoapprove,amongothers,specificlawsinexternalandinternal
audit, and the adoption of an internal control framework based on internationally accepted
standards,likeC.O.S.O.9intheUS.
8.3.
Albaniahasembarkedonanambitiousandchallengingpathtomodernizingitspublicfinancial
managementsystem.Whileinitialstepstowardsadoptionofanintegratedcontrolframework
and modernization of the internal and external audit functions are beginning to take place,
implementation of these changes will necessitate several years to come to fruition, and a
considerable effort and resources to support a highly challenging and significant change
management process that should not be underestimated since it’’s one of the most relevant
elementsinensuringthesuccessofthereforms.
8.4.
DirectcontrolofthepublicprocurementsystemfallswiththePPA,throughitsmonitoringand
oversightfunctions,andwiththeinternalauditfunctionexertedbyeachinstitution,whilethe
externalcontrolfunctionistheresponsibilityoftheSSA.
8.5.
ThroughanEUfinancedTwinningProgram,thecapacityoftheSSAhasbeenstrengthenedand
modernized. This project also supported the strengthening and formal creation in all
governmentinstitutionsofaninternalauditfunction.AreviewofreportsissuedbytheSSAand
theinstitution’’sinternalauditorsintheinstitutionsreviewedbytheAssessmentTeamshowed
aratherformalisticapproachfocusedsolelyoncompliance.
9. MarketDevelopment
9.1.
Whilethemajorityofcontractorsandrepresentativesfromtheprivatesectorandcivilsociety
interviewedduringtheassessmentexpressedafavorableopinionoftheeͲGPplatformandits
ability to increase competition, most of them are concerned about the confidentiality of the
process and fear that government procurement officials may have access to the contents of
bidspriortobidopening,evenifkeptinthelockbox.Whilenoproofofsuchcomplaintswas
9
InternalcontrolframeworkdevelopedbytheTreadwayCommissionoftheCommitteeofSponsoring
Organizations,establishedbytheU.S.Congress.
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offered,oneofthechiefelementscontributingtothisconcerncouldbeexplainedbythelackof
acommunicationsstrategyandproactiveengagementwiththeprivatesectorbythePPA10.
9.2.
ThefunctionsandresponsibilitieslistedinthePPLforthePPAdonotincludetheengagement
of the private sector. Consequently, the PPA does not have funding in its budget to provide
trainingtotheprivatesectororstrategytoproactivelyengagetheprivatesectoranddevelopa
strongpartnershiptohelpbuildthelocalprocurementmarket.
9.3.
Although the Albanian private sector and the civil society have experienced a considerable
development,particularlyfrom2006through2009,theirleveloforganizationandengagement
with the government sector is characterized by some distrust and perceptions of lack of
transparency and corruption. Nonetheless, the 2009 corruption survey published by
Transparency International shows a relative improvement for Albania, which moved from
position111in2006,to95in2009.
10. LegalFramework
10.1.
10.2.
10.3.
Enacted in 2006, Albania’’s Public Procurement Law (PPL) provides a comprehensive legal
frameworkforpublicprocurement.Ithasbeenfrequentlyamendedinthepastthreeyearsto
reflect the provisions of Directive 2004/18/EC of the European Parliament and Council
concerning the coordination of procedures for the award of public works contracts, public
supplycontractsandpublicservicecontracts.Itsinitialversionwasmodeledonothersources,
particularly the UNCITRAL Model Law on the Procurement of Goods, Works, and Services
(1994). Its internal organization is still reminiscent of the UNCITRAL11 Model Law, but its
substantiveprovisionshavebeensignificantlyamendedtoensuregreatercompliancewiththe
AcquisCommunautaire12.
ThePPLwasamendedinlate2009tobebroughtintogreatercompliancewiththeprovisionsof
EC Directive 2004/17 (Utilities Directive) covering entities that operate the water, energy,
transportandpostalservices.ThePPLhasnowbroughtutilitieswithinitsscopeofapplication
andincludesimportantprovisionsforsectoralcontracts(Article58).ThePPLalsoprovidesnow
forframeworkagreements(Article35).Therationalebehindintroducingthesenewmodalities
wastoenhanceefficiencyintheexpenditureofpublicmoneysforgoods,services,andworks.
Moreover, review procedures have been brought into greater compliance with the
requirements of the EC Remedies Directives (89/665/EEC, 92/13/EEC and 2007/66/EC),
establishingaPPCthatwilltakeoverreviewfunctionsofthePPAandbyformallyempowering
thePPCtoconducttimelyandeffectivereviewofprocurementcomplaints.
10
PPAisnotlegallyrequiredtoengagewiththeprivatesector.
Theinternalstructureofthelawincludingdefinitions,principlesandinstitutionalsetͲupresemblesthe
UNCITRALmodellaw
http://www.uncitral.org/uncitral/en/uncitral_texts/procurement_infrastructure/1994Model.html
12
ThebodyofCommunitylegislationbywhichallEUMemberStatesarebound.CountriesjoiningtheEUmust
haveimplementedtheexistingAcquisCommunautairebythetimeofaccession.
11
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10.4.
10.5.
10.6.
10.7.
However, further improvement is advisable. The PPL amendments have not addressed
concerns that its provisions on the scope of its application leave room for evasion by stating
vaguelythat““othercontractsmayberegulatedbyotherlegislation.””BecausethePPLdoesnot
apply to concessions, there is a lingering risk of overlapping between the legal concepts of
““concession”” and ““procurement contract.”” A recent amendment based on the directives,
whichallowsauthoritiesthediscretionofshorteninguptoamaximumof7daysthetimelimit
forrespondingtotendersthatareannouncedelectronicallyrunscountertobestpracticeand
theveryconceptoffairopportunityprovidedtobidders13.
ThePPLisseenbygovernmentofficialsandusersoftheprocurementsystemashighlycomplex
andratherrigid,whichinturnaffectstheoperationalefficiencywithincontractingauthorities.
The PPL establishes a highly complex procurement ““machine””, the very existence of which
makes it difficult to create institutional capacity in the PPA to carry out its regulatory and
advisory functions effectively. The inherent complexity of the PPL stems from comments
received throughout our fieldͲwork from both contracting authorities and bidders;
consideration of the existing organizational structure consisting of 1,700 procurement units;
andacomparisontoothercountriesbasedonourcumulativeexperienceinthefield.Further,
because of a significant number of amendments and the rather recent shift to adopt almost
exclusivelyelectronicprocedures,thePPLinitsentiretycreatestheimpressionthatithasbeen
stretchedtoitslimitstoaccommodatevariouspolicyprioritiesandthat,insteadofacoherent
whole;itresemblesachangingpatchworkofinitiatives.
The PPL is an overarching regulatory umbrella for the operations of about 1,700 contracting
authorities. While the PPL in itself simply borrows this structure from the Law on Budget (its
appendix lists all the budgetary units of the Government which are in turn considered under
the PPL procurement units), the sheer number of contracting authorities in a relatively small
country such as Albania with modest human and financial resources makes uniform and
effective application of the PPL difficult. Further, while fragmentation and decentralization of
authorityregardingprocurementisindicativeofgreaterresponsivenesstogovernmentand/or
public needs, it also risks shifting responsibility for decisionͲmaking to low tier government
officialswithoutproperaccountabilitylodgedinhighertiersofgovernment.
The secondary (or subsidiary) legislation implementing the PLL has also evolved in the right
direction.TheAssessmentTeamtakesnoteofseveralCouncilofMinistersDecisionsincluding
those establishing the Directorate for Concentrated Procurement, and amending the
procurement rules to provide, among others, binding rules for effective eͲprocurement. The
subsidiarylegislationincludesmodeltenderdocumentsforgoods,services,andworks.Italso
includesgeneralconditionsofcontractsforpublicsectorcontracts.
13
AccordingtothePPA,shorteningoftimeͲlimitsforreceiptofrequeststoparticipateandforreceiptoftenders
stipulated in article 43 of the PPL, paragraphs 1, through 7, was implemented based on the directives of the
European Community which provide that whenever an eͲprocurement system is used, the contracting authority
mayconsideritappropriatetoreducetimeͲlimitsuptoamaximumof7days.TheConsultingTeamisoftheview
that such reduction is illͲadvised considering that the use of an eͲprocurement system does not necessarily
contribute to reduce the amount of time required by bidders to prepare and submit their offer. In turn, such
reductionmayhavetheundesiredeffectofhinderingtheabilityoftheGOAtoobtaingoodvalueͲforͲmoney.
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10.8.
However,furtherstepsneedtobetakentomakethesecondarytieroflegislationmorehelpful
for the implementation of the PPL and more responsive to the very concept of effective and
transparent procurement. Despite important amendments to the PPL in 2009, little thought
seemstohavebeengiventotheurgentneedtoreflecttheseamendmentsintheprocurement
rules.Noamendmentshavebeenissuedasyet.ThePPAhasyettoadoptafullyfunctionaland
widely embraced procurement manual which will effectively help contracting authorities and
users.Someimportantconceptsusedinthesubsidiarylegislationdonotseemtobeconducive
to transparent and effective procurement. To mention one example, the introduction and
actual widespread use of the concept of the estimated value of a contract and the so called
““ceilingonfunds””(““fondilimit””)inmanyprocurementproceduressetsthestageforpotential
forerrorsorabuses.
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III.
MAINFINDINGSANDRECOMMENDATIONS
11. Below there is a summary of the main findings and recommendations. These findings and
recommendations are aimed at ensuring that the system fosters better fiscal management and
supports the GOA’’s objectives. This assessment does not present a traditional action plan, but
insteadincludesamatrixofmainfindingsandproposedareasforimprovementandpossibleactions
thattheGOAisencouragedtoconsider(seeAnnex1).Thematrixisintendedtoserveasatoolfor
the GOA to use in deciding on the actions to be taken, its priorities, and the timing of
implementation,therebyleadingtotheformulationofanactionplanforimprovements.
12. All findings and recommendations summarized below, as well as the more detailed version
contained in the ““Matrix Capacity Action Plan,”” Annex 1, have been thoroughly discussed and
agreedwiththeGOA,representedbytheDirectoroftheDSDC,whichprovidedoverallcoordination
for the assessment, the Director of the PPA, and the Chairman of the PPC. Furthermore, the
preliminary draft report, which contents are substantially the same as those of this report, were
reviewedandagreedwiththeAdvisoryGroup14.
13. As in many other countries, decision makers in Albania have traditionally viewed public
procurementasanadministrative,almostclericalfunction(aseriesofpurchasingevents).However,
procurementisnowviewedinternationallyasastrategicgovernmentfunctionthatshouldbeused
to promote better fiscal management and to support the government’’s development policies. As
such, its key objective is not control, but the system’’s ability to deliver works, goods and services
efficientlyandeconomically,withinarobustframeworkoftransparency,ethics,andaccountability
principles.
14. While the Albanian legal framework for public procurement system has undergone significant
improvements;thecapacityofitsinstitutions;levelofoperations;marketdevelopment;theinternal
controlframework,andtheinternalandexternal controlfunctions,havenotevolvedat thesame
pace. Consequently, while certain minor adjustments to the PPL are in order, the Albanian public
procurementsystemhastheopportunitytobenefitthemostfromaseriesofactionstowards:
x
implementingframeworkcontractsforsmallpurchasesandpurchasesofenergy;
x
discontinuingthepracticeofpublishingthe““limitfund””;
x
discontinuing the use of a formula to identify abnormally low offers, replacing it with
appropriatemechanismstodealwith““lowballing””
x
simplifyingprocurementprocesses;
14
Advisory Group: group assembled by the UNDP for the purpose of overseeing the performance of the
assessment of the public procurement system of Albania. The Advisory Group is formed by the Director of the
DSDC,DirectorofthePPA,UNDP,theWorldBank,USAID,EuropeanCooperation,andAustrianCooperation.
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x
modernizingandupgradingtheeͲGPplatform;
x
enhancing the capacity of the PPA and CAs while significantly simplifying and reducing the
currentstructureof1,700CAsthroughimplementingasolidchangemanagementstrategy;
x
developing a specific job description and career stream for public procurement officials and a
trainingstrategytosupportit;
x
developingandimplementingastrategytoproactivelyengagetheprivatesectorasapartnerin
thedevelopmentofamoreefficient,competitive,transparentandethicalprocurementmarket;
x
fullyintegratingtheprocurementsystemwiththepublicfinancialmanagementsystem;
x
RevisePPA’’srolepertaininginvestigationsoncomplaintsbroughttotheattentionofthePPAV
(PPLArticle66);
x
enhancing the planning function; adopting a common integrated internal control framework;
andmodernizingtheinternalandexternalcontrolfunction;
x
reassesstheworkͲloadofthePPAensuringtheadequacyofitsstructure,stafflevelandbudget,
toenableittoproperlydischargeitsvariousresponsibilitiesasrequiredbythePPL;and;
x
makeofthe2010diagnosticandthecapacitydevelopmentplanacommontoolforprioritizing
andcoordinatingthesupportofalldonors.Thisrecommendationentailsdefiningadetailed
actionplanwithappropriategoalsandperformanceindicatorsforeachmajortaskandvettingit
withthemembersoftheinternationaldonorcommunityandmajorstakeholdersinAlbania,as
wellasputtinginplacearobustgovernancestructuretocoordinateandoverseeitsfinancing
undera““SWAP””modalityanditsimplementation.
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AlbaniiaǦReporrtonBencchmarkin
ngandDra
aftCapaccity 2010
0
A
Assessme
ent
IV.
RESULTSFR
ROMTHEASSSESSMENTBA
ASEDONTHEOECD/DACM
METHODOLO
OGYFORPUBLIC
PROCUREM
MENTSYSTEM
MS(VERSION4)
dicators, supplemented by
b the
15. Overaall, the assessment of thee 12 BLI indiicators and itts 56 subͲind
assesssment of the
e applicable CPIs,
C
is consisstent with th
he various im
mprovements introduced to
t the
PPL and
a with the introduction of the eͲGP platform as the sole con
nduit of public procuremeent in
Alban
niasinceJanuary2009.
16. Thetw
wographicsb
belowdepict theassessed
dlevelofthe publicprocu
urementsysteemforeacho
ofthe
fourp
pillarsrepresentativeofth
heexpected idealcapacittyofapubliccprocuremen
ntsystem(Grraphic
1), an
nd for each of
o the 12 BLLIs (Graphic 2),
2 as of March 2010, ass well as the opportunitiees for
impro
ovements with respect to the benchmark. Fu
urthermore, the graph also showss the
impro
ovementssincetheprevio
ousassessmeentconducted
dbytheWorrldBankinJu
une2006.Taable2
alsoshowstheasssessedlevelo
ofcapacityforreachpillarin
ncomparativeformfor20
010and2006.
Graphic1––AssesssmentofthePublicProcu
urementSyste
emofAlbania
PillarI
3
2.5
2
1.5
1
0.5
PillarIV
Benchm
mark
PillarII
0
2010
2006
PillarIII
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Graphic2––AssessmentofthePublicProcurementSystemofAlbania
1
3
12
2
2.5
2
11
3
1.5
1
0.5
10
Benchmark
2010
4
0
2006
9
5
8
6
7
Table2––AssessedLevelofCapacityoftheAlbanianPublicProcurementSystem2006––2009
Pillar
2010
AssessedCapacity
2006
NetChange
I. LegalFmwrk.
2.42
Satisfactory
2.25
8%
II. Inst.Capacity
1.58
RelativelyLow
0.83
81%
III. MarketDvlpt.
1.61
RelativelyLow
1.2
25%
IV. Int.&Trpcy.
1.77
RelativelyLow
0.94
79%
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V.
DETAILEDBENCHMARKINGANALYSIS
17. Thissectionprovidesadetailedanalysisoftheassessedlevelofcapacityforeachofthe12BLIsand
their 56 subͲindicators, classified under each of the four Pillars that are deemed ––by the
internationalcommunityͲrepresentativeofthecapacityofapublicprocurementsystem.
18. EachsubͲindicatorisbasedoninternationallyrecognizedbestpracticesinpublicprocurement.The
scoringsystemrangesfrom3to0foreachBLIsubͲindicator,with3representingtheideallevelof
complianceandperformancewiththestatedstandard.Ascoreof2isforcaseswherethesystem
exhibits less than full compliance and performance and consequently necessitates some
improvementsintheassessedarea.Ascoreof1indicatesanareawheresubstantiveworkisneeded
toattainareasonablelevelofcomplianceandperformance.Aratingof0istheresidual,indicatinga
failure to comply with the proposed standard. No decimals are admitted in the scoring of subͲ
indicators, while the scoring at the BLI and Pillar level correspond the arithmetical average of the
individual scores for each subͲindicator. There is no aggregate scoring for the system as a whole
sinceeachPillarreferstoadifferentdimensionofthesystem.
19. Tofacilitatetherelationbetweentheassessmentanalysisbelowandeachoftherelevantfindings
statedunderSectionIII.––““MainFindingsandRecommendations””,thematrixcontainedinAnnex1
classifiesallfindingsunderthecorrespondingPillar.
PILLARI.––LEGISLATIVEANDREGULATORYFRAMEWORK
20. Alegislativeandregulatoryframeworkisthestartingpointforasoundgovernancesystemandas
suchiscoveredthroughPillarIoftheOECD/DACMethodology.PillarIencompassestwoindicators
and14subͲindicators,whichhavebeenscoredfollowingascalefrom0to3,asexplainedabove.
BaseLineIndicator/SubͲ
Indicator
SummaryAssessment
Score
PillarI––LegislativeandRegulatoryFramework
1––Publicprocurement
legislativeandregulatory
frameworkachievesthe
agreedstandardsand
complieswithapplicable
obligations
1(a)––Scopeofapplication
ofthelegislativeand
regulatoryframework
Sinceemergingin1991fromfourdecadesofCommunistrule,
and 10 years after devolution into lawlessness, Albania has
undergone a remarkable transformation. Aggressive market
reforms, government modernization, and active engagement
with the international community have brought about NATO
membership, a Stabilization and Association Agreement with
the European Union (EU), greater freedoms, and better living
standards. Expanding at an average rate of 6% per annum,
2
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BaseLineIndicator/SubͲ
Indicator
SummaryAssessment
Score
PillarI––LegislativeandRegulatoryFramework
Albania’’seconomyisoneofthefastestgrowingintheBalkans.
Albania is politically organized as a parliamentary democracy.
ThePresidentistheheadofstateandiselectedtoservefora
5Ͳyear term by the Assembly of the Republic of Albania
(hereinafter referred to as the Parliament). The President
appoints a Prime Minister from the ruling Party. The Prime
MinisternominatestheappointeestotheCouncilofMinisters
for ratification in the parliament, and thereafter becomes the
chairman of, the Council of Ministers. Executive power rests
withtheCouncilofMinisters.
AlbaniaisaCivilLawcountry.Itslegalsystemincludesits
constitution,codes(legislationtheadoptionofwhichrequiresa
qualifiedmajorityvoteintheparliament),laws(legislation
whichcanbeadoptedbyasimplemajorityvoteinthe
parliament),subsidiarylegislationsuchasdecisions,orders,
regulations,rules,andinstructionsissuedbytheCouncilof
MinistersoraMinistry,decreesissuedbythePresidentof
Albania,andcourtdecisionsissuedbytheConstitutionalCourt
ortheSupremeCourtwhentheSupremeCourtissues““unifying
decisions.””
TheConstitutionprovidesforthehierarchy,statusandeffectof
legalnorms.Inparticular,Article4declarestheConstitutionis
supremewithintheAlbanianlegalsystem.Article122provides
thatinternationalagreements,ratifiedbylaw,prevailover
incompatiblelawsofAlbania.Article116oftheConstitution
providesthat:““normativeactsthatareeffectiveintheentire
territoryoftheRepublicofAlbaniaare:a.Constitution;b.
ratifiedinternationalagreements;c.laws;d.normativeactsof
theCouncilofMinisters.””
Article118providesthatalawmayspecifythatanorganhas
thecompetencetomakedelegatedlegislationonspecified
mattersaccordingtospecifiedprinciples,butthatorgancannot
furtherdelegatesuchcompetence.Otherwise,rulesissuedby
theCouncilofMinisters,ministriesandcentralstate
institutions,andordersofthePrimeMinister,areonlybinding
onsubordinateadministrativeentitiesandmaynotserveasthe
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BaseLineIndicator/SubͲ
Indicator
SummaryAssessment
Score
PillarI––LegislativeandRegulatoryFramework
basisfortakingdecisionsthataffectindividualsandother
subjects(Article119).
AstheConstitutiondeterminesthehierarchyofnormsitisnot
necessarytoindicatespecificallyinalawthatitisincompliance
withtheConstitution,asthiswillnormallybetreatedasselfͲ
evident.However,thetextofdelegatedlegislationshould
specifythelegalauthorityunderwhichitismade.
Alaw,afterapprovalintheParliament,ispromulgatedbythe
PresidentoftheRepublic,andentersintoforce15daysafterits
publicationintheOfficialGazette.
ThefoundationofAlbania’’slegalframeworkintheareaof
publicprocurementisLawno.9643onPublicProcurement
(PPL),whichwasadoptedon20November2006andentered
intoforceon1January2007,replacingthePublicProcurement
Lawno.7971whichhadbeeninforcesince1995.ThePPLwas
furtheramendedinOctoberof2009.ThePPLisbasedmainly
ontheprovisionsofDirective2004/18/EC,butitalsoreflects
influencesfromothersources,suchastheUNCITRALModel
Lawonpublicprocurement,theWorldBankguidelinesandthe
WTOGovernmentProcurementAgreement(GPA).
OnthebasisofthePPL,theCouncilofMinistersadopted
implementingregulationsintheformofDecisionno.1dated
10January2007OntheRulesofPublicProcurement,amended
mostrecentlyon25May2010.Theseregulationsamplify,
clarify,andimplementthelegalframeworksetoutinthePPL.
In essence, the PPL and its implementing legislation sets up a
procurement system that consists of a central Public
Procurement Agency (PPA) with a regulatory/oversight
function, approximately 1,700 functionally independent
procurementunitsatcentralandlocallevelsofgovernment,a
directorate for concentrated procurement on behalf of the
Executive Branch, a Public Procurement Commission (PPC) (a
bodythatreviewsandmakesdeterminationsonadministrative
complaints);andaPublicProcurementAdvocate(PPAD),anonͲ
bindingombudsmanwhoprovidesadviceandguidance.
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BaseLineIndicator/SubͲ
Indicator
SummaryAssessment
Score
PillarI––LegislativeandRegulatoryFramework
ThePPLwas amendedinlate2009to bebroughtintogreater
compliance with the provisions of EC Directive 2004/17
(Utilities Directive) covering entities that operate the water,
energy,transportandpostalservices.ThePPLhasnowbrought
utilities within its scope of application and includes important
provisions for sectoral contracts (Article 58). The PPL also
provides now for framework agreements (Article 35). The
rationale behind introducing these new modalities was to
enhance efficiency in the expenditure of public moneys for
goods,services,andworks.
Moreover, review procedures have been brought into greater
compliance with the requirements of the EC Remedies
Directives (89/665/EEC, 92/13/EEC and 2007/66/EC),
establishing a PPC that will take over review functions of the
PPA and by formally empowering the PPC to conduct timely
andeffectivereviewofprocurementcomplaints.
In order to place recent changes in proper context, our
assessmentfollowedupontherecommendationsoftheWorld
Bank Country Fiduciary Assessment of August 2006 (page 19).
While great effort has been placed to bring the PPL into
compliancewiththedirectives,theAssessmentTeamnotesa
few recommendations that have not been formally
incorporatedintothePPL,suchas:
x definingemergencyandforcemajeure;
x definingnonͲdiscrimination;
x providing for selection of consultants for service
contractsonthebasisoftechnicalqualificationsalone;
and,
x providinganopportunitytodebarredpartiestoprotest
thedebarment.
The Assessment Team recognizes that the above
recommendations were made in the context of an older and
significantly different legal framework. It also recognizes that
definitionsmayhavebeenprovidedinotherlaws.However,for
purposes of ensuring responsiveness and continuity, it
encourages thePPAto addaspecific referenceto suchother
lawsonthePPA’’swebͲsite.
ThePPL’’sscopeisextensive.AsstatedinitsArticle1,thePPL
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setsouttherulesapplyingtotheprocurementofgoods,works,
and services. Some public contracts are exempted: defense
contracts; secret contracts or contracts requiring special
security measures; contracts regarding financial services,
arbitration services, or broadcasting services; as well as
contractswhicharegovernedbyagreementswithotherstates
orinternationalorganizations(Articles5,6,7,and8ofthePPL).
Albanian authorities have yet to address earlier concerns,
raisedbytheWorldBankandSigma(ajointinitiativeoftheEU
and the OECD), that PPL’’s provisions and the scope of its
application,allowsevasionandloopholes.Forexample,thePPL
in its Article 4, states vaguely that ““other contracts may be
regulatedbyotherlegislation.””Althoughthislanguageisbased
ontheDirective,theDirectiveisconsideredasastartingpoint,
and not necessarily indicative of international best practice.
GiventhefactthatthePPLdoesnotapplytoconcessions,there
isalingeringriskofoverlappingbetweenthelegalconceptsof
““concession””and““procurementcontract.””
WetakenotethatamendmentstotheLawonConcessionsare
in the process of being developed and adopted and that they
would purportedly resolve this concern. However, as of now
thegoverninglegalframeworkislackinginthisregard.
TheAssessmentTeam,throughitsconsultations,foundthatthe
PPL is considered by officials and users of the procurement
system as highly complex and rigid, which in turn affects the
operational efficiency within contracting authorities. Indeed,
the PPL establishes a highly complex procurement system,
which makes the creation of institutional capacity in the PPA
difficult and impacts its ability to carry out its regulatory and
advisoryfunctionseffectively.Further, becauseofasignificant
number of amendments and the recent shift to adopt almost
exclusivelyelectronicprocedures,thePPLattimescreatesthe
impression that it has been stretched to its limits to
accommodate various policy priorities and that, instead of a
coherentwhole,itresemblesapatchworkofinitiatives(though
theymaybecommendable).
As noted above, the PPL provides a framework that regulates
the day to day activities of 1,700 contracting authorities
defined in the Budget Law (its appendix lists all the budgetary
units of the Government which are in turn considered under
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1(b)––Procurement
the PPL procurement units). The sheer number of contracting
authoritiesdoesnotseemcommensuratewiththeconstraints
of a relatively small country with limited human and financial
resources. Such overly heavy organizational structure makes
uniform application of the PPL extremely difficult and
unnecessarily costly. To underscore the significance of this
point, if the average number of employees per procurement
unitis3(asrequiredbyCouncilofMinisters’’DecisionNo1of
January 10, 2007, On the Rules of Public Procurement,
amended most recently on 25 May 2010, Chapter V, Article
1(b)),thenthePPLrequiresapproximately5,100employeesfor
its effective operation, a staggering number and cost given
Albania’’ssizeandresources.
Whilethisisapolicyconcernthatdoesnotnecessarilyrelateto
the formal soundness of the procurement legislation, it is
emphasized because it has ramifications for the effective
implementationofthePPL,andbecauseitdoesaffectthelongͲ
termviabilityofthesystemandthecoreprincipleofeconomy
intheuseofpublicresources.
Further, fragmentation and decentralization of authority
regardingprocurementisindicativeofapolicydecisiontowards
greater responsiveness to government or public needs.
Legislators should be aware that this decentralization of
authoritycouldalsoshiftresponsibilitytogovernmentofficials
at lower tiers, without proper accountability lodged in higher
tiers of the bureaucracy. It is unclear whether policy options
were analyzed or whether regulatory impact analyses were
conducted that would clearly present arguments and
counterargumentsinfavororretainingthiscomplexsystemor
streamlining it. This is another policy concern that does not
necessarily relate to the formal soundness of the PPL but that
could have a negative impact on the integrity and
accountabilityofthepublicprocurementsystem.
Access to legislation is reasonably good. Applicable legislation
may be accessed for free though the PPA’’s website
(https://www.app.gov.al/), as well as though the online
database of the Office of Official Publications
(http://www.qpz.gov.al/).
The PPL sets forth 5 different procurement methods: open,
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methods
restricted,negotiatedwithorwithoutpublication,requestsfor
proposals, and design contests (Article 29). Although not yet
operational,thePPLalsoprovidesforelectronicreverseauction
andthedynamicpurchasingsystem(Article37).
The PPL explicitly provides that the open procedure is the
defaultprocedure.(Article30).Restrictedproceduresaretobe
used when necessary to distinguish between a phase dealing
with qualifications and a phase dealing with the actual
responsiveness of the offer (Articles 29, 30). The use of a
negotiated procedure with or without prior publication is
intended to be exceptional. However, even under the
application of the negotiated procedure without prior
publication,thelawcallsforobtainingquotationsfromatleast
5 economic operators. This in turn entails a competitive
process15.
The requirement for publication depends on how the value of
the contract relates to the high or the low value thresholds
(Article31).Thehighvaluethresholds(Article27)arecurrently
set by secondary legislation at 1,200,000,000 ALL for public
works and 200,000,000 ALL for goods and services (Council of
Ministers’’ Decision No 1 of January 10, 2007, On the Rules of
PublicProcurement,amendedmostrecentlyon25May2010).
Thelowvaluethresholdsarecurrentlysetat12,000,000ALLfor
publicworks,and8,000,000forgoodsandservices(Councilof
Ministers’’ Decision No 1 of January 10, 2007, On the Rules of
PublicProcurement,amendedmostrecentlyon25May2010).
Article 29.5 of the PPL and Chapter VI 2) provides for small
value purchase, as a simplified procedure, such simplification
still requires appointment of a special commission of 3
membersandtoobtainatleast““……threeindicationsofpricesof
goods or services.”” Consequently, neither the PPL nor its
subsidiary legislation provide for the purchase of low value
15
A review of tenders performed at the government electricity producing corporation KESH, for
purchasesofenergyfromneighboringcountries,showedthatuseofthenegotiatedprocedureentailed
a competitive process and also yielded lower prices than those obtained through open international
tenders.
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items or small purchased through direct contracting under
petty cash accounts. This omission appears unwarranted and
may lead to situations in which authorities have to incur
needless administrative costs for purposes of implementing
cumbersome procurement procedures for minor purchases.
Additional subsidiary legislation for purposes of fully
implementing the PPL provisions on framework contracts (see
below)mayprovideasolutionfortheneedtoefficientlyhandle
smallpurchasesbyspecifyingthatframeworkcontractsmaybe
used,among,otherforpurposesforsmallpurchases.
ChapterIVofCouncilofMinisters’’DecisionNo1ofJanuary10,
2007, On the Rules of Public Procurement, amended most
recently on 25 May 2010) is unambiguous in assigning
responsibility at an appropriate level for the use of a specific
procedure (the head of the Contracting Authority or his/her
assignee).
Article 28 of the PPL specifically prohibits the fractioning of
contractsasameansofbypassingcompetition.
Article 58 provides comprehensive umbrella rules and
procedures for procuring sectoral or framework contracts.
However,Article58/3––whichwouldseemtoexcludefromthe
application of the PPL sectoral contracts for the resale and
lease to third parties of, inter alia, energy, water,
transportation and postal services –– is vague and likely to
generate problems in implementation. Also, Article 58/6
provides for an unnecessary exclusion from the scope of
applicationofthePPLforpurchasesofenergy,fuelsandwater
if such goods are used for the production of energy. It should
be noted that while the definition adopted by the PPL is the
sameasthatincludedintheDirective,inclusionofthiswording
in the Directive assumes there is a separate legislation
regulating public utilities and their procurement, which is not
thecaseinAlbania.
Broadlyspeaking,publicprocurementunderthePPLisopento
foreign companies. The law is based on the principles of nonͲ
discrimination and national treatment for any economic
operator.
1(c)––Advertisingrulesand The legislative framework (both the PPL and the secondary
2
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timelimits
legislation) provide clear rules and criteria related to, and
indeedrequire,thepublicadvertisingoftendersinaccordance
withspecifiedtimelimitsofasequenceofsteps.
Article38ofthePPLprovidesthatnoticesforcontractsvalued
above the highͲvalue thresholds must be published in the
Public Procurement bulletin as well as a newspaper of wide
circulationinEurope.Italsoprovidesthatnoticesforcontracts
valued below than the high value thresholds but higher than
the low value thresholds must be published in the Public
Procurement Bulletin. The Public Procurement Bulletin
produced in Albanian only and is accessible for free at:
https://www.app.gov.al.
In the case of open procedures above the high value
thresholds,theminimumtimelimitforsubmittingtendersis52
daysfromthedateofpublicationofthecontractnotice(Article
43ofthePPL).
Article43ofthePPLalsospecifies,amongother,thefollowing
timelimits:
a. for requests to participate, 20 days from the date of
publication of the contract notice for restricted or
negotiated procedures with publication valued above
thehighthreshold;
b. forreceiptoftenders,20fromthedateofsendingthe
invitationforrestrictedprocedures;
c. for receipt of tenders, 30 days from the date of
publicationforopenproceduresbetweenthehighand
lowvaluethresholds;
d. for requests to participate, 15 days from the date of
publication of the contract notice for restricted or
negotiated procedures with publication valued
betweenthehighandlowthresholds;
e. forreceiptoftenders,15daysfromthesendingofthe
invitationforrestrictedproceduresvaluedbetweenthe
highandthelowthresholds.
Article43alsoprovidesforareductionby7daysinthecaseof
the52daytimelimitorthe30daytimelimit(describedabove)
if electronic means are used. Although such reduction was
implemented based on the directives, it should be mentioned
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1(d)––Ruleson
participation
that the directives do not ““mandate”” an across the board
reductionoftimeͲlimitsby7days,butrecognizetheabilityfor
the contracting authority to reduce timeͲlimits up to a
maximumof7days.TheAssessmentTeamviewsthisprovision
as illͲadvised. The purpose of the time limits is to ensure that
biddershaveadequatetimetorespondtoatender.Whilethe
introductionofeͲprocurementmayarguablymakeiteasierfor
authoritiestoevaluatetenders,itdoesnotnecessarilymakeit
easierforbidderstorespondtoatender.
As a consequence, bidders may not have appropriate time to
preparetheirbidsandthiscouldresultintotheGOAnotbeing
abletogetrealvalueͲforͲmoneythroughpublicprocurement.
Also, the 52 day minimum specified in Article 43 of the PPL is
impracticalandincompatiblewithproceduresusedforsectoral
contractsunderArticle58ofthePPLandparticularlythosefor
the purchase of energy. The PPL needs to be amended to
provideformorerealisticminimumperiodsthatareapplicable
toproceduresforsectoralcontracts.
Article 39 of the PPL provides the main criteria regarding
contract notices. Chapter III, Article 2(a) of the Council of
Ministers’’ Decision No 1 of January 10, 2007, On the Rules of
Public Procurement, amended most recently on 25 May 2010
specifies comprehensive requirements for notices of contract
awards.
Article45ofthePPLprovidesreasonableexclusioncriteriafor
prospective bidders. These include: criminal convictions,
professional misconduct, insolvency, and failure to pay taxes.
Article 46 of the PPL provides rules about the qualification of
bidders.ExceptforParagraph1(b)ofArticle46whichprovides
for qualification on the basis of technical ability, which may
createanopeningforarbitrariness,therulesareintendedtobe
nonͲdiscriminatoryandtoencourageparticipationbysmalland
medium enterprises. They also, to the extent, possible favor
pass/fail type criteria. The Consulting Team recommends GOA
tofurtherrefineapplicablecriteriainthesecondarylegislation.
The rules are also intended to be proportionate to the nature
and size a contract to be awarded. Article 47 of the PPL
2
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1(e)––Tender
documentationand
technicalspecifications
providesthedisqualificationcriteria.Ourreviewhasnotfound
any provision or legal instrument that would seem to favor
participation by government owned or controlled economic
operators.
Onepointofconcernisthatwhilegroundsfordebarmentseem
by and large clear, neither the PPL, nor the subsidiary
legislation provide the applicable administrative rules or
procedures as to how debarred parties can appeal the
debarment. Debarment procedures are contained in the
Administrative Code. However, for sake of transparency and
completenessofinformation,theConsultingTeamencourages
PPAtoincludeaspecificreferencetotheAdministrativeCode
inthePPA’’swebͲsite.
Also, the Consulting Team underscores the fact that while the
overarchingrulesonparticipationandqualitativeselectionare
generally adequate and nonͲdiscriminatory from a normative
pointofview,thesupportingsecondarytieroflegislationis,in
certain instances, vague and creates room for potential errors
orabuse.
Article 41 of the PPL provides that each CA will use standard
bidding documents (SBDs), as provided by the public
procurement rules. SBDs are available for download from the
PPA’’swebͲsiteandtheiruseismandatorybyallCAs.
Article42ofthePPLprovidestheframeworkforclarifyingand
modifying tenders. Article 13 of the PLL states that the PPA
should favor the use the international standards in the
preparationoftechnicalspecifications.
CouncilofMinisters’’DecisionNo1ofJanuary10,2007,Onthe
Rules of Public Procurement, amended most recently on 25
May 2010 establishes in Chapter III the minimum tender
documentsbyenumeratingelementsofageneralandspecific
nature.
ChapterV,Article2oftheCouncilofMinisters’’DecisionNo1of
January 10, 2007, On the Rules of Public Procurement,
amended most recently on 25 May 2010 specifies the rules
governingthepreparationoftechnicalspecifications.According
to it, each Procurement Unit is responsible for drafting the
3
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1(f)––Tenderevaluation
andawardcriteria
technicalspecificationsexceptincaseswhereitlacksexpertise.
Inthesecases,thetechnicalspecificationsaredraftedonbehalf
oftheContractingAuthoritybyspecialistswithinorwithoutthe
ContractingAuthority.
Article 23(3) specifically states that the use of international
standardsand,intheirabsence,otherstandards,isencouraged
when preparing tender specifications. While this general
principleiscommendable,theConsultingTeam’’sreviewshows
that these provisions necessitate of further guidance and
clarificationinthePublicProcurementRules.
Articles53and54ofthePPLprovidethegeneralrulesforthe
evaluation of tenders. These rules make possible, in principle,
the submission of alternatives if a Contracting Authority does
notreceiveeconomicallysoundtenders.ChapterV,Article4of
theCouncilofMinisters’’DecisionNo1ofJanuary10,2007,On
theRulesofPublicProcurement,amendedmostrecentlyon25
May 2010 provides more detailed rules that must be made
publicinadvanceofthetenderevaluation.Thesedetailedrules
are largely sound. Although technical criteria for tender
evaluation are of the pass/fail nature, the low level of
institutionalcapacityandtheoverallcomplexityofprocedures
warrant greater specificity. This could be achieved through a
revisionoftheProcurementRegulations.
Article 58 of the PPL specifies the procedures for awarding
sectoral contracts. These procedures are compatible with the
AcquisCommunautaireandgenerallysound.
ChapterVI,Article3oftheCouncilofMinisters’’DecisionNo1
of January 10, 2007, On the Rules of Public Procurement,
amendedmostrecentlyon25May2010providesstepͲbyͲstep
rules for contracts for services. These rules sufficiently
distinguishbetweenthetechnicalandmonetaryaspectsofthe
evaluation process by providing for a pointsͲbased, twoͲtier
evaluation process, the first tier of which focuses on the
technicalproposalandthesecondtierofwhichfocusesonthe
costproposal.
Article 56 of the PPL provides the framework for dealing with
abnormally low tenders. Chapter V, Article 4(ë) of the Council
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1(g)––Submission,receipt
andopeningoftenders
ofMinisters’’DecisionNo1ofJanuary10,2007,OntheRulesof
Public Procurement, amended most recently on 25 May 2010
provides the rule for assessing whether an offer is abnormally
low. According to this provision, an offer is abnormally low
when it is greater than the arithmetical median of all the
discounts (difference from the ceiling price) of all remaining
offersplusonefifthofthatdifference16.
This rule is inappropriate since it artificially produces an
abnormally high number of abnormally low offers even in
situations where the supposedly abnormally low price would
appearnormalonitsfaceandineffect.
Although not included in the PPL, Chapter 3, 2Ͳa) of the
subsidiarylegislationrequirespublicationoftheestimatedfund
foraparticularprocurementinthe““contractnotice.””Areview
of a sample of tender processes at 10 contracting authorities,
encompassing approximately 40 tenders, shows that the
maximum fund available is always provided in the tender
documents made available to bidders. This practice should be
discontinued because not only it encourages bidders to bid
artificially low amounts and therefore decrease the quality of
the goods, services, or works they provide but also when
combinedwiththetechnicalspecifications,itcanbeeffectively
usedtofavoraspecificsupplier.Thepracticeofpublishingthe
maximum limit funds deprives the public authorities from
obtainingbestvalueinprocurementandmayleadtoadditional
administrative costs. Such change would be best effectuated
throughanamendmentoftheCouncilofMinisters’’DecisionNo
1 of January 10, 2007, On the Rules of Public Procurement,
amendedmostrecentlyon25May2010.
Articles 48 through 52 of the PPL provides the general criteria
forsubmittingtenders,verifyingreceipt,preservingthesecurity
oftenders,modifyingandwithdrawingtenders,andopeningof
tenders.
3
16
Forexample,ifthefundlimitis750,000lek,andfiveoffersarereceivedasfollows:749,950;749,000;749,400;
748,900;and,745,000;theformulawouldcalculateandcomparethefollowingfactors:Averagepriceoffered
(749,950+749,000+749,400+748,900+745,000)/5=748,450lek;Differencewithfundlimit=(750,000––748,450)=
1,550lek;factor=(1,550+1/5*1,550)=1,860;differencebetweenlowestpriceandfundlimit=(750,000Ͳ745,000)
=5,000;thenif5,000isgreaterthan1,860,offerof745,000lekisofabnormallylowprice.However,therelative
differencewithrespecttothelimitfundisonly0.6%.
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1(h)ͲComplaints
ThesegeneralcriteriaareamplifiedinChapterVoftheCouncil
ofMinisters’’DecisionNo1ofJanuary10,2007,OntheRulesof
Public Procurement, amended most recently on 25 May 2010.
This Chapter provides stepͲbyͲstep rules for submitting and
opening tenders. They outline a defined and regulated
proceeding for opening tenders and require that the modality
ofsubmissionbespecifiedclearlyinadvanceofthesubmission.
(In the overwhelming majority of cases, this is a rather moot
point, as tenders are conducted by using the eͲprocurement
platform).Therulesarealsoclearanddetailedonthedutyto
maintainadequaterecordsoftheproceedings.
One point of some concern is that while the subsidiary
legislation provides that members of an evaluating committee
must sign statements to the effect that no conflict of interest
would arise by their participation in the evaluation process,
there is no explicit language which would require that during
theevaluationperiod,informationrelatingtotheexamination,
clarificationandevaluationoftendersmustnotbedisclosedto
the participants or to others not involved officially in the
evaluation process. While the provisions of Article 21.1 of the
PPL might make this point seem redundant, the Consulting
Team’’s view is that it needs to be clearly stated in applicable
legislation17.
The PPL unambiguously establishes a right of review of
decisions made by Contracting Authorities or the PPA. The
2009 amendments to the PPL have established a twoͲtier
complaintsreviewsystem.
The first tier is intraͲsystemic. An aggrieved party may file a
complaint with a Contracting Authority within 7 days of
becoming aware of the alleged irregularity (Article 63 of the
PPL).ACAmustreviewthecompliantandmakeadecisionon
its validity within 7 days of receipt of the compliant, a period
during which the award of the contract is suspended. If the
complainantisnotsatisfiedwiththedecisionoftheContracting
3
17
PPLArticle21.1““TherelevantinformationrecordedbytheCAaccordingtoArticle12ofthePPLshall,on
request,bemadeavailabletoanyinterestedpersonafteratenderhasbeenawarded,orafterawarding
procedureshavebeenterminatedwithoutresultinginaprocurementcontract.Suchrequestmaybesubmitted
anytimeandtheCAisobligedtomaketheinformationavailablewithin5daysfollowingthereceiptofarequest.””
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authority,s/heoritsauthorizedagentmayfileacomplaintwith
thePPCwithin7daysofthedecisionmadebytheContracting
Authority.
Complaints with the PPC follow the extraͲsystemic tier in that
the PPC is an independent agency tasked with administrative
review authority over procurement decisions. It decisions are
finalontheadministrativelevel,butsubjecttojudicialreview.
Its decisions can be appealed in the District Court of Tirana (a
first level court) which, in such a case, would have original
subject matter jurisdiction over the dispute. Article 64 of the
PPLdescribesPPC’’sscopeofauthorityandthemattersthatare
subjecttoreviewbythePPC.
Additionally, thePPLgivesthePPAtheauthoritytoinitiatean
administrative investigation in all cases where it determines
thattherehasbeenaviolationofthePPL(Article66).
The latter generates an inconsistency and a potential conflict
withtheintentofthePPLthatallcomplaintsbedecidedbythe
PPC.TotheextentthatthePPAretainstheauthoritytodecide
ontheperformanceofanadministrativeinvestigationandsince
onlythosecomplaintsthatareexpresslyfiledtothePPCbyan
economicoperatorwouldbereviewedbythePPC,thePPAmay
receiveacomplaint directlyfromthe CAorfromaneconomic
operatorwhodoesnotliketodeposittherequired10%ofthe
amountofthecontractvalue.
At the time of finalizing the wrapͲup mission for this
assessment,RulesofProcedureofthePPCwerebeingdrafted,
andassuchtheiranalysishavenotbeenincludedaspartofthis
assessment.
To understand the significance of the 2009 amendments, it is
necessary to summarize the essence of the EC Remedies
Directives (89/665/EEC, 92/13/EEC and 2007/66/EC). The
original remedies directives date from 1989 as to supply
contracts (89/665/EEC), and 1992 as to utilities (92/13/EEC).
Thecurrentversions(the““RemediesDirectives””)resultedfrom
updates adopted in 2004: Directive 2004/18/EC, applicable to
contractsforpublicworks,supplies,andservices,andDirective
2004/17/EC, applicable to contracts in the water, energy,
transport, and postal sectors. Those directives provide means
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bywhichparticipantsinpublictenders(““economicoperators””)
couldseektoenforceEuropeanlawonpublicprocurementby
challengingtheactionsofpublicauthorities.Theircornerstone
is the requirement that each EU Member State establish a
meansoflegalredressbeforeacourtoradministrativetribunal.
On December 20, 2007, the European Parliament and Council
of Ministers published a longͲawaited directive to enhance
remedies available to disappointed bidders in public tenders
conducted by any of the 27 members of the European Union
(2007/66/EC)(the““NewDirective””).Thisdirectivewasdesigned
to make existing remedies for violations of competitive
procurement procedures more viable. The New Directive
supplemented and amended preͲexisting directives on
procurement remedies by requiring a ““standstill”” period of 10
calendar days after bidders are given notice of the award
decision, including a summary of reasons. This will enable a
disappointedvendortoinitiateachallengeintimeforthecourt
or administrative tribunal to preserve the status quo by
forbidding execution of a contract pending legal review. In
cases of ““urgency,”” a Member State may limit the initial
standstill to seven calendar days; however, this period is
extendedbyanadditionalthreedaysifacompanynotifiesthe
procuringauthoritywithintheinitialsevendaysofitsintentto
protest.Toensurethatpotentialchallengerscanconsidertheir
optionsduringthestandstillperiod,thedeadlineforrequesting
legalreviewcannotbelessthan10daysafternoticeofaward.
In cases of ““extreme urgency,”” as defined by the Remedies
Directives,nostandstillperiodapplies.Inordertopermitaction
within these tight timeframes, contracting and review
authorities are required to accept notice of review by fax or
electronic medium (eͲmail). Member State procedures may
require companies to bring their complaints first to the
procuringauthority,beforeseekingreviewbytheindependent
tribunal required by the Remedies Directives. In the event the
procuring authority rejects the protest, however, there is an
additional standstill period of five working days after the
authority issues its decision. During that period, the aggrieved
companymayinitiatereviewbytheindependenttribunal.
TheConsultingTeam’’sreviewofthe2009amendmentsshows
that the PPL has been brought into greater (albeit not full)
compliance with the Acquis Communautaire. It should be
pointed out that –– despite a Stabilization and Association
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2––Existenceof
ImplementingRegulations
andDocumentation
2(a)––Implementing
regulationthatprovide
definedprocessesand
proceduresnotincludedin
higherͲlevellegislation
2(b)––Modeltender
documentsforgoods,
works,andservices
2(c)––ProceduresforpreͲ
Agreement with the European Union –– Albania is at present
under no obligation to ensure full compliance. The 2009
amendments are decidedly a noted improvement in Albania’’s
legislativeframeworkforpublicprocurement.
Regulations implementing the PLL (Council of Ministers’’
Decisionsarelargelycomprehensive.Theoverwhelmingbulkof
them (albeit not everything –– a notable exception being the
very Council of Ministers’’ Decision that establishes the
DirectorateforConcentratedProcurement)areconsolidatedin
theCouncilofMinisters’’DecisionNo1ofJanuary10,2007,On
theRulesofPublicProcurement,amendedmostrecentlyon25
May 2010. A set is available on the website of the Public
ProcurementAgency.
Such regulations have been updated regularly. However,
because of frequent amendments and the fact that they were
not completely consistent with one another, and considering
the number of tertiary legal instruments that are required to
make them fully functional, regulations are neither optimally
organized hierarchically, nor wellͲstructured formally. Further
steps are advisable to make such regulations more helpful for
theimplementationofthePPLandmoreresponsivetothevery
conceptofeffectiveandtransparentprocurement.
Modelinvitationandtenderdocumentsforanextensiverange
ofgoods,works,andservicesprocuredbygovernmentagencies
have
been
adopted.
They
are
available
at:
https://app.gov.al/ep/BiddingDocuments.aspx.
The PPA has adopted a set of standard, obligatory set of
templatesthatareconsistentwithapplicablelegislation.These
templates are to be used when preparing documents used in
competitivetenderprocesses.
Responsibility for drafting and regularly updating such model
documents has been assigned to the PPA (Article 13.2 of the
PPL).
The subsidiary legislation (consolidated in the Council of
2
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qualification
Ministers’’ Decision No 1 of January 10, 2007, On the Rules of
PublicProcurement,amendedmostrecentlyon25 May2010)
provides rules on designing and implementing procedures for
preͲqualification. Chapter III, Article 3 provides limitations on
the content of the procedures for preͲqualifications in works,
goods,andservicescontracts.
While not explicit about the use of pass/fail type qualification
criteria, this legal instrument is aimed at supporting and
favoringtheuseofsuchcriteria.
The subsidiary legislation also provides guidance on the
applicationofpreͲqualificationcriteria(SeeChapterIII,Article3
andChapterV,Article2).
However, while the Consulting Team’’s assessment of the
procedures for preͲqualification in subsidiary legislation shows
that these procedures are largely sound, it should be pointed
out that greater definition and specificity on the nature and
circumstances of use of such procedures is warranted. What
would otherwise be deemed reasonable legislative principles
areattimes improperlyappliedtoproducescenariosinwhich
seemingly qualified bidders end up being unfairly disqualified
fromcertainprocurementactions18.
ChapterVIoftheCouncilofMinisters’’DecisionNo1ofJanuary
10, 2007, On the Rules of Public Procurement, amended most
recently on 25 May 2010 provides rules for procedures
governing the procurement of consulting services (Article 3)
and design contests (Article 4). These rules pay adequate
attention to how technical capacity is to be evaluated. These
rulesallowforascoredevaluationoftechnicalcapacity,aswell
asforacombinationofpriceandtechnicalcapacity.
Our assessment shows that these rules do not allow for
selection on the basis of technical qualifications alone. SubͲ
2(d)––Proceduressuitable
forcontractingforservices
orotherrequirementsin
whichtechnicalcapacityis
akeycriterion
2
18
In one instance, the Consulting Team observed that a CA had placed a turnover requirement as a pre-qualification
criterion for a bidder that was equal to the value of the contract. The procurement involved purchasing automobiles.
The explanation provided was that the CA had applied the principle of proportionality per Article 46 of the PPL.
Given the nature of the procurement and the relatively low risk on the part of the government, this rule on qualitative
selection was applied in a discriminatory manner.
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2(e)––User’’sguideor
manualforcontracting
entities
2(f)––GeneralConditionsof
Contracts(GCC)forpublic
sectorcontractscovering
goods,worksandservices
consistentwithnational
requirementsand,when
applicable,international
requirements
indicator 2 d) states that the legal framework should provide
for conditions under which selection based exclusively in
technical capacity is appropriate. While the law specify
conditionswherethedecisionwillsolelybebasedontechnical
considerations,thisinpracticedefaultsintheuseofaweighted
evaluationcriteriathatassignsatleast30%toprice.
Ourassessmentalsoshowsthattheserulesarenotadequately
clearontheproceduresandmethodologiesforcombiningprice
andtechnicalcapacityunderdifferentcircumstances.
ChapterXIoftheCouncilofMinisters’’DecisionNo1ofJanuary
10, 2007, On the Rules of Public Procurement, amended most
recently on 25 May 2010provides that the PPA is tasked with
producing user’’s guide and manuals, as well as organizing
capacity building activities for purposes of the effective
implementationofthePPL.
A Guide on Procedures for Public Procurement was produced
byaUSAIDͲfundedprojectin2007andadoptedbythePPA.Itis
available for consult on the PPA’’s website at:
https://app.gov.al/ep/ProcurementManuals.aspx. It seems, at
thetimeofproductionandadoption,thisGuidewasadynamic
document that produced tangible information for users of the
publicprocurementsystem.
However, this Guide has not been update to reflect the
important legislative and regulatory changes that have been
adoptedsince2007anditthereforeoflittleornousetousers.
Our assessment did not identify any specific evidence of
ongoingeffortstoproduceanupdatedmanualorguide.
ThereareGeneralConditionsofContractthatincludethemain
provisions to be included in contracts for goods, works and
services with the Government of Albania. These General
Conditionsareavailableat:
https://app.gov.al/ep/BiddingDocuments.aspx. While the legal
partoftheConsultingTeam’’sanalysisshowsthattheseGeneral
Conditionsmaybearticulatedmoreclearlyandthewordingof
contracts, in general, may be more clear, these General
Conditions of Contracts are generally in keeping with
reasonably sound applicable legislation and reflect key
provisions of the law that have a bearing on the contractual
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performanceoftheparties.
To briefly illustrate, the General Conditions of Contract for
Works procured in an open procedure include clauses on
corrupt practices and conflict of interest confidential or
proprietary information, intellectual property, origin of goods,
obligations of each party, communications, insurance,
reporting, curing defects, warranties, payment, force majeure,
amendments, conflict resolution, etc. Other types of contracts
include similar General Conditions. We find these General
Conditions to be comprehensive and compatible with
internationalbestpractice.
TheGeneralConditionsarecomprehensiveand––byandlarge––
consistent with international best practices such as the use of
clausesonavoidingconflictsofinterest,protectingintellectual
property rights, and amending the agreement. One point of
concern,however,isthattheseGeneralConditionsofContracts
contain no provisions on alternative dispute resolution
mechanisms as a method of avoiding costly litigation and
promotingefficiency.
PillarII––INSTITUTIONALFRAMEWORKANDMANAGEMENTCAPACITY
21. PillarIIfocusesonhowtheprocurementsystem,asdefinedbythelegalandregulatoryframework,
isactuallyoperatinginpractice.
22. PillarIIencompasses3indicatorsand12subͲindicatorstoassesstheinstitutionsandmanagement
systemsthatareintegralpartoftheoverallpublicsectorgovernanceofthecountry.Thefollowing
table summarizes the result of the assessment of the 12 subͲindicators which have been scored
followingascalefrom0to3,asexplainedabove.
BaseLineIndicator/SubͲ
Indicator
SummaryAssessment
Score
PillarII––InstitutionalFrameworkandManagementCapacity
3ͲThepublicprocurement
systemismainstreamed
andwellintegratedinto
thepublicsector
governancesystem
3(a)––Procurement
planningandassociated
Currently,procurementplanningisnotfullyintegratedintothe
budget formulation process, and budget availability continues
2
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to be the main focus of procurement plans instead of the
prioritization of institutional needs aligned with strategic
governmentobjectives.
Overall,timingforbudgetformulationhasnoticeablyimproved
with regards to the 2010 budget, but links between
procurement plans and strategic objectives are lacking, and
links between multiyear estimates and subsequent setting of
budgetceilingscontinuetobeunclear.
A review of a sample of contracts shows that payments are
3(b)––Budgetlawand
processed with significant delays due to a lack of available
financialprocedures
supporttimelyprocurement funds.Thissituation,whichdirectlyaffectsdevelopmentofthe
local procurement market and puts local firms at peril, is
contractexecution,and
payment
compounded by the lack of integration of the public
procurement system with the public financial management
system.
According to law, no procurement action may start without
3(c)––Noinitiationof
proper budget authorization (Directive No. 1, of January 1,
procurementactions
1996). However, there is no electronic link between the
withoutexistingbudget
authorization of funding in the budget and the eͲGP system.
appropriations
Furthermore, responsibility for budget appropriations rests
witheachlineministry,andthePPLdoesnotincludeasoneof
the PPA responsibilities to ensure there are available funds
prior to initiating the procurement action through the system.
Lack of a proper control at the level of the eͲGP platform is
madeevidentbythesignificantvolumeofoverduepaymentsto
government vendors. Such a tardiness is simply explained by
the subsequent change effected to budgetary commitments,
whichcreatesanunrealisticcashposition,resultingintheover
commitment of funds. Consequently, enforcement of
budgetary authorizations prior to commencing a procurement
processthroughtheeͲGPplatformshouldcontributetoreduce
thispractice.
The eͲGP system is not electronically linked with the public
3(d)––Systematic
financial management system. Additionally, the available
completionreportsare
preparedforcertificationof informationonprojectedcashflowavailabletobudgetentities
only covers a twoͲmonth ceiling set by the MOF for each
budgetexecutionandfor
reconciliationofdelivery
institution.ThescopeoftheeͲGPsystemdoesnotencompass
withbudgetprogramming informationpertainingtocontractexecutionandmanagement,
for which no information is available on contract completion.
expendituresarepartofthe
budgetformulationprocess
andcontributetomultiyear
planning
1
2
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4––Thecountryhasa
functional
normative/regulatorybody
4(a)––Thestatusandbasis
forthe
normative/regulatorybody
iscoveredinthelegislative
andregulatoryframework
4(b)––Thebodyhasa
definedsetof
responsibilitiesthatinclude
butarenotlimitedtothe
following:providingadvice
tocontractingentities;
draftingamendmentsto
thelegislativeand
regulatoryframeworkand
Eachinstitutionkeepsrecordsofcontractcompletion.Controls
over contract management are kept by the corresponding
technical or operational units that requested the goods,
services or works procured. PPA and its units do not
contemplate contract management as part of their
responsibility,forwhichtheeͲGPsystemwasdesigned toend
atcontractaward.
The degree of independence of the PPA is considered to be
similar to that of a cabinet minister, since both, cabinet
ministers and the head of the PPA are appointed and report
directlytothePrimeMinister.Furthermore,thePPAisobliged
topresentanannualreporttotheCouncilofMinisters.While
independence is always relative, considering the line of
dependency,thePPAisconsideredtobeestablishedatalevel
affording it a reasonably adequate degree of authority and
independence.
The PPL established the PPA as a ““central body”” reporting
directlytothePrimeMinister,financedbytheStatebudget.
PPA is responsible for drafting legislation and regulations for
theapprovaloftheCouncilofMinisters;monitorsprocurement
activities19; produces the Public Procurement Bulletin;
promotes and organizes the training of central and local
government official involved in procurement; and assists CAs
with advice to ensure adequate and consistent application of
thePPL.UponestablishmentofthePPCinApril2010,thePPA
has ceased from performing administrative review of
complaints(seePillarIV,indicator10(b)forfurtherreference).
3
3
19
Article2ofthePPLdefinesthemonitoringfunctionofthePPAasencompassingtheprocurementprocess
throughthecontractaward,hencelimitingitsoversightcapacityoncontractexecution.Thisinturn,posesan
internalcontrolriskandlimitstheabilityoftimelypreventingordetectingpaymentsinexcessorforitems,
quantitiesorqualitydifferentthanthatcontracted.Currently,contractadministrationresponsibilitiesrestsolely
withtherequestingunitofeachbudgetaryunit(i.e.:lineministries;municipalities;autonomousinstitutions,etc.).
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As stated in the PPL, PPC’’s decisions and instructions, in the
areaofpublicprocurement,areadministrativelyfinal20.
AlthoughthePPL(Article19/1)definesthecreationofaPublic
Procurement Committee as the highest body in the field of
procurement, responsible for examining complaints and for
takingdecisionsthatareadministrativelyfinal,thePPChasnot
formally established. Subsequent to the performance of this
assessment, in April 2010, the members of the PPC were
formallyappointed;itsorganizationalstructureconsistingof18
positions was approved; and its budget was also approved;
effectivelybecomingoperationalinMayof2010.
EstablishmentofthePPCeliminatedtheconflictofinterestthat
existed priortoApril2010,duetothe factthatthe PPAacted
notonlyinacapacityofapolicymaking,oversightandadvisory
body,butalsoasreviewerofappeals.Thisinturnundermined
the perception of fairness and transparency over the appeal
processofcomplaints.
At the time of this assessment, March 2010, the roster of the
4(c)––Thebody’’s
PPA consisted of 36 positions, and was considered reasonably
organization,funding,
staffed. However, following the decision of establishing the
staffing,andlevelof
independenceand
PPC, in April 2010, the government transferred to the PPC 18
authority(formalpower)to positionsoriginallyassignedtothePPA.Furthermore,ofthe18
exerciseitsdutiesshouldbe remaining positions, approximately 9 correspond to IT staff
sufficientandconsistent
positions, leaving only 9 positions, including the Director, to
withtheresponsibilities
perform all of the core functions of the PPA. Such level of
staffingraisesseriousconcernsaboutthecapacityofthePPAto
adequatelydischargeitslegalresponsibilities,andmuchlessto
be able to undertake the implementation of the
recommendations resulting from this assessment.
Consequently, the level of staffing and resources of the PPA
andthoseofthePPC,willhavetobereassessed.
ThelastreformofthePPLconferredthestatusofcivilservants
toallmembersofthePPA,includingtothePPA’’sDirector.
implementingregulations;
monitoringpublic
procurement;providing
procurementinformation;
managingstatistical
databases;reportingon
procurementtootherparts
ofthegovernment;
developingandsupporting
implementationof
initiativesforimprovements
ofthepublicprocurement
system;andproviding
implementationtoolsand
documentstosupport
trainingandcapacity
developmentof
implementingstaff.
2
20
DecisionsofthePPCcanbeappealedatthecourts.However,intheopinionoftradeassociations,chambersof
commerceandentrepreneursinterviewedaspartofthisassessment,publicconfidenceintheeffectivenessofthe
courtsisverylow,andtheprocessisregardedasveryonerousandtimeconsuming.Thisinitselfconstitutesa
majorsystemicbarrier.
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4(d)––Theresponsibilities
shouldalsoprovidefor
separationandclaritysoas
toavoidconflictofinterest
anddirectinvolvementin
theexecutionof
procurementtransactions
5––Existenceof
InstitutionalDevelopment
Capacity
5(a)––Thecountryhasa
systemforcollectingand
disseminatingprocurement
information,including
tenderinvitations,requests
forproposals,andcontract
awardinformation
EstablishmentofthePPC,asstatedunderindicator4(b)above,
eliminated the perceived conflict of interest that existed
throughApril2010,asaconsequenceofthePPAtoperforming
incompatiblefunctions.
2
The eͲGP platform, which is structured as a partially
transactionalsystem21,isthenatural““tool””tocapturerelevant
procurement information needed to retroͲfeed the decision
making process regarding public expenditures and
procurement.InformationtobeproducedbytheeͲGPplatform
should help assess the overall performance and quality of the
procurement system; review the adequacy of the strategic
direction for developing the market; plan and exploit
opportunities for further aggregation of procurement; and for
the overall optimization and integration of the public
procurement system into the public financial management
system. However, the ability for gathering and reporting on
relevantprocurementinformationisstilllackingduetolackof
advanced query capabilities22, software and hardware
limitationspendingimplementationofasuitablesolutiontothe
2
21
TheeͲGPplatformwasdesignedtohandleaprocurementtransactionfromtheinitiationoftheprocurement
processuponformalapprovalofthepurchaseorderbytheheadofabudgetunit,totheawardofthecontract.
Furthermore,theeͲGPplatform––consistentwiththePPA’’sviewthattheprocurementprocessendswiththe
contractawardͲdoesnotcontainanyinformationregardingcontractexecution,limitingtheabilityoffullytracking
overallperformanceoftheprocurementprocess.
22
USͲAID,whoaspartofitsdevelopingeffortstohelpstrengtheningthepublicprocurementsystemofAlbania,
financedthedesign,programmingandimplementationoftheeͲGPplatform,statedthattheoriginalsystemand
itshardwarehadnotbeendesignedtohandlealargevolumeoftransactionsasitisnowthecase.Similarconcerns
wereraisedbyKPMGconsulting,whichperformedanauditoftheeͲGPplatformin2008.ThePPAhasechoed
thoseconcernsandwiththeassistanceofthesameconsultingfirmthathadoriginallydesignedtheeͲGPplatform,
performedseveralchangestoaddressthebulkoftheauditors’’recommendations,includingthepurchaseof
severaladditionalservers.However,thesolutionsimplementeddidnotencompassimplementationofasolution
tothelackofasuitablearchiveprocedure.AnewauditoftheeͲGPplatform––financedbytheWorldBankͲis
expectedtotakeplaceinthenearfuture.However,thechangesintroducedtothesystemdidnotencompass
upgrades/changestothehardware,forwhichconcernsaffectingtheperformanceandstoragecapacityofthe
systemhaveyettobeaddressed.
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archiving of effected procurement transactions, which are
currently absorbing an inordinate amount of the processing
capacity.
Asmentionedunder5(a),whiletheeͲGPshould,bydefinition,
5(b)––Thecountryhas
systemsandproceduresfor playtheprimaryroleincapturingrelevantinformationtofeed
the analytical process required to ensure adequate decision
collectingandmonitoring
making in terms of implementing public policy through
nationalprocurement
statistics
effective and efficient procurement, the current system does
not currently capture or produce information such as the one
suggested under Compliance and Performance indicators by
the OECD/DAC methodology. Furthermore, onͲline query
capabilitiesoftheexistingsystemareverylimitedandpreclude
runningbasicqueries,suchashowmanytenderswereawarded
inagivenyeartothesamevendor.
ThePPAisformallytaskedwiththeresponsibilityfordesigning
5(c)––Asustainable
a strategy for training of public procurement officials both at
strategyandtraining
central and local government levels. In so doing, the PPA
capacityexiststoprovide
partners with the Training Institute for Public Administration
training,adviceand
(TIPA),whichhasabudgetofapproximately$90,000ayearfor
assistancetodevelopthe
capacityofgovernmentand training6,000governmentemployees.Thelatterisconsidered
largely inadequate to satisfy the training needs of
privatesectorparticipants
tounderstandtherulesand approximately 5,100 civil servants assigned to the 1,700 CAs,
regulationsandhowthey
without including private sector organizations, which are the
shouldbeimplemented
naturalpartnersofthegovernmentinthepublicprocurement
process.In2009,thePPAinpartnershipwiththeTIPA,trained
approximately 700 employees at the local government level
and 900 at the central government level. These trainings
focusedontheuseoftheeͲGPplatformonly.
PPA does not have a training strategy. Plans are drafted on a
yearlybasis,basedonwhatisconsideredapriorityareaatthat
time.
Training for 2010, is expected to focus on the use of the eͲGP
platform.
Trainingdoesnotincludetheprivatesector,sincethePPLdoes
notformallyrecognizeasamandateforittoprovidetrainingto
theprivatesectorororganizedcivilsociety,andassuchhasno
budgetallotmentforthatpurpose.However,asinprioryears,
PPA is willing to facilitate training to the private sector if the
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privatesectorcoversthecostofdevelopingandrenderingthe
training.
AlthoughPPAhasdraftedsomepreliminaryplans,itlacksofa
5(d)––Qualitycontrol
standardsaredisseminated formal strategy for developing a career path and an
accreditationprogramforprocurementspecialists.
andusedtoevaluatestaff
performanceandaddress
While there is a performance evaluation system, lack of a
developmentissues
specific terms of reference and of a career path for
procurementofficials,rendertheperformanceassessmentasa
perfunctory exercise that is not designed to actually measure
and address performance gaps and build capacity through
recruitmentofqualifiedprofessionalsandtraining.
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PillarIII––PROCUREMENTOPERATIONSANDMARKETPRACTICES
23. Pillar III focuses on the operational efficiency and effectiveness of the procurement system at the
level of those institutions responsible for issuing individual procurement actions. It looks at the
marketasonemeanofjudgingthequalityandeffectivenessofthesystem.
24. Pillar III encompasses 3 indicators and 10 subͲindicators to assess whether the country’’s
procurement operations and practices are efficient; the functionality of the public procurement
market;andtheexistenceofcontractadministrationanddisputeresolutionprovisions.
25. The following table summarizes the result of the assessment of the 10 subͲindicators which have
beenscoredfollowingascalefrom0to3,asexplainedabove.
BaseLineIndicator/SubͲ
Indicator
SummaryAssessment
Score
PillarIII––ProcurementOperationsandMarketPractices
6––Thecountry’’s
procurementoperations
andpracticesareefficient
6(a)––Thelevelof
procurementcompetence
amonggovernmentofficials
withintheentityis
consistentwiththeir
procurement
responsibilities
Capacityofprocurementofficialsvarieswidelyamongdifferent
lineministries.Toillustratethispoint,ourreviewofarandom
sample of procurement processes at 10 CAs, showed
inconsistent application of the law and other errors that are
indicative of capacity shortcomings throughout the system.
Thesefindingsarecorroboratedbythe2008AnnualReportof
the SSA, which quotes having found errors and inconsistent
application of the PPL in connection with 60% of the
procurementprocessesselectedforreview.
Representatives of private sector associations that were
interviewed as part of our assessment consistently pointed to
lackofcapacityandunderstandingofgovernmentprocurement
officials.
In addition to the Annual Report of the SSA, the PPA’’s Annual
Report provides useful data to ascertain the existing gap
betweencapacityandrequirements.
The low capacity levels are perpetuated through a lack of
budget allocations to support training and of a strategy to
enhancetheprofessionalprofileofpublicprocurementofficials
throughaspecificcareerpath.
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As indicated under 5(c ) and 6(a) there are procurement
training programs, but their overall scope and effectiveness is
undermined due to the lack of a strategy and appropriate
budgetresourcestoimplementit.
In our interview with the Administrator of TIPA, we gathered
information about the trainings provided in 2007 and 2008 to
form trainers of trainers, in government procurement.
However,noinformationcouldbeobtainedabouthowmanyof
thosetrainedstillremaininthesystem.Statisticalinformation
ongovernmentstaffrotationcouldnotbeobtainedduringthe
fieldworkphaseoftheassessment.
6(c)––Thereareestablished Whilethereareformalrequirementsastothenumberofyears
that public records are to be kept, lack of a formal internal
normsforthesafekeeping
controlframeworkcreatesasomewhaterraticandinconsistent
ofrecordsanddocuments
relatedtotransactionsand level of compliance. Furthermore, following mandatory use of
contractmanagement
theeͲGPsystemforconductingallpublicprocurementatlocal
and central government levels, coupled with inherent
electronicarchiveconstraints,questiontheabilityofthePPAto
ensure full archiving of electronic records on public
procurement transactions after one year. This in turn poses a
seriousriskofsecuringanappropriateaudittrail.Inaccordance
tocommerciallaw,proposalsandothertenderdocumentation
providedinhardͲcopyaretobekeptfor10years.
6(d)––Thereareprovisions PPA is responsible for the oversight of procurement processes
fordelegatingauthorityto performedbyCAs.
Following the establishment of the PPC in April 2010, all
otherswhohavethe
complaints, which were being processed by the PPA, are now
capacitytoexercise
directlyaddressedbythePPC.
responsibilities
7––Functionalityofthe
publicprocurementmarket
AlthoughPPAhasofferedsomelimitedtrainingandassistance
7(a)––Thereareeffective
totheprivatesector,asstatedin5(c),thePPAdoesnothave
mechanismsfor
asoneofitsfunctionstoprovidetrainingtotheprivatesector
partnershipsbetweenthe
or to work with it to help develop the market in Albania.
publicandprivatesector
Accordingly, PPA’’s limited budget does not provide for
resourcestoundertaketrainingactivitiesfortheprivatesector,
unless the private sector pays for it. As a result, there is no
strategyonhowtoworkwiththeprivatesectortohelpdevelop
themarket.Thereisbeenlittleprivatesectorconsultationand
6(b)––Theprocurement
trainingandinformation
programsforgovernment
officialsandforprivate
sectorparticipantsare
consistentwithdemand
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7(b)––Privatesector
institutionsarewell
organizedandableto
facilitateaccesstothe
market
7(c)––Therearenomajor
systemicconstraints(e.g.
inadequateaccesstocredit,
contractingpractices,etc.)
inhibitingtheprivate
sector’’scapacitytoaccess
theprocurementmarket
although the private sector welcomed the introduction of the
eͲGP platform, it remains suspicious of the level of security
affordedbythesystem,aswellasofthegovernment’’sabilityto
manipulatetheprocess.
With the exception of the association of constructors, the
American Chamber of Commerce, and the Chamber of
CommerceofTirana,theprivatesectorandcivilsocietyarenot
wellorganized.
The private sector in Albania shows growth over the past 3
years. In particular, construction and commercial enterprises
havedevelopedatasteadypace.However,theglobalfinancial
crisis has had an impact on the accelerated pace of growth
showedbytheAlbanianeconomyoverthepastfewyears.Asa
result, access to credit, while unrestricted, has become more
difficult.Furthermore,duetotheincreasingfinancialcostsand
theunpredictabilityofthegovernment’’sfunding,whichresults
in significant delays in paying obligations, private sector firms,
especially small and medium size companies, are hesitant to
participateinpublicprocurement.
There are no constraints for foreign firms to participate in
public procurement tenders, other than the fact that only
international bids are advertised in English. While virtually, all
tenders are open to both local and foreign firms local tenders
are all published in Albanian language only. This in turn may
restrict the GOA’’s ability to obtain good valueͲforͲmoney in
procurement of items that are not produced in Albania.
Nonetheless, it should be noted that the PPL does not afford
any margin of preference or preferential treatment to local
bidders over international bidders. Furthermore, definition as
to when a tender should be local or international is done
through the establishment of procurement thresholds, which
areapprovedbytheCouncilofMinistersandrevisedeverytwo
years,orwhentheconditionssowarrant.TheConsultingTeam
likes to encourage the PPA –– as part of a clear strategy to
develop the local procurement market –– to consider the
possibilityofestablishingcriteriainthesecondaryprocurement
legislation of when the procurement of specific items,
regardless of the thresholds, should require that the RFP be
publishedbothinAlbanianandinEnglish.
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PillarIII––ProcurementOperationsandMarketPractices
8––Existenceofcontract
administrationanddispute
resolutionprovisions
8(a)––Proceduresare
clearlydefinedfor
understandingcontract
administration
responsibilitiesthatinclude
inspectionandacceptance
procedures,qualitycontrol
procedures,andmethodsto
reviewandissuecontract
amendmentsinatimely
manner
8(b)––Contractsinclude
disputeresolution
proceduresthatprovidefor
anefficientandfairprocess
toresolvedisputesarising
duringtheperformanceof
acontract
8(c)––Proceduresexistto
enforcetheoutcomeofthe
disputeresolutionprocess
Contract administration responsibilities, including inspection
and tests prior to acceptance and payment for works, goods
and services, are clearly defined. However, one of the
consequences of advertising the fund limit is the potential
acceptanceoflowerqualityofworks,goodsandservices.
2
AlbaniaacceptseitherUNCITRALortheInternationalChamber
of Commerce (Paris) arbitration rules for resolving contract
disputes whenever the government is a party. Conflicts and
disputesarisingfromprocurementcontractsareresolvedbased
on the Civil Code of Albania. SBDs do not contain information
onADRmechanism,butreferonlytocourts.
2
Albania is a member of the New York Convention on
Enforcement of International Arbitration Awards. The
evaluation team was not able to find records of enforcement
thatmightbeindicativeoftheeffectivenessofthecourtsinthis
regard.
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PillarIV––INTEGRITYANDTRANSPARENCYOFTHEPUBLICPROCUREMENTSYSTEM
26. PillarIVfocusesontheadequacyandperformanceoftheintegrityandinternalcontrolmechanisms
andsystems,aswellasontheinternalandexternalauditfunction,thatareconsiderednecessaryto
support adequate implementation and performance of the legal and regulatory framework.
Consequently,thisPillartakesaspectsoftheprocurementsystemandgovernanceenvironmentand
seekstoensurethattheyaredefinedandstructuredtocontributetointegrityandtransparency.
27. Pillar IV encompasses 4 indicators and 18 subͲindicators to assess the adequacy of the country’’s
control and audit systems; the efficiency of the appeals mechanism; the degree of access to
information;andtheadequacyofethicsandanticorruptionmeasuresinplace.
28. The following table summarizes the result of the assessment of the 18 subͲindicators which have
beenscoredfollowingascalefrom0to3,asexplainedabove.
BaseLineIndicator/SubͲ
Indicator
SummaryAssessment
Score
PillarIV––IntegrityandTransparencyofthePublicProcurementSystem
9––Thecountryhas
effectivecontrolandaudit
systems
9(a)––Alegalframework,
organization,policy,and
proceduresforinternaland
externalcontrolandaudit
ofpublicprocurement
operationsareinplaceto
provideafunctioning
controlframework
On November 6, 2009, by Decision No. 640, the Council of
Ministers approved the ““Policy Paper and Action Plan for the
PublicInternalFinancialControlfor2009Ͳ2014.””
The PIFC recognizes the need to improve the managerial
accountability,internalcontrols,riskmanagement,
accounting service, and monitoring. Decision No. 640,
concludes recognizing that ““……This will require the preparation
of the FMC Law,……”” as well as the approval of specific laws in
ExternalandInternalAudit,andtheadoptionofanintegrated
internal control framework based on international accepted
standards,likeC.O.S.O.intheU.S.
Albaniahasembarkedonanambitiousandchallengingpathto
modernizing its public financial management system. While
initial steps towards adoption of an integrated control
framework and modernization of the external and internal
audit function are beginning to take place, implementation of
thesechangeswouldrequireseveralyears,andaconsiderable
amount of resources to support a highly challenging and
significantchangemanagementprocess.
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9(b)––Enforcementand
followͲuponfindingsand
recommendationsofthe
controlframeworkprovide
anenvironmentthatfoster
compliance
9(c)––Theinternalcontrol
systemprovidestimely
informationoncompliance
toenablemanagement
Atthetimeofthisassessment,duetotheabsenceofadefined
internal control framework, each institution is responsible for
establishing their own set of regulations for authorizing and
processingoffinancialtransactionsandcontracts.Furthermore,
whencombinedwiththeabsenceofdetailedjob descriptions,
the internal control varies from institution to institution and
poses significant risks when it comes to ensuring adequate
segregation of duties between the authorization, registration,
processingandsafekeepingfunctions.
Through the EU funded Twinning project, the capacity of the
State Supreme Audit has been modernized. This project also
supported the strengthening and formal creation in all budget
entities of an internal audit function. Our review of
procurement transactions revealed a fair amount of focus on
thepartofboththeSSAandtheinternalauditorsinthereview
of procurement transactions. However, the aim of those
reviews––basedonthefindingsandrecommendationsͲappears
tobetooformalisticandfocusedsolelyoncompliance.
Reportsfor2009performanceoftheSSAwerenotavailableat
thetimeofthisassessment.The2008AnnualReportoftheSSA
shows a broad coverage of procurement processes at the
centralgovernmentlevelofapproximately87%ofprocurement
processes tendered. The number of processes found in nonͲ
compliance represented approximately 60% of the processes
audited, with a total amount of assessed economic loss of
779,815,000lek.
According to the 2008 Annual Report of the SSA, compliance
with outstanding recommendations has significantly improved
from previous years. The current compliance rate is of
approximately 80%. Typically, institutions have 20 days upon
final issuance of the audit report to comment on
recommendations and to provide a plan for their
implementation. According to the SSA, enforcement of
administrative and disciplinary measures as well as damage
recoveryimprovedin2008.
Compliancewithoutstandingauditrecommendationsissuedby
both, internal auditors and the SSA, are tracked in each
institution in a centralized manner, typically by the General
Counsel. However, timeliness in compliance and reporting
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action
9(d)––Theinternalcontrol
systemsaresufficiently
definedtoallow
performanceauditstobe
conducted
9(e)––Auditorsare
sufficientlyinformedabout
procurementrequirements
andcontrolsystemsto
conductqualityauditsthat
contributetocompliance
10––Efficiencyofappeals
mechanism
10(a)––Decisionsare
deliberatedonthebasisof
availableinformation,and
thefinaldecisioncanbe
reviewedandruleduponby
abody(orauthority)with
enforcementcapacityunder
thelaw
varies significantly from institution to institution, due to the
lack of standard procedures. Nonetheless, the SSA noted a
significant improvement in the overall rate of reporting and
compliancecomparedtopreviousyears.
As stated in 9(a), lack of an integrated internal control
framework along with a relatively incipient internal audit
function, hampers the conduct of performance audits. Most
audits on projects financed by international donors consist of
financialaudits,whicharedifferentinscopeandconsequently
different in the level of assurance on the internal control
systemoveroperations.
WhileauditorsaregenerallyconversantwiththePPL,theyhave
notyethadaccesstotheeͲGPplatform.Theinitialsetupofthe
eͲGP platform requires auditors to obtain authorization to
accesstheeͲGPplatformfromtheheadofeachinstitutionthey
want to audit. Although this process mirrors the Audit Law, t
whenconsideredtogetherwithaverylimitedtrainingtakenby
SSA auditors has effectively constrained the SSA’’s ability to
auditprocurementprocessesthroughtheeͲGPsystemin2009.
Starting on January 1, 2009, by decision of the Council of
Ministers all public procurement transactions are to be
conductedthroughtheelectronicplatform.Thisdecision,along
with the standͲstill created by the cumbersome process for
auditors to access transactions due to the lack of an
unrestricted ““Auditor”” profile in the eͲGP, hampers the
effectiveness of the external and internal audits of
procurement. Additional training for auditors is planned for
2010.
ThePPLestablishesthePPAasthehighestbodyintheareaof
publicprocurement.Animportantconcernhighlightedin4(b),
is that currently, and until formal establishment of the PPC
(based on law No. 10170 of October 22, 2009), through the
appointmentofitsmembers,thePPAwillcontinuetodraftall
procurement legislation for approval of the Council of
Ministers; and advice CAs on application of the PPL and on
specific procurement transactions, while complaints are
reviewedbythePPC,anindependentbodydefinedinthePPL
0
1
2
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andformallyinplacesinceApril2010.EstablishmentofthePPC
has effectively eliminated the conflict of interest that existed
beforebyhavingthecomplaintreviewfunctionunderthePPA.
Throughthedateofcompletionofthefieldworkrelatedtothis
10(b)––Thecomplaint
assessment, PPA was still responsible for the review of
reviewsystemhasthe
complaints.
capacitytohandle
complaintsefficientlyanda Asmentionedabove,startingApril2010,theGOAhasformally
meanstoenforcethe
remedyimposed
established and put in place the PPC, which has an
organizational structure consisting of 5 members and 18 staff
positionswithadedicatedbudget.Thisstructure,alongwithits
functional dependency from the Prime Minister, affords the
PPCwiththerequiredlevelofindependenceandstafftoensure
adequatehandlingofcomplaints.However,duetothefactthat
the PPC was not in operations at the performance of this
assessment,thecurrentgradingassignedtothisindicatordoes
not reflect its actual performance, which will have to be
assessedafteritsfirstyearofoperations.
The number of complaints have almost doubled in 2009
(1,100),withrespectto2008(564),and2007(645).Amongthe
reasonsforsuchincrease(thiscanbeconsideredasameasure
ofsuccessoftheintroductionoftheeͲGPplatform),isthefact
that theaveragenumber ofbidspertender processincreased
from 2 to almost 8. Consequently, the actual frequency of
complaints when measured on the total number of bids
receivedhasdecreasedfrom1complaintevery21bidsin2007Ͳ
2008, to 1 complaint every 33 bids in 2009. However, the
relativenumberofcomplaintsresultingineithercancellationof
the procurement process or modification of the bidding
documentscontinuestobeapproximately30%overtheperiod
2007Ͳ2009; while the number of complaints dismissed either
becauseofbeingfiledaftertheexpirationofthe5daysallotted
orduetolackofsufficientinformationorfailuretocomplywith
requirementsstillisat70%.
Oneofthechiefcomplaintsexpressedbythosecontractorsand
suppliersinterviewedthroughoutthisassessmentisthelackof
consistencyandcapacityofprocurementauthoritiestohandle
complaints. This, in turn, impinges upon the required level of
fairness,andtransparencythatistobeexpectedbytheprivate
sector. In particular, we observed a transaction pertaining to
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the procurement of vehicles where two bidders complained
abouttheinclusionofafinancialrequirementforthemtoshow
alevelofannualsalesduringthethreeyearsprecedingthecall
fortender,ofatleastthemaximumamountofthecontract,for
300vehicles.Suchrequirementwhichappearsunjustifiedgiven
theinherentriskassociatedinthistypeofprocurement(i.e.the
governmentwouldonlypayupondeliveryofthevehicles),was
reviewed and dismissed by the PPA23, which sided with the
opinionoftheprocurementselectioncommitteeestablishedby
the CA in connection with that tender. This example raises
concernsabouttheindependence,objectivityandtransparency
ofthecomplaintandappealmechanisms.
The review of procurement transactions and contract
10(c)––Thesystem
administration at 10 entities shows inconsistencies in the
operatesinafairmanner,
withoutcomesofdecisions repliestocomplaints,indicativeoflackofdedicatedresources
aswellaslackofcapacity.
balancedandjustifiedon
thebasisofavailable
information
ComplaintsarenotpublishedinthePPA’’swebsite.Repliesto
10(d)––Decisionsare
requests for clarification during the course of an RFP are
publishedandmade
processed through eͲmail, using the accounts defined by the
availabletoallinterested
bidders in a dedicated mail box assigned to each bidder.
partiesandtothepublic
Appeals are registered in the courts’’ docket. In 2009, of
approximately 1,100 complaints received in connection with
7,277advertisedtenders,or15.1%.Ofthesecomplaints,23.4%
(257)resultedincancellationoftheprocurementprocess;3.5%
(38)resultedinmodificationstothetechnicalspecificationsor
bidding documents; while 73.2% (805) were dismissed due to
lack of compliance with formal requirements or missing
information.
10(e)––Thesystemensures DecisionsofthePPAcanonlybeappealedthroughthecourts.
The amendment creating the PPC does not change the
thatthecomplaintreview
bodyhasfullauthorityand appellateprocedures,whicharestatedinthePPL.Theprivate
independenceforresolution sectorpointstosignificantdelaysandcostlyproceedingsasthe
ofcomplaints
majordeterrentstopursueappealsondecisionsofthePPA.
1
3
3
23
Therequirementofrequestingbidderstoshowalevelofsalesequalingthetotalamountofthecontractfor
eachofthethreeyearsendedpriortotheyearoftheRFP,isallowedbyadecreeoftheCouncilofMinisters,for
whichthePPAconsideredthatuseofsuchmaximumrequirementbytherespectiveCAhadnotcontravenedthe
law.
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PillarIV––IntegrityandTransparencyofthePublicProcurementSystem
11––Degreeofaccessto
information
11(a)––Informationis
publishedanddistributed
throughavailablemedia
withsupportfrom
informationtechnology
whenfeasible
Information is published in the ““Public Procurement Bulletin””,
weekly and posted on the PPA’’s website. Information posted
for contract awards corresponds to calls for tenders; award
notices;andcancellations.Thewebsitehaslinkstothe““Public
Procurement Bulletin;”” the PPL; amendments; SBDs; a
procurement manual (which is largely outdated since it does
not incorporate any of the amendments introduced in 2009);
anddecisionsoftheCouncilofMinisters.
12––Thecountryhasethics andanticorruption
measuresinplace
Albania has ratified several international treaties and
12(a)––Thelegaland
regulatoryframeworkfor
conventions related to corruption and is member to some of
procurement,including
the major international organizations and programs dealing
tenderandcontract
with corruption and/or organized crime. The Civil Law
documents,includes
Convention on Corruption (Council of Europe) was ratified by
provisionsaddressing
on7June2000bytheAlbanianparliamentwiththepassingof
corruption,fraud,conflict
Law No. 8635. The duties and liabilities of this convention are
ofinterest,andunethical
partially adopted in the internal legislation. However, some
behaviorandsetsout
amendments are still pending, including some involving the
(eitherdirectlyorby
Civil Code, the Code of Administrative Procedures, and the
referencetootherlaws)the Status of Civil Servants, because they have not yet been
actionsthatcanbetaken
approved by Parliament. All these laws require a voting
withregardtosuch
majorityofthreeͲfifthofallmembersofparliament,sopassing
behavior
them demands crossͲparty consensus, which hardly seems
likelyinthecurrentpoliticalenvironment.
TheCriminalLawConventiononCorruption(CouncilofEurope)
wasratifiedbytheParliamentwiththepassingofLawNo.8778
on 26 April 2001. This has been changed with Law No. 9369
from 14 April 2005, which has removed all reserves. The
definitions included in this convention have already been
adopted as amendments in the Penal Code and the Penal
Procedural Code. The Additional Protocol to Criminal Law
Convention on Corruption (Council of Europe) was ratified by
theAlbanianParliamentwithLawNo.9245from24June2004,
but it has still not been fully implemented in the national
legislation.
The United Nations Convention Against Corruption (UNCAC)
2
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wasratifiedbytheAlbanianParliamentwithLawNo.9492on
13March2006.Mostoftheprovisionsofthisconventionhave
now been adopted in the national legislation. However, a few
provisionsstillremaintobeincorporated.
Albania has also ratified a number of key conventions in the
broader field of economic crime, including the Convention on
Laundering, Search, Seizure and Confiscation of the Proceeds
fromCrime(since2001), theConventiononCybercrime(since
2002). Albania has been a member of the Group of States
Against Corruption (GRECO) since the ratification of the
Criminal Law Convention on Corruption in 2001, and is also
membertotheStabilityPactAntiͲCorruptionNetwork(SPAI).
Albanian legislation relevant for antiͲcorruption has improved
substantially in recent years. The Criminal Code criminalizes
both active and passive bribery and undue influence of public
officials (articles 244, 245, 245/1, 259 and 260). The Criminal
ProceduralCodewasamendedin2004toincludeenhanced
regulation of financing of political parties, conflict of interest,
rules of ethics in the public administration, criminalization of
active and passive corruption, and the use of special
investigation means and further improvements are in the
pipeline.TheLawonthePreventionandCombatingOrganized
Crime adopted in September 2004 provides the legal basis for
combating economic crimes performed by organized criminal
groups.
AlbaniatookasignificantstepforwardwhenitadoptedtheLaw
ondeclarationofPropertiesbyOfficialsin2002andtheLawon
prevention of Conflict of Interest in 2005. Both laws provide
comprehensive regulations, clear rules and duties, strict
limitationsofpersonalinterestofpoliticiansaswellasmidͲand
highͲlevel officials in relations their duties, severe
administrativepenaltiesandlinkagewiththecriminallaws.Asa
result of the two laws, the High Inspectorate for Declaration
and Auditing of Assets (HIDAA) is currently in a quite strong
positiontofulfillitsmandate.Furthermore,anumberofrecent
lawshavefocusedonsimplifyingtheadministrativeprocedures
for businesses, such as the PPL, the Law on Registration of
Businesses as well as numerous amendments to various laws
which has abolished some licenses and simplified remaining
procedurestoobtainthenecessaryones.
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12(b)––Thelegalsystem
definesresponsibilities,
accountabilities,and
penaltiesforindividuals
andfirmsfoundtohave
engagedinfraudulentor
corruptpractices
12(c)––Evidenceof
enforcementofrulingsand
penaltiesexists
The government’’s current draft antiͲcorruption strategy (““the
CrossͲcutting Strategy for Prevention, Fight on Corruption and
Transparent Governance 2007Ͳ2013”” described further below)
includesapipelineoffurthersuggestedlegislativechanges.This
includes a Law on Limiting the Immunity of Members of
Parliament and Ministers as well as amendments to the Civil
ServiceLaw,CivilCodeandCivilProceduralCode.
The PPL confers to the PPA with the authority to exclude an
economic operator from participation in awarding procedures
foraperiodof1to3yearsincasesoffraud,corruptionornonͲ
fulfillment of contractual obligations (PPL Article 3). The PPL
also makes specific reference to corruption and conflicts of
interest(Article26);andtoexclusioncriteriaofcandidatesand
bidders convicted by final judgment due to: participation in a
criminal organization; corruption; fraud; money laundering;
and,forgery.
However, ““fraud”” and ““corruption”” are not defined or
characterized in the PPL. Specific reference to fraud and
corruption and conflict of interest, applying to economic
operationsandcivilservantsiscontainedinthePPL(Article26).
The PPA is empowered to exclude economic operators (i.e.
individuals and firms) from participating in awarding
procedures for up to 3 years (see 12(a) above). Furthermore,
underarticles45through47,thePPLestablishesconditionsfor
exclusion of bidders under certain conditions involving fraud
and corruption. The PPA also has the capacity to impose
penalties and recommend sanctions (ranging from monetary
penalties to debarment for firms and individuals, as well as to
CAs and civil servants) to those involved in procurement for
inappropriate conduct and fraud and corrupt practices.
However, the penalties and sanctions are not well defined
eitherinthePPLorintheProcurementRules.
Enforcement of penalties and sanctions against economic
operators are published in the Public Procurement Bulletin
posted in the PPA’’s website, and also reported in the PPA’’s
AnnualReport.
2
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Albania,withtheassistanceoftheinternationaldonorshasan
ongoing anticorruption program. However, the Assessment
Team could not obtain sufficient information on the
coordination of that program among the government entities
involved.
ThecreationofthePPADin2007,affordsanadditionallevelof
assurance in connection with the overall transparency and
fairnessoverprocurementoperations.InitsAnnualReportfor
2008, the PPAD indicates that of the allegations received, 354
had enough merit to warrant a full investigation. In 210, the
PPA has initiated an administrative action, whereas 144 were
resolved without the need to resorting to an administrative
investigation.
Of the recommendations issued by the PPAD, 129 supported
theclaimsraisedbythebidders;30involvedrecommendations
tothereevaluationofthebidsreceived;and102calledforthe
invalidation of the tender. Of the 354 cases investigated, the
PPAsupportedtheconclusionsofthePPADinallbut64cases.
TheAssessmentTeamalsotooknoteofthecommentincluded
in the 2008 Annual Report of the SSA, which quotes that
encountered nonͲcompliance with procurement processes in
approximately 60% of the cases reviewed. Typically, the nonͲ
compliance findings refer to issues such as: delays in the
initiation of tendering procedures; delays in payments;
shortcoming and infringements on freelance consultancy
payments; application of inconsistent legal provisions; lack of
observance of proper contract resolution provisions by
implementation units; and inadequate calculation of the fund
limit.
By and large, confidence in the public procurement system
12(e)––Stakeholders
(privatesector,civilsociety, among civil society and economic operators is generally low.
VeryfewprivateassociationsandNGOsareactivelyinvolvedin
andultimatebeneficiaries
ofprocurement/endͲusers) the public procurement process. Furthermore, the PPA does
supportthecreationofa
not have a strategy or any mechanism to proactively engage
procurementmarketknown theprivatesectorandcivilsocietyinadialoguetoimprovethe
foritsintegrityandethical publicprocurementmarket.
behaviors
ThePPAD,createdbythePPLtosafeguardthelegalrightsand
interests of suppliers against irregular actions or omissions of
12(d)––Specialmeasures
existtopreventanddetect
fraudandcorruptionin
publicprocurement
2
1
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contracting authorities. The PPAD is appointed for 5 years by
parliament, following a recommendation of the Council of
Ministers.
ThePPADhasnopowerenforcementofhisownandtoalarge
extentitsfunctionsduplicatethemonitoringtasks ofthePPA.
However, considering the inherent conflict of interest in the
performanceofthereviewfunctionthatexisteduntilApril2010
that the PPC was formally put in place, the work being
performedbythePPADplaysasupportiveandeffectiveroleto
the reviews or investigations conducted either by the PPA or
othercompetentauthorities.
ThePPAfeaturesinaboxlocatedintheupperleftcornerofits
12(f)––Thecountryshould
main webͲpage under the title ““Telephone””, two telephone
haveinplaceasecure
numbers.Althoughthesenumberscorrespondtothenumbers
mechanismforreporting
of the hotline, no explicit reference is made to them as
fraudulent,corrupt,or
unethicalbehavior
belonging to the hotline. to report allegations of fraud and
corruption. The PPAD has also had meetings with trade
associations and chambers of commerce and civil society to
entice their cooperation and make them aware of the
functions, structure, and proceedings of the PPAD. The PPAD
hasadedicatedresourcetomaintainingthehotline.
During themeetingstheassessmentTeamhadwitheconomic
operators, they commended the work of the PPAD and feel
confident about the confidentiality afforded by the PPAD to
casesreported.
Relevant legislation is included in Law No. 9131 (September
12(g)––ExistenceofCodes
ofConduct/CodesofEthics 2003)onRulesofEthicsforPublicAdministration,andLawNo.
forparticipantsthatare
8549(November11,1999)onStatusofCivilServants.Financial
involvedinaspectsofthe
disclosure of personal assets for those who deal with public
publicfinancial
financialmanagementisrequiredbylaw.
managementsystemsthat alsoprovidefordisclosure
The Assessment Team was not able to obtain evidence of the
forthoseindecisionmaking existence of a code of conduct or ethics endorsed by trade
positions
associations and chambers of commerce. In the absence of a
code of ethics, those interviewed during the performance of
theassessmentnotedthattheycomplywiththerequirements
ofthePPL,Article26,whichreferstoconflictsofinterest,fraud
andcorruption.
2
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VI.
PROGRESSSINCE2006ASSESSMENT
29. The tables below provide a followͲup of the status of implementation of all recommendations
contained in the previous assessment of the public procurement system issued by the Operations
Policy and Services Unit for Europe and Central Asia Region of the World Bank in August 2006,
Report No. 38028ͲAL ““Albania Country Fiduciary Assessment.”” It should be noted that the 2006
assessmentwasbasedonadifferentlegalframeworkthantheonecurrentlyinplace.Thecurrent
legalframeworkisalignedwiththeEUDirectives,thusmakingsomeofthe2006recommendations,
suchastheincorporationofthedefinitionsof““forcemajeure””,and““emergency””,redundant.
30. Forpurposesofproducingthefollowingupdate,thestatusofimplementationofrecommendations
has been classified as either: ““implemented””, when substantially all elements contained in the
originalrecommendationhavebeenassessedasbeinginplaceandoperatingadequately;““Partially
Implemented””,whennotallelementsoftherecommendationhavebeenassessedasbeinginplace
or operating adequately; ““Under Implementation””, when the elements contained in the
recommendation are in the process of being put in place and consequently their level operation
cannot be assessed; and, ““Not Implemented””, when the elements referred to in the original
recommendationhavebeenassessedasnothavingbeenimplementedandconsequentlytheyare
notinplace.
31. All recommendations either ““Partially Implemented””, ““Under Implementation””, and ““Not
Implemented””, that were deemed substantial for the proper operation of the public procurement
systemhavebeenincorporatedascurrentrecommendationsresultingfromthe2010assessmentof
thepublicprocurementsystemofAlbania.
#
1
2
3
PillarIͲLegislativeandRegulatoryFramework
2006Finding/Recommendation
2010Status
Thereisapracticeofdisclosing““limitfunds””
Not Implemented Ͳ Although the PPL does not
(estimatedcost)inbidnotices.
require publication of the ““fund limit””, PPA
requires all CAs to publish the maximum ““fund
limit””ineachtender.
NotApplicableͲThecurrentlegalframeworkis
Strengthenprovisionsonuseofdirect
procurementbydefiningthe““forcemajeure,””
alignedwiththeEUDirectives,thusmakingthe
““emergency,””andurgentsituations(Article17
need to define ““force majeure,”” and
and19).
"emergency,””redundant.
Implemented –– Public utilities are an integral
PPLshouldberevisedtoregulatethepublic
utilitiesseparatelyfromotherprocurement,
partofthePPLunderChapterV/1““Procedures
eitherasaseparatechapterunderexistinglaw for Awarding Sectoral Contracts””, Articles 58/1
orseparatelaw.
to58/10.
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#
2006Finding/Recommendation
2010Status
4 Improveandstrengthenconsultingservices
Partially Implemented –– PPL Articles 3 and 4,
provisionstoselectconsultantsnotbasedon
provides for rules for procedures governing
thelowestprice,butbasedonqualifications
procurement of consulting services. However,
andqualityofservices(Article21).
these rules do not allow for the selection of
consultants solely on the basis of technical
qualificationsandtheyarenotadequatelyclear
on the procedures and methodologies for
combining price and technical capacity under
differentcircumstances.
5 RevisePPLtoinclude,ataminimum,allrelevant Implemented –– Contract awards are published
informationforcontractawardnotice.
in the PPA’’s website. PPL properly define the
minimum information to be included in the
contract award notice, in compliance with best
practicesinpublicprocurement.
Implemented –– PPL Article 20 complemented
6 AmendPPLtofullydefinenonͲdiscrimination,Ͳ
includinganygrounds,notjustonthebasisof
bytheRulesandRegulations.
nationality(Article9).
Implemented –– PPL Article 22, and Chapter IV
7 AmendPPLtoindicatethemethodofdelivery
ofbids,whetherbymail,hand,courier,orany
““Electronic Procurement”” set the basis for the
othermodality(Article30––31).
method of delivery of bids, requiring advanced
electronicsignatureforelectronictenders.
8 Createaseparatecomplaintreviewbodyother Implemented –– The PPL established the PPC,
thanPPA.
andinApril2010,thePPCwasformallyinplace
and operating with an organization structure
providingfor18staffpositionsandadedicated
budget ensuring its independence and capacity
toperformitsfunctionsasintended.
Not Implemented Ͳ This recommendation has
9 Thetimeforpreparationofbidsinlocalopen
tendersisrelativelyshort““minimum20days.””
not been implemented. Instead, Article 43 of
Thisshouldbeincreasedto28days(Decision
the PPL has been amended to allow –– in the
No.335).
caseofelectronicbids––ashorteningby7days
of the time limits for preparation. The
Assessment Team finds this amendment illͲ
advised.
10 Biddersshouldbegiventheopportunityto
Implemented –– Bidders can appeal debarment
appealdebarmentdecisions(DecisionNo.335). decisionsthroughthecourts.
11 Limitfund(estimatedprice)shouldbe
Implemented –– PPL Chapter III ““Common
calculatedrealisticallybasedonmarketprices.
Procurement Rules””, Article 28, ““Methods for
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12
13
14
15
PillarIͲLegislativeandRegulatoryFramework
2006Finding/Recommendation
2010Status
Also,nationalstandardsoncostanalysisfor
calculating the estimated value of public
constructionworksshouldbeupdatedregularly contracts.””
andthenused(InstructionNo.1).
Thereisaneedtopreparehighqualitytechnical Partially Implemented –– Although the PPA has
specificationstopromotethebroadestpossible managed to attain some improvements with
competitionfollowinginternationallyaccepted respect to the situation assessed in 2006, the
standards.
review of more than 40 procurement tenders,
still shows that the nature of complaints
received by the CAs and PPA, points at a
considerable number of instances where
technical specifications where either wrong or
lacked of sufficient information. This reveals
unevencapacityinthedifferentCAs.
SBDsshouldbeamendedtomandatesigningof Implemented
theminutesofbidopeningbybidders,inorder
toavoidsubsequentchangesbyprocuring
entities.
Implemented
SBDsshouldbeamendedtospecifythatthe
bidsforalltenders,ifsubmittedbeforethe
deadlineforbidsubmission,shouldbekept
safely.
SBDsforgoodsshouldbeimprovedtodecrease Implemented
changesinquantitiesafterthecontractsigning. According to the PPL, the maximum allowance
Maximumallowancecouldbeupto15percent upto90daysaftercontractsigningis20%.
increase/decreaseofofferedquantity.The
currentlimitof30percentisveryhigh.
#
1
2
PillarIIͲInstitutionalFrameworkandManagementCapacity
2006Finding/Recommendation
2010Status
Theprocurementplanningprocessshouldstart Partially Implemented –– Timing for
atleastthreemonthspriortotheupcoming
procurement budget planning has substantially
fiscalyear.TheMTBPandannualbudgetshould improvedin2009.However,thereisnolinkage
belinked,andexpenditurecyclemaderealistic between the budget and the public
sothatcompetitiveprocurementmethodsand procurementsystemyet.
efficientuseofresourcesareensured.
Implementationshouldbefollowedthrough
Partially Implemented –– Reporting has greatly
betterreportingandacommitmentshouldbe
improvedthroughtheimplementationoftheeͲ
madetoestablishacontrolsystem.
GP platform. However, more work is still
needed, along with Albania’’s adoption and
implementation of a common integrated
internal control framework across the
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3
4
5
6
7
8
PillarIIͲInstitutionalFrameworkandManagementCapacity
2006Finding/Recommendation
2010Status
government.
ThePPAdirectorandallotherprofessionalstaff Implemented –– The PPA director and all other
shouldbecivilservantsinordertoavoid
professional staff are considered members of
politicalinterference(Article8).
thecivilserviceasstatedinthePPL.
Implemented Ͳ The PPL established the PPC,
AnindependentProcurementReviewBody
shouldbeestablishedtohandlecomplaints
and its members, organizational structure and
(Article8).
budgetwereformallyapprovedandputinplace
inApril2010.
WebͲbasedprocurementinformationshouldbe Implemented––PPA’’swebsitethroughtheeͲGP
publishedwithaprovisionforsystematic
platform and the weekly ““Public Procurement
updateoftenderinvitations,RFPs,andcontract Bulletin””, provides information of tenders,
awards,andsoforth.
RFP’’s,contractawardsandpenalties.
Thewebsiteshouldalsocontainannual
Partially Implemented –– Statistical information
statisticsonprocurement,whichshouldbe
on procurement procedures is not
updatedregularly.
systematically collected and reported yet, only
for total number of tenders advertised and
awarded. Additional statistical information is
reportedannuallyinthePPA’’sAnnualReport.
Not Implemented –– PPA has been working
ThePPAshouldbetaskedwithdevelopinga
nationalstrategyforpublicprocurement
towards strengthening its focus on training.
training,andthegovernmentshouldallocate
With that aim in mind, it implemented a
adequateresourcestoimplementsuchstrategy dedicatedpositionfortraining.However,lackof
overthenext3to5years.
funding and information has hampered
developmentofatrainingstrategy.
PPAorganization,funding,andstaffingshould
Implemented –– Chapter II ““Public Procurement
bereviewedbythegovernmenttoincreaseits
Organization””, Article 13, defines the PPA as a
levelofindependenceandauthority
centralbody,withalegalandpublicpersonality
reportingtothePrimeMinister,andfinancedby
thestatebudget.
#
1
PillarIIIͲProcurementOperationsandMarketPractices
2006Finding/Recommendation
2010Status
Maketherequiredlevelofcompetenceamong Partially Implemented –– Although overall
procurementstaffconsistentwiththeir
capacityhasimprovedsince2006,therearestill
responsibilities.ThePPAneedstoinitiatea
significant capacity gaps both at central and
dialogwithingovernment.Inparticular,the
local government levels. A separate career
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4
5
PillarIIIͲProcurementOperationsandMarketPractices
2006Finding/Recommendation
2010Status
DepartmentofPublicAdministration(DOPA)
stream, as well as specific job descriptions for
shouldestablishaseparatecareerstreamfor
public procurement officials has yet to be
procurementinthecivilservice,bothatcentral established.
andlocalgovernmentlevels.Thisactionshould
besupportedwithseparatejobdescriptions,
qualificationrequirements,careerstructures,
andsalaryscalesforprocurementofficers.
Capacityininternalauditunitsintheministries Partially Implemented –– The EUͲTwinning
shouldbestrengthenedtotakeamoreactive
projecthasprovidedmuchneededtrainingand
roleinassuringcompliancewithpublic
supporttoboththeStateSupremeAuditors,as
procurementprocedures.
well as to the creation of the internal audit
function in each line ministry. However,
consolidation of the internal audit function
across the government is a process that is
expected to take a couple of years. Specially,
considering that the government lacks of an
integratedinternalcontrolframework.
Standardbiddingdocumentsshouldincludean Not Implemented –– Standard bidding
alternativedisputeresolutionmechanism,such documents do not include an alternative
asarbitration.
dispute
resolution
mechanism
as
recommended.
Not implemented –– Implementation of this
Theprivatesectorshouldbeseenasa
developmentpartner.Moreoutreachprograms recommendation requires full engagement of
shouldbeorganizedtoimproveprivatesector
theprivatesectoraspartasastrategyincluding
capacityinbiddingforpublicprocurement
training and an open discussion forum. PPA as
tender.
defined in the PPL does not contemplate
outreach activities with the private sector as
one of its mandates, and lacks of budget
resourcestosupportsuchactivities.
However,thePPAhasprovidedlimitedtraining
to the private sector and would be willing to
continue to do so to the extent private sector
institutions are willing to defray the related
trainingcosts.
Adequateaccesstocreditshouldbeensured
Implemented –– Access to credit by private
throughsuitablepolicychangesbygovernment. sectoroperatorsisconsideredhasconsiderably
improvedoverthepastfewyears.However,the
internationalfinancialcrisisisalsoaffectingthe
local financial market posing some constraints
intherelevanttermsofavailablefinancing.
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PillarIIIͲProcurementOperationsandMarketPractices
2006Finding/Recommendation
2010Status
Contractadministrationshouldbestrengthened Not Implemented –– Contract administration is
throughsuitabletrainingofstaff.
not considered part of the procurement cycle
under the purview of the PPA. The latter,
coupled with the lack of an integrated internal
control framework, and insufficient training,
contributes to perpetrate weaknesses in
contractmanagement.
#
1
2
3
4
5
6
7
PillarIVͲIntegrityandTransparencyofthePublicProcurementSystem
2006Finding/Recommendation
2010Status
Anumberofjudgesshouldbespecializedfor
PartiallyImplemented––Sometraininghas
procurementdisputecases
beenprovidedthroughtheSchoolof
Magistrates.
PartiallyImplemented––StartingApril2010,
ThePPAwebsiteshouldcontaincomplete
informationonthecomplaintsandstatusofthe PPCisresponsibleforaddressingallcomplaints
complaints
andassuchshouldbealsoresponsiblefor
publishingrelevantstatisticalinformation.
Implemented
AbeginningineͲprocurementshouldbemade
bypublishingallprocurementnoticesand
awardresultsonthePPAwebsite.
Implemented––ThePPCwasformallyputin
ThePPLshouldberevisedtoestablishan
IndependentProcurementReviewBody(also
placeandstartedoperationsinApril2010.It
coveredinPillarI)toincreasetheconfidenceof hasanorganizationalstructureprovidingfor18
theprivatesectorandotherstakeholdersinthe staffpositions,adirectlineofdependencyfrom
system.
thePrimeMinisterandadedicatedbudgetthat
ensuresitsindependenceandfunctioning.
ThePPLshouldbeamendedtodefine
PartiallyImplemented––Fraudulentandcorrupt
fraudulentandcorruptpractices.
practiceshavebeendefinedasintheDirective.
However,thePPLdoesnothaveadirectcrossͲ
referencetothebodyoflawcontainingthose
definitionsandtheirscope.
Alistofdebarredcompaniesshouldbeposted
Implemented––Debarredcompaniesare
onthePPAwebsite
publishedinthewebsiteofthePPAandalsoin
thePublicProcurementBulletins.
NotImplemented––NeitherthePPLorthe
PPL(Articles12,16)envisagesactionsfor
fraudulentpractices.Theseprovidefor
ProcurementRulesandRegulationscontainthe
debarment,butproceduresneedtobedefined administrativeproceduresguidingdecisionsand
fordebarmentcompanies.
proceedingsleadingtothedebarmentof
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PillarIVͲIntegrityandTransparencyofthePublicProcurementSystem
2006Finding/Recommendation
2010Status
companies.
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MatrixCapacityActionPlanAnnex1
Criteria
inGovernment
Policy
Difficulty
Impact
PossibleActions
International
Practices
Competition
Transparency
Efficiency
AreasforImprovement
TimeRequired
Assessment24
C
B
A
PillarIͲLegislativeandRegulatoryFramework
X
X
X
1. The PPL does not coverconcessions.Art. 4 of the PPL 1.UndertakeareviewofthePPLaimedat:
vaguely references to the application of other laws that are not specified. Furthermore, the PPL provisions for
x Incorporatingthetreatmentofconcessionsinto
procurement by public utilities (a.k.a. sectoral contracts)
thescopeofthePPL.
lack clarity and congruency. This condition creates
x Clarifying provisions applicable to the
confusionamongpublicutilitiesastohowtobestchannel
procurement by public utilities ensuring that
theirprocurementtobeincompliancewiththelaw.This
their needs are properly covered without
resultsininconsistenciesandopensthedoortopotential
leavingloopholesorprovisionsrequiringfurther
nonͲcompliance and less than transparent procurement
clarification.
24
Timerequired:Referstotheapproximateamountoftimetocompletetheaction.““A””requireslessthansixmonthsforimplementation,““B””requiresfromsix
monthstoayear,and““C””requiresatleastoneyear.
Degreeofdifficulty:Anestimateofthedegreeofpolitical,financial,ormanagerialdifficultyinvolvedinimplementingthechange.““A””meanslow,““B””means
average,and““C””meanselevated.
Impact:Estimatedeffectonthesystem’’squality,administrativeexpenses,andefficiencyingeneral.““A””meanssignificant,““B””meansmoderate.LowͲimpact
measuresarenotproposed.
Actionsrated““A””inallthreecategoriescanbeimplementedrelativelyquicklyandeasilyandhavesignificantimpact.
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Criteria
inGovernment
Policy
X
X
Impact
X
2. Although the PPL provides for the use of framework
contracts, their application and use has not yet been
decided by the PPA. Accordingly, the Rules and
Regulationsdonotincludeguidanceonthepotentialuse
offrameworkcontracts.
In the particular case of Albania, and given government
Difficulty
practices. For instance, Article 58/6 provides for the
unnecessary exclusion from the scope of application of
the PPL of purchases of energy, fuels and water if such
goodsareusedfortheproductionofenergy.
X
PossibleActions
International
Practices
Competition
Transparency
Efficiency
AreasforImprovement
TimeRequired
Assessment24
B
B
A
x
Revise the contents of the PPA’’s webͲsite to
IncludecrossͲreferencestothespecificbodyof
law where the meaning and scope of the
followingrelevantlegaltermsandconceptsare
properlyexplained:
o Fraudandcorruption;
o Emergencyandforcemajeure;
o NonͲdiscrimination
o Quality based selection of consultants
(i.e. based on technical qualifications
alone);and,
o Debarred parties’’ opportunities to
protest or appeal the debarment
decision.
2. Undertake the necessary steps to effect
implementation of the framework contract modality in
the shortͲterm. Such steps should encompass ––among
others––thefollowing:
x RevisionoftheeͲGPplatformtoaccommodate
framework contracts, by providing for
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Criteria
inGovernment
Policy
International
Practices
Competition
X
X
efforts about improving ––among othersͲ the efficiency
electronic catalogs and onͲline bidding by
andeffectivenessofitspublicprocurementsystem,useof
qualifiedeligiblevendors/suppliers.
frameworkcontractswouldresultinacostͲeffectiveand
x Detailed guidance on the scope of application
transparent solution for the procurement of
and implementation of the various types of
commodities, recurrent items and small purchases, as
framework contracts, such for small value
well as for purchases by public utilities, such as energy.
purchases, concentrated procurement such as
EspeciallyconsideringthatthePPLdoesnotprovidefora
office
supplies;
medicines;
computer
direct purchasing modality applicable to pettyͲcash
equipment; etc.; and purchases by public
purchases(i.e.smallvalueprocurementthatarebasedon
utilities,suchaspurchasesofenergy.
considerations of costͲeffectiveness are normally
purchaseddirectlyandpaidthroughpettyͲcash).
If properly implemented, framework contracts would
helpsimplifyprocurementwhilecontributingtoincrease
the level of participation and competition amongst
potential eligible participants. This in turn will produce
considerable savings while improving the overall
transparency,competitivenessandcostͲeffectivenessof
thepublicprocurementprocess.
3.PriortothemandatoryadoptionoftheeͲGPplatform 3. Review the current instruction to reduce time limits
asthesoleconduitforallpublicprocurementprocesses, stated under Article 43 of the PPL, up to 7 days due to
the use of the eͲGP platform, in order to conform to
timelimitsforparticipationwere:
internationalbestpractices.
x 20 days from publication to the contract notice Impact
X
PossibleActions
Difficulty
X
Transparency
Efficiency
AreasforImprovement
TimeRequired
Assessment24
B
A
A
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inGovernment
Policy
x
x
x
x
Impact
PossibleActions
Difficulty
International
Practices
Competition
Transparency
Efficiency
AreasforImprovement
TimeRequired
Assessment24
for restricted or negotiated procedures with
publication,valuedabovethehighthreshold;
20 days for receipt of tenders from the date in
which invitations for restricted procedures are
sent;
30 days for receipt of tenders from the date of
publicationforopenproceduresvaluedbetween
thehighandlowvaluethreshold;
15daysforrequeststoparticipate,fromthedate
of publication of the contract notice for
restricted or negotiated procedures with
publication valued between the high and low
thresholds;and,
15daysforreceiptsoftenders,fromthesending
oftheinvitationforrestrictedproceduresvalued
betweenthehighandlowthresholds.
InpreparationofthemandatoryuseoftheeͲGPplatform,
Article 43 of the PPL was amended to provide for a
reductionofupto7daysincaseofallprocurementtime
limits, including the 52 day time limit applicable to
internationalopentenders.
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This reduction seems to be illͲconceived since the
additionaleffectivenessintroducedthroughtheadoption
of an eͲGP platform does little or nothing to reduce the
time or effort required by potential bidders to prepare
and submit their bids. Furthermore, some of the time
limits described in Article 43 of the PPL were already
consideredshorterthanthoseconsideredbestpractice.
4. According to Article 43, the time limit applicable to
purchasesbyutilitiesshouldbeof52days.Thistimelimit
is considered impracticable for purchases of energy by
KESH, the government owned electric power generating
company. Energy markets are shortͲterm focused (spot
market). Accordingly, international suppliers that can be
in a position to supply energy to Albania during the
draught season would typically add a considerable
surcharge to their prices when asked to quote a price
todayandkeepitvalidformorethan7or10days.
Given this constraints, KESH has resorted to using the
restricted modality with negotiation, which allows them
to have more flexibility given its much shorter legally
requiredtimeͲframe.
4. As part of the review of the legal framework, clarify
the use of time limits for public utilities providing for
more flexible and advantageous applicable time frames
that contemplate the nature of the particular market
accessed by public utilities to satisfy their specific
procurement needs resulting from operational
requirements.
X
Impact
PossibleActions
International
Practices
Competition
AreasforImprovement
Difficulty
X
Assessment24
TimeRequired
X
Transparency
Efficiency
Criteria
inGovernment
Policy
C
A
A
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A review of purchases of energy by KESH shows that it
wouldgreatlybenefitfromusingframeworkcontractsto
purchase energy during the draught season. Should that
be thecase, framework contractscould be structured to
qualifyinternationalprovidersofenergycommittingthem
to supply energy based on availability at international
market prices at the time of actual purchase. Using the
framework contract modality, when there is a need for
energy, KESH would submit a request to the qualified
eligible international providers, who would then
transparently compete amongst themselves to offer the
lowest possible price. Use of this modality would also
contribute to reducing the risk of untimely responses to
energyneedsduringthedraughtseason.
5.WhilethePPLinArticle56providestheframeworkfor
dealing with abnormally low tenders, it is through the
Rules and Regulations, as amended by the Council of
MinistersonJanuary29,2009thatprovisionismadefora
specificprocedureforascertainingwhenanofferistobe
considered abnormally low. According to this provision,
an offer is abnormally low when it is greater than the
5. Amend the Rules and Regulations for Public
Procurement to discontinue the use of a formula to
ascertain abnormally low prices and replace it instead
with a common sense and simple rule based on a
relative value referred to the estimated market price,
below which bidders have to provide written
explanations for their pricing and cost components
X
Impact
PossibleActions
International
Practices
Competition
X
AreasforImprovement
Difficulty
X
Assessment24
TimeRequired
X
Transparency
Efficiency
Criteria
inGovernment
Policy
B
A
A
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arithmeticalmedianofallthediscounts(differencefrom
the ceiling price) of all remaining offers plus one fifth of
that difference. This rule is inappropriate since it
artificially produces an abnormally high number of
abnormally low offers to the extent that the majority of
offersreceivedareclosertotheceilingprice.This,inturn,
causes Contract Authorities (CA) to consider as
abnormally low, offers that otherwise would be
considerednormalinallmaterialrespects.
justifying thequoted bid price. For instance, offers that
are priced below 20% of the estimated market price
shouldbeconsideredabnormallylowandinordertobe
qualified, further written price justification is to be
required
from
bidders.
(see
UNCITRAL’’s
recommendationsonlowͲballing)
Implementationofthisrecommendationwouldresultin
potential savings and contribute to making the public
procurement process less discretionary, and more
simpleandtransparent.
6. Amend the Rules and Regulations for Public
Procurement to discontinue the practice of advertising
the fund limit or ceiling fund in all public procurement
tenders.
X
6.WhilethePPLdoesnotrequiretheuseofaceilingfund
ormaximumfundavailable,theRulesandRegulationsfor
Public Procurement when referring to the contents of
““contractnotice””,specificallyrequiretheuseofaceiling
fund or maximum fund available. Accordingly, all
government tenders state the ceiling fund in the face of
callsfortender.
Thispracticehasundesirableeffects,suchasencouraging
bidders to either bid amounts very close to the ceiling
fund or to decrease the quality of goods and services in
Impact
PossibleActions
International
Practices
Competition
X
AreasforImprovement
Difficulty
Assessment24
TimeRequired
X
Transparency
Efficiency
Criteria
inGovernment
Policy
A
A
A
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ordertoofferapriceascloseaspossiblebelowtheceiling
fund. Furthermore, when combined with the technical
specifications,itcanbeeffectivelyusedtofavoraspecific
supplier.
Furthermore,incaseofprocurementofgoodsorservices
where technology is a major component, the use of a
ceiling price can deprive the government from obtaining
best value in procurement and may lead to additional
administrativecosts.
7. Despite the 2009 amendments to the PPL, while
procurement rules and regulations have been frequently
updated, they are neither optimally organized
hierarchically,norwellͲstructuredformally.
8. While overall the PPL and the Rules and Regulations
appear to contain sound provisions for preͲqualification,
thereviewofasampleofprocurementtenderprocesses
revealed instances in which bidders may have been
unfairly disqualified due to the inclusion of either
unwarrantedorunreasonablerequirements.
7.Aspartoftheimplementationofamendmentstothe
PPL, revise the contents, structure and organization of
the Rules and Regulations for public procurement, and
assess the adequacy of the rules governing the internal
processesandproceduresofthePPCthatwererecently
developed,inlightofitsfunctions..
8.AspartoftherevisionofboththePPLandoftheRules
and Regulations for Public Procurement, clarify the
scope of preͲqualification requirements and the
importanceoftheprinciplesofensuringfaircompetition
and nonͲdiscrimination through the inclusion of
requirements that are relevant and commensurate to
X
X
X
X
X
X
Impact
PossibleActions
Difficulty
AreasforImprovement
TimeRequired
Assessment24
International
Practices
Competition
Transparency
Efficiency
Criteria
inGovernment
Policy
C
B
A
C
B
B
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In one instance, a CA included as a preͲqualification
conditionaturnoverforthethreeyearsprecedingthecall
for tender equivalent to the total value of the contract.
The explanation given by the CA was that they had
appliedtheprovisionsofArticle46ofthePPL,referredto
the principle of proportionality of financial guarantees.
Given the nature of the procurement in question,
automobiles, and the relatively low risk for the
government in case of a potential nonͲperformance by
the bidder, this rule, as applied, appears to be
discriminatory.
Itshouldalsobenotedthattheinitialcomplaintsoftwo
bidders was dismissed by the CA and that a subsequent
appealbyoneofthebiddersdirectlytothePPAwasalso
dismissed.
9. A Guide on Procedures for Public Procurement was
produced by a USAIDͲfunded project in 2007, and
adopted by the PPA. This guide is still available for
consultationonthePPA’’swebsiteat:
https://app.gov.al/ep/ProcurementManuals.aspx.
the risk to which both the government and the private
sectorfaceinconnectionwithaparticularprocurement
process.
X
9. Update the Guide on Procedures for Public
Procurement and organize it in a way that makes it
simple to update its content as new legislation is
produced.
Impact
PossibleActions
International
Practices
Competition
AreasforImprovement
Difficulty
X
Assessment24
TimeRequired
X
Transparency
Efficiency
Criteria
inGovernment
Policy
B
A
A
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Criteria
inGovernment
Policy
Difficulty
Impact
PossibleActions
International
Practices
Competition
Transparency
Efficiency
AreasforImprovement
TimeRequired
Assessment24
C
C
A
Unfortunately,thisguidehasnotbeenupdatedtoreflect
the substantial amendments introduced since 2007.
Accordingly,theguideisoflittleornovaluetousers,and
noongoingeffortsseemtobeinplacetoupdateit.
PillarII––InstitutionalFrameworkandManagementCapacity
X
X
X
10. The PPL, which sets the organization of the public
procurement function, incorporates as an annex, the
budgetary structure, which defines as a budgetary unit
each entity that has an assigned budget. Consequently,
the PPA consists of approximately 1,700 Contract
Authorities,eachofwhichhasaminimumrosterof3staff
–– as stated in the PPL –– yielding approximately between
5,100and8,500civilservantsassignedtoperformpublic
procurementwork.
Both the sheer number of individuals assigned and the
delegation of authority down the line resulting from the
currentstructureseemexcessiveforacountrythesizeof
Albania and with the volume and nature of Albania’’s
publicprocurementoperations.
10. Assess the current organizational structure of the
publicprocurementfunctionandaspartoftherevision
of the PPL, contemplate a substantial streamlining of
thecurrentstructureinlinewiththesizeandcomplexity
ofAlbania’’spublicprocurementneeds.
Implementation of this recommendation should be
effected jointly with a governmentͲwide change
management strategy to emphasize and properly ““sell””
toallstakeholdersinvolved,theneedforchange.
Itshouldbenotedthattheproposedstreamliningofthe
structureofcontractingauthoritiesinlineministriesand
public offices does not purport a modification of the
organizational structure of those line ministers and
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Criteria
inGovernment
Policy
International
Practices
Competition
X
X
The implicit and explicit costs associated to the current
public procurement structure, coupled with the lack of
capacity and tight budget environment, pose a heavy
burdenonthesoundoperationofthepublicprocurement
function, and an undue financial strain to the citizens of
Albania.
11.Thepublicprocurementprocesscommenceswiththe
signing of the purchase order (PO) by the authorized
governmentofficialineachinstitution.Thesigningofthe
PO assumes that sufficient funds are available in the
budget to pay for its cost. The eͲGP platform starts the
procurement process based on the PO, which is not
entered into the system, and the eͲGP platform is not
linked to the financial management system (i.e. financial
accounting, budgetary and integrated financial
informationsystems).Asaresult,noassuranceisgivento
the availability of funds to cover all procurement
processesinitiatedinanygivenyear.Inaddition,budget
availability continues to be the main focus of
procurement plans instead of the prioritization of
institutional needs aligned with strategic government
objectives.
Impact
X
PossibleActions
Difficulty
X
Transparency
Efficiency
AreasforImprovement
TimeRequired
Assessment24
C
B
A
publicofficesthemselves.
11.AspartofthebroaderconceptofeͲGovernment,link
theeͲGPplatformwiththepublicfinancialmanagement
platform (i.e. financial accounting, budgetary, treasury
andintegratedfinancialinformationsystem).
Provide for specific procedures and criteria to ensure
alignment of procurement planning with the
implementationofgovernmentstrategicobjectives.
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Furthermore, a review of a sample of procurement
contracts shows that payments are processed with
significant delays due to lack of sufficient funds. This
situation, directly affects development of the local
procurement market putting local firms at peril, and is
compounded by lack of integration of the eͲGP platform
withthepublicfinancialmanagementsystem.
12.ThePPLdoesnotcontemplate aspartof PPA’’svarious
responsibilities,theoversightofcontractimplementation
ortheproactiveengagementoftheprivatesectorinthe
developmentofthemarket.
As a result, the public procurement environment in
Albaniaischaracterizedbyageneralsenseofmistrustin
procurement officials and in the fairness and
transparencyofthepublicprocurementprocessatlarge.
Contractors feel that procurement contracts contain
harsh legal covenants designed to ensure their
compliancebutnottoprotectthemfromnonͲcompliance
by the government, such as lack of timely payment for
12. Revise the scope of work of the PPA to encompass
from oversight of the procurement planning process
throughcontractmanagementandcompletion.
Concurrent with expanding its scope, PPA should
developastrategyforfosteringaclosepartnershipwith
theprivatesectorandcivilͲsocietytofurtherdevelopthe
procurement market in Albania and the continuous
improvement of the public procurement process. Such
strategy should provide ––among others –– for the
developmentof:
x PublicͲprivatepartnerships
x Effective mechanisms to foster open dialogue
X
Impact
PossibleActions
International
Practices
Competition
AreasforImprovement
Difficulty
X
Assessment24
TimeRequired
X
Transparency
Efficiency
Criteria
inGovernment
Policy
C
C
A
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Criteria
inGovernment
Policy
International
Practices
Competition
X
X
goods,worksandservicesrendered.
A review of general conditions for government
procurement contracts, as well as a review of contract
management for a sample of contracts, showed uneven
application and compliance with legal covenants by CAs.
Hence,providingareasonablebasisfortheprivatesector
belief of an overall lack of capacity, resulting in
discrimination and uneven balance of contractors’’ rights
andobligations.
13. Following the start of operations of the PPC in April
2010, the GOA transferred 18 staff positions previously
assignedtotherosterofthePPA.Thisdecisionresulted
incuttingthestafflevelofthePPAbyhalf,sincepriorto
the creation of the PPC, the PPA had 36 positions, of
which approximately 2 were assigned to dealing with
complaints.
Itshouldbenotedthatpriortothisreductionandbased
on the facts and information gathered by the consulting
team during the assessment of the public procurement
system, it appeared that the PPA’’s could have benefited
x
Impact
X
PossibleActions
Difficulty
X
Transparency
Efficiency
AreasforImprovement
TimeRequired
Assessment24
A
B
A
and broad participation of all relevant
stakeholders
Publiccommunicationandtraining
13. Reassess the workͲload of the PPA ensuring the
adequacy of its structure, staff level and budget, to
enableittoproperlydischargeitsvariousresponsibilities
asrequiredbythePPL.
The assessment of the PPA’’s workload should be
undertaken taking into consideration not only the
currenttasksassignedtothePPA––asperthePPL––but
alsoconsideringtheadditionaltasksandresponsibilities
associated to the implementation of the capacity
developmentopportunitystatedunder““PossibleAction””
number12,above.
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Criteria
inGovernment
Policy
Difficulty
Impact
PossibleActions
International
Practices
Competition
Transparency
Efficiency
AreasforImprovement
TimeRequired
Assessment24
B
B
A
from a workͲload assessment to more adequately
dimensionitsstafflevelinlightofthefunctionsthatitis
expectedtoperform.
Accordingly,thereductionofthestafflevelfrom36to18
positions appears illͲadvised and directly affects the
capacity of the PPA to perform its core functions, and
makesitunviableforittoexertthenecessaryleadership
required to undertake the implementation of the action
planoutlinedthroughtheserecommendations.
PillarIII––ProcurementOperationsandMarketPractices
X
X
X
X
14.PPAlacksastrategyandasystemcapabletogather,
analyze and report procurement information to
adequately support the decision process inherent in
managing and developing a sound public procurement
system.
WhilethecurrenteͲGPplatformcontainsalltransactions
processed since January 2009, existing hardware and
software limitations preclude the ability to store all
procurementinformationandtorunqueriesandreports
14.AspartofthescopeoftheongoingauditoftheeͲGP
platformbeingconductedbyaconsultingfirmfundedby
the World Bank, analyze the capacity of the current
platformintermsofsupportingdataͲminingandadͲhoc
queries and reporting to supportprocurementplanning
anddecisionͲmaking.
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that are considered essential to support the decision
makingprocess.
15. PPA is formally tasked with the responsibility of
designing a strategy for the training of public
procurement officials, both at central and local
governmentlevels.
Training funding is the responsibility of the Training
Institute for Public Administration (TIPA), which has an
annual budget equivalent to US$ 90,000 to train up to
6,000governmentofficials.
The above budget is considered largely inadequate to
satisfy the training needs of the more than 5,100 civil
servants involved in procurement, which accounts for
almostthesamenumberoftotalgovernmentemployees
thatTIPAisrequiredtohelptrainannually.
Trainingin2009wasonlyfocusedontheuseoftheeͲGP
platform and encompassed approximately 700 and 900
employeesatthelocalandcentrallevels,respectively.
15. The PPA should develop a comprehensive training
strategy based on specific curricula for procurement
official encompassing from the basic tenets and
procedures applicable to public procurement through
the more advance concepts, procedures, tools and
practices.
TheGovernmentofAlbaniashouldsupportdevelopment
of the institutional capacityas a means of attainingthe
type of improvement of the public procurement that it
seeks.Suchsupportshouldbeintermsofanaggressive
changemanagementprocessandthroughtheallocation
of the proper resources to attain a positive
transformation of the knowledge and skills of
procurement officials, and to develop the kind of
information and reporting tools required to support
decisionͲmakingandoversight.
X
Impact
PossibleActions
International
Practices
Competition
X
AreasforImprovement
Difficulty
X
Assessment24
TimeRequired
X
Transparency
Efficiency
Criteria
inGovernment
Policy
B
B
A
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inGovernment
Policy
International
Practices
Competition
X
X
Training plans for 2010 were still being prepared at the
time of this assessment though the training will also be
focusedontheuseoftheeͲGPplatform.
16. There is not a specific career path for civil servants
assigned to perform as public procurement officials.
Accordingly, formulation of a strategy for attracting a
cadreofqualifiedprofessionalsbecomesahaphazardous
exercise. The procurement function in Albania needs to
beperformedbyindividualswiththetypeofprofessional
educationandexperiencetoallowthemtobeproficient
intheperformanceoftheirduties.
The public procurement function requires a combination
of technical skills such as: accounting; business
administration;
economics;
law;
engineering;
management; and information systems, just to cite the
mostrelevantones.
Once individuals with those skills are in place, it is also
required to have a training strategy that would
progressivelyfocusthetrainingofthedifferentspecialties
intheprogressivelymorechallengingandcomplextypes
Impact
X
PossibleActions
Difficulty
X
Transparency
Efficiency
AreasforImprovement
TimeRequired
Assessment24
B
C
A
16.InclosecollaborationwiththeDepartmentofPublic
Administration(DOPA),developadedicatedcareerpath
for the different specialties involved in public
procurement.Basedontheresponsibilitiescontainedin
the various job descriptions and the scope of authority
assignedtoeachpositionalongthecareerpath,develop
andimplementatrainingstrategycoveringa3to5year
horizon,alongwiththecorrespondingperformanceand
qualitativeindicatorstomeasureitssuccess.
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Criteria
inGovernment
Policy
International
Practices
Competition
X
X
of procurement processes and contract management
issues,fromalegalandoperationalstandpoint.
17. The PPA has developed standard bidding documents 17. PPA should update SDBs to explicitly refer to the
(SDBs) to support different types of procurement. applicableADRmechanism.
However, those SDBs do not contain information on the
applicable alternative dispute resolution mechanism
(ADR),butreferonlytocourts
Impact
X
PossibleActions
Difficulty
Transparency
Efficiency
AreasforImprovement
TimeRequired
Assessment24
A
A
B
C
C
A
PillarIV––IntegrityandTransparencyofthePublicProcurementSystem
X
X
X
X
18.Asstatedinthe““PolicyPaperandActionPlanforthe
Public Internal Financial Control for 2009 –– 2014 (PIFC)””,
Albania is in the process of improving its managerial
accountability, internal controls, risk management,
accountingservice,andmonitoring.
This in an on itself is a very challenging and demanding
exercise, which requires no only to have the required
level of financial resources, but above all the political
commitment and the support from the majority of
stakeholdersinvolved.
18. The Ministry of Finance should prioritize
implementation of a riskͲbased integrated internal
controlframework,inaccordancetoPIFC,obtainingthe
political commitment and stakeholders’’ support
required to consolidate implementation of all reforms
articulatedinthePIFC.
Thedauntingmagnitudeandchallengeofthesereforms,
necessitates of a concurrent and wellͲarticulated and
financed changeͲmanagement strategy, to ensure
adequateandsuccessfulimplementationofthereforms
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Criteria
inGovernment
Policy
International
Practices
Competition
X
Currently, Albania does not have a uniform internal
control framework. As a result, each institution sets its
own.Thisprocessresultsinagreatdealofinconsistencies
among various entities and opens the door to potential
undueexposurestononͲcomplianceincriticalareas.Lack
of an integrated control framework also imperils SSA’’s
auditors as well as internal auditor’’s ability to plan and
conductperformanceaudits.
Furthermore, the review of procurement transactions
revealedaratherformalisticapproachtoauditingwitha
focusoncompliance.
Giventheexistingcapacitygapandthelackofexperience
in the country with modern approaches to riskͲbased
integrated internal control frameworks, and riskͲbased
and operational auditing, the magnitude of the changes
to be undertaken would necessitate a governmentͲwide
changemanagementstrategy.
19,ThedesignoftheeͲGPplatformdoesnotcontemplate
aseparateuserprofiletograntSSAandinternalauditors
withunrestrictedaccesstoprocurementtransactions.As
Impact
X
PossibleActions
Difficulty
X
Transparency
Efficiency
AreasforImprovement
TimeRequired
Assessment24
B
A
A
sought.
19. Revise the contents of the Audit Law in order to
guarantee SSA with unrestricted access to all
procurementtransactionsintheeͲGPplatform,withthe
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a result, both internal and the State Control Auditors
(SSA), need to obtain permission from the head of the
entity they want to audit, for them to access a specific
procurementprocess.
Suchsecuritydesignnegatestheverynatureoftheaudit
function. Pronouncement of the International Auditing
Standards applicable to the external audit function
(INTOSAI), as well as the Standards for the Professional
Practice of Internal Auditing (SPPIA) of the International
Institute of Internal Auditors (IIA), state that auditors
should have unrestricted access to all relevant
informationrequiredtoperformtheirwork.
The current situation coupled with the lack of training
availableforinternalandSSAauditors,castsdoubtsover
the level of transparency that should characterize the
operations of government entities and in particular over
their procurement operations, while negating the
benefitsofanelectronicprocurementsystem.
exceptionoftransactionskeptinthelockbox.Aspartof
such revision, modify the eͲGP platform, creating a
dedicated access profile for both, SSA and internal
auditors and grant them access to all procurement
informationononͲgoingandexecutedtransactions,with
the exception of those included in the lockbox pending
eͲopeningofthetender.
Impact
PossibleActions
Difficulty
AreasforImprovement
TimeRequired
Assessment24
International
Practices
Competition
Transparency
Efficiency
Criteria
inGovernment
Policy
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20.Areviewofasampleofprocurementtransactionsand
contract administration at 10 government institutions,
revealed several instances of inconsistent application of
criteria in dealing with complaints, both at the level of
CAsandatthePPA.
Whiletheunevenandsomewhatrandomcriteriaapplied
by CAs and the PPA might be explained by lack of skills
combinedwithinsufficienttraining,someoftheinstances
observed,raisevalidconcernsabouttheoverallfairness,
objectivity and independence of the complaint
mechanism.
21. The PPA is empowered to exclude economic
operators(i.e.individualsandfirms)fromparticipatingin
procurementproceduresforupto3years.ThePPAalso
has the capacity to impose penalties and recommend
sanctions(rangingfrommonetarypenaltiestodebarment
offirmsandindividuals,aswelltoCAsandcivilservants).
However, the range of penalties and sanctions are not
well defined either in the PPL or in the Procurement
20. Assess PPC25 and CAs experience dealing with
complaints accumulated since 2009 and through today.
The assessment should be aimed at extracting lessons
learned, and apply them to the implementation of the
internal procedures to be applied both by the Public
Procurement Committee and by CAs in dealing with
complaints.
International
Practices
Competition
X
PossibleActions
X
X
21. As part of the amendment to the PPL and of the
Rules and Regulations, include a wellͲdefined set of
vendor sanction provisions articulating the range of
penaltiesandsanctionsthatcanbeimposedbythePPA
in connection with inappropriate behavior, fraud and
corruption.
Impact
X
X
AreasforImprovement
Difficulty
X
X
Assessment24
TimeRequired
X
Transparency
Efficiency
Criteria
inGovernment
Policy
B
B
A
B
B
A
25
ThroughApril2010,thatthePPCwasformallyputinplace,allprocurementcomplaintsweretheresponsibilityofthePPA.
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22.AccordingtothescopeconferredbytothePPAbyin
thePPLinconnectionwiththeperformanceof
administrativeinvestigations,ChapterVII,Article66
““Actionsfollowingtheconclusionofadministrative
investigation,””paragraph1,states:““Oncethe
investigationisover,thePPAmaytakethefollowing
decisions:
22. Revise the role of the PPA in connection with the
conductofadministrativeinvestigationsasitiscurrently
statedinthePPL,ChapterVII,Article66,paragraph1.
The revised text should state that all decisions in
connection with complaints are the sole prerogative of
thePPC,whichatitsdiscretionmayrequestthePPA,the
State Control Auditors or any other competent body to
startandadministrativeinvestigationinconnectionwith
complaints involving public procurement matters
broughttoitsattention.
Impact
PossibleActions
Difficulty
AreasforImprovement
TimeRequired
Assessment24
International
Practices
Competition
Transparency
Efficiency
Criteria
inGovernment
Policy
A
A
A
Rules.
X
X
X
a)toclosetheinvestigationastheactions,or
failuretoact,oftheCAunderinvestigation,did
notinfringethePPL,noranyother
administrativeorcriminalprovision.
b)toissueareasonedopinioninwritingtothe
CAinvolved,orderingtostoptheillegalbehavior
withinasettimeͲlimit.
The above article effectively creates a loophole and a
potentialconflictbyprovidingthePPAwiththeauthority
to investigate and decide in connection with complaints
thatmaynothavebeenroutedeitherbythecomplainer
orbytheCAdirectlytothePPC.
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Criteria
inGovernment
Policy
International
Practices
Competition
X
X
Creation of the PPC was done with the intent that all
investigations and decisions in connection with
complaints related to public procurement would be the
prerogative of the PPC. The PPC ––at its discretion –– can
then instruct the PPA to start an administrative
investigationonitsbehalf.
ThisfindingwasdiscussedandagreedwiththeDirectorof
the PPA, the Chairman of the PPC; and the Deputy
DirectoroftheDSDConJune14,2010.
23. The Public Procurement Advocate (PPAV) plays a
supportive and effective role to the reviews or
investigations conducted either by the PPA or other
competent authorities. However, the PPAV has been
directly involved in the conduct of independent
investigations of allegations of potential irregularities
involvingpublicprocurement.
Toalargeextent,suchinvestigativefunctionsconstitutea
duplication of the functions conferred in the PPL to the
PPC, which through April 2010, date in which the PPC
formally started operations, had been performed by the
23.OncethePPChasbeen inplace andfullyoperational
for about a year, there should be a revision of the
investigative role of the PPAV so as not to incur in an
unnecessaryduplicationoffunctions.
Additionally, such assessment should encompass a
thorough review of the functions performed by other
stakeholders within the public procurement system to
ensuretherearenounnecessaryduplicationoffunctions
andtheprincipleofeconomyofcontrol.
Impact
X
PossibleActions
Difficulty
X
Transparency
Efficiency
AreasforImprovement
TimeRequired
Assessment24
B
B
B
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PPA.
24.ThereisnoexplicitreferenceinthePPA’’swebsitetoa
dedicated eͲmail and hotline to report allegations of
potential improprieties in connection with public
procurement processes or the actions of civil servants
involvedinpublicprocurement.
24. Modify the contents of the PPA’’s webͲsite to
highlight the telephone numbers reserved for the
hotline and provide content explaining that those
numbersaretoencouragethepublictoreportinstances
ofpotentialfraudorcorruption.
X
Impact
PossibleActions
International
Practices
Competition
AreasforImprovement
Difficulty
X
Assessment24
TimeRequired
Transparency
Efficiency
Criteria
inGovernment
Policy
A
A
A
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ListofContactsandProcurementEntitiesReviewedAnnex2
InaccordancewiththeOECD/DACMethodology,theAssessmentTeamcomplementedtheassessment
ofthe12BLIindicatorsandtheir56subͲindicatorswiththeresultsofareviewofasampleoftenderand
contractmanagementdocumentationcorrespondingto8entitiesand2municipalitiesselectedbythe
AdvisoryGroup.
Theresultingnotessummarizetheworkperformedinconnectionwitheachreviewandanyfindingsand
observationsnotedbytheAssessmentTeam.
Alistoftheinstitutionsreviewedaswellastheindividualsinterviewedfollows:
INSTITUTIONS
1 DSDC
2 PublicProcurementAgency
3 HighStateAudit
4 USAID
5 ProcurementAdvocate
6 MinistryofHealth
RESPONSIBLE
PERSON
ValbonaKuko
AlpinaQirjazi
Klodiana
Cankja
Reida
Shahollari
Anilda
Sefgjini
GjergjiMocka
ElvanaTivari
PjeterBeleshi
KocoSokoli
SeanHuff
IlirjanaDana
SokolAliko
Kreshnik
Karalliu
Fatbardh
Vrioni
GjergjGoxhi
GjergjiVesho
AnjezaAlliu
IlvaCavo
Theodhoraq
Zguri
Skender
Carcani
CONTACTDETAILS
Director
HeadoftheTraining,Integration,Financeand
HumanResourcesDepartment
DeputyDirector
ITexpert
Director,LegalQualityControl
ExpertonprocurementAudit
LegalExpert
SupervisoryProgramOfficer
DeputyProgramOfficer
MCCProjectManager
Inspector
Inspector
Director
HeadofProcurementUnit
LegalExpert
Procurement
HeadofInternalAudit
HeadofFinanceDepartment
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INSTITUTIONS
7 MinistryofEducation
8 MinistryofInterior
9 MinistryofTransports
10 KESH
11 INSIG
12 MunicipalityofKamza
13 MunicipalityofTirana
RESPONSIBLE
PERSON
DafinaCaushi
SkenderJaku
Etjon
Kapedani
Gezim
Cekrezi
Marsuela……
ErvinAliu
Xhevdet
Mehmetaj
Arben
Shkembi
MimozaBalla
ErletaBucaj
……
AlionCenolli
OsmanHoxha
Gezim
Sharrra
KlaraMullaj
IlirIslamaj
AstritVeliu
Alqivadh
Ndini
SuelaShanaj
ArturKurti
EtisXhomo
ErionSeferi
Antoneta
Mancellari
ArbenMuja
AtliHoti
Shpresa
Xhakrosa
CONTACTDETAILS
HeadofProcurementUnit
HeadofInternalAudit
Generalsecretary
DirectorCentralProcurement
9
GeneralSecretary
Officer,ProcurementUnit
headofProcurementUnit
OfficerProcurementUnit
Director,Wholesalesupplydepartment
Legalexpert
ProcurementExpert1
Director,ProcurementDepartment
Officer,ProcurementDepartment
Officer,ProcurementDepartment
Officer,ProcurementDepartment
Officer,ProcurementDepartment
Officer,ProcurementDepartment
DirectorEconomicDepartment
HeadofFinanceUnit
HeadInternalServices
HeadofFinanceDepartment
DeputyChairman
Director,LegalDepartment
Head,ProcurementUnit
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14
15
1
INSTITUTIONS
CFCU
GRD
Interviews
AmericanChamberof
CommerceinAlbania
RESPONSIBLE
PERSON
MirsaTitka
OlsaNikolla
FloretaLuli
Faber
Vladimir
Konomi
4
InfosoftSystemssh.a.
AlbanianConstruction
Association
AlbanianConstruction
Association
5
ALPET
6
Profarma
IlirHebovija
Albana
Laknori
Anja
Novosela
EDILALͲIt
FICADEXAlbania
FortuneAlbania
Xhilda
Dervishi
MariaDushi
ErionCela
2
3
7
8
9
CONTACTDETAILS
Officer
Director,LegalDepartment
Director
SalesManager
LuigjAleksi,
President
EditorinChief
ChiefofJuridicalDepartmentAffaires
TechnicalAssistant
HeadTenderUnit
Administrator
Officer,TechnicalDepartment
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MeetingswiththeAdvisoryGroupAnnex3
ThisannexcontainsallminutessummarizingthemeetingsheldbytheAdvisoryGroupandthe
AssessmentTeamduringthecourseofthework.
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Annex4
RawstatisticaldataobtainedtoanalyzeCPIs
The information depicted below was provided by the PPA to the consulting team for the
purpose of populating the compliance and performance indicators or ““CPIs”” suggested in the
OECD/DACmethodologyfortheassessmentofpublicprocurementsystems.
Asitistypicallythecaseinmanyothercountries,thelevelandnatureofstatisticalinformation
available prior to the mandatory use of the eͲGP platform, effective January 1, 2009, was not
sufficient to help populate all of the required indicators. However, the range and type of
information available was sufficiently adequate to help populate the most relevant indicators
and coupled with the result of the tenders reviewed during the field work phase, helped to
provide the consulting team with the required information to assess the actual level of
performanceandcomplianceofthesystem.
STATISTICALDATAONPUBLICPROCUREMENTPROCEDURESforyears2007Ͳ2009
DetailedmonthlytablesforMarchthroughtoDecember2007
MARCH2007
Openprocedure
No.ofprocedures
Limitfund
Realisedfund
Savedfund
Civilworks
0
0
0
0
Goods
1
1,500,000
1,489,894
10,106
Services
1
2,000,000
1,991,000
9,000
Solicited
proposal
Civilworks
3
3,900,000
3,690,236
209,764
Goods
9
9,533,000
8,439,244
1,093,756
Services
1
9,533,000
8,439,244
1,093,756
Civilworks
0
0
0
0
Goods
0
0
0
0
Restricted
procedure
Services
0
0
0
0
Other
procedures
Civilworks
0
0
0
0
Goods
0
0
0
0
Services
0
0
0
0
15
26,466,000
24,049,618
2,416,382
Total
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No.ofpublishedopenprocedures
2
No.ofpublishedsolicitedproposalprocedures
No.ofpublishedrestricted
procedures
No.ofotherpublishedprocedures(consultancyservices,negotiationsandwith
publication)
13
No.oftotalpublishedprocedures
15
3,500,000
Solicitedproposalprocedurelimitfund
Restrictedprocedurelimitfund
Otherprocedurelimitfund(consultancyservices,negotiationsandwith
publication)
22,966,000
0
Totalpublishedprocedurelimitfund
26,466,000
Openprocedurelimitfund
Totalsavedfund
0
0
0
2,416,382
APRIL2007
Open
procedure
Solicited
proposal
Restricted
procedure
Other
procedures
Total
No.ofprocedures
Limitfund
Realisedfund
Savedfund
Civilworks
8
95,479,841
90,007,654
5,472,187
Goods
63
577,738,851
526,137,003
51,601,848
Services
20
83,614,161
78,344,154
5,270,007
Civilworks
Goods
33
52,951,265
51,448,021
1,503,244
125
143,014,373
135,387,656
7,626,717
Services
91
91,225,765
85,586,027
5,639,738
Civilworks
0
0
0
0
Goods
0
0
0
0
Services
0
0
0
0
Civilworks
0
0
0
0
Goods
1
1,267,008
1,193,600
73,408
Services
0
0
0
0
341
1,045,291,264
968,104,115
77,187,149
No.ofpublishedopen
procedures
No.ofpublishedsolicitedproposalprocedures
No.ofpublishedrestricted
procedures
No.ofotherpublishedprocedures(consultancyservices,negotiationsandwith
publication)
No.oftotalpublished
procedures
91
249
0
1
341
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Assessment
756,832,853
Solicitedproposalprocedurelimitfund
Restrictedprocedurelimitfund
Otherprocedurelimitfund(consultancyservices,negotiationsandwith
publication)
287,191,403
0
Openprocedurelimitfund
Totalpublishedprocedurelimitfund
Totalsavedfund
1,267,008
1,045,291,264
77,187,149
MAY2007
No.of
procedures
Limitfund
Realisedfund
Savedfund
Civilworks
18
287,166,171
236,160,670
51,005,501
Goods
145
1,142,251,715
991,877,496
150,374,219
Services
64
308,828,492
300,328,600
8,499,892
Civilworks
45
62,060,311
60,235,574
1,824,737
Goods
175
185,364,089
175,019,275
10,344,814
Services
91
89,331,819
82,776,915
6,554,904
Civilworks
0
0
0
0
Goods
0
0
0
0
Services
0
0
0
0
Civilworks
0
0
0
0
Goods
1
1,150,000
1,150,000
0
Services
3
5,660,000
5,580,550
79,450
542
2,081,812,597
1,853,129,080
228,683,517
Openprocedure
Solicited
proposal
Restricted
procedure
Other
procedures
Total
No.ofpublished
openprocedures
No.ofpublishedsolicited
proposalprocedures
No.ofpublished
restrictedprocedures
No.ofotherpublishedprocedures(consultancy
services,negotiationsandwithpublication)
No.oftotalpublished
procedures
227
311
0
4
542
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Openprocedurelimit
fund
1,738,246,378
336,756,219
0
6,810,000
Totalpublishedprocedurelimitfund
2,081,812,597
228,683,517
Solicitedproposalprocedurelimitfund
Restrictedprocedure
limitfund
Otherprocedurelimitfund(consultancyservices,
negotiationsandwithpublication)
Totalsavedfund
JUNE2007
Solicited
proposal
Restricted
procedure
Other
procedures
Total
Limitfund
Realisedfund
Savedfund
Civilworks
37
580,854,376
504,602,587
76,251,789
Goods
134
1,707,275,376
1,383,254,056
324,021,320
Services
52
186,262,335
162,606,230
23,656,105
Civilworks
35
55,089,012
53,704,283
1,384,729
Goods
171
185,487,960
173,568,981
11,918,979
Services
52
82,242,066
75,394,234
6,847,832
Civilworks
0
0
0
0
Goods
0
0
0
0
Services
0
0
0
0
Civilworks
0
0
0
0
Goods
0
0
0
0
Services
3
7,208,309
6,788,394
419,915
484
2,804,419,434
2,359,918,765
444,500,669
Open
procedure
No.of
procedures
No.ofpublished
openprocedures
No.ofpublishedsolicitedproposal
procedures
No.ofpublishedrestricted
procedures
No.ofotherpublishedprocedures(consultancyservices,
negotiationsandwithpublication)
No.oftotalpublished
procedures
223
258
0
3
484
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Openprocedurelimitfund
Solicitedproposalprocedurelimitfund
Restrictedprocedurelimitfund
Otherprocedurelimitfund(consultancyservices,negotiations
andwithpublication)
Totalpublishedprocedurelimitfund
2,804,419,434
444,500,669
Totalsavedfund
2,474,392,087
322,819,038
0
7,208,309
JULY2007
No.of
procedures
Limitfund
Openprocedure
Realisedfund
Savedfund
Civilworks
142
2,492,936,849
2,122,161,392
370,775,457
Goods
173
1,137,976,064
1,059,138,087
78,837,977
Services
48
214,081,383
191,295,308
22,786,075
Civilworks
149
171,926,123
168,313,556
3,612,567
Goods
210
165,736,702
158,276,674
7,460,028
Solicitedproposal
Services
115
70,995,141
69,017,446
1,977,695
Restricted
procedure
Civilworks
1
239,080,000
238,652,538
427,462
Goods
0
0
0
0
Services
0
0
0
0
Civilworks
1
702,400
680,000
22,400
Otherprocedures
Goods
0
0
0
0
Openinternational
procedure
Services
9
61,535,731
61,146.500
389,231
Civilworks
1
395,850EURO
360,830Euro
849
4,554,970,393
4,068,681,501
486,288,892
Total
No.ofpublishedopen
procedures
No.ofpublished
international
procedures
No.ofpublishedsolicitedproposal
procedures
No.ofpublished
restrictedprocedures
No.ofotherpublishedprocedures(consultancyservices,
negotiationsandwithpublication)
No.oftotalpublished
procedures
363
1
474
1
10
849
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Openprocedurelimit
fund
Solicitedproposalprocedurelimitfund
Restrictedprocedure
limitfund
Otherprocedurelimitfund(consultancyservices,negotiationsand
withpublication)
Totalpublishedprocedurelimitfund
3,844,994,296
408,657,966
239,080,000
62,238,131
4,554,970,393
AUGUST2007
No.of
procedures
Limitfund
Openprocedure
Realisedfund
Savedfund
Civilworks
158
2,726,367,621
2,491,062,094
235,305,527
Goods
121
984,034,505
911,911,677
72,122,828
Services
40
394,880,409
382,845,094
12,035,315
Civilworks
103
156,182,232
152,080,122
4,102,110
Goods
112
102,660,487
98,279,527
4,380,960
Solicitedproposal
Services
56
51,663,618
50,484,187
1,179,431
Restricted
procedure
Civilworks
1
0
0
0
Goods
1
333,000
298,460
34,540
Services
0
0
0
0
Civilworks
0
0
0
0
Goods
2
5,818,646
5,057,940
760,706
Services
2
39,559,000
39,261,818
297,182
596
4,461,499,518
4,131,280,919
330,218,599
319
271
2
4
596
Otherprocedures
Total
No.ofpublishedopen
procedures
No.ofpublishedsolicitedproposalprocedures
No.ofpublishedrestricted
procedures
No.ofotherpublishedprocedures(consultancyservices,negotiations
andwithpublication)
No.oftotalpublished
procedures
Openprocedurelimitfund
Solicitedproposalprocedurelimitfund
Restrictedprocedurelimit
fund
Otherprocedurelimitfund(consultancyservices,negotiationsand
withpublication)
Totalpublishedprocedurelimitfund
Totalsavedfund
4,105,282,535
310,506,337
333,000
45,377,646
4,461,499,518
330,218,599
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Assessment
SEPTEMBER2007
Openprocedure
No.ofprocedures
Limitfund
Realisedfund
Savedfund
Civilworks
226
3,075,562,404
2,953,508,966
122,053,438
Goods
153
1,098,238,495
1,020,193,501
78,044,994
Services
52
275,986,780
262,827,573
13,159,207
Civilworks
204
293,834,949
288,265,074
5,569,875
Goods
92
85,938,084
83,567,420
2,370,664
Solicitedproposal
Services
59
59,921,132
58,136,225
1,784,907
Restricted
procedure
Civilworks
2
76,279,237
73,247,079
3,032,158
Goods
9
271,000,000
268,250,890
2,749,110
Services
2
139,738,233
139,003,566
734,667
Civilworks
0
0
0
0
Goods
3
13,367,166
13,271,900
95,266
Services
11
29,416,665
28,393,008
1,023,657
813
5,419,283,145
5,188,665,202
230,617,943
431
355
13
14
813
Otherprocedures
Total
No.ofpublishedopen
procedures
No.ofpublishedsolicitedproposalprocedures
No.ofpublishedrestricted
procedures
No.ofotherpublishedprocedures(consultancyservices,negotiationsand
withpublication)
No.oftotalpublished
procedures
Openprocedurelimitfund
Solicitedproposalprocedurelimitfund
Restrictedprocedurelimitfund
Otherprocedurelimitfund(consultancyservices,negotiationsandwith
publication)
4,449,787,679
439,694,165
487,017,470
42,783,831
Totalpublishedprocedurelimitfund
5,419,283,145
230,617,943
Totalsavedfund
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Assessment
OCTOBER2007
Openprocedure
No.ofprocedures
Limitfund
Realisedfund
Savedfund
Civilworks
244
2,784,495,296
2,616,424,265
168,071,031
Goods
122
1,263,928,127
937,928,481
325,999,646
Services
96
654,844,683
596,001,552
58,843,131
Civilworks
196
399,667,400
356,511,713
43,155,687
Goods
156
181,125,563
174,649,872
6,475,691
Solicitedproposal
Services
118
159,330,893
156,846,138
2,484,755
Civilworks
2
736,339,461
641,519,207
94,820,254
Goods
1
39,230,000
39,053,000
177,000
Restrictedprocedure
Services
1
1,000,000
990,000
10,000
Civilworks
12
568,856,125
548,979,917
19,876,208
Goods
9
104,435,000
98,465,996
5,969,004
Services
5
37.781.481
36,454,020
1,327,461
962
6,931,034,029
6,203,824,161
727,209,868
462
470
4
26
962
4,703,268,106
740,123,856
776,569,461
Otherprocedures
Total
No.ofpublishedopen
procedures
No.ofpublishedsolicitedproposalprocedures
No.ofpublished
restrictedprocedures
No.ofotherpublishedprocedures(consultancyservices,
negotiationsandwithpublication)
No.oftotalpublished
procedures
Openprocedurelimit
fund
Solicitedproposalprocedurelimitfund
Restrictedprocedurelimit
fund
Otherprocedurelimitfund(consultancyservices,negotiationsand
withpublication)
711,072,606
Totalpublishedprocedurelimitfund
6,931,034,029
727,209,868
Totalsavedfund
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Assessment
NOVEMBER2007
Open
procedure
No.ofprocedures
Limitfund
Realisedfund
Savedfund
Civilworks
151
5,387,170,099
4,877,409,480
509,760,619
Goods
93
1,058,544,393
737,006,682
321,537,711
Services
47
635,808,403
555,469,248
80,339,155
Civilworks
108
150,572,193
145,067,437
5,504,756
Goods
43
52,710,887
50,471,732
2,239,155
Services
52
55,623,626
52,775,750
2,847,876
Civilworks
0
0
0
0
Goods
0
0
0
0
Services
0
0
0
0
Civilworks
0
0
0
0
Goods
4
20,408,036
20,400,000
8,036
Services
3
49,666,666
29,688,514
19,978,152
501
7,410,504,303
6,468,288,843
942,215,460
291
No.ofpublishedsolicitedproposalprocedures
No.ofpublished
restrictedprocedures
No.ofotherpublishedprocedures(consultancyservices,
negotiationsandwithpublication)
No.oftotalpublished
procedures
203
0
7
501
7,081,522,895
258,906,706
0
70,074,702
7,410,504,303
Solicited
proposal
Restricted
procedure
Other
procedures
Total
No.ofpublishedopen
procedures
Openprocedurelimit
fund
Solicitedproposal
procedurelimitfund
Restrictedprocedure
limitfund
Otherprocedurelimitfund(consultancy
services,negotiationsandwithpublication)
Totalpublished
procedurelimitfund
Total
saved
fund
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Assessment
Openprocedure
Civilworks
186
7,928,242,955
7,607,989,732
320,253,223
Goods
96
942,515,158
791,168,323
151,346,835
Services
85
1,184,180,210
1,136,759,696
47,420,514
Civilworks
95
170,412,756
161,691,673
8,721,083
Goods
57
72,552,170
70,922,348
1,629,822
Services
39
39,691,617
37,976,464
1,715,153
Civilworks
2
458,328,065
455,853,073
2,474,992
Goods
0
0
0
0
Services
0
0
0
0
Civilworks
3
84,740,250
79,336,800
5,403,450
Goods
6
11,813,832
11,560,687
253,145
Services
20
150,157,990
146,957,474
3,200,516
589
11,042,635,003
10,500,216,270
542,418,733
Otherprocedures
Total
No.ofpublishedopen
procedures
No.ofpublishedsolicitedproposal
procedures
No.ofpublished
restrictedprocedures
No.ofotherpublishedprocedures(consultancyservices,
negotiationsandwithpublication)
Totalno.ofpublished
procedures
Openprocedurelimit
fund
Savedfund
Restrictedprocedure
Realisedfund
Solicitedproposal
DECEMBER2007
No.of
procedures
Limitfund
367
191
2
29
589
10,054,938,323
282,656,543
458,328,065
Solicitedproposalprocedurelimitfund
Restrictedprocedurelimit
fund
Otherprocedurelimitfund(consultancyservices,
negotiationsandwithpublication)
246,712,072
Totalpublishedprocedurelimitfund
11,042,635,003
542,418,733
Totalsavedfund
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Assessment
SUMMARYTABLEPERMONTH2007
No.ofprocedures
Limitfund
Realisedfund
Savedfund
January
0
0
0
0
February
0
0
0
0
March
2
3,500,000
3,480,894
19,106
April
91
756,832,853
694,488,811
62,344,042
Openprocedure
May
227
1,738,246,378
1,528,366,766
209,879,612
June
223
2,474,392,087
2,050,462,873
423,929,214
July
363
3,844,994,296
3,372,594,787
472,399,509
August
319
4,105,282,535
3,875,818,865
229,463,670
September
431
4,449,787,679
4,236,530,040
213,257,639
October
462
4,703,268,106
4,150,354,298
552,913,808
November
291
7,081,522,895
6,169,885,410
911,637,485
December
367
10,054,938,323
9,535,917,751
519,020,572
January
0
0
0
0
February
0
0
0
0
March
13
22,966,000
20,568,724
2,397,276
April
249
287,191,403
272,421,704
14,769,699
Solicitedproposal
May
311
336,756,219
318,031,764
18,724,455
June
258
322,819,038
302,667,498
20,151,540
July
474
408,657,966
395,607,676
13,050,290
August
271
310,506,337
300,843,836
9,662,501
September
355
439,694,165
429,968,719
9,725,446
October
470
740,123,856
688,007,723
52,116,133
November
203
258,906,706
248,314,919
10,591,787
December
191
282,656,543
270,590,485
12,066,058
January
0
0
0
0
February
0
0
0
0
March
0
0
0
0
April
0
0
0
0
Restricted
procedure
May
0
0
0
0
June
0
0
0
0
July
1
239,080,000
238,652,538
427,462
August
0
0
0
0
September
13
487,017,470
480,501,535
6,515,935
October
4
776,559,461
681,562,207
94,997,254
November
0
0
0
0
December
2
458,328,065
455,853,073
2,474,992
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Assessment
January
0
0
0
0
February
0
0
0
0
March
0
0
0
0
Otherprocedures
April
1
1,267,008
1,267,008
0
May
4
6,810,000
6,730,550
79,450
June
3
7,208,309
6,788,394
419,915
July
10
62,238,131
61,826,500
411,631
August
4
45,377,646
44,319,758
1,057,888
September
14
42,783,831
41,664,908
1,118,923
October
26
711,072,606
683,899,933
27,172,673
November
7
70,074,702
50,088,514
19,986,188
December
23
246,712,072
237,854,961
8,857,111
5,683
45,777,572,686
41,855,933,422
3,921,639,264
Total
SUMMARYTABLEFOR2007
Proceduretype
No.ofprocedures
Limitfund(lekë)
Realisedfund(lekë)
Savedfund
Openprocedure
2,776
39,212,765,152
35,617,900,495
3,594,864,657
Solicitedproposal
2,795
3,410,278,233
3,247,023,048
163,255,185
Restrictedprocedure
20
1,960,984,996
1,856,569,353
104,415,643
Otherprocedures
92
1,193,544,305
1,134,440,526
59,103,779
5,683
45,777,572,686
41,855,933,422
3,921,639,264
TOTAL
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I.
OpenProcedures
RestrictedProcedures
NegotiatedProcedures
withPriorPublication
DesignContests
RequestsforProposals
8302 procedures
Procedures with e-procurement
Manual (paper-based) Procedures
373
7929
ProcurementProcedures
Procedures
announced
througheͲ
procurement4%
Manual(paperͲ
based)
procedures(fast
track)96%
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Below find a chart showing the percentages of Award Notices through Eprocurement.
AwardNoticesaccordingtoTypeofProcurement
3%
EͲprocurement:
177procedures
PaperͲbased:
5618procedures
97%
2009
6.4.1. Statistics related to the number of announcements
for public procurement during 2009
- The total number of announcements of public procurement
procedures during 2009, according to types of contracts
(services, goods, works) on the website of the APP is 7277, of
which:
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Contract Announcements for 2009
Services
Type of
Procedure
Consulting
services and
design contests
Negotiated
procedures with
prior publication
International,
Open
Procedures
Open
Procedures
RFPs
Restricted
Procedures
Total
Goods
Number of
contract
announcements
Type of
Procedure
Works
Number of
contract
announcements
Type of
Procedure
Number of
contract
announcements
216
1
3
447
725
4
1396
Negotiated
procedures
with prior
publication
International,
Open
Procedures
Open
Procedures
RFPs
Restricted
Procedures
Internally
open,
restricted
procedures
Total
5
5
1154
1853
5
Negotiated
procedures
with prior
publication
International,
Open
Procedures
Open
Procedures
3
3
1599
RFPs
1252
Restricted
Procedures
2
3024
Total
2857
- Total number of published awards is 3615, of which:
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Award Notices for 2009
Services
Type
International,
open
Goods
Number
Type
1
Open Procedure
150
RFPs
289
International,
open
Open
Procedure
RFPs
Works
Number
Type
5
607
785
International,
open
Open
Procedure
RFPs
Number
1
944
734
2
International,
restricted
International,
restricted
1
International,
restricted
1
Consulting
Services
Total
95
535
Total
1400
Total
1680
- Total number of announcements for executed contracts
with prior publication is 3634 of which:
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Notices of Executed Contracts for 2009
Services
Type
International,
open
Open
Procedures
RFPs
Goods
Number
Type
1
150
289
International,
open
Open
Procedures
RFPs
Works
Number
Type
26
607
785
International,
open
Open
Procedures
RFPs
Number
944
734
1
Restricted
Procedures
1
Restricted
Procedures
Restricted
Procedures
1
Consulting
Services
Total
95
536
Consulting
Services
Total
Consulting
Services
1419
Total
1679
During 2009, there have been published 1,182 executed
contracts following procedures without prior publication.
The chart below provides data on the number of public
procurement procedures for 2009, the ceiling amounts, and %
of savings:
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Tootal number of Published Procedures divided according to the type of
procedure between January 3, 2009 and December 31, 2009
Total number of Published Procedures
The total ceiling amount of the Published Procedures
Consulting services
Value of consulting services
Negotations with prior publication
Value of Negotations with prior publication
Open, international
Value of Open, International
Open, domestic
Value of open, domestic
RFPs
Value of RFPs
International, restricted
Value of International, restricted
Domestic, restricted
Value of Domestic, restricted
Negotations without prior publication
Value of Negotations without prior publication
8459
110,722,796,084
216
2,185,956,022
9
17357490
11
12,904,892,615
3,200
80,276,016,724
3,830
9,125,111,004
2
1,960,868,000
9
497,672,013
1,182
3,754,922,217
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Procurement Procedures conducted through the E-platform January 3, 2009
through December 31, 2009
Total Procedures
Total value of ceiling amount for published procedures
Total number of published procedures still in process
Total value of ceiling amount of published procedures still in
process
Total number of published procedures which have been
cancelled
Value of total ceiling amount of published procedures which
have been cancelled
Total number of awarded procedures
Total amount of procured ceiling amount
Total value of offers
% of offers to total ceiling amount procured
Total value of savings
% of savings to total amount of procured ceiling amount
7277
106,967,873,867
1034
21,169,037,580
2628
25,746,131,128
3615
60,052,705,159
51,358,000,549
85%
8,694,704,610
15%
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E-procurement Procedures and Negotiated Procedures without Prior
Publication which have been published and concluded with an executed
contract January 3, 2009 through December 31m, 2009
Total number of published procedures
Total value of ceiling amount for published procedures
Total number of awarded e-procurement procedures
Total ceiling amount for Total number of awarded eprocurement procedures
Total offers for e-procurement procedures
Number of Awarded negotatied Procedures without Prior
Publication
Their total value
Total amount for negotiated procedures without prior
publications
% of ceiling amount for negotiated procedures with prior
publication to ceiling amount of procedures that have
concluded with an executed contract
% of ceiling amount for negotiated procedures without prior
publication to ceiling amount of procedures that have
concluded with an executed contract
% of ceiling amount for negotiated procedures without prior
publication to total amount of offers for procedures that have
concluded with an executed contract
Total number of awarded procedures (e-procurement +
negotiation without prior publication)
Total ceiling amount procured (e-procurement + negotation
without prior publication)
Total offers (e-procurement + negotation without prior
publication)
% of offers to ceiling amount
Total Savings
% of savings to ceiling amount procured
8459
110,722,796,084
3615
60,052,705,159
51,358,000,549
1182
3,754,922,217
3,522,045,649
24.6%
5.9%
6.4%
4797
63,807,627,376
54,880,046,198
86%
8,927,581,178
14%
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Data on public procurement procedures conducted and concluded with an
award during 2009
Type of Procedure
Total
Open Procedures
(International+domestic)
(award notice)
RFPs (award notice)
Restricted Procedure
(domestic) (award
notice)
Negotiation with Prior
Publication (award
notice)
Consulting Services
(award notice)
8,694,704,610
% of
savings
of celing
amount
to
procured
celing
amount
15.00%
Total
procedures
Ceiling Amount
Procured
Offered Amount
3615
60,052,705,159
51,358,000,549
%
awarded
celing
amount
to
procured
ceiling
amount
85.00%
1708
54,593,844,173
46,403,638,462
85.00%
8,190,205,711
15.00%
1808
4,603,835,484
4,119,891,168
89,49%
483,944,316
10.51%
3
56,436,433
55,832,600
99.00%
603,833
1.00%
1
4,166,660
4,101,152
98.43%
65,508
1.57%
95
794,422,409
774,537,167
97.00%
19,885,424
3.00%
Savings
II. In the charts below we provide data on procedures published
on the website of the APP during 2009 as compared to 2008:
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Totalnumberofpublished
proceduresfor2009:
7085
Totalnumberofpublished
proceduresfor2008:8758
III.
CivilWorks
Services
Goods
IV. In the chart below we provide data on award notices
published on the website of the APP during 2009 as
compared to 2008:
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Totalnumberofprocedures
concludingwithanawardnotice
in2009:3871
Totalnumberofprocedures
concludingwithanawardnotice
in2008:5893
Number of offers on the website of APP during 2009 compared
to 2008, as well as the median number of offers for type of
procedure:
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Totalnumberofoffersfor
2008is11786
Totalnumberofoffersfor
2009is36225
MedianNumberofOffers
Statistical data on number of complains 2007-2009
2007
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NUMBER OF COMPLAINTS FILED WITH THE PPA DURING
2007
Total
number of
complaints
during 2007
645
Number
of V. Number of
complaints
complaints lodged
made during
during first half
second half of
of 2007
2007
148
497
Hence, the complaints considered in the first half of 2007
amounted to 148 for around 3,000 procurement procedures
conducted over that same period. It was found that 54 out of
the 148 complaints considered by the said Directorate, were
invalid through failure to duly fill in the standard form and to
observe the stages of the complaints procedure and time-limits
as prescribed by law. With regard to 36 of the complaints the
go-ahead was given for the procurement procedure, given that
the complainant’’s allegations did not stand. A decision was
taken to cancel procedure for 30 of the complaints, and to
reconsider procedure for 28 of them.
In the second half of 2007, the number of complaints
increased as compared to the first half. This increase,
however, is in proportion with the increase in the number of
procurement procedures conducted over these six months. In
the second half, the said Directorate considered 497
complaints for around 5,000 procurement procedures
conducted. Failure to duly fill in the standard form and to
observe the stages of complaints procedure, as well as the
legal time-limits, rendered 105 out of the 497 complaints
considered by the said Directorate invalid. For 186 of them,
the go-ahead was given for the procurement procedure,
because the complainant’’s claims did not stand. The decision
was taken to cancel procedure for 99 of them (adding also
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those complaints that were cancelled by the authorities
following reconsideration, they total 140). The decision for 41
of them was to reconsider procedure and to observe the
requirements contained in Article 42 for modifying the
documents. And for 66 complaints, a final decision was taken
to enforce legislation without initiating any administrative
inquiry.
2008
Chart #1
Processing of Complaints regarding Public Procurement
Procedures during 2008
Total
Complaints
564
No. Of
Complaints in
which a
decision was
made to
Investigate
the Complaint
188
No. Of
Complaints
which have
been
Quashed
169
No. of
Complaints in
which a
decision was
made to reevaluate
25
Invalid
Complaints
(failure to
observe
steps, or
improper
forms)
143
Complaints
without legal
basis
Complaints in
which a
decision was
made to allow
modification
of documents
27
2009
Chart #1
Processing of Complaints regarding Public Procurement
Procedures during 2009
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Total Complaints
1100
1200
No. Of Complaints
in which a
decision was
made to
Investigate the
Complaint
No. Of Complaints
which have been
Quashed
213
257
No. of Complaints
in which a
decision was
made to reevaluate
Invalid Complaints
(failure to observe
steps, or improper
forms)
38
592
1100
1000
800
592
600
400
213
257
200
38
0
Total Complaints
Complaints leading
to Decisions
Complaints leading
to Decisions
Complaints leading
to Decisions
Invalid Complaints
1100
213
257
38
592
Total number of Complaints filed with APP in 2009
Total
Complaints in
2009
Total Complaints in Total Complaints in
nd
the 1st six months of the 2 six months of
2009
2009
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1100
534
566
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Annex5
1.
2.
3.
4.
5.
6.
ListofAlbanianLegislationReviewedfortheAssessment
TheConstitutionoftheRepublicofAlbania(1998);
TheCodeofAdministrativeProceduresoftheRepublicofAlbania,(1999);
Law on Public Procurement No. 9643 of 20.Nov. 2006, consolidated with Amending
Laws no.9800 of 10. Sep. 2007; no.9855 of 26.Dec.2007, and no. 10 170 of 22. Oct.
2009;
LawonCompilingandImplementingtheStateBudgetoftheRepublicofAlbania,no.
8379of29.Jul.1998;
LawonManagingtheBudgetSystemoftheRepublicofAlbania,no.9936,of
26.Jun.2008;
Decision of the Council of Ministers no. 1, of 10.Jan.2007, On the Rules of Public
Procurement, consolidated with Amendments (additional decisions of the Council of
Ministers) no.153 of 22.Mar.2007, no.135 of 03.Feb.2008, no.392 of 08.Apr.2008,
no.822 of 18.Jun.2008, no.46 of 21.Jan.2009, no.495 of 15.May.2009, and no.398 of
26.May.2010.
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Annex6
DispositionofcommentsreceivedfromtheAdvisoryGroup
Casals & Associates and Claro & Associates would like to thank the members of the
AdvisoryGroupfortheirsupportandhelpfulcommentstotheReportsubmittedonJuly
20,2010.
Aspartofthereportfinalizationprocess,belowisalistofcommentsreceivedfromthe
membersoftheAdvisoryGroupassembledbytheUNDPforpurposesofaccompanying
the performance of the assessment of the public procurement system of Albania
undertakenbytheConsultingTeam.
To facilitate thereviewof the disposition of each comment, therationale followed by
theconsultantstoeitherincludetotallyorpartiallyortoexcludeaparticularcomment
isstatedfollowingeachone.
Additionally,commentsreceivedfromtheAdvisoryGrouparecitedinblack,whilethe
actionbytheconsultantsisincludedinblueitalics.
1. European Commission: Only one comment, related to Page 9: The statement
that the "Introduction of the eͲGP platform undoubtedly had a very positive
effect in reducing corruption and overall opacity of the public procurement
system,whileincreasingtransparency.Asanexampleindicativeofthispositive
trend, the average number of offers per bidding process increased from 2 in
2008,tomorethan6in2009;whilethenumberofcomplaintswasreducedfrom
1every21offersto1every33offers."
Whilst we can agree thatthe eͲplatform has contributed to reducingsystemic
vulnerabilities to corruptionͲit is not clear that this representsa significant
factorindecreasingactualcorruptioninPP.Thedecreaseincomplaintsdoesnot
necessarily imply a decrease in corruption, and on the same line the increased
publicityoftendersdoesnotautomaticallyguaranteetransparency.
ThereforeIwouldsuggesttorephraseforexampleasfollows:
"introductionoftheeͲGPplatformhasreducedsystemicrisksofcorruption......."
Action:Nomodificationtoexistingwording
Reviewingthesubstanceofyourcomment,wecouldnotagreemorewithyouin
that both the increase in the number of offers per bid and the decrease in the
number of complaints are simply indicators of a positive trend as stated in the
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paragraphonpage9.Furthermore,asitistypicallythecaseinanyothercountry
whereaneͲGPsystemhasbeenintroduced,itsmereintroductionhashelpedto
increasetransparencyaswellasreduceopacity,whichareregardedashavinga
positiveeffectinreducingcorruption,asalsostatedintheparagraph.
However,webelievetheparagraphinquestiondoesnotexplicitlyusetheword
““significant,”” nor implicitly imply that introduction of the eͲGP platform
constitutesasignificantfactortowardsreducingcorruption.Measuringtowhat
extent specific factors may have contributed individually or collectively to
reducing corruption is a much more complicated subject that has to do with
amyriadother factors that escape the scope and nature of the assessment we
wereengagedtoperform.
2. European Commission: Furtherto [our previous] message of last 11 June
regardingcomments to the PP Assessment, I would like to addthe
belowcomment.
From the section of the report concerning "Institutional Framework and
Management Capacity" it is confirmedthe important role of the PPA and the
challenges ahead regarding both the improvement of the PPA management
capacityand the role the PPAis expected to playin raising the management
capacities of Albanian contracting authorities as a whole.The assessment and
then the reportinevitably refer to an institutional framework/management
capacities of the PPA that were present at the time of the experts mission in
Tirana(Feb./March),allofwhichhavechangedsignificantlyinApril.
In this context, I would like to suggest that the "Institutional Framework and
ManagementCapacity"partofthereportbeupdatedinordertobettertakeinto
accountthenewstructureofthePPA,aftertherestructuringwhichtookplaceat
theendofApril.
Action: Modifications introduced to reflect changes in the staffing level of the
PPAsubsequenttocreationofthePPC.
Allappropriatesectionsofthereporthavebeenupdatedtoreflectthechanges
introducedtothestaffinglevelofthePPAsubsequenttothecreationofthePPC.
TheMatrixcontainingalldetailedfindingsandrecommendationsincludesanew
recommendationNo.13,whichaddressestheneedtoreassessthestaffinglevel
and resources of the PPA in light of the many responsibilities it is required to
performaccordingtothePPL.
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Please refer to the recommendations contained in the PowerPoint presentation
thatwasdeliveredtothemembersoftheAdvisoryGrouponJune14(seeAnnex
3attheend),wherethereisaspecificrecommendationtoassesstheworkͲload
ofthePPA.
With regards to [your previous comment] of June 11th, please see our answer
above.
3. Austrian Development Agency: Referring to the recent DIP meeting, the GTZ
representative,UlrikeGantzerͲSommermentionedthatGTZiscurrentlycarrying
out a gap analysis on the Albanian procurement law in relation to EU
procurement regulations, etc. If this is the case, you may consider to mention
thisGAPanalysisinthereportandincluderelatedfollowupactionsintheAction
plan.
Perhaps the EU integration process/adjustments to EU standards could be
reflected more prominently in the action plan and the change management
processes.MyunderstandingisthatEUMemberstatesdealtdifferentlywiththe
issueofadjustmentsrelatedtoEUvsexistingnationalprocurementregulations,
etc.. However, in case the Albanian government has already decided how to
proceedwiththeseadjustmentprocessesthenpleaseignoremycomment.
Action:Nomodificationsweremadetofinalreport.
Rationale: The assessment of the Albanian public procurement system was
performedinfulladherencetotheOECD/DACmethodology,whichincorporates
bestpracticesasthebasisforassessingthegapbetweentheexistingsystemand
processes. In addition to assessing the gap with respect to internationally
recognizedbestpractices,theConsultingTeamalsocomparedtheEUͲDirectives
to the Albanian legal framework and practices in public procurement. Specific
referencestoexistinggapsareincludedintheappropriatesubͲindicatorsineach
ofthefourpillarsencompassedbytheassessment.
WedonothaveenoughinformationontheGTZ’’sgapassessmentmentionedin
theeͲmail,specificallywhetheritsscopeandnaturewouldconsistsofaspecific
studyoftheremaininggapswithrespecttoEUͲDirectivessoastoputaspecific
commentinourreport.However,theGOAmay,ifdeemedappropriate,includea
referencetoitintheirdetailedactionplanforimplementingtheMatrixCapacity
ActionPlanlaidoutinAnnex1oftheassessmentreport.
4. WorldBank:Wewouldliketonotethatthefollowingobservationsareintended
to comment on the report in our function as member of the Advisory Group.
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They do not represent the Bank's own assessment of Albania's country
procurement system and the Bank expressly reserves the right to separately
comment on Albania's Public Procurement System at a later time. In addition,
the Bank's comments should not be considered as an endorsement of the
scoringprovidedintheassessmentreport.Withthatinmind,wewouldliketo
providethefollowingmajorcomments/observationsonthereport:
x I.Introduction:Concerningthemethodologyfortheassessment,ithasbeenour
understanding that the OECD/DAC methodology assessment would include the
Compliance and Performance Indicators (CPIs) in addition to the Base Line
Indicators (BLIs). This is also confirmed in paragraphs 3.1 and 3.2 of the
assessmentreportwhichstatethattheassessmentcombinesbothBLIsandCPIs,
wheneverapplicable.Tothisend,thereadermayexpectaseparatesectionon
the CPIs in consistency with the proposed structure of the OECD/DAC
methodology.Weacknowledgethattheconsultantmighthavefaceddifficulties
incollectingthedataandwebelievethatsuchdeficiencyofthesystemshould
bestatedinthereport.However,wenotedthatthereportattachesatablewith
CPIsapparentlydiscussedwiththeprivatesector(andChambersofCommerce),
butwecouldnotfindwherethecollecteddatawasincorporated.Alternatively,
atablecouldbeincludedwithonlythoseindicatorsforwhichinformationwas
possibletoobtain.Furthermore,thereferencetotheauditoftheeͲGPplatform
financedbytheWorldBankshouldbecorrectedfroma"fullͲscopesystemaudit"
toa"highͲlevelassessmentoftheGovernmentofAlbania’’seͲGPprocessesand
system".Onanotheraspect,wenotedthatthemainsummaryofthereportdoes
notprovidethebasisfortheassessmentespeciallyintermsoflegalframework
thatincludesinteralia:theprimarylegislation,secondarylegislation,datesand
numbers of legislative instruments, amendments to these documents, etc. For
purposesoflegalcertaintyandclarity,itisexpectedthatacompletelistwould
bedisclosedtothereadersofthereport.
Actions:Nochangesintroduced.
All pertinent statistical information available to populate the most relevant
compliance and performance indicators contained in Part II of the OECD/DAC
Methodology (Version 4) is displayed primarily in Table 1 and in Annex 4.
Additionally,informationpertainingclaimsandnumberofbiddersisalsostated
intheanalysisofthecorrespondingsubͲindicators,totheextentthattheresults
oftheanalysisofCPIs,whichincludedthereviewofmorethan50procurement
processes in their entirety (from budgetary appropriation to execution of
contract), were used to complement the rating assigned to each subͲindicator,
whereapplicable.
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ReferencetothehighͲlevelreviewoftheeͲGPplatformbyanindependentfirm
financed by the World Bank was included in the appropriate paragraphs of the
reportreplacingthepreviouswording.
Annex 5 to the report contains a list of the legal documents reviewed by the
consulting team in connection with the assessment of the legal framework of
Albania.
x
II.OverviewoftheExistingSystem:Wenotedthatthestructureofthissection
does not follow the same order of the OECD/DAC methodology and we were
wonderingwhetheritshouldbestructuredalongthefourpillars.Inaddition,we
missedsomereferencetotheimplementationandoperationofeͲGPamongthe
listedresponsibilitiesofthePPA(boxonpage8).RegardingtheeͲGPplatformin
Albania, we think that the introduction of the eͲGP system has been a major
achievement. International best practice has shown that such systems need to
beimplementedgradually.Tothisend,theuseofeͲGPcanbeconsideredabig
successwhileitappearsquitenaturaltoaddmorefunctionalityinfuture.Before
adding new features such as the integration with other systems (e.g. budget
planning) or contract management, the currently identified issues should be
addressed.AlthoughreferencetotheeͲGPauditfinancedbytheWorldBankhas
been mentioned in the report, we think that the connectivity issue mentioned
under 7.9. On page 12 may require additional clarification to avoid the
perception as if the bidders are excluded from participating in public
procurementduetoconnectivityissues,whichitselfwouldconstituteaviolation
ofoneoftheprinciplesofpublicprocurement,i.e.openandfaircompetition.
Action:Somechangesweremade
Rationale: According to the OECD/DAC Methodology (Version 4) ““Assessment
Report,””paragraph22statesthatthecontentsfortheoutlineofthereportare
““suggested.””Forpurposesofclarityofpresentationandbasedontheexperience
gatheredonpreviousapplicationsoftheOECD/DACMethodology,particularlyin
theassessmentoftheMexicanpublicprocurementsystem,theconsultingteam
decidedtofollowasimilarpresentationasthatappliedinthatopportunityfora
joint assessment team conformed by the World Bank and the InterͲAmerican
DevelopmentBank.Analysisofthesystemandprocessesfollowingeachofthe
four pillars depicted in the OECD/DAC Methodology can be found in greater
detailunderSectionV.oftheassessmentreport.
ThecontentsofresponsibilitiesofthePPAstatedinBox8.,havebeenexpanded
to also incorporate those pertaining the establishment, operation and
maintenanceoftheeͲGP.However,itshouldbenotedthatsuchresponsibilities
are not expressly stated in the PPL, Chapter II, ““Public Procurement
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Organization,”” Article 13 ““The Public Procurement Agency (PPA),”” paragraph 2.
Thelatterwasalsonotedinthetextappendedtotheendoftheresponsibilities
depictedinBox8.
The text on paragraph 7.9 was revised along the lines suggested by the World
Bank to avoid a perception that uneven connectivity in the interior of Albania
results in potential bidders being excluded from participating in public
procurement.
x
III.MainFindingsandRecommendations:Thissectionisverybriefconsidering
thatAnnex1iscomprehensivelylistingalltheproposedactionstobeconsidered
byGoA.WebelievethatthisactionplanshouldbeagreedwiththeGovernment
of Albania, who will be responsible for its implementation. In addition, we
believethatonemajorconcernshouldberaisedinthissection:thefactthatthe
PPAisexpectedtodomorewithless.Ontheonehand,thePPAneedstotakeon
more responsibilities, such as developing a training strategy for contracting
agencies and economic operators, improving the eͲGP platform including new
functionalities,implementationoftheFrameworkAgreementagenda,etc.;while
on the other hand, there are no additional resources allocated to the PPA, at
least in the form of headcounts, even worse, the PPA staff is cut in half (see
comment on subͲindicator 4 c below). As lead agency for public procurement,
the PPA should have sufficient staff to be able to manage public procurement
based on a comprehensive public procurement strategy which seems to be
missingatthemoment.
Action:Onechangewasmade
Please note that as stated under III. Main Findings and Recommendations, the
detailed findings and resulting recommendations are contained in Annex I,
whereas the findings depicted in Section III are intended to provide the reader
with arelevant summary of the main weaknesses affecting theAlbanian public
procurementsystem.
With regards to the comment about the need to agree all findings and
recommendationswiththeGOA,pleasenotethatasstatedinthedraftminutes
of the Advisory Group meeting held at the UNDP office in Albania on June 14,
2010,theGOA,whichwasrepresentedbytheDirectorofthePPAandtheDSDC,
stated their agreement with the contents, findings and recommendations
contained in the preliminary draft report that was circulated to all members of
theAdvisoryGrouppriortothemeeting.Theintroductiontothereport,aswell
asthescopesectioncontainsadetaileddescriptionofthevettingprocess,which
alsoincludedconsiderationofthecommentsreceivedbytheAdvisoryGroup.
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With regards to comments pertaining the significant reduction on the staffing
levelofthePPA,pleasetakenoteoftheinclusionofrecommendationNo.22.,in
the Matrix Capacity Action Plan in Annex 1., as well as comments in the
appropriate sections and subͲindicators. A specific recommendation was
contained in the PowerPoint presentation that was delivered by the consulting
teamleadertotheAdvisoryGrouponJune14,2010.
x
IV.ProgressSince2006Assessment:Wenotedthatthereporttakesstockofthe
recommendations of the 2006 assessment which the team of the World Bank
proposed at that time based on a different legal framework than the current
assessment. We would like to draw your attention to the fact that the
comparison between the 2006 and 2010 assessments may be perceived as if
progress is measured against the same legislative framework which is not the
case.Therefore,wewouldadvisethatthereportincludesatleastreferenceto
the different legislative frameworksas basis for the assessments in 2006 and
2010 respectively. For example: the definition of "force majeure" and
"emergency" were necessary under the previous PPL considering the highly
abusivepracticesindirectprocurementduetothesetwoclauses.ThenewPPL
includesthenegotiatedprocedurewithoutorwithpriorpublicationofacontract
noticeandtheconditionsforuseofthismethodareveryspecificandrestrictive
thusreducingtheriskofabusebycontractingauthoritiesandmakingredundant
theneedtodefine"forcemajeure"and"emergency".Anotherexampleisuseof
preͲqualification which could have been beneficial under the previous PPL, but
under the new law that is aligned with EU Directives, preͲqualification is not a
sepearate proceeding, but is integrated into the procedure for restricted
tendering.
Action:Allchangesweremadeassuggested.
x
V. Detailed Benchmarking Analysis:In several instances, the summary
assessmentgivenforeachindicator/subͲindicatorseemstomisssomerelevant
information while in other instances, it seems to beyond the scope of the
indicator.Afewexamplesaresharedbelow.Inaddition,wefindthatthereport
explains in many cases the provisions of the EU procurement Directives. While
weunderstandthattheyareforeasyreferencetothereader,morereferenceto
theavailablefeaturesinthesystemcurrentlyunderreviewshouldbeincluded.
x
SubͲindicator 1(a): Scope of application of the legislative regulatory
frameworkͲthesummaryofthissubͲindicatorcouldbenefitbyexplaining
brieflythelegalsystemofthecountry,hierarchyoflegalinstruments,a
bitofhistoryofprocurementlegislation,howitevolvedcompletecurrent
legislative framework and its major features. The current summary
includes multiple topics that are not easily readable and may be
confusing for the reader. In addition, the summary refers to "initial
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version of the PPL that resembles UNCITRAL model law". Is this about
firstPPL(1996)ortheinitialversionofthecurrentPPL?
Action:Wordingofsubindicator1(a)wasrevisedassuggested.
x
SubͲindicator (1b): Procurement methods Ͳ although they are not yet
operational,thePPLprovideselectronicreverseauctionandthedynamic
purchasing system (article 37), which could be considered as additional
procurement methods. We suggest to include some reference to them
here.
Action:Changemadeassuggested.
x
x
SubͲindicator1(e):TenderDocumentationandtechnicalspecificationsͲ
the summary for this sub indicator could benefit from confirming upͲ
front that the country has Standard Bidding Documents, mandatory for
use by contracting authorities. It may then provide a short description
andcontentofSBDsandnotonlyrefertotheimplementingregulations.
Action:Changemadeassuggested.
SubͲindicator 1(h): complaints ͲThis indicator is probably one of the
most important considering the weaknesses noted in the complaints
review system in Albania for a long time. The summary of the subͲ
indicatorcouldbenefitfromcoreinformationsuchas:allocationoftasks
of each entity involved in handling the complaints, identify any
overlapping between the functions of entities, gaps in institutional
framework, independence and adequacy of the complaints review,
capacity of human resources. It should further explain the procedures
envisaged by the PPL to treat the complaints, possibility for
appeal,deficiencies,etc.Wewouldadvisetoremoveanyreproductionof
theEURemediesDirectivesfromthereport.Sincethisassessmentmight
have started at a time when the Procurement ReviewCommissionwas
not yet operational, but completed when the PPC was functional (April
2010), the summary could briefly describe the previous Complaints
reviewmechanism(byPPA)andthechangesthattookplaceinOctober
2009(byPPC).
Action:TextinsubͲindicatorwassupplemented.
Please note that the governing rules for the operation of the PPC were
beingdraftedatthetimeofthelastmissionperformedbytheconsulting
teamleaderonJune3through14,2010.Additionally,theMatrixCapacity
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x
Action Plan in Annex 1, includes a specific recommendation (No. 22)
addressing the need to revisit the responsibilities for starting
administrativeinvestigationsoncomplaints,whicharestillwiththePPA
(seePPLArticle66).
SubͲindicator4(c):ThesummaryreferstoPPAwith36staff.TheBankis
aware that the PPA has been downsized by half of the staff since April
2010. This is a major step back in the process of strengthening and
building capacity of PPA. We believe that this should be incorporated
intothereportasitwillaffecttheabilityofPPAtocarryouteffectively
theregulatoryandmonitoringfunction.
Action:Changemadeassuggested.
Please note inclusion of recommendation No. 13 in the Matrix Capacity
ActionPlan,Annex1.Additionally,thisrecommendationhadalreadybeen
reflectedinthePowerpointpresentationprovidedbytheconsultingteam
leadertothemembersoftheAdvisoryCommitteeonJune14,2010.
Annex1ͲMatrixCapacityActionPlan:Itisnotexpresslystatedinthereportwhether
theactionplanisagreedandendorsedwiththeGovernment,butitisquitethorough
inrecommending numerous changes in four pillars most notably on legislative
framework.Weadmitsomeofthemarenecessarytofillintheloopholesinthesystem,
but for others we would suggest that they should be consistent with the principles of
theEUDirectives.Forexample:
x
PPL does not include concessions: Albania has a concessions law which
regulates the concessions contracts in the country. Since the country is
aiming to align the legislation withthe acquis communitaire, any
proposalforlegislativechangeshouldpossiblycomplywithsuchregime.
In this respect, the EU Procurement Directives leave it to the states to
decide how to treat these two types of public contracts. However, it is
important that the broad principles of procurement and concessions
contractexpressedinrespectivelawsarethesameandnotinconsistent.
To that end,it may not be necessaryto "host" concessions under the
procurementlaw.Infact,thatmightbeconfusingnowthatthecountry
hasseparatelaws.
Action:Nochangesweremade.
Asstatedabove,itisuptothestatestodecidewhethertheconcessions
law should be integrated into the procurement law or constitute a
separatelawaltogether.Theconsultingteamisoftheopinionthatgiven
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thatthebroadprinciplesofprocurementoughttobethesame,andsince
the PPA has also been charged with the responsibility of oversee the
concessions law, it would be more practical to integrate it as part of a
newchapterofthePPL.
x
Timelimits:theactionplanproposestoincreaseagainthetimelimitsin
caseofapplicationofeͲGP.Wewouldsuggestthatifthesetimelimitsare
withinthelimitsallowedbyEUDirectives,theremaynotbeaneedfor
changing them. However, if during the implementation of new time
limits, the business community complains on these time limits being
insufficient,GoAmayreturntothislater.
Action:Nochangesweremade.
Asstatedinthereport,theconsultingteamhasnotfoundanydiscernible
facts indicating that the introduction ofeͲGP resulted inefficiencies (i.e.
time savings) significantly reducing the time needed by economic
operators to prepare their offers in response to public tenders.
Accordingly, the consulting team is of the opinion that the provision
authorizingthePPAtoreduceby7daysalltimelimitsstatedinthePPL
forbidderstoprovideoffersisunwarranted.
Thisrecommendationaswellasallotherfindingsandrecommendations
were thoroughly discussed and agreed with GoA prior to finalizing the
preliminarydraftreportcirculatedforcommentstotheAdvisoryGroup.
*****
TheConsultingTeamtruststhatthisdocumentwillhelpthetimelyreviewofthe
FinalReportandisgratefultotheGovernmentofAlbaniaandalldonorsforthe
opportunitytobeofassistancewiththisimportantproject.
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