2004年-世界发展银行全球_Kosovo___Operational_Procurement_Review_54页_4mb

Summary of the Operational Procurement Review for Kosovo

Purpose of the Report

This Operational Procurement Review (OPR) aims to assess the public-sector procurement system in Kosovo, focusing on the legislative framework, institutional responsibilities, procurement practices, and the control environment. It also evaluates the performance of procurement on World Bank-financed projects and identifies risks to Bank funds. The report provides recommendations for improving procurement procedures, increasing transparency, and combating corruption.

Key Findings

• Legal Framework: The legal framework for public procurement in Kosovo was initially established by the Finance Administration Instruction (FAI) 2/99, issued by the Central Fiscal Authority (CFA) in December 1999. This framework was intended to be temporary but remained in effect for three and a half years. It provided limited guidance and allowed too much discretion to contracting authorities, resulting in inefficient and non-transparent practices.

• Procurement Practices under FAI 2/99:

  • Procurement procedures were often poorly packaged, reducing competition and leading to failed tenders.
  • The Direct Single Source Procurement was overused, and bid evaluation criteria were overly subjective, increasing the risk of error and manipulation.
  • There was a lack of effective oversight, as the Public Procurement Agency (PPA) and Public Procurement Regulatory Body (PPRB) were under-resourced and lacked independence.

• New Law on Public Procurement (LPP) 2004/3:

  • A new law was enacted on February 9, 2004, and became effective on June 9, 2004. It is aligned with EU procurement directives and introduces a more comprehensive framework, including Open Tendering as the main procurement procedure.
  • The law also includes safeguards to prevent abuse and enhance transparency, but the implementation of these provisions is still in its early stages.

• Institutional Capacity:

  • The new oversight bodies (PPA and PPRC) have not yet been formally established, leading to a lack of legal basis for their operations.
  • The implementation regulations and standard bidding documents (SBDs) required to support the new law are still pending, creating uncertainty for contracting authorities.

• Control Environment:

  • Internal auditing and control systems in UNMIK and PISG institutions are underdeveloped.
  • The Office of the Auditor General (OAG) is under-resourced and has not yet established a credible audit record.
  • External audits by the Netherlands Court of Accounts have identified significant procurement abuses.

• Corruption:

  • Corruption is not a pervasive force in governance, but it remains a significant issue, especially in procurement.
  • High-profile corruption cases have led to prosecutions, and the private sector reports corruption as a major constraint on business operations.
  • The UNMIK administration has been criticized for not serving as a good role model in transparency and accountability.

• World Bank Projects:

  • Procurement performance on World Bank-financed projects has been unsatisfactory due to high staff turnover and weak institutional capacity.
  • Breaches of procurement arrangements are common, and the Bank should continue prior review processes for procurement procedures.

Main Recommendations

Legislative Reform

• A transitional legal instrument should be enacted to provide a legal basis for the existing PPA and PPRB until the new institutions are formally established.
• Implementing regulations and standard procurement documents should be promulgated to support the new Law on Public Procurement (LPP).

Institutional Reform

• The Public Procurement Agency (PPA) should be restructured to focus only on executive procurement functions.
• Regulatory functions should be concentrated in the Public Procurement Regulatory Commission (PPRC).
• The Public Procurement Rules Committee should be abolished.
• A new Public Procurement Review Commission should be established as an independent second-instance body for bid protests.

Procurement Procedures

• Transparency and accountability should be increased through the launch of an Internet website with full details of procurement operations.
• Annual reports and decisions of the PPA, PPRC, and Review Commission should be published.
• A procurement training program should be launched at the Kosovo Institute of Public Administration (KIPA) to build technical capacity.
• A "procurement professional certificate" should be introduced to qualify procurement professionals.

Bank-Financed Projects

• The financial thresholds for International Competitive Bidding (ICB) should remain low to accommodate the weak procurement capacity in Kosovo.
• The Bank should continue to review procurement procedures for its projects to mitigate fiduciary risks.

Context

Kosovo was placed under UN administration following UN Security Council Resolution 1244 in June 1999. The Provisional Institutions of Self-Government (PISG) have been established to move toward self-government, but the UN Special Representative of the Secretary General (SRSG) retains authority over key areas, including fiscal policy and law enforcement. The SRSG has set out "Standards for Kosovo" which define the conditions for Kosovo to be considered a "normal society," but political and security uncertainties have hindered progress toward these standards.

Conclusion

The procurement risk in Kosovo is currently high due to the incomplete legal framework, weak institutional capacity, and ongoing corruption concerns. The new LPP is a step in the right direction but requires further implementation and institutional support to be effective. The World Bank recommends continued oversight and reform to ensure that procurement practices in Kosovo meet international standards and reduce the risk of misuse of public funds.