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Public procurement in Serbia: Progress and future goals for 2024 and beyond

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In the first half of 2024, public procurement in Serbia has reached its highest level of participation in GDP over the past two decades, according to the Public Procurement Development Program adopted by the Government on August 9. However, Serbia’s public procurement share remains below the EU average of around 14%.

The share of public procurement in Serbia’s GDP has increased from 7.63% in 2014 to 10.5% in 2023. This marks a significant rise, though still lower than the EU average. The Program notes that in 2019, the participation was at 8.14%, highlighting a substantial 2.87% increase from 2014 to 2023.

Despite this growth, the Program indicates that there has been no notable increase in business entity involvement in public procurement procedures since 2019. The average number of bids per tender has slightly decreased from 2.6 in 2014 to 2.4 in 2023, with 51% of public procurement procedures receiving only a single bid. This figure shows a slight improvement from previous years but still reflects a competitive concern.

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In 2023, the highest number of bids were for goods procurement (average of 2.7), followed by works (2.6), and services (1.9). The Program’s analysis highlights that the proportion of tenders with only one bid has dropped from 52% in previous years to 51%, though this is still comparable to EU standards where single-bid tenders range from 13% to 52%.

A positive development is the significant involvement of small and medium-sized enterprises (SMEs), which secured 79% of contracts by number and 68% by value, totaling around 583.6 billion RSD. This suggests that SMEs play a crucial role in Serbia’s public procurement market.

Looking forward, the Public Procurement Development Program aims to enhance the fairness and effectiveness of procurement procedures. The criteria for awarding contracts will increasingly emphasize qualitative factors beyond just price. The recent amendments to the Public Procurement Law (PPL) align with EU standards to improve service quality through such criteria.

The Program also outlines several goals, including increasing economic competitiveness, incorporating environmental and social considerations into procurement, and reducing irregularities. The first-year Action Plan for 2024 targets modest improvements, such as increasing SME participation in contracts to 80% and raising the use of non-price criteria for contract awards to 5%.

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Overall, the Program’s focus is on creating a fairer, more transparent public procurement system that supports sustainable development and better service quality.

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