Maximising the Benefits of Effective Competition in Public Procurement in Slovenia

Executive summary

In recent years, Slovenia has consistently ranked among EU countries with a high rate of single-bid procedures, as reported by the European Union’s Single Market Scoreboard: 51% in 2022, up from 44% in 2021. Until recently, Slovenia also had high rates in the use of negotiated procedures without prior publication (26% in 2020).

To improve the efficiency of the public procurement system, the Government of Slovenia has committed to several measures in its Recovery and Resilience Plan. One of these commitments includes reducing the proportion of negotiated procedures without prior publication in all transparently published procedures to 14% by end-2024, as measured by the European Single Market Scoreboard. In the meantime, Slovenia has taken steps to address some of the root causes identified in this report, including enacting an amendment to the Public Procurement Act to further simplify procurement processes and creating the Public Procurement Academy to strengthen the capacities of procurement professionals.

Despite these policy actions and a reduction in the rate of negotiated procedures — 11% in 2022 — Slovenia continues to face challenges with supplier participation in procurement processes. Although its public procurement system is built on strong legal foundations and driven by transparency and efficiency, certain shortcomings that could limit competition still remain, even when open and transparent procedures are used.

As such, this report provides an in-depth quantitative analysis of competition in public procurement in Slovenia, a detailed assessment of the institutional and regulatory frameworks and the potential impediments to competition, and recommendations for future reforms and policy actions, including for building the capacities of contracting authorities and the private sector to improve bidders’ access to procurement opportunities.

Key findings and recommendations:

Improving public procurement data governance and data availability

• Slovenia has become one of the OECD countries that make the most information about the procurement process available to the public, thanks to its various platforms. E-JN serves as a tool to submit bids, e-Narocanje publishes procurement opportunities, and e-Revizija is the central tool for legal protection in procurement processes. However, data governance could be further improved by merging the different platforms to create a single-entry portal for all steps in the procurement process. Furthermore, the Public Procurement Act should be revised to require the preparation and publication of the procurement plans on the portal(s). Other improvements could include monitoring the impact of eForms on data quality and competition and exploring the use of artificial intelligence for data collection and analysis.

Improving monitoring and control of the procurement system

• Slovenia has several mechanisms to monitor and control the procurement system, particularly regarding negotiated procedures without prior publication, including a new ex ante mechanism undertaken prior to the launch of the procedure. Several steps can be taken to strengthen these monitoring and control mechanisms. The MPA should monitor the efficiency of the new ex ante mechanism and measure its impact on the rate of use of negotiated procedure without prior publication. Furthermore, collaboration among entities responsible for monitoring public procurement (DKOM, Court of Audit, Competition Protection Agency, Commission for the Prevention of Corruption) should be further strengthened, particularly through the development of a shared portal to better co-ordinate data collection and sharing information for certain cases. These institutions should also focus monitoring activities more on improving competition in public procurement.

• The MPA should consider developing an action plan to tackle issues in competition in public procurement, with concrete measures in the short, medium and long terms. These measures could include actions recommended by this report, such as the improvement of the e-Procurement system, promoting better co-ordination among key actors, enhancing the capacities of contracting authorities and economic operators, and raising awareness of corruption risks. The MPA could also consider developing a performance measurement framework for public procurement and report regularly on its results.

Understanding the impact of centralised purchasing on competition

• Centralised purchasing in Slovenia is undertaken by the Ministry of Public Administration. Its use is compulsory for some contracting authorities through government decision. However, given the structural characteristics of the procurement market in Slovenia, there are still many contracting authorities that implement similar public procurement procedures individually. Centralised and joint procurement are therefore under-utilised, leaving smaller contracting authorities sceptical about the efficiency of centralised procurement. The Government should consider conducting an in-depth analysis of the performance of centralised purchasing to better understand its impact on competition in public procurement and promote it to different contracting authorities. The use of a dynamic purchasing system should also be encouraged to increase participation of SMEs.

Building the capacity of key procurement stakeholders and professionalising the procurement function

• Slovenia has made several efforts to offer training to contracting authorities through the creation of the Public Procurement Academy. The Government should pursue its capacity-building efforts, targeting several stakeholders by:

  • Improving the capacities of contracting authorities to ensure that they are preparing, planning and conducting their procurement procedures in a way that makes procurement opportunities more attractive for the business sector (e.g. strategic planning for seasonal trends, making preparation and publication of procurement plans mandatory, making the most of the ESPD, favouring best price-quality ratio as an evaluation method, extending bid preparation timeframes, using lots, and applying better contract management practices.).

  • Strengthening the role of the Public Procurement Academy by including a mandatory certification scheme to increase the recognition of the procurement profession. The academy should provide training and practical tools on key topics such as market engagement, the use of quality criteria, collaborative approaches, and preventing collusion and corruption.

  • Improving the capacities of economic operators by engaging professional associations in supporting less experienced firms, facilitating joint ventures and subcontracting, and pursuing current initiatives to boost SME engagement. The Government of Slovenia should also strengthen engagement and consultations with the private sector during reform processes affecting the public procurement system and inform them regarding legal changes in the system to ensure legal certainty.

  • Asking the Competition Protection Agency to regularly provide data on mergers and acquisitions to help contracting authorities with market analysis, and provide training on competition practices.