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PUBLIC PROCUREMENTS IN CROATIA

Legal Grounds
The Public Procurement (Zakon o javnoj nabavi), the law in force since 1st January 2013, sets out procedures of public order system as well as provisions of general (framework) contracts for delivery of goods, performing work and providing services; it also defines means of legal protection and bodies responsible for the public order system.

No rules concerning public and private partneship (co-operation of public and private entities) are regulated by the said law because there is a separate law in the matter which was introduced on 7th November 2008. Recently, a new PPP law was voted and has been in force since 21st July 2012 (NN 78/2012).

In order to make the procedure easily available for the public, a special Internet site with relevant laws, forms and on-line registration possibility has been created (http://www.javnanabava.hr/default.aspx).

The Public Procurement Law of Croatia does follow directives of the European Union, so procedures are the same as those of Directives and those existing in Poland. The Law is followed by executory rules by which the most important details are set - such as announcement (invitation) forms, preparing and revealing auction documentation, rules of opening of tenders, supervision and training of relevant staff. All these documents are available in the English language at www.javnanabava.hr

Provisions of the said law shall apply to orders of estimated value (without V.A.T.) equal to or higher than HRK 200,000.00 in case of supply of goods and providing services, and HRK 500,000.00 in case of construction works. The law must be obeyed by government administration units, local self-government bodies, subjects of public law, public-service units (water, energy, transport, postal services). As it was stated above, the law governs services, deliveries and construction works, but some exemptions do exist as well.

According to the Public Procurement Law, the types of public orders are: public auction (open), auction open to selected persons, negotiation after announcement, negotiation without announcement, contest, competitive dialogue. Of those, public auction (most frequent) and auction open to selected persons are basic procedures. In particular sectors of the economy, negotiation after announcement is wide used, too.

In public orders, the lowest price or the most convenient economical conditions are the main criteria. In the other case, some additional circumstances – such as quality, after-sale service, date of delivery, date of completion, etc. - are taken into account,

Low Value Public Procurement and EU Threshold

No lower limit for public orders has been established by the Law. However, in case of low-cost projects (bagatelna nabava): up to HRK 200,000 in case of deliveries and services and up to HRK 500,000 for construction works, simplified procedures are allowed; these are open auction, selected persons auction and negotiation after announcement.

For the period from 01/01/2016 to 31/12/2017, there are new – increased – thresholds for public orders. Although European directives related to public orders must be obeyed in case of projects exceeding specified value, the said directives are in use for smaller projects in Croatia as well with some minor modifications. According to the Law mentioned above, there are high-cost public orders (javna nabava) and low-cost public orders (bagatelna nabava) - these are under-threshhold ones. The main difference lies in periods of some acts. For example: in case of open auctions, offers must be delivered within 40 days from the date of sending invitation; in low-cost cases – 20 days. The terms for lodging appeals and objections are 10 and 5 days respectively (from the date of announcement or of delivery of the decision).

There are also value limits: EUR 80,000 / HRK 610,024 and EUR 1,000,000 / HRK 7,625,300 which are applied for public orders being made in accordance with Art.18 Section 7 of the Public Order Law. It says low-cost procedures may be applied to defined groups of projects. However, the total value of the project must be first divided into smaller parts not exceeding the above mentioned values: HRK 610,024 for supplies and services and HRK 7,625,300 for construction projects.

According to EU law, public orders exceeding European thresholds must be published at the official gazette of the European Union (http://ted.europa.eu). It is not required for low-cost projects. In Croatia however, all the said projects must be revealed and made open by an official page EOJN (Elektronski oglasnik javne nabave) www.eojn.nn.hr . Announcements are published in a shortened form; to get full text with complete set of annexes, registration in the system is required.

Notices in press and/or other media are allowed, but they must not be revealed there before the EOJN and TED systems. The following are usual notices in the matter: order announcements, initial information regarding public orders planned for the next 12-month period, information about results of the procedures. In case of those procedures where there is no obligation to publish an anouncement (for example: negotiation), decisions of start of the procedure is published in order to make the case transparent and open to the public. In an order announcement, it is necessary to quote relevant codes of Common Lexicon of Orders (CPV). An ordering party should prepare a dossier (auction documentation) and may request contractors to reimburse him the cost of its printing and mailig.

One more circumstance should be mentioned here: filing offers by electronic means. Since 01/01/2016, this way of communication is obligatory; in case of low-cost projects, it was introduced on 01/07/2016.

In the Public Procrement Law (Zakon o javnoj nabavi), there are also included the following provisions:
- payment for the work/service performed by a subcontractor must be made directly to the subcontractor if he participated in the procedure – not to the chief contractor (as it was regulated by previous law); this should solve the problem of delay of payments from chief contractor to subcontractors,
- the best economic aspect of an offer – not the lowest price - is the main criterion of selection of a contractor,
- limited right to object and protest the procedure result; only those paticipants who can prove they could have won the order are so entitled.

Chief Croatian bodies dealing with public order procedures

The following are central offices responsible for public order cases:
1. Public Order Office (Ured za javnu nabavu, www.javnanabava.hr)
2. Public Order Inspection Office (Držawna komisija za kontrolu postupaka javne nabave (www.dkom.hr) .

The Public Procurement Office deals first of all with right application of provisions of the Law (gives legal opinions); further, it manages the EOJN Internet site, gathers data regarding orders, organizes instruction courses on public order system, monitors procedures and participates in international order cases.

The Public Procurement Inspection Office is an appeal instance; a lot of useful information regarding the appeal procedures in public procurement cases can be found at their Internet site.

Croatia the best country for your business !! The unusual climate for your business !!
You have to try to do your business here !!!

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