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Identification corruption in Croatian public procurement By Jagoda Radojcic

One of the biggest sources of corruption in the country is public procurement, which includes the areas of public procurement, concessions and public-private partnerships. It is estimated that through public procurement annually in Croatia is turned around five billion EUR. A significant portion of that money, according to some public estimates 10 to 15 percent, has ended in private pockets. Procurements are the specific area where public and private sector meet: in chain of corruption participates government or state-owned companies on one, and on the other side a private company, trying by unlawful actions to gain a privileged position in relation to the competition and pay for it. According to Croatian law, public procurement payers are government institutions and companies that are entirely or partly owned by the state. The fundamental problem that occurs in all corrupt activities is that all those involved in corruption don’t want anyone to know about it. Public documents on procurement are opaque, inaccessible, their browsing and searching difficult. Regulations governing public procurement in Croatia have changed about 15- times in the last 5 years. At this point, for public procurement system are responsible Country Procurement Management of the Ministry of Economy, the State Commission for Supervision of Public Procurement, Ministry of Finance, in the part relating to the concession, the Agency for Public-Private Partnership, the National Audit Office and the State Attorney that is, in accordance with the provisions of the Public Procurement Act, actively legitimated for appealing the State Commission. Jurisdiction of different state bodies are in "collision", intertwined, their level of engagement in public procurement is different, so the function of effective control and monitoring is very difficult.

However, since the goal of any corrupt activity to achieve that state money (after it has apparently went through a certain procedure and through one or more transmission ends up in private pockets), and with an appearance of legitimacy, there are relatively few reliable ways for corruption in the procurement becomes visible. Number of indicators point to the likely misuse of public procurement: 1. Unclear technical specifications of procurement. 2. Often changing the clause during the procurement procedure, cancellation, shortening and extension of payments, partial cancellation or re-scheduling ads procurement for the same goods or services from the same tax payers procurement. 3. Participation in the bidding of private companies owned by government officials and their family members 4. Publication of data on closed public procurement during the procedure. 5. Failure to comply with the rules relating to description of procurement. 6. Preference for a particular bidder, or the manufacturer through description of procurement or through conditions to demonstrate its capability. 7. Unlawful cancellation, amendment propositions contest. 8. Error of law established by law and the tender documentation. 9. Failure to comply with the provisions of the Act relating to framework agreements. 10. Incorrect assessment of the acceptability and offers, choosing an unacceptable offer, or the choice of the bidder. 11. Failure to comply with the special rules relating to a specific subject matter (special permits, licenses and other conditions that are necessary for the marketing and use of certain goods, works or services, etc.). 12. Simulation of direct negotiation by legal restrictions. 13. Repeated getting jobs with the same client of the same company. 14. By not demonstrate the ability of the indicators relate to the subject of procurement. Public procurement will continue to be abused, the state will continue to react or not react lukewarm and modus operandi will more or less remain the same. However, change can be initiated by participants of the procurement or potential participants, who are most interested to improve the existing system. How to achieve this? Simply, by adding transparency into the game. Unfortunately, corruption will never be completely eradicated. It is wrong to think that it’s only the task of the state. Any engagement in public procurement, any discussion about them, criticism in this process is useful. Think of it as bringing light into the vampire tomb; it would had the same effect bringing more light into the process of public procurement in Croatia: number of corruptive ‘vampires’ would definitely decrease, and the remaining vampires would be drawn to a new alternative, less profitable positions.

Identification corruption in Croatian public procurement