Detection and Suppression of the Criminal Offense of Abuse in Relation to Public Procurement

The public procurement volume amounts to 10.5% of GDP which represents a considerable part of the Slovene economy. Thus, public procurement remains an important generator of economic growth and one of the key agents for the public financial expenditure policy. The public procurement analysis shows that the public procurement structure and share did not essentially change in Slovenia from 2001 to 2006. The data analysis of the public procurement contracts awarded in 2006 showed that the public procurement contracts were non-uniformly distributed according to their values and the number of procedures. On the one hand, great fragmentation and dispersion of public procurement contracts manifest themselves in the small-value public contract segment and its 25.1% value share in all of the public procurement contracts, but on the other hand, there is concentration of the high-value public procurement contracts in merely few large-volume orders.
 
 Key words: • public procurement • public funds • public procurement procedure • economic policy • Slovenia

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In recent times, the attention given to innovations and informal competitions and their ability to stimulate demand-side policies such as public procurement contracts have mounted among policymakers and researchers. However, fewer studies have focused on analysing these relationships, especially in catching-up countries. This paper, therefore, aims to investigate whether innovations and, its related activities, and informal competitions play important roles in influencing firms’ decisions to secure public procurement contracts. We employed the logistic and treatment effect regression models using pooled cross-sectional data from the 2019 World Bank Enterprise Survey to test these relationships. The results, based on a cross-sectional sample of 2,606 firms, revealed that product innovation and informal competitions positively influence firms’ abilities or willingness to secure public procurement contracts. On the contrary, we find that process innovation does not influence firms’ ability to obtain public procurement contracts. The results also demonstrate that patents and external collaboration significantly influence firms’ abilities to successfully secure public procurement contracts. The main practical implication of the research is that firm managers in catching-up economies such as the Visegrád Group aiming to be successful in the tendering process should consider engaging in innovation and collaborative bidding to stand a better chance of securing these competitive government contracts.

The integration of environmental criteria into public procurement contracts can constitute a powerful tool to promote desired environmental practices in the EU. As major purchasers of goods and services from the private sector, public entities have significant market power allowing them to influence corporate behaviour by attaching environmental criteria to public contracts. Behind the background of the current revision of the procurement directives, this article discusses the potential implications of the environmental integration principle (EIP) on public contracting in the EU. It is argued that Article 11 TFEU incurs an obligation for the EU legislator to ensure that national authorities are not in a position to entirely disregard environmental concerns. Moreover, the environmental integration principle implies an obligation for a wide use of environmentally friendly procurement mechanisms where no conflict with the objectives of value for money and competitive tendering arises. In the case of competing interests, a proper balancing exercise requires environmental measures that are least restrictive on competitive tendering as well as a procurement framework that is least restrictive on environmental protection.

A decision-making relevance for retaining the incidence of the special legislation applicable in the matter of public procurement presents the qualification of the contract as a public procurement contract, subsequent to the analysis of the legal features of the contract, but also of the qualities of the contracting parties. The legal features that particularise the public procurement contract represent autonomous notions, defined by EU law, with the exception of the element relating to the administrative character, not provided for by Directive 2014/24/EU, but mentioned by Romanian law. Also, the qualification of the public procurement contract is an autonomous qualification, in accordance with the provisions of EU law on public procurement, and the qualification of the contract in national law is not relevant from this perspective. Equally, the concepts of contracting authority and economic operators, tenderer are defined not only at the legislative level, but have been the subject of a rich ECJ jurisprudence, which must be taken into account and applied as such by the national judge. In terms of guaranteeing the most efficient use of public money, avoiding the non-application of special provisions in the field of public procurement, as well as consolidating theoretical knowledge in the matter, it is useful to approach the previously mentioned autonomous notions in the light of European and Romanian jurisprudence and doctrine.

The Act on the Prevention of Conflict of Interest prohibits public officials from pursuing private interests in connection with the performance of their duties. The Act aims to ensure fair performance of duties, and to secure the public's trust in public administration. It was enacted and went into effect on May 19, 2022. It is not easy to find precedents in comparative law for regulations regarding conflict of interest situations. In particular, defining and determining the scope of conflict of interest involves evaluation and judgment on very comprehensive issues, such as procurement contracts. Conflicts of interest in public procurement are an area in which violations of public official duties, criminal punishment, administrative sanctions, civil suits for damages, and issues of contract validity can be complexly connected, and a systematic review of legal principles related laws and regulations.
 In France, regulations on conflict of interest were established relatively late, but judgements established a specific precedent for conflict of interest in the area of procurement contracts. Administrative court's strong will to comply with the principle of open and fair competition was revealed in that it confirmed that if a conflict of interest is recognized through judgement, it can lead to termination of concluded contract. French law cases can give a reference in relation to case analysis and precedent issues regarding the situations of conflict of interest. This paper examine French regulations on conflicts of interest focusing on public procurement contracts, and discuss the resolution of legal disputes regarding compliance with the obligation to open and fair competition in the process of concluding public procurement contracts.

Relevance. The relevance of this study is determined by the growing trend of implementing approaches from the private sector in managing public procurement, such as suppliers’ reputation assessment. Although the suppliers’ reputation factor is a topic of current interest, both in research and in public procurement practice, there are ongoing discussions on the effects of the reputation criterion usage in public procurement, and some aspects have been insufficiently studied. Purpose of the study. This study examines the role of suppliers’ reputation factor in terms of interregional cooperation between public buyers and suppliers at the micro and regional levels. Data and methods. The analysis is based on a survey of public buyers in Russia, revealing procurers’ orientation on suppliers’ reputation factor and their involvement in cross-regional cooperation for micro-level analysis. With the help of open data on public procurement contracts, a grouping of Russian regions by the share of suppliers from other regions is proposed. The combination of open data analysis and survey results is then used to explore the role of reputation in terms of interregional cooperation. Results. The analysis shows that a suppliers’ reputation factor is of particular importance when more than half of a buyers’ suppliers are from other regions. Also, suppliers’ reputation is of major significance for public buyers in regions that are more involved in contracting with suppliers from other regions. Thus, the importance of the suppliers’ reputation factor, in terms of interregional cooperation, is confirmed both at the micro level of procurers’ purchases and at the regional level. Conclusion. For effective management of contractual relationships in public procurement, it is important to understand the effects and the role of considering the reputation of suppliers. The study focused on one of the insufficiently explored aspects of suppliers’ reputation in public procurement. The results may be of interest both to regulators and direct procurement participants – public buyers and suppliers.

Outsourcing can be defined as the delivery of public services by the private sector. The sign of the effect of outsourcing on public spending is ambiguous ex-ante. While outsourcing may reduce public spending through higher competition in the private sector, it may also increase public spending due to the presence of transaction costs or the so-called “hold-up” problem among others. Using a panel of Spanish regions over the 2002-2018 period, this paper explores the association between outsourcing and public spending empirically. Spain offers an interesting case study from a broad perspective, as the degree of decentralization of public health and education is almost complete, and the different regions have adopted quite distinct approaches as regards the public-private mix in the provision of these public services. In line with previous cross-country evidence [e.g. Alonso et al. (2017); Potrafke (2018)] our estimates point to a positive relationship between public spending and outsourcing. The result holds when a number of robustness exercises are carried out. By components, we find that outsourcing is associated with higher public consumption and health spending, while there is no statistical association with investment and education expenditure. In any case, it is worth mentioning that the impact of outsourcing on the efficiency of public spending cannot be ascertained with our approach, due to data limitations.

Public Procurement and Supplier Job Creation: Insights from Auctions

Government procurement regulations require efficient implementation and remedy systems to achieve the goals of public procurement and protect the suppliers’ business opportunities. In the phase of awarding public procurement contracts, the establishment of a more independent and professional organization will increase the authority, credibility, and efficiency of dispute resolution in complaint processing. In order to protect the rights and interests of the participants, the public procurement suspension procedures should be further improved; the application of the Alternative Dispute Resolution (ADR) system such as mediation, arbitration, etc, should be encouraged. When a supplier claims damages for losses due to illegal activities, it should use a more diversified dispute resolution mechanism. The remedy system in the awarding phase of public procurement contracts can enable China’s public procurement system to better meet the needs of the Government Procurement Agreement (GPA) and enable Chinese companies to participate in international competition fairly and effectively. China should establish professional and independent complaints resolving institutions. Improve the suspension procedures for the dispute settlement in the Public Procurement contract awarding phase.

One of the basic principles of the Public Procurement Law, regulated in Article 17(2), provides that “The contract is awarded to the contractor selected in accordance with the provisions of the Act”. However, this does not mean that it cannot be changed after the signing of a public procurement contract. Frequently, the contractor, for reasons beyond his control, is not able to complete the subject of the public procurement on time. In addition, it may also be necessary to perform additional activities and even change the contractor. However, it should be remembered that in the case of making changes to the content of the public procurement contract, the content of Articles 454–455 of the Public Procurement Law should be considered. The purpose of this article is to analyse the provisions of law, doctrine and jurisprudence regarding the admissibility of making changes to the public procurement contract. The Author will try to answer the following questions: 1) “What changes to the public procurement contract can be considered significant?” and 2) “In which cases is it permissible to make changes to the public procurement contract?” The article was prepared using non-reactive research methods, dogmatic-legal and legal-comparative.

The experience gained in the field of public procurement leads me to the statement that the activity of amending the public procurement contract / framework agreement is a challenging activity for the contracting authority. Maybe not from the perspective of elaborating the documents necessary to operate the change or changes that may be required during the development of the public procurement contract / framework agreement, but rather from the perspective of the solutions offered by the law, solutions that cover only certain areas. Starting from the normative acts in force, this paper aims to identify the situations and the way in which the contracting authority can modify the public procurement contract / framework agreement, the documents to be elaborated and the effects that the modifications might entail. In order to increase transparency, predictability and coherence in relation to the operation of contractual changes, contracting authorities should carry out analyses after each public procurement process as well as of the various practical situations encountered during the execution of contracts.

국가나 지방자치단체가 체결하는 다양한 계약들(공공조달계약, 민간위탁계약, 국·공유재산 점용허가계약, 민간투자 실시협약 등)은 「국가를 당사자로 하는 계약에 관한 법률」(이하 국가계약법), 「지방자치단체를 당사자로 하는 계약에 관한 법률」(이하 지방계약법), 「사회기반시설에 대한 민간투자법」(이하 민간투자법) 등 다양한 법률의 규율을 받고 있다. 그런데 개별계약들이 이들 법률들의 적용을 어디까지 받는지에 관해서 다양한 문제가 발생하고 있다. 이 글에서는 이러한 문제를 푸는 실마리를 프랑스법과의 비교에서 찾아보았다. 2018년에 제정된 프랑스의 「공공발주법전」(Code de la commande publique)이 다음과 같은 특징을 가지고 있기 때문이다. 첫째, 이 법전은 단순히 EU 공공조달지침을 국내법으로 전환하는 데에 그치지 않고 국내 공공발주법제의 개혁의 기회로 삼아 법률부분과 법규명령부분으로 나누어 공공발주에 관한 내용을 종합적으로 규율하고 있다. 둘째, 이 법전은 그동안 공공조달과 특허가 별도로 규율되던 것에서 벗어나 이들을 포괄적으로 규율하면서 이 두 가지 모두에 적용되는 기본원리(후보자들의 동등대우의 원리, 자유로운 접근의 원리, 절차의 투명성의 원리)를 체계화하고 있다. 셋째, 이 법전은 기존의 행정계약의 법리(불가예견론 등)를 입법화하고 공공발주계약과 행정계약과의 관계를 명문화함으로써 행정계약의 법리발전에 기여하고 있다. 프랑스 「공공발주법전」의 제정사례는 우리나라 법제에도 많은 시사점을 제공해주는 것으로 볼 수 있다. 첫째, 공공조달계약과 실시협약의 계약적인 측면이 국가계약법 및 지방계약법에서 통합적으로 규율되는 것이 바람직하며, 둘째, 공공조달계약, 실시협약, 민간위탁계약 등에 공통적으로 적용되는 원리들을 국가계약법 및 지방계약법에서 입법화하는 것이 바람직하고, 셋째, 공공조달과 특허가 대가지급방식에서 차이가 있으므로 민간투자법에서 수익형 민자사업과 그 외의 민자사업간의 차이를 면밀히 고려한 입법이 이루어질 필요가 있고, 넷째, 공공조달계약은 물론 민간위탁계약, 실시협약이 원칙적으로 국가계약법이나 지방계약법의 적용대상이 된다는 점을 확인적 차원에서 명시할 필요가 있고, 다섯째, 국가나 지방자치단체가 체결하는 계약의 법적 성질을 보다 명확하게 하기 위해서 우선 계약체결의 근거가 된 개별법령(예를 들어 민간투자법)에서 공법상 계약에 해당되는 경우를 명시해주는 것이 필요하다.Contracts, which are concluded by state and local government (eg. public procurement contract, delegation contract to private parties, authorization contract for state or local government’s asset, public-private partnership contract), are regulated by various statutes like 「Act on the Contracts in which the State is a Party」(hereinafter ‘State Contract Act’), 「Act on the Contracts in which the Local Government is a Party」 (hereinafter ‘Local Government Contract Act’), and 「Act on the Public Private Partnerships in Infrastructure」(hereinafter ‘PPP Act’). The application scope of these statutes to each type of contract is debated nowadays. This paper seeks the way to address this issue by comparison with Korean & French law, because 「Code de la commande publique」 in France has following characteristics. First, this Code does not content with transposing EU public procurement directive only, and goes furthermore to regulate commande publique with legislative part and regulatory part. Second, both public procurement contract (marché public) and concession contract are comprehensively regulated in this Code and general principles of commande publique (equal treatment of candidates, freedom of access, transparency of procedure) are systematized in this Code. Third, this Code legislates the theory of contrat administratif (such as theorie de imprévision), and makes clear the relationship between commande publique contact and contrat administratif. French experience of legislating 「Code de la commande publique」 shows many implications to Korea. First, contract aspect of public procurement and PPP (public private partnership) should be comprehensively regulated by State Contract Act and Local Government Contract Act. Second, general principles which apply to public procurement, PPP contract and delegation contract to private parties should be comprehensively provided in State Contract Act and Local Government Contract Act. Third, concession type PPP and non-concession type PPP should be regulated by PPP Act in due consideration of its differences, Fourth, State Contract Act and Local Government Contract Act should make clear its scope of application including PPP contract and delegation contract. Five, the types of contract of public law nature should be provided in each Act (eg. PPP Act) which is a ground to each contract to clarify the legal nature of each contract.

The article is devoted to the consideration of dumping as a criminal offense in the field of public procurement. It is investigated that the domestic criminal legislation does not currently contain a criminal offense that would characterize the signs of dumping as a socially dangerous encroachment. However, in practice, depending on the consequences of dumping, such a phenomenon in its nature and consequences may well be considered in the aspect of a criminal offense. The article analyzes the definition of dumping from the standpoint of national and international law. The importance of dumping in scientific reference sources and works of individual scientists is considered. It is a general conclusion that dumping is, first of all, a manifestation of unfair competition, which is embodied in the deliberate lowering of prices for goods, services, work in order to gain an advantage over other competitors and to make a profit. Emphasis is placed on the special features of dumping as an illegal act, which this phenomenon acquires during the procurement of goods, works and services to meet the needs of the state and local communities. Special attention is paid to the consideration of each component, namely the specific features of the criminal offense, as well as the subject and limits of evidence. It also indicates the key features of the entities that are harmed by the dumping transactions and the entities that may be held liable for the act. The objective and subjective aspects of dumping as a criminal offense during procurement procedures have been studied. The main manifestations of dumping during public procurement are presented and described. A comparison of illegal dumping acts with acts, the external manifestation of which is identical to dumping, but in essence it is not. The defining features that characterize dumping during public procurement as a criminal offense are highlighted. The consequences of dumping in the field of public procurement, which are manifested in causing material damage, misuse of funds and bankruptcy, are considered and analyzed. The importance and necessity of improving the legislative regulation of the issue under consideration were emphasized.

This study sheds additional light on the relationship between public work complexity and the choice between different public procurement procedures. In particular, the analysis examines in detail the role of project complexity as one of the main determinants in the choice between auction and negotiation. The analysis is based on a dataset provided by the Italian Authority for the Surveillance of Public Procurement (avcp) which contains detailed information on each public work procurement contract tendered by Italian municipalities over the period 2007 and 2012. The dataset is extended by adding information on the political structure of municipalities and social capital endowment at local level; moreover information on important legislative interventions occurred over the sample period have been included. The study analyzes which factors affect the probability of choosing negotiation as awarding procedure; among those factors it includes an ad-hoc measure of complexity built by surveying technicians, with experiences in public works, employed in public or private sectors (municipalities public servants/managers, public servants/managers employed in the avcp and engineers and architects from the private sector). Main results suggest that more complex projects are more likely to be awarded by negotiated procedures. In particular, estimates suggest that an increase in work complexity from the 25th to the 75th of its distribution induces an increase in the probability of choosing negotiation of about 5 per cent. Over all, empirical findings are robust to the inclusion of several control variables related to various political characteristics and social capital endowments of municipalities.