Will Public Procurement Procedures Become More Just and Less Misused? – Advantage for “Green” and Quality

The lowest price should not be the only criterion based on which the best bid is determined at public procurement procedures. Also, the implementation of green criteria in awarding jobs at tenders will not be only one of the discretionary rights of the procuring entity, but should be a legal obligation. Finally, in the future, public procurement procedures which enable the reaching of social goals should become a rule, not an exception, which is the case now, considering their number.

This is how the analysis in the Grey Book of the National Association for Local Economic Development (NALED) maps out the main problems related to public procurement procedures, with propositions of measures of public policies which are supposed to be implemented by the Government of the Republic of Serbia, so that the problems would not only be solved, but also so that the whole field would be upgraded.

When it comes to the price as a criterion, namely the lowest one, the NALED points out that Article 132 of the Law on Public Procurement Procedures proscribes that the economically most favorable bid is primarily determined based on the price, while leaving it up to the procuring entity to alternatively use the costs or the ratio of price and quality.

– However, in practice, it has been recorded that the criterion of the economically most favorable bid is very rarely used, in only 6% of the cases in 2020. Furthermore, in certain activities such as software development, architectural, engineering or translation services, the principle of the lowest price cannot lead to an efficient selection of the bidder, considering that the quality of the offer can differ greatly. There’s a danger of the procuring entity deciding by default to carry out the procurement exclusively using the criterion of the lowest price, which would be unacceptable and which would render the purpose of public procurement procedures meaningless – it is emphasized in the Grey Book.

Due to this, the NALED proposes for Paragraph 3 to be added to said article, which says: “In case of awarding the contract on the public procurement of the services of development of a computer program, architectural services, engineering services, translation services or advisory services, the economically most favorable offer cannot be determined exclusively based on the criteria from Paragraph 1 Item 1 of this Article”, says the proposal and adds that, in such cases, the criteria of selection can be determined by a bylaw, but the procuring entity can also be allowed to proscribe the manner of rating the bids in the offer itself.

Also, opinions from the practice match those of the NALED. As the president of the association Ponudjaci Srbije, Jasmina Markovic, says in an interview for Biznis.rs, setting the criterion of the lowest price offered often fails to fulfill the purpose of a “value for money” procurement, because, she adds, there needs to be a price and quality ratio. If the bidder offers low quality goods at a low price, it often happens that the use of such goods, that is, the costs of use, exceed their value.

– In that sense, it is necessary to achieve a certain balance. The lowest price offered only makes sense if the technical specification of the procurement procedure is such that it doesn’t accept low quality – our interviewee emphasizes.

Green public procurement procedures

In its analysis, the NALED also says that the Law on Public Procurement Procedures does not oblige the procuring entity to implement the so-called green criteria, but that the criterion is in the domain of the discretionary rights of the procuring entity.

This kind of a legal solution, according to the NALED’s conclusion, evidently does not have an impact on the raising of ecological standards through public procurement procedures, which is also confirmed by the analysis of the implementation of the Program of Development of Public Procurement Procedures in the Republic of Serbia for 2019-2023, which points out that, during 2020, no public procurement procedure involving the implementation of ecological criteria was recorded.



The NALED therefore proposes a legal definition of a green public procurement, whose main characteristic would be that the goal of such a tender is to reduce the negative impact on the environment and incite circular economy. Following that, the Government of Serbia would define, through a bylaw, the list of procurement items for which the procuring entities are obliged to set ecological criteria for the awarding contracts, and the bylaw should be adopted no later than 12 months from the date the law comes into effect.

NALED Beograd

Vlada Republike Srbije

Poslovno udruženje ponuđača Srbije u postupcima javnih nabavki

Ponuđači Srbije

Office for Public Procurement Procedures

Jasmina Marković

Law on Public Procurement Procedures

Grey Book

economically most favorable bid

public procurement procedures

green public procurement procedures

development of public procurement procedures with social elements