Web Publication of Public Procurements (MK0146)

Which public problem is addressed by the commitment? Basic data on public spending by means of tender procedures are available on the government’s portal Electronic Public Procurement System (EPPS). Main purpose of this portal is organization of public procurements between state institutions and companies. The portal is intended for persons responsible for public procurements at institutions and companies who have received training for use of this portal. Hence, transparency of public procurement data is not a primary function of the portal, resulting in difficult access to basic data on public spending under public procurements for the general population and other stakeholders, whereby – contrary to the situation in other countries - citizens do not have fast, simple, easy and understandable insight about the manner in which public funds are spent. Two consecutive surveys of the Center for Civil Communications about the level of awareness among citizens in respect to public spending under public procurements, conducted among 400 respondents across the country, in 2017 and 2019, show that implementation of similar measures has increased the share of citizens who believe they have sufficient information on the manner in which public funds are spent under tender procedures has increased from 6% to 20% over the course of three years. In both surveys, high 98% of citizens responded that information they have about public spending come from the institutions’ websites and from the media. Hence, institutions must publish more information on public spending on their respective websites, as the places where citizens most often look for and expect to receive such information. Commitments and activities implemented under the previous two OGP Action Plans served as precondition for this commitment. The first commitment concerns development of the list of information/documents as minimum standard for transparency in public procurements, followed by the Bureau of Public Procurements enabling a new functionality in EPPS that creates hyperlinks 21 to EPPS notices that can be used to publish such information on the institutions’ websites. This allows fast, easy and simple method for institutions to hyperlink their EPPS notices on their websites, making all basic information about their public procurements available in one place. In particular, individual profiles of local administrators registered in EPPS now include “HTML” tags for “iFrame” that contain information on planned procurements, procurement notices, notifications on contracts signed, and notifications on contract performance per contracting authority. All they need to do is copy and paste “HTML” tags on their websites.

Main objective of the commitment The commitment concerns an obligation for institutions/contracting authorities stipulated under Article 9 of the Law on Public Procurements for creation of separate section (tab) on their websites designated for “public procurements” where all information and documents will be published in one place, including annual plans for public procurements, procurement notices (link to notice published on EPPS), notifications on contracts signed (link to notification published on EPPS), publication of contracts signed, and notifications on contract performance (link to notification published on EPPS). The purpose is for citizens to have fast, easy, simple and understandable access to information on the manner in which institutions spend public funds under public procurements (around 900 million euros annually) whereby institutions publish this information on their websites which, in turn, are the first point of information for citizens about particular institution.

How will the commitment contribute to addressing the public problem? Fast, easy, simple and understandable availability of such information for citizens will increase the institutions’ accountability and responsibility in public spending, while citizens will be able to understand how are their money spent and for which purpose, and will be able to influence spending of public funds for their needs. The fact that publication of such information is fast and utterly simplified and can be done by copying “HTML” tags from EPPS and inserting them on the institution’s website will address current problems related to insufficient ICT professional staff at institutions and overburdened persons responsible for public procurements, because publication of this information does not require special expertise and is not time consuming.

How is the commitment relevant to OGP values? COMMITMENT IS IMPORTANT FOR TRANSPARENCY because it provides access to new and more information, improves quality of information available to citizens and civil society organizations, and improves access to public information, i.e. facilitates the right to information. COMMITMENT IS IMPORTANT FOR CIVIL PARTICIPATION because it creates or improves opportunities and conditions for public participation and influence in decision-making, and creates or improves the enabling environment for civil society. COMMITMENT IS IMPORTANT FOR PUBLIC ACCOUNTABILITY because it creates or improves accountability rules, regulations and mechanisms for public officials.

Additional information Implementation of this commitment does not require additional budget because EPPS’ function for creation and fast and easy transfer of hyperlinks to published information on the institution’s websites is already available. In the case of institutions that do not have separate tabs, this commitment would imply creation of such tabs that is not subject of additional funding. Additional budgets 22 fund will be needed only by institutions that do not have own websites, in respect to website design and hosting. Link to UN Sustainable Development Goals Link to SDG16: Peace, Justice and Strong Institutions SDG target 16.10: Ensure public access to information and protect fundamental freedoms, in accordance with national legislation and international agreements. Measures defined under this commitment contribute to improved access to public information through more efficient enforcement of the laws and better information dissemination to citizens.

No. Milestone Indicators Activity holder Start date End date 1.3.1 Create separate section (tab) on official websites of the institutions (contracting authorities) designated for “public procurements” Share of institutions that have created separate section on their websites designated for “public procurements” (target: 50%) (According to MISA’s last report from the registry of public sector employees, there are 1332 active public institutions in the country) All contracting authorities October 2021 March 2022 1.3.2 Publish information and documents on the institutions’ websites (section on “public procurement”): - annual plan for public procurements (with all amendments thereto); - procurement notices (links to notices on EPPS); - notifications on contracts signed (link to notification on EPPS); - public procurement contracts; and Share of institutions that regularly publish basic information on their public procurements (target: 50%) All contracting authorities April 2022 continuous 23 - notifications on contract performance (link to notification on EPPS).

Action Plan Review

Commitment 1.3: Publish basic information on public procurement on institutions’ official websites

● Verifiable: Yes

● Does it have an open government lens? Yes

● This commitment has been clustered as: Public procurement transparency (Commitments 1.1, 1.3, and 2.1 of the action plan)

● Potential for results: Modest

Commitment cluster 1: Public procurement transparency

(Public Procurement Bureau, Central Register of the Republic of North Macedonia, General Secretariat at the Government of the Republic of North Macedonia, Center for Civil Communications, Institute for Democracy “Societas Civilis” - Skopje, Metamorphosis Foundation for Internet and Society)

For a complete description of the commitments included in this cluster, see Commitments 1.1, 1.3, and 2.1 in the action plan here.

Context and objectives:

The commitments in this cluster aim to enhance the transparency of North Macedonia’s public procurement system. Under Commitment 1.1, the Public Procurement Bureau (PPB) will publish information on the beneficial owners of companies that are awarded state tenders to the government’s Electronic Public Procurement System (EPPS). ^[25] Although the Central Register of the Republic of North Macedonia (CRRNM) created North Macedonia’s beneficial ownership register in January 2021, the information is accessible only upon request and payment of a fee. Commitment 1.1 will make part of this information publicly available and free of charge on the EPPS, specifically the beneficial owners of legal entities that are awarded public procurement contracts over 1,000 EUR (the legal threshold). A working group of the CRRNM, the PPB and the Center for Civil Communications will be responsible for preparing the criteria for the data that the PPB will publish. Users will be able to download the information as open data using keyword searches. ^[26]

Commitment 1.3 continues the implementation of the Law on Public Procurement. Contracting authorities will create separate tabs on their websites to publish all information and documents related to their public procurement, including links to procurement notices on the EPPS. Finally, for Commitment 2.1, the PPB will provide data on public procurement in open format, specifically as comma separated value export (CSV). According to the Institute for Democracy ‘Societas Civilis’ (IDSC), the procurement data will be modelled after the open finance portal from the previous action plan (2018–2020). [27]

Commitments 1.1. and 2.1 were proposed by civil society, though the PPB was involved in their design from the start. ^[28] Commitment 1.3 was proposed by civil society, and it mostly continues from a commitment in the previous action. ^[29] There were no significant objections during the co-creation of these commitments. While there was a discussion between the PPB and CSOs for Commitment 2.1 over what would be considered as open data format, stakeholders reached an agreement on adopting the CSV format. ^[30] The idea for public procurement as open data was discussed during previous action plans, but was finally included in this fifth action plan as it fit the current work of the PPB. This cluster's commitments support the OGP value of transparency and have activities that are verifiable.

Potential for results: Modest

North Macedonia faces challenges with corruption in public procurement, which can negatively affect foreign investment. ^[31] These commitments could strengthen public scrutiny of government spending so that corruption can be detected more easily. Though each is a positive step forward, their potential is modest due to design limitations and, in the case of Commitment 2.1, pending decisions about the scope of data to be provided in open format.

Presently, it is unclear who the real owners are of companies that are awarded public procurement contracts. As the beneficial ownership register is currently available for a fee, Commitment 1.1 will make some of its information more accessible. By having access to the beneficial owners of companies that win public procurement contracts, users can better detect conflicts of interest in the allocation of state funds. A civil society stakeholder also noted that being able to access data in machine-readable format will be a major shift in accessibility. ^[32] At present, the concluded contracts are largely available as screenshots in PDF files and there is no possibility to search for information within the files. This means that users must identify information from the documents manually and then transpose it into a machine-readable document, such as an Excel file, if they wish to analyse more than one contract at a time. The change will reduce the time that users need to download, code, and sort the data they need when conducting advanced analysis and evaluating integrity of public procurements.

However, this commitment is likely to only have modest results toward “prevent[ing] illusionary competition in tender procedures among companies with same beneficial ownership”. ^[33] Only the beneficial owners of companies that have won public contracts will be disclosed, but not those of companies that unsuccessfully bid. Without information on all bidders, users may find it difficult to detect collusion between companies who make previous arrangements to control who wins a contract. [34] In North Macedonia, public procurement contracts are evaluated based on the most economically advantageous offer and the best quality offer (Law on Public Procurement), so it is important to have an overview of all offers made and how the economic and quality criteria were concurrently considered for awarding contracts.

Regarding Commitment 1.3, public institutions have a legal obligation (under the Law on Public Procurement) to provide all information and documents on their procurement in one place. The information that public institutions will publish on their procurement tabs is already available on the EPPS. There are no sanctions for institutions that do not publish their procurement information on their webpages, nor is there a deadline by which institutions must create their procurement tabs. ^[35] In practice, larger institutions already publish procurement information on their websites, but there are over 1,300 institutions involved in public procurement in North Macedonia and some do not have their own webpages. ^[36] Also, the milestones have a target for only 50% of public institutions to have procurement tabs. Thus, this commitment on its own is unlikely to see major changes to transparency. However, in combination with the other two commitments, it can further enhance the searchability of procurement information, as users will be able to find procurement information directly on the websites of institutions, rather than having to cross check with the EPPS.

Public procurement data on the EPPS is currently not available in open format, limiting its usability for stakeholders. Under Commitment 2.1, the PPB will publish its procurement data in CSV format, in line with the Open Contracting Partnership’s Open Contracting Data Standard (OCDS). ^[37] Users will be able to browse and export data from the past three years and the PPB will create an archive going back ten years. If a user searches for all public procurements for the year 2020, for example, they will be able to download the data in CSV format, which can then be used for more advanced analysis. This commitment will also reduce the time that users need to sort through the data they need. Civil society stakeholders plan to use the data to establish an early warning system to flag suspicious trends in public procurement. Currently, this data is usually analysed in biannual intervals, but similar analysis can now be done more frequently as the data will be more easily available. ^[38] Civil society noted that it would have been better for the data to be updated automatically, as opposed to having to be updated manually. Nonetheless, the change from previously not having any information in open data is significant.

Discussions continue between CSOs (the IDSC and the Center for Civil Communications (CCC)) and the PPB about which procurement data will be published in open format. Currently available data covers only the procurement body, who won the contract, and the type of procedure. The IDSC and the CCC have additional parameters they want the PPB to include as open data and there is still a possibility for the PPB to export all its data in open format for this commitment. This would include around 20 variables that will be highly useful for analysing procurement trends, such as contract dates, information on other bidders, additional information on the procedure, and how it was implemented. If this commitment leads to all variables being published in open format, it will facilitate more serious and more in-depth analysis.

Opportunities, challenges, and recommendations during implementation

The PPB currently does not anticipate any technical difficulties for implementing Commitments 1.1 and 2.1, but a potential risk is coordinating all involved parties. ^[39] For Commitment 1.3, the largest obstacle is that not all institutions have webpages where they can publish their procurement information. Nonetheless as stated, the information is already available on the EPPS. For Commitment 2.1, as explained, the greatest limitation is the uncertainty over which data will be published in open format. However, the PPB will reportedly soon provide the IDSC and CCC with more clarity on this issue.

The IRM offers the following recommendations regarding beneficial ownership transparency:

● Expand disclosure to include all bidding companies’ beneficial owners. Commitment 1.1 is limited to the beneficial owners of companies that win public procurement bids, which obscures the full scope of public procurement calls. In future action plans, the PPB could expand disclosure to cover all companies who bid on procurement calls, and not only those awarded public contracts. Such disclosure may be useful for tackling money laundering and collusive practices.

● Publish more information from the beneficial ownership register on the EPPS beyond the names of beneficial owners. Milestone 1.1.2 calls for publishing the names of beneficial ownership in legal entities that are awarded public procurement contracts. While this is a good starting point, the PPB could publish more information, including beneficial owner’s birth month and year, their country of residence and nationality, and the nature and extent of their beneficial interest. Where publishing the more beneficial ownership data on the EPPS not possible due to privacy concerns, the PPB could link the EPPS directly to the beneficial ownership register so that users can find out more about the beneficial owner. Open Ownership has guidance on balancing privacy concerns with transparency. [40] The PPB could also engage end users of the data to establish which critical data points would be useful to publish in the EPPS.

● Strengthen existing verification process by introducing mechanisms for reporting inaccurate data on the beneficial ownership register. The Law for Preventing Money Laundering and Terrorist Financing obligates the CRNMM to verify the accuracy of the information that companies submit to the register. The CRRNM could further support the existing verification process by introducing new mechanisms for users (civil society and journalists) to report potential anomalies in the data in the register. This could allow for additional external oversight from the public and civil society without changing the existing verification process. The CRRNM could also work with the State Commission for the Prevention of Corruption and other relevant bodies when verifying beneficial ownership information.

The IRM offers the following recommendations regarding public procurement transparency:

● Ensure all data on current contracts is published in open format and available in a timely manner. To ensure maximum transparency, the PPB should open all its data in open format on current procurement contracts, with a focus on contracts for which parties can be still held responsible. It is important to ensure that the information is published in a timely manner and updated in real time (as opposed to every six months). The PPB could consider developing automatic systems for updating the data.

● Work directly with the Open Contracting Partnership (OCP) to align the EPPS with the Open Contracting Data Standard (OCDS). To ensure that the EPPS is aligned with international best practices, the PPB could explore working directly with OCP to fully adopt the OCDS [41] and implement procurement process oversight. For example, in Lithuania’s 2021–2023 action plan, their Public Procurement Office is working directly with OCP to open all its historical procurement data in OCDS. [42] The PPB could also consult OCP’s resources on adopting the OCDS. OCP has a list of indicators aligned to the end use for contracting data [43] and guidance on how to link indicators to data in OCDS format. [44] OCP also has a quick-start guide for open contracting [45] and strategic recommendations for regulating open contracting. [46]

● Train stakeholders on how to use procurement data for impact. The success of Commitment 2.1 largely depends on stakeholders’ usage of the newly opened data. Public usage of the data is critical, as the PPB may not have the capacity to monitor all procurement and ensure that public funds are spent efficiently and fairly. The PPB could train stakeholders on using procurement data. For example, in its 2016–2018 action plan, the Republic of Moldova trained small and medium enterprises, civil society, and software developers on using their new e-procurement system, MTender. [47]

● Include citizen feedback in the EPPS. The PPB could establish a feedback mechanism and opportunities for the public to act on the procurement data, such as filing complaints, reporting irregularities, or suggesting improvements. It is also important for the PPB to respond to and act on the feedback received. As an example, Ukraine launched DoZorro during its 2016–2018 action plan, which enables citizens to submit feedback, including alerts of irregularities and violations, on the ProZorro e-procurement system. [48] The PPB could publish the questions and replies on the same webpage so users can reference previously published answers.