EIMIN: Increasing centralisation of public procurement
Procurement by entities under the authority of ministries and municipalities continues to be centralised. In addition, the number of international and simplified purchases centralised by other procurers is also increasing. This is reflected in the Ministry of the Economy and Innovation's report to the government on the progress of centralisation of public procurement in 2023.
"The number of centralised purchases by ministries and their subordinate entities has almost doubled in the last three years, from 6% to 11.6%, and the value of purchases has increased from 13.5% to 20.4%. We therefore encourage the institutions to continue to centralise their purchasing as it is beneficial to the country and the public. Last year alone, centralised procurement helped contracting authorities save up to €219 million. They also helped to shorten procurement procedures by up to 20%, significantly reducing the number of single-source and failed purchases," said Aušrinė Armonaitė, Minister of the Economy and Innovation.
The majority of the value of centralised procurement was accounted for by purchases made through CPO LT, a public agency under the Ministry of Economy and Innovation. In the European Union (EU), a good indicator is when joint purchases account for at least 10% of total purchases. Lithuania therefore exceeds this indicator.
"Centralised procurement creates a consolidation effect, ensures more transparent, efficient and professional procurement and better quality of services to the public. Therefore, transferring procurement to CPO LT, which has a sufficient number of qualified procurement specialists, also solves the shortage of competent procurement specialists or their workload problems. It will also reduce procurement costs, while more professional procurement will save procurement funds," says Erika Kuročkina, Deputy Minister of the Economy and Innovation.
The report notes that last year CPO LT successfully completed Phase I of the centralisation of the healthcare sector, which helped to shorten procurement procedures and save almost EUR 3 million.
CPO LT is continuously improving its electronic catalogue to enhance the centralisation of public procurement. Last year, 12 new CPO LT e-catalogue modules were created, bringing the total number of modules to 94. Last year, CPO LT also trained 3,434 procurers and suppliers and organised 18 events on how to conduct procurement via the CPO LT e-catalogue. Approximately 4,000 active procurers and over 1,700 business representatives directly benefit from the e-catalogue.
The report prepared by the Ministry of Economy and Innovation also showed that in Lithuania, centralised international and simplified purchases by all procurers accounted for 27.7% of all purchases in terms of number and 44.8% in terms of value in the fourth quarter of last year.
In addition, the number of centralised contracts over €15,000 awarded by local government and entities under its control has also increased, almost doubling over the last three years from 40.5% to 79.4%, and the share by value has quintupled from 16.2% to 79.8%. About half of these contracts are awarded through CPO LT, while up to 30% are awarded through other centralised methods.
The Ministry of Economy and Innovation's report on the progress of the centralisation of public procurement in 2023 is available here.