Procurement Risk:
High
Score:
37/100
Government Policy
Q57
50/100
Does the country have legislation covering defence and security procurement with clauses specific to corruption risks, and are any items exempt from these laws?
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This indicator is not assigned a score in the GDI. The defence and security procurement legislation is fairly comprehensive and in line with the…
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The law recognizes corruption risks in this field only superficially but has some provisions that can be used to address the risk of corruption.…
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The State Audit Institution performed an audit of the Security Information Agency in 2017. Some conclusions on the state of the implementation practice of…
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Q58
67/100
Is the defence procurement cycle process, from assessment of needs, through contract implementation and sign-off, all the way to asset disposal, disclosed to the public?
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The pre-procurement phase is formalised by the MoD internal acts and should be directed by the obligations established in the mid-term plans and program…
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The practice of the MoD publishing its procurement plans on-line is now established, although sometimes it is delayed. It is unclear whether the procurement…
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There are detailed policies and procedures for each step of the implementation process (please refer to the indicator 58A for a description). The MoD…
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Q59
25/100
Are defence procurement oversight mechanisms in place and are these oversight mechanisms active and transparent?
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The external procurement oversight bodies are the Public Procurement Office, the State Audit Institution (SAI) and the Commission for Protection of Rights in the…
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The Public Procurement Office (PPO) oversight competencies are rather ʻsoftʼ and in practice mostly limited to data collection (reporting) and issuing recommendations [1]. It…
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The PPO, SAI and the Commission are legally required to prepare annual activity reports. PPO and SAI regularly publish their annual reports online [1,…
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Long-term objectives and priorities in attaining capabilities, including financial framework and potential purchases, are defined in the Long-term development plan for defence sector [1].…
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Following requirements by the Public Procurement Law [1], annual procurement plans are published on the MoD’s website [2]. The plans list all individual purchases…
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Quarterly reports on implemented public procurement and signed contracts are regularly published on the MoD’s website [1]. The reports contain data on the items…
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Quarterly reports on public procurement are published by the MoD in .pdf files, which does not make it easily searchable. Public Procurement Office makes…
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Capability Gap and Requirements Definition
Q62
0/100
What procedures and standards are companies required to have – such as compliance programmes and business conduct programmes – in order to be able to bid for work for the Ministry of Defence or armed forces?
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The Public Procurement Law (PPL) allows contracting authorities to define additional conditions for bidders to participate in the public procurement procedure [čl. 76]. However,…
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The MoD does not require bidders to have ethical codes of conduct or compliance programmes [1]. As such, this indicator is scored Not Applicable.
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Q63
17/100
Are procurement requirements derived from a national defence and security strategy, and are procurement decisions well-audited? Are defence purchases based on clearly identified and quantified requirements?
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The fundamental documents for defence policy are the National Security Strategy, the Defence Strategy and the military doctrine, the last is one not publicly…
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Defence system development plans or policies have not been subject to parliamentary scrutiny. The Defence and Internal Affairs Committee (DIAC) has not deliberated on…
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The MoD and the SAF have a complex process for financial and procurement planning. When it comes to arms and military equipment, internal regulation…
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Tender Solicitation, Assessment and Contract Award
Q64
13/100
Is defence procurement generally conducted as open competition or is there a significant element of single-sourcing (that is, without competition)?
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The Ministry of Defence (MoD) and the Serbian Armed Forces (SAF) implement three main types of procurement: public procurement (goods and services which are…
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The Law on Public Procurement obliges contracting authorities to request an opinion by the Public Procurement Office before initiating a negotiation procedure without an…
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Q65
56/100
Are tender boards subject to regulations and codes of conduct and are their decisions subject to independent audit to ensure due process and fairness?
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The Public Procurement Law comprises several provisions to prevent parties involved in public procurement on behalf of contracting authority from being in a conflict…
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The regulative framework requires a comprehensive audit trail of tender boards’ composition and activities. The Public Procurement Law obliges contracting authorities to register all…
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Tender board regulations are provided by the Public Procurement Law and Rulebook Regulating Public Procurement Procedure in the MoD and SAF, which are publicly…
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Contracting authorities are obliged by law to submit quarterly reports on implemented procurement to the Public Procurement Office (PPO). [1] In addition, the PPO…
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Q66
100/100
Does the country have legislation in place to discourage and punish collusion between bidders for defence and security contracts?
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The Law on Protection of Competition applies to state authorities, public and private companies and other natural and legal entities and associations [1]. The…
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A ʻrestrictive agreementʼ is a criminal offence in Serbian legislation, sanctioned with imprisonment (6 months to 5 years) and fines [1]. The same prison…
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The Commission for Protection of Competition (CPC) has occasionally investigated possible collusion of bidders participating in the MoD’s tenders. In 2015, the CPC concluded…
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The handbook for taking the exam for public procurement officer’s certificate covers the legislative provisions on preventing collusion and refers to the CPC’s instruction…
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Contract Delivery and In-Service Support
Q67
67/100
Are there mechanisms and procedures that ensure that contractors meet their obligations on reporting and delivery?
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The MoD has a developed internal regulatory framework for monitoring and assessment of contract execution (Rulebook regulating public procurement procedure in the MoD and…
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Contracting authorities are not obliged by law to publish public procurement contracts, but they do have to publish notifications of signed contracts up to…
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The MoD regularly publishes quarterly reports with tables presenting signed contracts, cancelled procurement procedures, contracts modifications and contracts execution [1]. The table presenting contracts…
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There is not enough information to score this indicator. With respect to public procurement, financial security instruments are used as remedies in cases of…
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Q68
83/100
Are there mechanisms in place to allow companies to complain about perceived malpractice in procurement, and are companies protected from discrimination when they use these mechanisms?
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Bidders and other companies interested in contracting can file requests for protection of rights in case they perceive any malpractice [1]. The requests are…
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The Commission has so far struggled with meeting the legally set deadlines for decision-making. An annual report for 2016 presented to the parliamentary Committee…
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An overview of the Commission’s database for the period 2014-2017 shows that the annual numbers of decisions on requests in cases where the MoD…
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The Public Procurement Law (PPL) requires bidders to prove that they or their legal representatives have not been convicted for organised crime, commercial criminal…
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Proceedings against suppliers for minor offences defined in the PPL can be initiated by the Public Procurement Office, State Audit Institution, or ʻanother authorised…
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No fines have been issued by the Commission for Protection of Rights in Public Procurement Procedures to MoD bidders so far. As the list…
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Offset Contracts
Q70
0/100
When negotiating offset contracts, does the government specifically address corruption risk by imposing anti-corruption due diligence on contractors and third parties?
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Offset arrangements are not mentioned in Serbian legislation, either explicitly or implicitly [1, 2]. In the self-assessment carried out in the framework of the…
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There is a recent example of an offset arrangement in practice, although the word ʻoffsetʼ has not been used by either the MoD or…
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The government does not officially recognise the existence of offset contracts [1, 2, 3].
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The government does not officially recognise the existence of offset contracts [1, 2, 3]. There is currently one contract (with Airbus Group) which resembles…
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The government does not officially recognise the existence of offset contracts [1, 2, 3].
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The government does not officially recognise the existence of offset contracts [1, 2, 3].
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There is no explicit legislative provision in Serbia either allowing or prohibiting offsets and the government has denied that they were legal [1]. In…
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Agents / Brokers
Q73
25/100
How strongly does the government control the company’s use of agents and intermediaries in the procurement cycle?
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The Law on Export and Import of Arms and Military Equipment aims to regulate brokering services and technical assistance [1]. Brokering services are defined…
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Recent developments involving, among others, the Serbian Minister of Interior’s father, who acted as an intermediary for the state-owned company Krusik, in selling weapons…
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Financing Package
Q74
25/100
Are the principal aspects of the financing package surrounding major arms deals, (such as payment timelines, interest rates, commercial loans or export credit agreements) made publicly available prior to the signing of contracts?
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Neither the MoD nor the government systematically publishes information on procurement in the field of defence and security. While the MoD’s procurement portal provides…
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Seller Influence
Q75
NS/100
How common is it for defence acquisition decisions to be based on political influence by selling nations?
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This indicator is not assigned a score in the GDI. Major arms deals are exceptionally rare. From 2015-2018, Serbia purchased two military transport helicopters…
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This indicator is not assigned a score in the GDI. Government and Serbian Armed Forces officials have occasionally cited military and economic rationale for…
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This indicator is not assigned a score in the GDI. Considering that both long-term and mid-term defence system development plans are fully classified, it…
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