Public spending is an important indicator of government performance, transparency and accountability toward its citizens. It is mostly implemented through public procurement, the process by which government entities purchase goods or services.
Public procurement is central to processes like hiring companies to build and repair roads, purchasing medical supplies for hospitals and emergency centers and many more. It interacts with a broad range of areas including education, health, agriculture, transport, finance and more. In this context, governments have turned to public procurement to amplify their purchases’ outcomes beyond economic efficiency.
Governments are the biggest buyers in economic markets, making public procurement a powerful tool that can change existing market patterns. It is estimated that every year, public authorities in the EU spend around 14% of GDP on public procurement. In the Western Balkans 6 (WB6) — Albania, Bosnia and Herzegovina, Kosovo, Montenegro, North Macedonia and Serbia — public procurement amounted to 9.5% of GDP in 2023.
Socially responsible public procurement (SRPP) considers public purchases’ broader impact on society. While public procurement’s aim, historically, has been purchasing at the lowest price for the best value for money, SRPP strives for public contracting that creates opportunities for decent jobs, social and professional inclusion and better conditions for disabled and disadvantaged people. It thus aims to promote social and labor policies during the performance of a public contract.
At the EU level, public procurement is regulated through the EU Directives on Public Procurement, which seek to ensure efficient and transparent use of public funds. The legal framework put in place by Directive 2014/24/EU on public procurement emphasizes buying social, meaning that governments should use their purchasing power to advance social goals and other objectives.
One notable aspect of the EU directives is reserved contracts. Through these, member states limit participation in public procurement procedures to two special categories of bidders: sheltered workshops and economic operators whose main aim is the social and professional integration of disabled or disadvantaged persons. This means less competition and higher chances to receive public contracts for economic operators whose main mission is the professional integration of disadvantaged workers.
This directive reduced the required employment percentage of disabled or disadvantaged persons from 50% to 30%, increasing the number of potential economic operators that could leverage such reforms. Other provisions refer to persons with disabilities, including tenders’ obligation to include specific references to accessibility for persons with disabilities, employing persons with disabilities as a condition to award a contract and more.
One example of what the directive produced came in 2017, when the Municipality of Corfu in Greece launched a reserved tender for work integration social enterprises to provide catering services. While the main criterion was the lowest price, the tender was open only for work integration social enterprises where at least 30% of the employees were persons with a disability or disadvantaged workers.
Since then, such initiatives have increased, in part due to Covid-19’s impact on vulnerable groups. EU policies emphasized providing opportunities for socially marginalized groups, using public procurement to partner with local suppliers and including social considerations in their tendering process.
Where do things currently stand in Kosovo?
Public procurement is a significant chapter in the EU integration process. In Kosovo, most developments in public procurement happened as part of the integration process, a common case across the region.
Throughout the WB6, most reforms in this field dealt with investing in e-procurement, digitalizing the sector and bringing greater public transparency on public expenditure. Kosovo’s public procurement sector and legislation governing it have undergone significant transformation aimed at integrating innovation and efficiency in an area that’s too often been a hotspot of corruption.
Most recently, due to several high-level initiatives such as the Green Agenda for the Western Balkans and the EU Carbon Border Adjustment Mechanism (CBAM) regulation, which will soon apply to WB6 businesses, public procurement is being used to advance green goals.
Marko Mandić, a Central European Free Trade Agreement (CEFTA) representative who specializes in public procurement, confirmed that regional trade trends currently prioritize green goals as part of the green transition. Other social goals are rarely mentioned by signatories in current initiatives related to trade and procurement, Mandić added.
In Kosovo, such trends are reflected in a lack of attention and untapped potential in using public procurement to achieve social goals. Agron Ibishi from the Public Procurement Regulatory Commission (PPRC) in Kosovo noted the challenges of integrating social objectives in public procurement while acknowledging that, currently, green goals receive more priority than social ones. This mirrors regional trends.
“Although the current legislation foresees the application of social goals, in practice, we witness the very low implementation of them,” said Ibishi. “In many cases, we notice that contracting authorities use minimum wages as social criteria,” he added, explaining the difficulties of advancing social objectives through public procurement.
Future-proof legislation
Attempts to push forward social objectives are scattered through current public procurement legislation in Kosovo. However, challenges arise once we take a closer look.
Recently, there have been efforts to design a new Public Procurement Law in Kosovo, something that has been requested and mentioned for several years in EU country reports. As an initiative sponsored by the Ministry of Finance, a working group was created to work on the new draft law. So far, though, no draft has been published or offered for public consultations. Policies like reserved contracts may have a long way to go until they make it to this legislation.
Article 17 of Law No. 05/L-068, the current legislation governing public procurement, stipulates that a contracting authority may require the economic operator to employ, among others, disabled persons for the duration of contract implementation. This contrasts with the reserved contracts article of the EU Directive on Public Procurement, which aims to further encourage economic operators that already employ disabled or disadvantaged persons.
Saying that the contracting authority may require the employment of disabled persons is a weaker formulation than if the law required that the operator employ disabled people. Additionally, beyond the implementation challenges Ibishi mentioned, such as limited capacities in monitoring and enforcing such provisions, an initiative like Kosovo’s is unsustainable and can further increase the feeling of discrimination and lower confidence at work, as the employment of persons with disabilities may end once the contract is completed.
Furthermore, biases and pejorative perceptions seem to play a big role, especially when it comes to the businesses’ attitudes toward employing persons with disabilities. In Save the Children’s 2021 survey on the employability of youth with disabilities in Kosovo, 73% of the 66 surveyed businesses declared that they didn’t employ persons with disabilities. The businesses cited clients’ reactions and prejudices about work efficiency to explain why they didn’t employ persons with disabilities, thereby emphasizing potential workers’ disabilities rather than abilities.
For Egzona Hoxhaj, the first woman with a disability to become a local assembly member in Kosovo, this discussion brings painful experiences, shared by people with disabilities throughout Kosovo. “In many cases, even in projects that were subsidized by public institutions, they were told by the company that they would get the salary but didn’t need to go to work. This had a very bad impact on their emotional state and confidence for future work,” Hoxhaj said.
Unfortunately, for Hoxhaj, such stories aren’t new, despite the current legislation obliging each employer to employ one person with a disability for every 50 employees. Hoxhaj says that the lack of opportunities for higher education and lack of accessibility remain the biggest impediments to equal employment, and lead to low implementation of the law and the high unemployment rates of persons with disabilities in Kosovo.
Persons with disabilities, in many cases, are not seen as potential members of the labor force in Kosovo, and according to the latest data, only 15% of persons with disabilities are employed. This figure does not consider sub-dimensions of the unemployment situation such as intersectional discrimination and discrimination based on the form and degree of disability.
A few bumps in the road
Currently, the main obstacle to advancing SRPP is the voluntary nature of its implementation, both in the EU and in Kosovo. At the EU level, contracting authorities are not obliged to implement SRPP and have independence in deciding when to use it as an instrument, apart from the obligation of respecting environmental, social and labor laws. This voluntary aspect hinders SRPP’s integration in public purchases and undermines the urgency of treating public procurement as a sector that can push social goals forward.
Kosovo’s EU integration process has no concrete public procurement requirements aimed at achieving social goals. Currently, the main requirements in public procurement in Kosovo center on institutional capacities and interoperability of e-procurement with no mentions of social aspects that could be advanced through this tool.
While there have been attempts to develop the new law on public procurement for over two years now, limited access to its content makes it difficult to hope for social considerations sufficient enough to make a change for persons with disabilities.
Given the upcoming general elections in Kosovo, the prospect of forming a new government may further prolong any potential change brought by the new legislative framework. On the other hand, there might be a window of opportunity to ensure that the working group for the new law is more diverse and inclusive, allowing civil society organizations that represent persons with disabilities to advance their interests and advocate for more opportunities.
Finally, no matter the changes in the legal framework, it all comes down to contracting authorities’ willingness to advance SRPP and invest in human resources and skills to implement it. A large number of contracting authorities suffer from insufficient managerial accountability, insufficient quality control and limited contract management capacity.
In Kosovo, the PPRC remains the main body providing training and seminars to address such capacity issues. Several EU-supported financial instruments, such as the Growth Plan for the WB6, are available for public institutions, which could be revised and directed to put more emphasis on using public procurement for social goals. Raising awareness within institutions and committing to providing adequate training and capacity-building for institutional staff directly involved in designing procurement processes are the pillars upon which every other initiative in this topic depends.
Feature Image: Atdhe Mulla / K2.0
Want to support our journalism? Become a member of HIVE or consider making a donation. 