9. Reducing administrative burden and simplifying public procurement in Poland

The interaction between governments, citizens and businesses can shape elements such as confidence in the public administration, economic competition, entrepreneurship and productivity. In the past years, public administrations have acknowledged the importance of introducing reforms that bring about positive economic outcomes and make the lives of citizens and businesses as easy as possible. Administrative simplification is a key tool in this respect.

In the Polish context, administrative simplification has been driven by efforts at the national level, particularly aimed at supporting business development and entrepreneurship. At the LSGU level, efforts have focused on implementing national policies, with reduced scope for action by the municipalities and subnational administrations. This has led to LSGUs being primarily “policy implementers” rather than “definers”, with limited leeway for adapting administrative processes to local specificities realities. There are however important efficiency gains to be obtained by simplifying procedures and reducing administrative burden, including increasing digitalisation, improving interactions with businesses at the local level and cutting red tape, notably in the context of public procurement.

As highlighted in the OECD Recommendation of the Council on Public Procurement (OECD, 2015[1]), public procurement can derive substantial benefits from administrative simplification. From the public administration’s perspective, there is a high cost related to compliance when the public procurement legal landscape changes constantly or requirements are excessive and difficult to meet. From the suppliers’ perspective, simplification allows easier and wider access to business opportunities and is a driver for economic growth. Thus, authorities need to carefully balance priorities, i.e. advancing a simplification and reform agenda without compromising legal stability and the capacity for users to absorb a given reform.

This chapter analyses the ongoing trends in administrative simplification at the national, regional and local levels in Poland. It then looks at how simplification applies to the public procurement context; specifically, it analyses the impact of ongoing public procurement reforms on LSGUs. Furthermore, it discusses how aspects of the regulatory framework pose particular challenges for LSGUs. Finally, it identifies concrete steps that LSGUs are taking to reduce administrative burden, particularly those generated by procurement procedures. The chapter concludes with proposals for actions aimed at: i) ensuring the successful implementation of regulatory reforms as a concerted effort by LSGUs and national authorities, implying, among other things, that these changes do not impose unnecessary burdens on LSGUs and residents; and ii) reaping the benefits, in terms of efficiency, economic competition and transparency, that can derive from an elimination of red tape and burdensome procedures, especially in the public procurement process.

Administrative simplification, defined as a strategy to reduce regulatory complexity and red tape is particularly important for the provision of government services and facilitates the reform of the public administration (OECD, 2009[2]). It is hard for citizens and businesses to comply with cumbersome regulations. Burdensome requirements and difficult processes limit the capacity of governments to achieve their objectives and hinder entrepreneurship and business development. Governments have acknowledged the efficiency gains that can be unlocked by cutting red tape and rendering processes more straightforward and streamlined, thus putting administrative simplification high on the policy agenda (OECD, 2010[3]). Easier formalities are correlated with higher compliance, as fulfilling the regulatory requirements implies an opportunity cost for residents and business representatives (OECD, 2010[3]). Moreover, when the cost of complying is particularly high, it can represent an entry barrier for small- and medium-sized enterprises (SMEs), which in 2016 accounted for over 99% of the total number of enterprises in Poland and employed 67% of the workers in the country (EC, 2016[4]). The majority of the efforts and resources that the country has devoted to administrative simplification have focused on reducing the burdens on SMEs.

In 2006, Poland introduced its regulatory reform programme, which included a thematic area focusing on the simplification of administrative procedures and reduction of operating costs for businesses (OECD, 2011[5]). Since then, administrative simplification has been a relevant component of the regulatory policy in the country, leading to the implementation of several legislative changes, especially to simplify administrative procedures for businesses (see Box 9.1 below). However, the reform programme focused almost exclusively on the national level of government and did not devote resources to the subnational levels (OECD, 2011[5]).

LSGUs are the first contact point between citizens and the public administration and, as such, they shape the experience of residents in relation to the government to a significant extent. Streamlined procedures that adapt to the different realities of LSGUs can increase the efficiency in the provision of services and enhance business development. By some estimates, approximately 20% of the formalities and processes represent, on average, 80% of the administrative burden faced by regulated parties, which is why smart investments in simplification can represent significant efficiency gains (OECD, 2010[3]).

As highlighted above, consulted stakeholders mentioned that different institutions of the public administration often interpret laws differently. This leads to uncertainty, lower compliance levels and greater barriers to entry, particularly for small businesses that cannot afford specialised legal services. A law enacted in 2018 (see Box 9.1 seeks to address this problem by requiring the publication of simple explanations of regulations and providing that, if in doubt, regulations should be interpreted in favour of the entrepreneurs.

In 2016, the Polish Ministry of Entrepreneurship and Technology introduced the 100 Changes for Companies programme, whose main objective is to reduce the administrative burdens that SMEs face (OECD, 2018[6]), particularly by:

  • Simplifying the business constitution process.

  • Streamlining business regulations.

  • Increasing the revenue threshold for companies to maintain full accounting records.

  • Reducing the requirements for the construction industry and machine operation.

  • Reducing the number of years that a company must store employee information (from 50 years to 10 years), in addition to digitalising the files.

  • Simplifying the generational changes in family businesses.

  • Requiring ministries to publish simple explanations of administrative rules and tax laws.

In 2019, the Ministry of Development took another step in the reduction of administrative burdens by implementing the SME package. This programme includes the simplification of tax and economic laws for entrepreneurs (Ministry of Development, 2019[9]). Also, in 2019, the Friendly Law package introduced measures aimed at simplification (Ministry of Development, 2019[10]), including:

  • The right to error during the first year of operations.

  • Reduced reporting frequency for some obligations.

  • Reduced number of copies attached to some applications.

  • Digitisation of some reporting obligations.

The OECD indicators of product market regulation (PMR) reflect the result of Poland’s efforts regarding simplification and better regulation since 2006. PMR measures the degree to which policies (from a lawful perspective) promote or hinder market competition for goods and services (OECD, 2018[11]). Poland has improved its PMR estimates compared to the OECD average over the years. It remains slightly above the OECD PMR indicator average for 2018 – lower values represent international best practices. In the sub-indicator for simplification and evaluation of regulations in particular, Poland is doing better than the OECD average. Evidence on the impact of those efforts at the local level is however relatively scarce. Data and information gathered in the context of this project point to a contrasted landscape combining LSGUs that have taken a number of steps to identify and address priorities in this regard with others that lack the appropriate tools and resources to do so.

Evidence gathered through meetings with representatives of the private and public sectors shows that the legal environment is constantly changing and is difficult to navigate. Rigid and ever-changing public procurement laws and regulations make their application difficult by contracting units and constitute a barrier to potential bidders. Introducing administrative simplification measures in this domain is thus of great importance for boosting efficiency in public administration.

As mentioned above, most of the administrative simplification efforts have taken place at the national level of government and have mainly focused on administrative burdens faced by entrepreneurs. Although LSGUs do not have the responsibility to regulate many of the aspects that underpin the opening and operation of a business, they are the implementers of many processes and procedures that do affect entrepreneurs. This point, however, does not mean that LSGUs do not have opportunity areas to streamline and simplify the services and processes that depend entirely on them.

Regarding the implementation of regulations and procedures that the national level of government determines, both LSGUs and representatives from the private sector mentioned that constant regulatory changes, as well as the difficulty of administrative procedures, are one of the main sources of red tape. Rigid regulations imposed by the national government may limit the scope of influence of local administrations in the way regulations are implemented. A recent report concludes that “an increasing number of acts of the State imposes a rigid internal organisational structure on local authorities thus limiting their ability to take account of local circumstances and administrative efficiency in organising their own administrative services” (Congress of Local and Regional Authorities, 2019[13]). As discussed in the following sections, the area of public procurement is an area with significant potential for positive developments in that respect.

The Joint Committee of National Government and Territorial Self-government is a bilateral body, with equal representation of associations of the territorial self-government units and national government. Its functions include “analysing information on draft legal projects, government documents and programmes on the issue of territorial self-government, in particular on expected financial consequences” and “expressing opinions on draft normative acts, programmes and others government documents regarding the issues of local government, including those defining the relations between the local self-government and other public administration bodies” (Congress of Local and Regional Authorities, 2019[13]). According to the same report, “although the Joint Committee represents an adequate legal framework for consultation, the recent tendency is to bypass this mechanism, making it ineffective” (Congress of Local and Regional Authorities, 2019[13]). In the same vein, officials from some of the LSGUs interviewed mentioned that the national government does not engage with them before these regulatory modifications take place, creating a disconnection between the policy design and its implementers. Evidence gathered through in-depth interviews suggests that the views of LSGUs, especially the smaller ones, are not always considered during the development or modification of legal provisions, leading to the introduction of rules that are difficult to comply with and to a misalignment in expectations. Interviews with national government officials suggest otherwise and emphasised that LSGUs are well aware of the regulatory changes ahead. In any case, LSGUs, the private sector and the national government could benefit from closer collaboration and strengthening the engagement of relevant actors in the design and implementation of regulations.

Information collected through direct interviews with stakeholders shows that local public officials are somewhat reluctant to make changes to the way processes are implemented. Uncertainty regarding the interpretation of legal provisions by other public authorities, risk of sanctions in case of misinterpretation of the law and a preference for face-to-face interactions add up to the obstacles that need to overcome in order to introduce a broad-based administrative simplification strategy.

Size and resource availability (financial, human, technological) seem to be key determinants of the level of formality and of sophistication of the services that LSGUs provide to their residents and businesses. Interviews with LSGU officials show that smaller municipalities tend not to see value in formal procedures and perceive them as more cumbersome than informal interactions with residents.

Especially in smaller LSGUs, interactions are carried out in an informal way, as citizens personally know the LSGU officials and prefer a face-to-face approach with the official in charge of a given process or service. The risks of this approach range from limited transparency and accountability to the possibility of capture of the public officials and the lack of equal treatment. Some of the stakeholders consulted expressed their preference for more direct and informal interaction with the officials, whereas others have mentioned that public authorities in their LSGU offer more favourable treatment to bigger companies than SMEs. In particular, in the public procurement context, it is important to streamline interactions with suppliers to ensure equal treatment, e.g. during the market engagement. Similarly, interactions related to questions about the procurement process also need to be handled in a transparent way.

In general, administrative simplification does not come easy at the local level in Poland. According to the responses to the OECD questionnaire completed in the framework of this report, 53% of the municipalities do not have any requirement to minimise the administrative burden of planned or existing regulations (at the county level, only one out of the nine that answered the OECD questionnaire has an explicit requirement to simplify administrative burdens). In cases where the municipalities have explicit requirements (32% of those that answered), efforts are driven by the mayor or higher levels of administration, as there is no legal or de facto requirement to reduce the administrative burden for citizens or within the public administration. It would be important for LSGUs to formalise their administrative simplification strategy. The lack of a mandate or records may affect the continuity of the simplification efforts as changes in the administration could imply modifications to the priorities and/or a loss of knowledge and expertise. For those LSGUs where there is a mandate to reduce administrative burdens generated by the modification or implementation of a regulation, 26% of them reported carrying out measurements of the burden. Larger LSGUs seem to engage in the quantification of administrative burdens more often compared to their smaller counterparts.

Administrative simplification or streamlining of procedures is the most commonly used measure to tackle administrative burdens by LSGUs (see Figure 9.2). For example, the urban municipality of Międzyrzec Podlaski uses plain language in its public procurement tenders as a way to increase provider compliance and facilitate the analysis of the information and documents by municipality officials.

One of the tools used for the reduction of red tape is the introduction of e-government services. Information and communication technology (ICT) decreases the time that citizens and business representatives allocate to gathering, understanding and fulfilling regulatory requirements, thus making their lives easier and reducing the opportunity cost of compliance. Poland has introduced a series of regulations aimed at strengthening the digital transformation of the country by fostering interoperability, the use of data and enhancing cybersecurity. ICT tools, however, should be accompanied by a process where regulations and administrative procedures are reviewed and simplified.

In 2005, Poland introduced the Act on the Computerisation of the Operations of the Entities Performing Public Tasks, which defines the framework for the interoperability of systems at the national level (EC, 2019[14]). At the subnational level, regional and local authorities are in charge of developing a digital strategy, which should refer to the general direction set by the national government. Implementation of ICT tools at the regional level has not been easy due to uneven access to broadband Internet and digital technologies. In addition, the demographics of a given LSGU may shape the preferred communication and interaction channel between residents and government authorities. For example, LSGUs with a higher share of elderly population and with low Internet access might be reluctant to digitise1 administrative procedures. For an in-depth discussion on demographic trends and other contextual factors as well as their implications, please refer to Chapter 1 on strengths and challenges for local self-government development in Poland.

Capacity building and stakeholder engagement (for an overview of the benefits of stakeholder engagement, see Chapter 8 on open government) are relevant points that should be taken into consideration for the successful adoption of ICT tools. Officials in charge of providing public services and ensuring regulatory compliance can be somewhat hesitant to migrate to digital and standardised processes when they do not feel comfortable managing them. It is important to ensure that officials have access to existing capacity-building resources and receive adequate institutional support. This can help reduce resistance to change, particularly in those LSGUs where informal interactions with residents are deeply embedded. On the other hand, deploying digital technologies should be accompanied by the provision of facilities for the front users of the different platforms and channels. It is not enough to digitise the back office; citizens should be made aware of the facilities that this channel entails, the advantages of using a more formal approach and the potential time savings. In some LSGUs, citizens do not trust digital platforms and prefer to visit the municipal office to gather information or submit documents. Elements such as information campaigns, the introduction of one-stop-shops and user-friendly platforms foster the use of electronic channels. However, it is important to accompany these initiatives with capacity-building programmes aimed at providing public officials with the tools to operate digital platforms, otherwise, their implementation and continuity are compromised by the lack of officials with the resources to manage them.

Meetings with local officials and residents suggested a general scepticism regarding the facilities and efficiencies that can be unlocked by the digitalisation of formalities and services. Polish LSGUs pointed to the lack of accessibility, the extra administrative burden in comparison with the status quo and the preference for face-to-face interactions between residents and public officials as the main barriers for digitisation, which is a step towards a digital transformation of processes and services. Additionally, ICT infrastructure – measured by the share of households connected to broadband Internet – lags behind the OECD average, with the largest gap in rural regions, making it hard to introduce digital tools (please refer to Chapter 1 for further details). Figure 9.3 shows the share of people interacting with public authorities (at all levels of the administration) in OECD countries. In Poland, this figure neared 40% in 2019 compared to about 90% for the leading countries.

Co-ordination and collaboration across LSGUs, with the national administration, regional self-governments or with other public institutions is a good strategy to cut administrative burdens and boost efficiency. Collaboration allows for information sharing, better use of resources and reduces overlapping functions. It also fosters the exchange of good practices, innovation and knowledge dissemination. A formal approach to co-operation ensures the continuity of the co-ordination and collaboration efforts in spite of political and staff changes. Please refer to Chapter 6 on multi-level governance for an elaborate discussion on the topic.

Co-ordination across Polish LSGUs is a relatively infrequent and unsystematic process. Data from the OECD questionnaire indicate that 42% of consulted municipalities actively interact with other local authorities to reduce administrative burdens. Information gathered through interviews suggest that personal relationships drive the collaboration dynamics across LSGUs, making them particularly susceptible to political or managerial changes. Co-ordination between LSGUs and the national administration is also limited, especially for smaller LSGUs.

The national administration designs and enacts many of the regulations that LSGUs implement or need to comply with; thus, it is of utmost importance to align expectations, capacities and realities across government levels. There are various examples from OECD countries including Canada, Italy and Mexico, of successful practices and policies to promote regulatory reform and entrepreneurship at the subnational level, including ones regarding administrative simplification (see Box 9.2) (Villarreal and Pastor, 2010[16]). Administrative burdens, switching costs and constant regulatory changes could be avoided, at least in part, by establishing a whole-of-government co-ordination and collaboration strategy, with strong engagement from relevant parties, particularly in the Polish context, where LSGUs constantly mentioned lack of engagement with the national government.

One area of regulatory delivery where co-ordination is crucial is the inspection and enforcement process. As per the OECD Regulatory Enforcement and Inspections Toolkit, clarity should be ensured between different geographic levels (national, federal, regional, local, etc.) so that establishments are not subject to repeated (potentially conflicting) inspections and public resources wasted on uncoordinated and duplicating activities (OECD, 2018[18]). Interviews with LSGU representatives suggest that they are subject to constant inspections and audits from different institutions. Moreover, several interpretations of the law make the process burdensome and unpredictable. This means that LSGUs are devoting time and resources to the preparation of all of the information that is required for an inspection only to find out that there are overlaps and inconsistencies, generating inefficiencies and rigidities. The case for collaboration in the inspection process is also valid from the citizen and business perspective. Constant visits from authorities make compliance harder, limit the time that entrepreneurs allocate to productive activities and could give way to lawbreaking behaviour.

Regarding public procurement, the Supreme Audit Office in Poland will carry out audits every three years based on three criteria: i) complaints about a given entity; ii) information from an authority of the national government stating that an audit is required; and iii) the burden that is imposed on the inspected unit. Additionally, the new amendments to the PPL (Act of 29 January 2004) limit repetitive inspections; however, this provision does not apply to other regulated entities or processes.

One-stop-shops are physical or digital platforms that gather a wide range of information requirements with the objective of providing information to businesses and residents and/or carrying out transactions between the platform’s clients and public administration (OECD, 2020[19]). They can help reduce transaction costs for citizens and increase efficiency. Establishing and managing a one-stop-shop requires human, technological and financial resources. It involves co-ordination and collaboration between different institutions and ideally across levels of government. Evidence collected during in-depth interviews shows that these requisites are somewhat excessive for some LSGUs, as less than half of municipalities consulted and only two out of nine counties have one one-stop-shop (see Figure 9.4). Moreover, smaller ones often highlighted the maintenance costs as one of the main factors preventing them from creating a physical or digital platform. Additionally, informal interactions seem to be the preferred communication channel, thus limiting the uptake of services offered by existing one-stop shops.

It is important to embed the principles of monitoring and evaluation into the management of one-stop-shops. The definition of performance indicators that are linked directly to the objectives of the platform helps identify areas for improvement, bottlenecks and simplification opportunities. Among the Polish municipalities that have a one-stop-shop, the most common criterion to assess their performance is improved service delivery, followed by uptake levels. Although data from the OECD questionnaire do not offer a comprehensive description of the methodologies used by LSGUs, it is important to point out that other data sources such as transaction costs, service completion rates and in-depth interviews provide valuable insights into the users’ perspective (OECD, 2020[19]). It is worth highlighting that the figures referring to the questionnaire results reflect the answers of less than one-third of the respondents, as the majority does not assess the performance of the platform at all.

Polish municipalities and counties are responsible for the provision of most public services such as local public transport, social protection, municipal housing construction, among others (Congress of Local and Regional Authorities, 2019[13]). In order to fulfil their duties, governments use public procurement to identify, assess and ensure the best option to deliver services to their residents. As such, public procurement represents a significant amount of spending in terms of gross domestic product (GDP) and has a key role in furthering efficiency, transparency and accountability (OECD, 2015[1]).

Given the relevance of public procurement for the economy, it is of utmost importance to cut the red tape that contracting authorities and bidders face. In Poland, the Strategy for Responsible Development (Strategia na rzecz Odpowiedzialnego Rozwoju) and the reform to the PPL are the initiatives aimed at modifying and simplifying the regulatory framework that underpins public procurement at all government levels. The Strategy for Responsible Development focuses, among other things, on tackling the multiplicity of interpretations of the law – a problem widely acknowledged in Poland. On the other hand, the new law modifies significant legal provisions and introduces an intelligent purchasing system (Ministry of Funds and Regional Policy, 2017[7]). Simpler procedures, clear rules and the introduction of digital tools are measures that promote economic competition, increase the offer of goods and services and boost efficiency in the public administration.

The next section will focus on the public procurement framework in Poland and the application of principles related to administrative simplification and reduction of red tape to advance the reform of the public administration (EC, 2016[20]).

Public procurement accounts for nearly 11.2% of GDP in Poland in 2017 (OECD.Stat, n.d.[21]), slightly below the OECD average of 12% (OECD, 2019[22]). The public procurement system in Poland is decentralised, with approximately 14 000 contracting authorities spread out among the country’s ministries, national offices, province offices, state control organs, courts and tribunals, and territorial self-government offices (EC, 2016[23]). Indeed, public procurement expenditure is fairly concentrated at the level of subnational government, which accounted for 46.2% of procurement expenditure in 2017. By comparison, the share of national government procurement is 38.7%. In contrast, OECD countries tend to have slightly higher levels of centralised procurement expenditure, with an average of 41.6% of procurement expenditure at the national level and 42.7% at the subnational level (OECD.Stat, n.d.[21]).

In addition to being very significant in economic terms, public procurement is also a highly regulated area, following rules and regulations defined primarily at the EU and national levels, and in some instances at the local level too. Procurement rules aim to establish an equal-level playing field to accessing contracts with the government, ensuring transparency and competition as well as preventing fraud and corruption. Nevertheless, as a highly regulated area, public procurement is often linked to significant administrative burden, both for contracting authorities implementing procurement procedures and for suppliers responding to procurement opportunities.

Similar to other EU countries, contracting authorities at the local level in Poland have little influence over the regulatory framework, which is largely decided either at the EU or national level. Nevertheless, LSGUs are responsible for the lawful implementation of procurement regulations. This is often challenging due to the complexities linked to the implementation of public procurement. Indeed, a survey of procurement administrative practices in EU countries by the European Commission (EC) identified complexity as the single biggest challenge for procurement officials (EC, 2016[24]). Indeed, the complexities around public procurement are manifold and affect LSGUs across the board, particularly small ones. They involve technical knowledge around the procurement legal framework and practical implementation. The lack of legal knowledge has serious implications, as contracting authorities may find themselves in breach of regulations, which can result in sanctions or financial corrections. Lack of procurement skills on the other hand may result in suboptimal purchases, which either do not meet the needs of the final user or result in extra costs (e.g. additional works, increased maintenance costs, new purchases). These challenges are compounded at the local level as procurement officials typically have low levels of capacity both in terms of manpower and skills, and only procure infrequently, thereby making it more difficult to build up skills over time.

The complexities experienced across the EU are applicable in the context of Polish LSGUs. Indeed, many LSGUs voiced challenges in maintaining up-to-date legal knowledge of procurement provisions and thereby ensuring compliance with the law. Another common concern was the limited staff carrying out procurement procedures. For instance, in some of the smaller LSGUs visited, one person only was responsible for public procurement. In other cases, procurement staff was not working full-time on the topic but was also dedicated to other functions. The level of professionalisation of procurement officials appears relatively low, considering that most procurement practitioners do not practice the use of most-economically advantageous tender (MEAT) criteria. Similarly, LSGUs have a limited understanding of the strategic use of public procurement, e.g. by applying green or social criteria, which is also an indication of low professionalisation.

As part of its accession to the EU, Poland adopted the PPL of 2004 as the national legislation directly transposing EU directives and regulating public procurement. Since then, the PPL has been amended several times, notably in 2009, 2014, 2016 and 2019 (with the 2016 amendments being linked to the transposition of EU directives). In addition to the PPL, there also exists a body of secondary legislation that governs public procurement in Poland. This includes regulations of the prime minister, which cover issues such as the obligation to publish notices on the Tender Electronic Daily (TED), the European public procurement journal. Other major acts regulating the Polish public procurement system are the Public-Private Partnership Act of 19 December 2008 and the Concessions for Construction Works and Services Act of 9 January 2009 (Dzienni Ustaw, 2009[25]).

The procurement regulatory environment is shaped by the Public Procurement Office (Urząd Zamówień Publicznych, PPO), which is an executive and oversight agency for procurement in Poland, setting the primary policy in this regard. The PPO is responsible for drafting procurement legislation, gathering data and conducting analysis on the procurement system, including via the publication of annual reports, disseminating procurement guidance and maintaining the digital Public Procurement Bulletin (Biuletyn Zamowien Publicznych, BZP), the national e-procurement platform. The PPL that is drafted by the PPO is applicable to all contracting authorities in Poland, including those at the LSGU level, and applies to all contracts above EUR 30 000 (approximately PLN 128 000) (Urzad Zamowien Publicznych, 2004[26]). The PPO does not function in any purchasing role or as a national purchasing body. Individual contracting authorities, including LSGUs, are responsible for conducting their own procedures.

The public procurement regulatory landscape in Poland undergoes frequent changes that often result from top-down mandates for regulatory reform, as with the transposition of EU directives in 2016. However, regulatory changes often go beyond the obligatory amendments to align with European legislation. Indeed, the PPL has undergone several major amendments, named “secondary legislation”. There have been 21 separate secondary legislation created to either complement or amend the original PPL since its enactment in 2004 (Urzad Zamowien Publicznych, 2020[27]). Three significant pieces of secondary legislation came into force in 2014 and 2016, along with the forthcoming secondary law that will be enacted on 1st January 2021, requiring LSGUs to comply with new provisions, as discussed below. In contrast, other European member states, especially the “historical” ones, tend to have more stable procurement legal frameworks, as evinced by the EC’s stock-taking study of public procurement. Not least, the OECD Recommendation of the Council on Public Procurement calls for a coherent and stable legal, institutional and regulatory framework. At the same time, effective multi-level governance is needed given that multiple layers of government are involved in public procurement reforms.

The 2014 amendment of the PPL promotes award criteria beyond price, expands the scope for exclusion of suppliers in the event of gross negligence and introduces provisions on exceptionally low price. Overall, these developments can be seen as positive in aligning the legal framework to the promotion of value for money in public procurement. Indeed, promoting non-price criteria has been a priority of the most recent procurement reforms at the EU level. Finally, the new legislation permits contracting authorities to request additional information in the case of an exceptionally low price presented by the economic operator (EC, 2016[23]). In 2016, major amendments have been implemented to align the Polish legislation with the new European directives. The details of the 2016 amendments are discussed in Box 9.4 below.

On 24 October 2019, a new law was published (passed on 11 September 2019), providing significant changes to the Polish PPL to improve the transparency and efficiency of public procurement (Urzad Zamowien Publicznych, 2019[28]). These changes took effect on 1st January 2021. This new legislation updates the existing regulations and introduces numerous changes in relation to the currently applicable provisions. This includes:

  • Amendment to thresholds for publication on the BZP: Under the 2004 legislation, only tenders above the threshold of EUR 30 000 had to be published on the national BZP. In this amended legislation, there is now a requirement that all procurements above PLN 50 000 (approximately EUR 12 000) must be published on this bulletin. By lowering the threshold for publication of procurement, the amendment provides greater transparency and potentially opens up a greater share of procurement to competition.

  • Expansion of the e-procurement system and integration with the BZP: In parallel to the amendment of procurement thresholds, the e-procurement system will be generalised for all contracts above PLN 50 000. Namely, all entities will be obliged to use the e-procurement platform for the publication of notices on the BZP, which will be integrated in the e-procurement system. Procurement plans must also be published or referenced on the BZP via the e-procurement platform. The e-procurement platform has a phased approach to implementation: from 1st January 2021, all tenders above the threshold must be published on the platform. Then from the second quarter of 2021 until mid-2022, there will be further functionalities added, including modules for reporting and analysis. While the platform is not obligatory for LSGUs as such, due to the integration with the BZP, all LSGUs will be obliged to use the e-procurement platform for the publication of notices. They will also be required to regularly send information on their procurements via the platform and provide an annual report on awarded contracts.

One of the reasons behind introducing such a platform is that the information that it generates will provide insights into how the new thresholds work and provide oversight as to what spending is occurring in LSGUs in Poland.

  • The introduction of a new simplified procurement procedure: For contracts with a value below EU thresholds. This includes a new procedure called the “basic procedure”, under which the contracting authority will have three options to choose from:

  • The basic procedure without negotiations, in which the contracting authority selects the most advantageous tender without the possibility of negotiation.

  • The basic procedure with the possibility of negotiating the content of tenders.

  • The basic procedure with mandatory negotiations, in which the contracting authority negotiates the content of submitted tenders in order to improve them.

  • With this amendment, LSGUs will have additional flexibility on how to run a procurement procedure below EU thresholds.

  • The introduction of a list of abusive clauses in public contracts: This solution is intended to limit the transfer of all risks of fulfilment of a public contract to the contractor. Clauses which were considered abusive include provisions regarding the calculation of contractual penalties for the conduct of the contractor not related directly or indirectly to the subject of the contract or its proper performance and provisions regarding the contractor’s liability for delays (unless justified by the circumstances or the scope of the contract).

While there may be important reasons to amend the PPL, it should be considered that frequent changes to the regulatory environment have a cost too. As reported in the OECD questionnaire (2020), the greatest challenge for LSGUs administering public procurement at the local level is constantly changing national legislation, making it hard to adapt to new regulations (60.5% of respondents). This challenge may be exacerbated in small LSGUs, as they often have less capacity to keep up-to-date on such legal changes. Moreover, these findings are consistent with the analysis by the EC on administrative practices in public procurement in Poland (EC, 2016[29]). Namely, the instability of the general legal framework poses a challenge to contracting authorities, as they need to constantly stay abreast of new developments. Thus, an unstable legal framework can be a source of irregularities and may not allow contracting authorities to make full use of available provisions to make procurement more effective, i.e. the implementation of non-price criteria. Specifically, the LSGUs visited in the fact-finding mission are often wary of using MEAT criteria in their procurements, due to uncertainties on how to apply the law. Indeed, as reported by LSGUs, limited legal clarity in this area makes them vulnerable to appeals.

Poland made substantial progress in reforming its procurement system in recent years, creating a robust system of institutions to shape, guide and oversee public procurement procedures nationwide. These national reform efforts in public procurement have a strong impact on LSGUs, as they are affected by these regulations in their daily operations. Specifically, LSGUs are responsible for providing a number of public services that are implemented via public procurement, e.g. road maintenance. Thus, LSGUs’ ability to adapt to new rules is essential for the lawful and effective implementation of procurement. However, LSGUs are often confronted with barriers in this process. Whenever LSGUs are not sure how to interpret new procurement rules, they may have a tendency to opt for known practices and procedures. As a result, small contracting authorities often do not evolve in their public procurement practices, for instance by continuing the use of the lowest price over non-price criteria.

At the same time, reform initiatives taken at the national level may not sufficiently take into account local specificities or prepare LSGUs for the new sets of rules. The forthcoming changes to the Polish PPL present a case in point. From the perspective of national authorities, the new amendments will lead to simplification, more transparency and better access to public procurement opportunities. However, LSGUs interviewed during the OECD fact-finding missions shared concerns about the potential additional burden posed by the new rules and often consider themselves unprepared to adapt to the new regulatory environment. Namely, the main concerns revolved around lowering the threshold for publication of procedures and using the upcoming e-procurement platform, which may pose difficulties for them and suppliers.

To ensure the uptake of any given reform and this reform in particular, national-level authorities need to consider how implementation affects practices on the ground and what specific challenges LSGUs will be faced with. Failure to do so may result in a faulty uptake of the new rules, lack of compliance or even the need to backtrack on some reform steps. A sweeping public procurement reform attempted in the Czech Republic in 2012 provides a cautionary tale for reform efforts that are not sufficiently informed by the realities on the ground (see Box 9.5).

Beyond that, commitment to effective multi-level governance is also key to ensuring that reforms are successfully adopted by local self-government authorities. Indeed, the need to strengthen multi-level governance and to improve co-ordination between levels of government and has been highlighted by the Strategy for Responsible Development. Initiatives such as the Joint Committee of National Government and Territorial Self-Government provide a forum for exchange and take a multi-level approach to policy design (see Chapter 6).

The national framework for public procurement is often perceived as burdensome by local authorities, as demonstrated by the OECD questionnaire (38 municipalities and 9 counties). As mentioned, the fact that national legislation is constantly changing is considered a major challenge by surveyed LSGUs. Furthermore, a plurality of respondents considers red tape imposed by government-level regulation the second largest challenge in the implementation of procurement locally (Box 9.5). Another area of difficulty for LSGUs is the fact that control and audit institutions may interpret the law differently whenever it changes, further compounding the difficulties in adapting to the legal framework. Capacity constraints may add an additional layer of complexity: small LSGUs do not always have full-time public procurement staff and procurement officials tend to have other responsibilities. Thus, keeping abreast of changes in procurement legislation is even more difficult for them. In contrast to municipalities, counties surveyed appear to face fewer challenges in understanding the interpretation of the law, as well as in accessing support from national authorities.

In some instances, the burden may result from the technical provisions of the law. In other instances, the burden for LSGUs may lie in the adaptation process to new changes, in particular when these are significant. Conversations with LSGUs during the fact-finding mission revealed that many of them do not consider themselves prepared for some of the developments brought by from the forthcoming regulations. Not least, burden can result from a lack of legal clarity about existing provisions. Indeed, the forthcoming public procurement regulation will bring significant changes to procurement operations of contracting authorities including LSGUs. Two particular provisions are expected to result in a significant impact on how procurement is currently conducted: first, the publication of procedures to the new threshold of PLN 50 000; second, the application of e-procurement to all procedures above this new threshold.

The transition to e-procurement has already been ongoing in Poland. In fact, the 2014 EU directives mandated the use of e-procurement (e-submission) as of 2018 for all European member states. A national-level public procurement platform is currently being developed that will be accessible to all LSGUs. In parallel, the so-called miniPortal,3 an e-procurement platform administered at the national level, also exists and is available to use for LSGUs. At present, LSGUs are able to use a combination of e-procurement solutions, resulting in a lack of a standardised approach. This includes using external solutions (or on a subscription or license purchase basis), their own tools or the PPO temporary tool, i.e. the miniPortal. The new solution (e-Platform) is to replace the current miniPortal. In some instances, technical issues affect the miniPortal, as reported by LSGUs. For instances, encrypted offers are very difficult to download off the system. Based on the feedback from the fact-finding mission, many LSGUs already struggle with the current e-procurement system.

With the new legal changes, many more public procurement procedures will be going through the new e-procurement platform. However, conversations with LSGUs revealed that they do not consider themselves prepared for this development and are concerned that suppliers are also not ready to face the digitalisation process. These findings are consistent with a 2018 evaluation report on the functioning of the procurement system by the PPO, in which contracting authorities do not consider themselves and the market fully prepared to embrace e-procurement (Falkowska, 2018[31]). Given that the upcoming platform is not yet operational, many LSGUs do not know what to expect from the new system. Thus, it is conceivable that lack of experience and predictability contributes to a hesitancy for a generalised shift to e-procurement. In addition, LSGUs consider that the publication of procedures above PLN 50 000 (EUR 12 000) will also add burden, compared to the current situation in which greater flexibility exists up to the threshold of EUR 30 000.

Legal clarity on upcoming provision is very important to limit administrative burden. In a number of instances, LSGUs still lack clarity about past amendments and have not been able to fully digest some of the provisions that are now established (see Box 9.6). This poses several challenges, as LSGUs are not able to communicate clearly about requirements to suppliers, particularly SMEs that are likely to lack detailed expertise themselves. Furthermore, LSGUs capacity to adopt important aspects of procurement good practices, such as non-price criteria, is reduced if the legal provisions are not clear. Finally, appeals are more likely to occur whenever legal clarity is not ensured.

The national government plays a crucial role not only to craft a given reform but also to ensure its successful uptake and implementation throughout the national territory. For public procurement, these responsibilities fall under the remit of the PPO. Given that public procurement is strongly decentralised, careful attention should be paid to ensure that all actors are on board when legal changes occur. A national-led effort to accompany LSGUs through reform is even more important considering that the administrative burden for LSGUs may also be linked to the process of implementing the reform itself. LSGUs may be put under strain whenever legal changes occur, without being sufficiently prepared to adopt these changes through consultation, training and lead time in the uptake of new rules for example. As discussed, throughout the course of several reforms, LSGUs have had difficulties in complying with the newly changed procurement rules and keeping abreast of new requirements.

The interactions between LSGUs and the PPO as observed in the field mission point to a need to enhance effective multi-level governance, whereby channels of communication and co-operation between the national and local levels are well-functioning and support LSGUs throughout the reform lifecycle, from its inception to the support needed for uptake, e.g. guidance and tools. Such governance mechanisms would help in minimising the administrative burden on LSGUs that have experienced throughout successive reform cycles.

For instance, preparation time appears to have been neglected when changing procurement rules. When the new procurement regulation was adopted in 2016, there was no grace period for contracting authorities to adjust and enforcement was effective immediately. With no chance to adapt to these new regulations, it was very difficult for LSGUs to apply the law immediately. Evidence from the LSGU visited suggests that some LSGUs do not become aware of any changes or amendments to the law until it has already been adopted, resulting in a complete lack of understanding as to how to interpret the new amendments. This issue has been particularly relevant for past amendments, while awareness appeared somewhat improved regarding forthcoming regulatory changes with at least some LSGUs having attended relevant training. Once again, smaller LSGUs are likely to suffer the most from such developments.

Consultations are also a helpful way to prepare LSGUs for upcoming regulatory changes, in addition to collecting input from practitioners affected by such changes. In regards to the forthcoming secondary legislation, the PPO considers having consulted extensively with LSGUs. Namely, the bill was uploaded as a public consultation document to their website and was sent to the Association of Polish Cities (Związek Miast Polskich, APC) for dissemination and review by LSGUs. According to the PPO, the bill solicited reactions from LSGUs but, overall, it is seen to promote positive change. Concerns over additional burden have been registered; nonetheless, the PPO is confident that the new law will be satisfactory.

In contrast, evidence suggests that the engagement of LSGUs in this process has been be limited. Namely, many of the LSGUs interviewed and that responded to the questionnaire stated that they have very limited contact with the PPO and have been unaware of any public consultations taking place. Similarly, communication concerning the new 2021 law has been limited or has not reached some of the final recipients. LSGUs, particularly the very small ones, often have limited capacity to be meaningfully involved in the consultation process. As a result, some public procurement practitioners in LSGUs consider that the laws are unpractical and do not sufficiently account for how procurement is carried out at the local level.

Communication between LSGUs and the PPO could be an additional instrument to facilitate preparation for new procurement rules and their uptake. With its institutional setup, Poland is well-placed to manage the communication with LSGUs. Namely, having the PPO as the key institution responsible for public procurement gives LSGUs a single interlocutor for procurement matters that is highly visible. In some OECD countries, particularly decentralised ones, responsibilities around public procurement are scattered and LSGUs do not have a clear counterpart. Second, the PPO has a one-stop-shop procurement portal in place, which pulls together key information on public procurement in one place and is considered good practice to share information to a wide audience, such as LSGUs.

LSGUs interviewed did not appear to have established communication channels with the PPO, nor did they seem to perceive the PPO as engaged at the local level. In many cases, the primary form of communication with the PPO is limited to sending calls for tender/tender announcements and statements on the winners. This communication is solely carried out via the PPO website. In part, there is a general recognition that the PPO is understaffed for conducting its multiple tasks, including outreach to LSGUs. Nevertheless, more proactive communication would increase the flow of information and support the adoption of important reform aspects, such as e-procurement uptake and the use of MEAT criteria. There is no one-size-fits-all approach to communication. Some OECD countries, particularly smaller ones, are active via social media in disseminating information on procurement. Others use more traditional means of communication, such as circulars or posting updates on their own websites. Regular face-to-face events are an additional way to engage with contracting authorities, as practised in the Netherlands by PIANOo, the Dutch Public Procurement Expertise Centre. In some instance, national authorities facilitate the exchange between peers by setting up fora or platforms, in which practitioners can exchange directly amongst themselves (see Box 9.7).

While communication from the national level to the subnational level appears limited, communication and collaboration across LSGUs seems more firmly established, albeit largely through informal channels. This allows LSGUs to share knowledge and experience on various topics, including good practices and procurement documents. Promoting these kinds of peer-to-peer channels for collaboration with the PPO could be a further way to reduce the various types of administrative burden on LSGUs. Available mechanisms for inter-municipal co-operation (as discussed in Chapter 6) could further be explored as suitable models to expand capacity and peer-learning at the local level. The Krakow Metropolis Association represents an example of such collaboration in the field of public procurement (Box 9.8).

The provision of training and guidance by a national level entity such as the PPO is vital to ensure that regulatory frameworks are able to be upheld and utilised in the correct manner. Acknowledging that many LSGUs are challenged by the new rules and requirements that are stipulated in a fast-changing regulatory environment, the PPO has made efforts to decentralise its training offer and bring it closer to local municipalities. Namely, as part of its training and dissemination activities, it held two large conferences in 2019 in Warsaw and additional conferences in Kraków, Lublin, Piła, Sopot and Wrocław over January-March 2020 (some have been postponed due to the COVID-19 pandemic). It has also planned 68 two-day and 18 one-day training courses on the new procurement rules throughout Poland over the period 2020-22. Information is regularly published on its website. Not least, the PPO is producing a new e-learning tool, with a number of different modules on public procurement, aiming to educate contracting authorities on the new national e-procurement platform.

Furthermore, to gain better insight into public procurement at the local level, the PPO carried out an evaluation of the functioning of public procurement in 2018. This report included an analysis of what LSGUs expect from the PPO in terms of training as well as an assessment of the current level of knowledge that LSGUs have on the public procurement process. The report highlights the need for additional training and heterogeneous levels of satisfaction amongst contracting authorities regarding the training offer. Greater coverage of e-procurement in the training programme would also be beneficial, according to the report (Falkowska, 2018[31]). The results of the study have been taken on board to better shape training and awareness activities, as described in Box 9.9.

While the PPO has been making an effort to make training available beyond the capital, access to training represents a key challenge for LSGUs. Indeed, many LSGUs stated that have not been made aware of any of these guidance or training opportunities. Furthermore, they are often unable to attend any of the conferences in Warsaw, as the location is not easily reachable for some officials. The very limited availability of training spots is an additional hampering factor for LSGUs. Beyond that, the current sanitary situation linked to the COVID-19 pandemic, adds further complexity to travel and calls for greater use of digital tools in training in present and future scenarios. Another problem described by LSGUs is that the law is made by policy-makers and not practitioners, so the training workshops are not very practical. The difficulty to effectively train and professionalise the procurement workforce is a common challenge in OECD countries, as reported in the Reforming Public Procurement report, which analyses progress in implementing the 2015 OECD Recommendation (OECD, 2019[34]). Many EU and OECD countries are increasingly moving towards professionalisation strategies that are based on predefined competency frameworks, such as the training strategy put in place by the French State Purchasing Directorate (Direction des achats de l’ État, DAE) (EC, n.d.[32]). Similarly, Lithuania is embarking on a professionalisation strategy based on a certification framework (OECD, 2019[35]).

As a result, many LSGUs also conduct their own training, for both their internal public procurement staff and contracting authorities within their jurisdiction. When there is a significant change in the law, LSGUs have taken the initiative to organise training days for public procurement practitioners from within the region. A notable example is described in Box 9.10 below. Other LSGUs follow a similar pathway. Some are able to attend the training provided by the PPO, yet still have to do a large amount of “self-training” themselves. Larger LSGUs, with significant resources and more staff, are more likely to have the capabilities to provide or attend public procurement training. Whereas those smaller LSGUs, with fewer resources, do not have the same capabilities. For example, a larger metropolitan LSGU regularly develops its own training session on the new law for all associated municipalities linked to this city hall and hired an external contractor, who is a practical user of the law, to host such sessions. In contrast, a smaller LSGU stated that they have been unable to get enough funding to host such training.

Pooling resources amongst LSGUs to expand training opportunities, as practised already by some of the LSGUs visited, appears an effective way to increase capacity at the local level. While single initiatives already provide results, the impact of such “self-organised” training would be much larger if organised or co-ordinated in a central location. The APC could take the initiative in this area, by regularly surveying the needs for training and pairing LSGUs with similar training needs for instance. Similarly, it could engage with LSGUs and the PPO to develop online training material, particularly in light of the current context. Not least, strengthening multi-level governance would facilitate a granular approach to channelling various forms of support from the national government to local authorities, taking into account the needs of different types of LSGUs.

LSGUs have limited scope for simplifying the legal and regulatory framework in public procurement. As per the OECD questionnaire, a small share of LSGUs (21%) is active in shaping the procurement framework either through local-level policies or by shaping national procurement legislation. The approaches used by municipalities can take various shapes but ultimately are limited to providing opinions on the draft PPL, defining case law and regulating contracts up to the EUR 30 000 threshold (Table 9.2). Nevertheless, LSGUs have some ability to make the most effective use of below-threshold public procurement. While this type of procurement is relatively small in value, it can have a significant impact on the local economy of smaller and often rural municipalities. In particular, optimising small value public procurement can be beneficial to SMEs, as these types of firms often do not have the technical or financial capacity to compete for larger contracts. Similarly, LSGUs can embrace the digitalisation of public procurement, including below-threshold, to make it more efficient.

As discussed, some LSGUs introduce below-threshold procurement strategies in the form of internal regulations or similar instruments to optimise their procurement procedures. In this context, “below-threshold” strategies refer to the frameworks in place that govern purchases by contracting authorities that are below the PPL financial thresholds for works, supplies and services. Depending on the municipality, these strategies can be more or less formalised. As previously mentioned, the current threshold for the application of the PPL in Poland is EUR 30 000.4 As demonstrated within the OECD questionnaire results and by interviews, an important share of LSGUs has formal strategies in place to govern under-threshold procurements.

For some LSGUs, such strategies are kept as basic as possible. This includes, for example, an LSGU that uses the principle of lowest price for all under-threshold procurements. Tenders between EUR 20 000 and EUR 30 000 are openly published and announced on their website. Only written offers are accepted: offers are not accepted via the e-procurement platform as there is not yet enough capacity from both contracting authorities and contractors. This LSGU uses the “request for proposals” procedure as often as possible – usually for three to four key businesses. The goal of such strategies is to ensure that processes are as open and as transparent as possible.

Other LSGUs simply follow the criterion that when procurement is coming close to the EUR 30 000 threshold, there must be a competitive tender. One LSGU simply assesses below-threshold procurement on a case-by-case basis. When a procurement contract gets closer to the EUR 30 000 threshold, stricter procedures are applied. Many LSGUs stated that it is significantly easier to procure under the threshold because there are fewer administrative burdens associated with the procurement process. For example, for under-threshold procurements, there is no requirement to advertise for the required 30 days that the PPL prescribes. In some instances, below-threshold strategies involve forming a committee that decides which company the procurement will be awarded to.

The success of under-threshold procurement strategies can be associated with formalised, ingrained processes that are associated with greater efficiency. Furthermore, standardised procurement strategies can be beneficial from the perspective of suppliers, as they typically designed to enhance transparency and competition. LSGUs that have bigger procurement teams are more likely to have an under-threshold policy. However, there is no one-size-fits-all approach to these kinds of procurement strategies. Indeed, they need to balance various goals, such as increased transparency and competition in relation to the market, while maintaining a degree of simplification and flexibility. Importantly, below-threshold procurement strategies need to be adapted to the level of capacity of the LSGU in question, so as not to add additional complexity and workload for entities that already face capacity constraints.

Contracting authorities are faced with great uncertainty regarding the transition to the new e-procurement platform, particularly given the fact that it is not yet operational. In addition to their own limited preparation, LSGUs consider that suppliers also lack the skills, tools and readiness for moving to digital procurement processes. It should be noted that such challenges are not limited to local procurement officials in Poland but are widely shared across OECD countries as highlighted in the report Reforming Public Procurement (OECD, 2019[34]).

These concerns are understandable when dealing with micro businesses and SMEs at the local level, which may not yet have been exposed to e-procurement processes. Furthermore, adequate preparation is needed both for contracting authorities and suppliers to navigate this transition. Nevertheless, LSGUs need not be scared of embracing digitalisation. In fact, e-procurement tools can be designed in such a way as to simplify the entire procurement process, including small value procurement. Digitalising small value procurement is meant to open up competition. Many OECD members and other countries have already made positive experiences moving towards digital public procurement above and below thresholds. For instance, Tunisia introduced a so-called E-Shopping Mall for small value procurement. Since its introduction, the system has been vastly popular with suppliers and contracting authorities, allowing to increase transparency and competition in procurement markets that were previously heavily reliant on established suppliers (OECD, 2020[37]). Italy has a similar widely popular system called MePA (Public Administration e-Marketplace) for goods, services and maintenance works under the EU thresholds. Moreover, e-procurement across OECD countries is gradually expanding towards a comprehensive system that allows the improvement of workflows, process automation and the elimination of silos. For instance, an increasing number of systems include modules for business intelligence or e-auctions (OECD, 2019[34]).

While many LSGUs have appeared hesitant in the uptake of e-procurement, some have taken a proactive approach by introducing a commercial e-procurement platform ahead of the mandatory schedule, thereby aligning their under-threshold strategies with the national PPL (see Box 9.11). This strategy was designed to prepare the market for upcoming national changes. While initially concerned about the market’s reaction to a shift to e-procurement, authorities reported satisfaction from suppliers.

A well-designed e-procurement system can reduce administrative burden through embedded interoperability links to other government platforms. This reduces time spent by both contracting authorities and suppliers. As suggested by one of the LSGUs, the new national e-platform could allow contractors to upload prechecked references to the system, to avoid having new manual reference checks. Verification of selection and exclusion criteria can also be simplified by connecting the e-procurement system to business registries, tax registries, the criminal records database and other relevant databases.

Not least, widespread use of e-procurement generates data on public procurement, which in turn could be analysed for monitoring and analysis purposes. At the local level, contracting authorities are able to use insights from procurement data for market analysis and benchmarking purposes, thus increasing the efficiency of procurement. National authorities could improve their monitoring and oversight function.

The following recommendations aim at introducing principles of administrative simplification at the LSGU level and improving the uptake of reforms led by national-level authorities. They focus on the role LSGUs can play to shape their regulatory environment and reduce the burden from top-down regulations. At the same time, the recommendations highlight the role national authorities play in ensuring that reforms are implemented smoothly without adding administrative burden.

Resources for simplification of administrative red tape are limited and should be allocated strategically. LSGUs should identify the procedures and requirements that place a greater administrative burden on citizens and businesses, and prioritise their simplification. Red tape reduction measures such as streamlining of processes, the introduction of simple and clear language and, when possible, creating digital alternatives help drive compliance levels and efficiency in the administration.

Create and promote formal communication channels and standardise the provision of information and services. This would foster transparency and equal treatment of citizens and businesses. Additionally, it facilitates the interaction with stakeholders that are not residents of the LSGU. In the context of public procurement, streamlined interactions with suppliers on questions about procurement procedures for example would help make tenders more easily accessible and promote equal treatment. Specific training would support LSGUs to better interact with stakeholders, notably putting in practice mechanisms for prior market consultations. 

Digital tools can help improve traceability of documents, data and information exchange and can reduce the time it takes officials to process requests. Moreover, they increase accessibility to relevant municipal services and reduce the room for illegal behaviour. The deployment of ICT tools should be accompanied by a communications campaign to promote their use by both citizens and public officials.

In the context of procurement, making use of digital tools, i.e. adopting e-procurement above and below thresholds, makes the procurement process more efficient and accessible, including to small suppliers. Sufficient resources need to be devoted to preparing this transition, at both the local and national levels.

Whilst the national authorities have key responsibilities in ensuring the smooth adoption of reforms, LSGUs can take proactive steps that allow them not only to adopt reforms effectively but also to have a stronger voice when reforms are designed at the national level. Collaboration among LSGUs is key in an environment where resources are scarce and their cohesive voice carries more weight. Furthermore, LSGUs can use different levels of advancement to their benefit by pooling and sharing resources and expertise.

In the procurement context, there are four main areas in which collaboration among LSGUs would bring tangible benefits in the application of procurement reforms: keeping abreast with regulatory changes, improving the consultation process with national authorities, ensuring training on upcoming regulatory changes and exchanging good practices. To this end, a focal point for interaction with the national government on procurement reform could be hosted by the Association of Polish Cities (APC) or be taken over on a rotating basis by one of the larger LSGUs. Additional proposals for action also differ on whether an LSGU lies inside a functional urban area or whether it lies outside of it, given the different levels of resources associated with these LSGUs. Collaboration and pooling resources are vital for smaller LSGUs, while better-resourced LSGUs have an important role to play in sharing their knowledge to support the smaller ones.

Simplification of public procurement for LSGUs is best achieved through exchanging and sharing good practices between peers that are experiencing similar conditions. Furthermore, smaller and less experienced LSGUs can benefit from the knowledge and expertise of more advanced ones. In some cases, simplification can be achieved through simple means, such as adopting clear language in tender documents. Sharing templates for technical specifications can be a simple way of helping procurement practices. Finally, LSGUs should seek to optimise below-threshold public procurement by implementing strategies that make this area of procurement more open, transparent and efficient.  

Rigid regulations and/or constant legislative changes make their adoption hard for LSGUs, especially for those with fewer resources. The national government could engage more directly with LSGUs and support them by providing guidelines, addressing their concerns and proposals and ensuring a stable and clear regulatory environment. The latter could be done through the Joint Committee of National Government and Territorial Self-government, which brings together representatives from the national government as well as LSGUs. However, to harness the benefits from the joint committee, all regulations that have an impact on LSGUs must go through the commission to collect views and feedback from its members.

Furthermore, the national authorities must consider the burden they place on local authorities whenever starting a reform initiative. The positive impact expected from the reform needs to be weighed against the capacity of authorities to effectively implement regulatory changes. Streamlining approaches (e.g. bundling several smaller reform initiatives into a single larger reform) can help rationalise efforts and minimise regulatory burden.

On the other hand, the national government, through Statistics Poland, could liaise with regional and local institutions that collect data from LSGUs to reduce red tape for LSGUs, such as reporting obligations, especially when there are several formats and overlaps on the data that is requested. Statistics Poland could emit guidelines on the characteristics and quality of the data and be the single authority gathering information and statistics from the LSGUs.

To ensure greater effectiveness of reform efforts, it is important to strengthen the collaboration and co-ordination between the national and local levels (multi-level governance). Even if the legislative process promotes the participation of all stakeholders during the public consultation phase, further efforts could be carried out to ensure the participation of all types of LSGU. In particular, national authorities could take specific actions targeted at smaller LSGUs that may otherwise be left behind. Namely, national authorities could ensure that a sample of small LSGUs is represented during the consultation process, as in practice they are seldom involved in such processes.

The adaptation time for legal changes to take place could also take into account the needs of LSGUs, particularly smaller ones. Active and effective communication channels with LSGUs should be ensured throughout the reform and implementation process to ensure that legal changes are understood and implemented correctly. Reform provisions that appear particularly burdensome to small authorities should be accompanied with dedicated support (e.g. the use of MEAT criteria), thereby ensuring a uniform uptake. 

Digitalisation is key to reduce administrative burden and increase efficiency in the processes of public authorities, including LSGUs. In the context of public procurement, the shift to e-procurement above and below thresholds will lead to greater efficiency, simplification and transparency for both contracting authorities and suppliers at all levels of government, including LSGUs. To achieve the efficiency and simplification goals of digitalisation, however, it is imperative that the necessary digital infrastructure is well-functioning and user-friendly, and that adequate training is available. Attention should be paid to the interoperability of digital tools such as e-procurement platforms. This is particularly important for public procurement, as it can be a significant driver for simplification (including through linkages with government databases). To familiarise users with the digital tool, it is necessary to provide all interested parties with its operating instructions in the form of multimedia presentations that teach correct use of the tool using a step-by-step methodology.  

A national authority can play a major role in facilitating the sharing of relevant knowledge by creating opportunities for exchange and sharing of good practices. Specifically, for public procurement, the PPO or the APC could support targeted experience-sharing, where LSGUs can learn from peers and discuss issues, challenges and solutions that are relevant to them. In addition, the PPO could continue delivering activities supporting LSGUs in the form of published good practices, model documents and guidelines of relevance to the public procurement process, as well as delivering other educational multimedia materials on the PPO portal.

References

[36] City Hall of Międzyrzec Podlaski (2020), Municipal Council, https://www.miedzyrzec.pl/en/ (accessed on 11 June 2020).

[38] City Hall of Płock (n.d.), Platformazakupowa.pl, https://przetargowa.pl.

[13] Congress of Local and Regional Authorities (2019), “Local and regional democracy in Poland”, https://rm.coe.int/local-and-regional-democracy-in-poland-monitoring-committee-rapporteur/1680939003 (accessed on 1 July 2020).

[25] Dzienni Ustaw (2009), Act on Public-Private Partnership Journal of Laws.

[14] EC (2019), Digital Government Factsheet 2019 - Poland, European Commission, https://joinup.ec.europa.eu/sites/default/files/inline-files/Digital_Government_Factsheets_Poland_2019_4.pdf (accessed on 17 July 2020).

[20] EC (2016), “EU public procurement reform: Less bureaucracy, higher efficiency”, European Commission, http://ec.europa.eu/DocsRoom/documents/16412 (accessed on 2 July 2020).

[23] EC (2016), “Poland country profile”, in Public Procurement – Study on Administrative Capacity in the EU, https://ec.europa.eu/regional_policy/sources/policy/how/improving-investment/public-procurement/study/country_profile/pl.pdf.

[29] EC (2016), “Poland country profile”, in Public Procurement - Study on Administrative Capacity in the EU, European Commission, https://ec.europa.eu/regional_policy/sources/policy/how/improving-investment/public-procurement/study/country_profile/pl.pdf (accessed on 8 July 2020).

[24] EC (2016), Stock-taking of Administrative Capacity, Systems and Practices across the EU to Ensure the Compliance and Quality of Public Procurement involving European Structural and Investment (ESI) Funds - Final Report, European Commission.

[4] EC (2016), Structural Business Statistics (database), European Commission, https://ec.europa.eu/eurostat/web/structural-business-statistics/data/database (accessed on 2 July 2020).

[32] EC (n.d.), Building an Architecture for the Professionalisation of Public Procurement, Library of Good Practices and Tools, European Commission, http://dx.doi.org/10.2873/56676.

[31] Falkowska, M. (2018), Raport z oceny funkcjonowania systemu zamówień publicznych, Urząd Zamówień Publicznych.

[17] Government of British Columbia (n.d.), Regulatory Reform Policy, https://www2.gov.bc.ca/gov/content/governments/about-the-bc-government/regulatory-reform/resources (accessed on 16 May 2018).

[8] Government of Poland (2018), Law on the Amendment of Some Acts to Introduce Simplifications for Entrepreneurs in Tax and Economic Law, http://isap.sejm.gov.pl/isap.nsf/download.xsp/WDU20180002244/O/D20182244.pdf (accessed on 2 July 2020).

[33] Krakow Metropolis Association (n.d.), http://metropoliakrakowska.pl/sektory/o-stowarzyszeniu.

[10] Ministry of Development (2019), Friendly Law Package, https://www.gov.pl/web/rozwoj/pakiet-przyjazne-prawo (accessed on 2 July 2020).

[9] Ministry of Development (2019), Ułatwienia dla firm [Facilitation for Companies], https://www.biznes.gov.pl/pl/ulatwienia-dla-biznesu/ulatwienia-dla-firm (accessed on 2 July 2020).

[7] Ministry of Funds and Regional Policy (2017), Strategia na rzecz Odpowiedzialnego Rozwoju [Strategy for Responsible Development], https://www.gov.pl/web/fundusze-regiony/informacje-o-strategii-na-rzecz-odpowiedzialnego-rozwoju (accessed on 30 June 2020).

[37] OECD (2020), “Improving the e-procurement environment in Tunisia: Supporting vulnerable groups in gaining better access to TUNEPS”, OECD, Paris.

[19] OECD (2020), One-Stop Shops for Citizens and Business, OECD Best Practice Principles for Regulatory Policy, OECD Publishing, Paris, https://dx.doi.org/10.1787/b0b0924e-en.

[15] OECD (2020), “Share of individuals using the Internet to interact with public authorities”, OECD Going Digital Toolkit, OECD, Paris, https://goingdigital.oecd.org/en/indicator/23/ (accessed on 17 July 2020).

[22] OECD (2019), Government at a Glance 2019, OECD Publishing, Paris, https://dx.doi.org/10.1787/8ccf5c38-en.

[35] OECD (2019), Improving Lithuania’s Public Procurement System Component 1 - Implementation of Professionalisation and Certification Frameworks, OECD, Paris, http://www.oecd.org/gov/public-procurement/ (accessed on 11 September 2020).

[34] OECD (2019), Reforming Public Procurement: Progress in Implementing the 2015 OECD Recommendation, OECD Public Governance Reviews, OECD Publishing, Paris, https://dx.doi.org/10.1787/1de41738-en.

[11] OECD (2018), Indicators of Product Market Regulation, OECD, Paris, https://www.oecd.org/economy/reform/indicators-of-product-market-regulation/ (accessed on 29 April 2020).

[18] OECD (2018), OECD Regulatory Enforcement and Inspections Toolkit, OECD Publishing, Paris, https://dx.doi.org/10.1787/9789264303959-en.

[6] OECD (2018), “Overview”, in OECD Economic Surveys: Poland, OECD, Paris, http://www.oecd.org/economy/surveys/Poland-2018-OECD-economic-survey-overview.pdf (accessed on 30 June 2020).

[1] OECD (2015), OECD Recommendation of the Council on Public Procurement, OECD, Paris, http://www.oecd.org/gov/public-procurement/OECD-Recommendation-on-Public-Procurement.pdf (accessed on 9 January 2020).

[5] OECD (2011), Administrative Simplification in Poland: Making Policies Perform, Cutting Red Tape, OECD Publishing, Paris, https://dx.doi.org/10.1787/9789264097261-en.

[3] OECD (2010), Why Is Administrative Simplification So Complicated? : Looking beyond 2010, Cutting Red Tape, OECD Publishing, Paris, https://doi.org/10.1787/9789264089754-en (accessed on 2 August 2017).

[2] OECD (2009), Overcoming Barriers to Administrative Simplification Strategies: Guidance for Policy Makers, OECD, Paris, https://www.oecd.org/regreform/42112628.pdf (accessed on 30 June 2020).

[21] OECD.Stat (n.d.), Government at a Glance - 2019 Edition, OECD, Paris, https://stats.oecd.org/Index.aspx?DataSetCode=GOV.

[27] Urzad Zamowien Publicznych (2020), Legal Frameworks, https://www.uzp.gov.pl/nowe-pzp/regulacje-pzp.

[28] Urzad Zamowien Publicznych (2019), Projekt ustawy - Prawo zamówień publicznych, https://legislacja.rcl.gov.pl/projekt/12320355.

[30] Urzad Zamowien Publicznych (2016), “Regulation of the Minister of Development) of 26 July 2016 on the types of documents which the contracting authority may require from the economic operator in a contract award procedure”, https://www.uzp.gov.pl/__data/assets/pdf_file/0022/35464/Regulation_on_types_of_documents.pdf.

[26] Urzad Zamowien Publicznych (2004), Act of 29 January 2004 - Public Procurement Law, https://www.uzp.gov.pl/__data/assets/pdf_file/0019/40177/Public_Procurement_Law_2018_consolidated.pdf.

[16] Villarreal, G. and J. Pastor (2010), “Successful Practices and Policies to Promote Regulatory Reform and Entrepreneurship at the Sub-national Level”, OECD Working Papers on Public Governance, No. 18, OECD Publishing, Paris, https://dx.doi.org/10.1787/5kmh2r7qpstj-en.

[12] Vitale, C. et al. (2020), “The 2018 edition of the OECD PMR indicators and database: Methodological improvements and policy insights”, OECD Economics Department Working Papers, No. 1604, OECD Publishing, Paris, https://dx.doi.org/10.1787/2cfb622f-en.

Notes

← 1. Digitisation refers to the process of converting physical documents and information into digital formats. On the other hand, digitalisation entails the use of digital tools to improve procedures, streamline processes and transformation systems.

← 2. Currently, the following two main directives, introduced in 2014, govern public procurement in the EU: Directive 2014/24/EU (“classical” directive) and Directive 2014/25/EU (“utilities” directive). In addition to these directives, other specific EU-level rules apply for the defence sector, concessions and remedies. As part of the reform process, member states were required to transpose the EU rules by April 2016.

← 3. See https://miniportal.uzp.gov.pl/.

← 4. The 2021 amendments stipulate that procurement above PLN 50 000 (approximately EUR 12 000) must be published in the national gazette.

Metadata, Legal and Rights

This document, as well as any data and map included herein, are without prejudice to the status of or sovereignty over any territory, to the delimitation of international frontiers and boundaries and to the name of any territory, city or area. Extracts from publications may be subject to additional disclaimers, which are set out in the complete version of the publication, available at the link provided.

© OECD 2021

The use of this work, whether digital or print, is governed by the Terms and Conditions to be found at http://www.oecd.org/termsandconditions.