1. Drivers and barriers to public procurement in Bratislava
This chapter depicts Bratislava’s territorial and economic profile through a snapshot of its territorial organisation, demography and economic trends. It reviews the city’s role in providing public services and provides an overview of the institutional and regulatory public procurement framework in the city. It also looks at the role of citizens in budgetary and procurement choices for better services. The chapter concludes with a call for rethinking the role of public procurement in the city’s new strategic vision.
1.1.1. Snapshot of Bratislava’s territorial organisation, demography and economic trends
The city of Bratislava is the capital of the Slovak Republic. Bratislava is divided administratively into 17 boroughs within five districts: Bratislava I (city centre), Bratislava II (eastern sector), Bratislava III (northeastern sector), Bratislava IV (western and northern sectors) and Bratislava V (southern sector). As of 2020, Bratislava’s population counts 437 726 inhabitants (Statistical Office of the Slovak Republic, 2021[1]). Bratislava is the highest populated city in the Slovak Republic when considering its functional urban area (FUA), as reported in 2019 (Eurostat, 2021[2]). In 2017, for instance, the city counted approximately 140 000 daily commuters (OECD, 2020[3]).
The FUA of Bratislava is composed of the core city (hereinafter called “the city”) and less densely populated local units that surround it and are part of the city’s labour market (called “commuting zone”). As described in Figure 1.1, in 2019 the metropolitan area of Bratislava itself was home to 12% of the national population (Eurostat, 2021[2]). The concept of an FUA can guide city governments in their procurement decisions when they plan infrastructure, for example, when it comes to transportation, housing, schools and cultural and recreational spaces. Co-ordination across municipal boundaries, including on public investment and public procurement, is critical because decisions in one municipality can have consequences for outcomes in other municipalities (OECD, forthcoming[4]). Strong co-operation is therefore required between the city of Bratislava, surrounding municipalities and the regional and national levels, to provide better services to citizens and businesses, which will be discussed in the following sections.
Source: Eurostat (2021[5]), Population on 1 January by Age Groups and Sex - Functional Urban Areas, http://appsso.eurostat.ec.europa.eu/nui/show.do?dataset=urb_lpop1&lang=en.
The metropolitan area of Bratislava accounts for 19% of the national gross domestic product (GDP) in 2018. Between 2000 and 2018, it generated 21% of the national GDP growth. Bratislava is among the top third metropolitan areas in the OECD in terms of GDP per capita, ranking 130 out of 490 metropolitan areas in 2018 (OECD.Stat, 2021[6]). GDP per capita in Bratislava is above the average of OECD metropolitan areas, lower than in Prague (Czech Republic) and Vienna (Austria) metropolitan areas but higher than in Budapest (Hungary). With a GDP per capita value that is 60% higher than that of the country, Bratislava is among the richest capital metropolitan areas in the OECD, relative to the overall country. The city ranks among the top 28% of OECD metropolitan areas of more than 250 000 inhabitants in terms of GDP per capita growth since 2000 (OECD, 2020[3]). GDP per capita has increased by 1.7% per year between 2001 and 2018 (OECD, 2020[3]) (Figure 1.2).
Source: OECD.Stat (2021[6]), OECD Metropolitan (database), https://stats.oecd.org/Index.aspx?Datasetcode=CITIES.
1.1.2. The key role of Bratislava in the provision of public services
Decentralisation reforms introduced in 2001-02 and throughout 2005 in the Slovak Republic increased the competencies and resources of its subnational governments, including municipalities. Municipalities have significant responsibilities and competencies in urban planning and local public services such as social assistance, housing, environment, primary schools and recreation. Their responsibilities are divided between own competencies and competencies devolved by the central government. Table 1.1 lists services provided by the central government, regions and municipalities. The Slovak Republic has a decentralised governance system based on a two-tier system of subnational government. The status of “city” is granted by the parliament to municipalities that are an administrative, economic and cultural centre providing public services to neighbouring municipalities. These “cities” have, however, the same responsibilities as other municipalities.
The municipal level (2 927 municipalities) includes cities (mesto) (141 municipalities), rural municipalities (2 744 municipalities), city districts in Bratislava (17 districts) and Košice (22 districts), as well as 3 military districts (OECD/UCLG, 2016[7]; Statistical Office of Slovak Republic, 2021[8]). City districts in the cities of Bratislava and Košice also have a “municipality” status (although they are contained within a municipality) and are responsible for issues such as urban planning, local road maintenance and ordinances, budget, park maintenance and public safety (OECD/UCLG, 2019[9]). Within this broader distribution of responsibilities, each level of government is responsible for its own procurement operations to fulfil its responsibilities. There is therefore a need to have a capable procurement workforce at all levels of governments, including at the local level.
Transport services
The provision of public transport is one of the most prioritised policy areas in Bratislava. The public transport network in the city is the largest in the Slovak Republic. The transport system plays a critical role in making parts of the city viable places to build homes and create jobs (OECD, 2020[10]) and to provide access to residents commuting into the city from the surrounding areas (commuting flows). Although the city aims to improve the experience of public transport users, it still faces three main challenges to extend its network and improve mobility. The first challenge relates to the expansion of the tram network, which was put to a halt in the 1980s as Bratislava started to build a metro line but suspended its construction due to feasibility challenges. The second challenge is the lack of capacity of the transport market. According to Bratislava, there are only two engineering companies capable of working on tram extension in the Slovak Republic. They have not been sufficient to absorb the work in Bratislava due to their size and the resources available. The third challenge is a lack of budget, which could result in unfinished infrastructure projects. The procurement volume related to public transport and mobility accounted for around EUR 79 million in 2020. Bratislava is planning an additional EUR 75 million of procurement for the tram line in 2021. However, the transport infrastructure is mainly financed by EU funding, while maintenance is financed by tax revenues generated by the city transport company. To advance procurement processes, the city’s department of transport, which is mainly in charge of developing policies, setting priorities and securing infrastructure (e.g. bus stops), could work closely with the city-owned company (Dopravný podnik Bratislava), which is in charge of the transport system and provides three types of transport services (trams, buses and trolleybuses). A good understanding of markets is essential if contracting authorities are to develop more realistic and effective tender specifications and provide vendors with a better understanding of public sector needs (OECD, 2019[11]).
Urban planning and social protection
Housing and social protection are two other areas prioritised by the government. The total expenditure of Bratislava on social affairs and services procured in 2020 was around EUR 20 million. However, there is a need for more and better housing and social services, especially for vulnerable populations. For instance, the lack of available building plots, slow permit processes and the price of real estate have steered building development towards the rural suburbs. In addition to price issues, housing expansion is causing challenges for the city to provide services without expanding the infrastructure capacity, including waste management, schools, services for the elderly, as well as mobility and transport infrastructure. Improving land use, spatial planning and housing services can support Bratislava in advancing its inclusion agenda. For example, the city is becoming a leader in design contest procedures within the Slovak Republic: it launched half of the 16 design contest procedures that have been published in the Slovak Republic since 2020. These contests aimed at designing projects for the reconstruction and improvement of specific public urban areas. Bratislava could increase efficiency and oversee the implementation of urban planning and social protection policies and their application to wider procurement activities by integrating the different policies and using collaborative procurement groups.
1.1.3. The institutional and regulatory framework for public procurement in Bratislava
Bratislava’s city government is divided into 13 departments, with a special unit addressing cross-cutting areas. The departments are responsible for organising spatial planning, guiding urban development, protecting the environment, enhancing well-being and social inclusion, as well as providing services related to transport, housing, energy, culture, waste and water management, and air quality. The city has created the Implementation Unit, managed by the mayor’s advisors, to advance horizontal priorities, including innovation, mobility, parking and social, green and sustainable policies. However, this unit was recently transferred to the information technology (IT) department and the budget and strategies in place are still following a sectoral approach. To close this gap, the city also created the Metropolitan Institute, which is in charge of working with all departments to align sectoral planning tools and to develop the city’s overall strategy.
Public procurement activities are performed within the different departments of the city. Even though there is a specific procurement department (PD) within the management department (1 of the 13 departments of the city), it is not seen as a cross-cutting means to implement the strategic plan of the city. Considering that each department is in charge of its own procurement processes, the PD is mostly perceived as an administrative department merely in charge of supervising procurement procedures. Putting in place a more effective cross-cutting organisational structure to advance public procurement in Bratislava could therefore help improve the efficiency and delivery of services to citizens.
To enhance the strategic role of public procurement in the organisational structure of the city, it is key to map the variety of stakeholders involved in procurement activities at the city level. Seven main stakeholders were identified (see Figure 1.3). Each of these stakeholders have a specific role:
Officials from the PD: They are in charge of developing the tendering procedure and preparing the administrative documents. In 2021, there are 12 procurement experts in this department. According to the city of Bratislava, this number will increase given the needs aggregation strategy that the city is aiming to implement. The turnover rate in the PD has been relatively high in the last six years, which saw six consecutive team leaders. Since January 2021, the city PD was reorganised by introducing two units. This change aims at speeding up procurement processes, as two additional managers will contribute to reviewing those processes.
Subject matter experts: They work in the different departments of the city and they are in charge of developing technical specifications and responsible for contract management (requiring areas).
Internal controllers: They have the authority to control all public procurement procedures of the city, including below threshold procedures.
Mayor and mayor’s office: They sign contracts and decide on the adoption of new public procurement directives.
Members of the pravidelna porada primatora, i.e. members of a regular meeting with the mayor, who serve as an advisory body to the mayor: They are in charge of approving projects and procurement activities that were not initially planned.
Officials from the legal affairs department: They are in charge of reviewing the contracts.
Officials from the budget sub-department (within the department of finance): They are in charge of approving the spending and verifying coherence between needs, the estimated value of the contract and the availability of budgets.
In addition, for the provision of various public services, Bratislava has an ownership interest in several companies that provide services and ensure the implementation of certain policies (municipal enterprise), such as transport, city parking, water and sewage, and waste management services. The City Business Strategy guides these companies. Each of them is responsible for its procurement operations under the supervision of the city and developed its own procurement directives. The Municipal Business Administration Department is leading the co-operation with companies and is working to increase the performance and efficiency of municipal companies and their management. The department has established two different approaches. The first relates to monitoring the management of municipal enterprises. In 2020, companies had to provide regular financial reporting to allow the city to monitor how companies managed their finances and procurement, and whether they complied with the financial plan approved by the city in 2019. The results of this monitoring demonstrated a need to improve the management capacity of municipal companies to increase the quality of public service delivery and spending, and to improve transparency. The second approach aims to improve business management and to utilise synergies with other public services. The city aims to streamline the procurement procedures and provide a better overview and control over public expenditure across companies. Moving forward, the PD could map all stakeholders in charge of procuring services and goods and provide guidance on how other departments could co-ordinate their procurement processes with city companies’ procurement. As the city plans to establish a holding with all municipal companies in the future, this mapping of stakeholders involved in procurement and the integration of city companies could contribute to the objectives of the new city strategy discussed in the next section.
The city of Bratislava’s procurement operations are ruled by the national public procurement framework derived from the 2014 European public procurement directives. In addition to the Public Procurement Act (PPA), Bratislava has also developed internal directives on public procurement. The current internal directives were updated in 2018. Bratislava’s PD is in the process of developing new directives aiming at improving the procurement process and enhancing the efficiency of the system. The draft directives will reflect systematic procedures covering the whole procurement cycle from needs analysis to the end of the contract (see more details in section 2.1.1). The new directives could play an important role in supporting Bratislava achieving its strategic priorities such as smarter, greener and more inclusive growth.
1.1.4. Furthering citizen engagement in budgetary and procurement choices for better services
Public procurement involves the use of public funds that come from taxpayers’ money. Therefore, well-governed public procurement can and must play a major role in fostering public sector efficiency and establishing citizens’ trust (OECD, 2020[12]). In recent years, civil society participation in the public procurement system has been a critical element in enhancing efficiency, transparency, integrity and accountability in different countries and at different levels of government (OECD, 2020[12]). Compared to the national level, local governments are the closest level of government to citizens, which enables them to implement effective mechanisms to facilitate the participation of citizens and civil society organisations in the procurement system. Those mechanisms can take different forms: i) consultations for reforming the public procurement system; ii) oversight of public procurement spending; and iii) consultations on citizens’ needs/procurement plans (OECD, 2020[12]).
To enable consultation on citizens’ needs, different mechanisms can be used, such as the organisation of public events and participatory budgeting processes (OECD, 2019[13]). Participatory budgeting processes, for instance, allow for assessing citizens’ needs and priorities. They are implemented mainly by subnational governments to empower citizens to vote on local public works projects. Many cities across OECD and non-OECD countries implemented such initiatives, including Lisbon (Portugal), Paris (France), Peñalolén (Chile) and Porto Alegre (Brazil). There are also some examples of participatory budgeting implemented by other cities in the Slovak Republic. For instance, the cities of Poltar and Trnava introduced the concept of participatory budgeting, where citizens are co-creating the investment budget for the city. Up until now, the city of Bratislava did not implement participatory budgeting processes. However, some of its city districts with budget autonomy have implemented such processes for a small share of their budget, ranging between EUR 20 000 and EUR 50 000. Bratislava could consider involving citizens in budgetary choices.
In the city of Bratislava, the most common way of collecting information on citizens’ needs is the regular exchange with the members of the municipal assembly. The city also organises events regarding the design of the public space, where they ask citizens to provide feedback. According to the PD, any interested party, including citizens, can send specific requests via the webpage of the city or a smartphone application and the relevant department has an obligation to provide a response. Elected representatives can define their ad hoc priorities and implement them by using a small allocated budget. However, this kind of practice is very limited and does not specifically aim at assessing citizens’ needs.
Bratislava has made a substantial investment in digital services in the last few years but without much success and impact on citizens. In order to tackle this challenge, the innovation department has been moved to the IT department. Furthermore, the city is implementing an open data portal, which is providing different types of information to citizens, enabling them to oversee municipal public spending. However, as described in section 2.5.1, the portal includes only past data and does not allow for a timely oversight of public spending and procurement activities. The city of Bratislava could make its portal interactive to advance its engagement with citizens by better understanding their needs and involving them in procurement processes. This could be done not only by providing information for monitoring public spending but also through surveys, consultations on project proposals, etc.
1.2.1. On the path to a new city strategy for Bratislava in the COVID-19 context
Taking stock of the current strategy
The strategy currently in place in Bratislava was developed for the 2010-20 period under the mandate of the former mayor. The strategy focused on five specific policy goals: i) the role of Bratislava as the centre of the metropolitan region; ii) becoming a knowledge-based economy; iii) quality of life and human resources; iv) quality of the environment and urban spaces; and v) mobility and technical infrastructure. As is the case in many cities, the strategy developed by Bratislava did not include any specific mention of the role of public procurement in achieving the city’s objectives.
Although there was no measurement framework or any set of indicators to monitor and evaluate the implementation of the strategy, the city was able to track preliminary progress based on four criteria (whether the goal was completely achieved, partially achieved, not achieved or there is no data/no competencies). Monitoring the implementation of the city strategy will be key to ensure that it achieves the desired objectives, and identify challenges and adequate mitigation measures. Bratislava could develop specific, measurable, comparable and timely key performance indicators (KPIs) to evaluate the implementation of its forthcoming strategy. Some of the indicators could be related to the procurement operations of the city (see section 2.3). In the city of Portland, United States (US), for example, the Sustainable Procurement Programme tracks KPIs at the department level to facilitate feedback to bureaux on sustainable procurement performance (City of Portland, 2018[14]). In addition, Bratislava could develop a dashboard on the progress made in the implementation of the strategy and could publish it on line to strengthen stakeholders’ engagement.
Taking stock of the COVID-19 outbreak
Necessary actions to fight the pandemic increased the pressure on local spending and procurement procedures in Bratislava. For instance, the city launched the construction of a quarantine town with the support of professional, medical and social staff that served 4 000 homeless people just after the pandemic outbreak. In addition, procurement and infrastructure delivery will play a decisive and strategic role in wider governmental responses for the post-crisis recovery (OECD, 2020[15]). According to the city of Bratislava, it is estimated that the COVID-19 pandemic caused direct and indirect losses of more than EUR 25 million in the revenues of the city and its organisations during 2020. Despite the critical macro-economic situation linked to the crisis, Bratislava’s city council approved the budget for 2021-23 in December 2020, with the main objective to advance the city’s projects, especially in the areas of transport, public spaces and the environment. The majority of these projects will be spent through public procurement operations.
During the initial outbreak, public entities from different levels of government acknowledged the strategic role played by public procurement. COVID-19 has presented all levels of governments with unprecedented challenges in ensuring not only the health of their citizens but also public service continuity (OECD, 2020[16]). Based on the information provided by the city of Bratislava, in 2020, around EUR 1 million was allocated to the procurement of goods, services and infrastructures dedicated to the COVID-19 pandemic (e.g. procurement of masks, gloves, antigen tests and the construction of the quarantine town). Bratislava aims to use its recovery efforts and its new strategy to address long-term challenges, including housing shortages, imbalances in the labour market and environmental pressures. In this respect, Bratislava could spell out the strategic role that public procurement could play in achieving an inclusive, sustainable and smart recovery in its new strategy.
From taking stock to looking forward: The new city strategy
The preliminary evaluation of the current strategy has been used to establish a set of short-, medium- and long-term priorities to develop the new city strategy. The city did not develop a specific COVID-19 recovery strategy. However, due to the COVID-19 pandemic, the city of Bratislava had to postpone the launch of the new strategy and redefined short-term priorities to reallocate the budget to emergency responses and recovery and stimulus measures (Table 1.2). The new city strategy (2030) aims to enhance planning and guide future investment needs to improve the quality of life of its citizens. The Metropolitan Institute is in charge of preparing the new city strategy and a related ten-year plan for investments to respond to the urban planning gaps, such as urban deprivation, inequalities in housing, transport, education, health and employment. The city could consider the role of public procurement to implement both the new strategy and the long-term plan. This would be in line with the OECD Principles on Urban Policy (OECD, 2019[17]), welcomed by ministers of OECD countries in March 2019, which underline that public procurement can help cities prepare themselves better for the future.
The long-term plan will identify priorities related to economic development, the administrative structure, the environment, mobility, technical infrastructure, sport, culture and urban development for co-ordinated multi-sectoral planning. Although the city’s departments are involved in the process to provide an integrated perspective and prioritise investments, Bratislava does not have a long-lasting history of participatory planning tools to involve districts and citizens. The Metropolitan Institute could use its new strategy to promote an integrated and whole-of-government approach by engaging not only the city departments but also the districts and citizens in the planning process. For example, the metropolitan city of Busan (Korea) has encouraged citizen participation in land use planning and urban regeneration projects (OECD, 2019[18]).
1.2.2. Strengthening prioritisation and planning for efficient procurement operations
Strategic planning is one of the main challenges in the city of Bratislava as policy makers are facing trade-offs between short- and medium-term issues. In particular, the city faces challenges regarding co-ordination across departments and with other stakeholders. With the COVID-19 outbreak, the need to strengthen planning and co-ordination among different departments became even more urgent. The pandemic did not only affect the budget of the city but it also jeopardised some of the planned projects and priorities. For the 2021 budget, the city had to review the selection of projects based on the new priorities related to COVID-19. The budgeting process started in the middle of the year 2020 when the finance department collected the needs of the different departments. The finance department requested detailed information from the different departments to prepare the budget (e.g. description of the project, timeline, tentative budget, etc.), translating the needs into operational costs and investments. Strategic planning translates into procurement plans, which provide city officials involved in procurement activities with a 3-years roadmap and help the market understand the needs of the city. However, only 40% of the approved procurement plans on average are executed. The city could therefore take actions to improve the execution of procurement plans. Such actions will also require vertical and horizontal co-ordination to implement the city strategy.
While needs usually exceed the available resources, entities have to set clear criteria to prioritise the different projects. Since the 2008 reform of fiscal decentralisation in the Slovak Republic, Bratislava strongly depends on EU funding. For the programming period 2013-20, the EU finances half of the city’s investment in infrastructure, while 45% comes from the state budget and 5% from the city budget. For the new programming period (2021-27), 40% of Bratislava’s infrastructure investment will rely on EU funding. The majority of the municipal budget is spent on mandatory expenditures and the priorities mentioned in the city strategy such as transport. However, the rest is spent based on political decisions. For instance, each member of the city council can identify an important project on a small scale and receive the corresponding budget to implement it without following any particular city project or programme. In this context, in 2021, the city established an investment committee that uses specific indicators to prioritise projects. This kind of committee exists in many cities such as London (United Kingdom) and Sacramento, US, as described in Box 1.1. The establishment of such an investment committee in Bratislava could help reinforce accountability and trust in the city government.
In 2019, the city of Sacramento, California, in the US created an Inclusive Economic and Community Development Investment Committee (IECDIC). The role of the IECDIC is to ensure that city investments are directed towards economic development, job growth and create opportunities for all of the city’s residents, including the most vulnerable.
The IECDIC provides the City Manager’s Office with advice on the development and review of projects, programmes and policies.
The committee meets regularly, on the first Monday of every month. The meetings are open to the public and the agenda is systematically published on the city of Sacramento’s website. During these meetings, the IECDIC discusses various topics such as:
1. The Inclusive Economic Development Strategy and Action Plan.
2. Innovation programmes and projects (e.g. digital inclusion in Sacramento, preparing the ground for start-ups)
The IECDIC can also make non-binding recommendations to the City Manager.
Its work contributes to the prioritisation of city projects and empowers citizens through the organisation of monthly meetings open to the public.
Source: City of Sacramento (2019[19]), Inclusive Economic and Community Development Investment Committee (IECDIC), https://www.cityofsacramento.org/Economic-Development/Inclusive-Economic-Development/Investment-Committee.
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