Selling to the Government
The new Law on Public Procurement has been in effect since December 31, 2019. The law seeks to modernize the public procurement system in Montenegro and harmonizes it with international obligations to spur economic growth and improved service. The law prescribes policies for the public procurement of goods and services; introduces greater transparency and integrity into the process; establishes entities to administer the system efficiently; and offers equitable access to government contracts for the private sector. The law applies to all investments financed by the budget, payments guaranteed by the government, or funds secured by loans taken by the government. According to the law, such purchases are made via public tenders published in the Official Gazette. The Public Procurement Directorate (PPD) is responsible for reviewing whether the procurement is done in conformity with the law, while the Public Procurement Commission (within the PPD) is in charge of bidder protection. The law defines the “best offer” as the offer with the lowest price which also complies with the tender’s specifications. Any other criteria must be prescribed in the bidding documents.
While there is a full legal and regulatory infrastructure in place to conduct public procurement, U.S. companies have complained in numerous cases about irregularities in the procurement process at the national level and maintain there is an inability to meaningfully challenge decisions they believe were made erroneously. In multiple cases, the institution offering the tender adjusted the requested specifications for the tender just days before the submission deadline, putting U.S. companies at a significant disadvantage.
Public procurement is conducted jointly by the Public Procurement Directorate, the Ministry of Finance (as the main line ministry for the procurement area), and the State Commission for Control of Public Procurement Procedures in the protection of rights area. The Public Procurement Directorate began operations in 2007 while the State Commission for the Control of Public Procurement Procedures Control was established in 2011. The State Commission makes decisions in the form of written orders and conclusions made at its meetings. The decisions are made by a majority of present members. The State Commission’s Rules of Procedure specify the method for this work. The Administrative Court oversees cases involving public procurement procedures.
The U.S. restored Normal Trade Relations (most-favored nation status) with Montenegro in 2003. This status provides improved access to the U.S. market for goods exported from Montenegro.
Montenegro became the 156th member of World Trade Organization (WTO) in 2011.
U.S. companies bidding on Government tenders may also qualify for U.S. Government advocacy. A unit of the U.S. Commerce Department’s International Trade Administration, the Advocacy Center, coordinates U.S. Government interagency advocacy efforts on behalf of U.S. exporters bidding on public sector contracts with international governments and government agencies. The Advocacy Center works closely with our network of the U.S. Commercial Service worldwide and inter-agency partners to ensure that exporters of U.S. products and services have the best possible chance of winning government contracts. Advocacy assistance can take many forms, but often involves the U.S. Embassy or other U.S. Government agencies expressing support for the U.S. bidders directly to the foreign government. Consult Advocacy for Foreign Government Contracts for additional information.
Financing of Projects
Multilateral Development Banks and Financing Government Sales
Price, payment terms, and financing can be a significant factor in winning a government contract. Many governments finance public works projects through borrowing from the Multilateral Development Banks (MDB). A helpful guide for working with the MDBs is the Trade Finance Guide. The U.S. Department of Commerce’s (USDOC) International Trade Administration (ITA) has a Foreign Commercial Service Officer stationed at each of the five different Multilateral Development Banks (MDBs): the African Development Bank; the Asian Development Bank; the European Bank for Reconstruction and Development; the Inter-American Development Bank; and the World Bank. Learn more by contacting the: Commercial Liaison Office to the European Bank for Reconstruction and Development
U.S. International Development Finance Corporation (USDFC) and Other Investment Insurance Programs
Montenegro, through the State Union of Serbia and Montenegro, became eligible for OPIC programs in July 2001. Authorized in 2018 by the BUILD Act, USDFC was formed on 20 December 2019 by merging the Overseas Private Investment Corporation (OPIC) with the Development Credit Authority (DCA) of the United States Agency for International Development (USAID). Montenegro remains eligible for USDFC programs. Prior to the establishment of the USDFC, OPIC activities in Montenegro included: insurance for investors against political risk, expropriation of assets, damages due to political violence and currency convertibility, and insurance coverage for certain contracting, exporting, licensing, and leasing transactions. The USDFC has not concluded any deals in Montenegro so far. More information on these programs can be found on USDFC’s website https://www.dfc.gov/.
Trade & Development Agency (TDA)
TDA is an independent U.S. government agency which promotes U.S. exports for major development projects. TDA funds feasibility studies, consultants, training programs and other project planning services related to U.S. exports. Contracts funded by TDA grants must be awarded to U.S. companies. U.S. involvement in project planning helps position potential U.S. suppliers at the project implementation stage.
In May 2006, TDA awarded a grant to the Ministry of Environmental and Physical Planning (now the Ministry of Ecology, Spatial Planning and Urbanism) for the creation of a revolving investment fund for water projects. The value of the grant was $463,950. TDA has been active in Montenegro working on evaluations of potential projects in the energy, transportation, and telecommunications (IT) sectors.
The Commercial Service maintains Commercial Liaison Offices in each of the main Multilateral Development Banks, including the European Bank for Reconstruction and Development and the World Bank. These institutions lend billions of dollars in developing countries on projects aimed at accelerating economic growth and social development by reducing poverty and inequality, improving health and education, and advancing infrastructure development. The Commercial Liaison Offices help American businesses learn how to get involved in bank-funded projects, and advocate on behalf of American bidders. Learn more by contacting the Commercial Liaison Offices to the European Bank for Reconstruction and Development and the World Bank.