Discusses the legal requirements for selling to the host government, including whether the government has agreed to abide by the WTO Government Procurement Agreement or is a party to a government procurement chapter in a U.S. FTA. Specifies areas where there are opportunities.
Last Published: 7/26/2019

Selling to government entities in North Macedonia is not an easy process.  North Macedonia has a decentralized public procurement system, with each government entity carrying out its own procurements.

North Macedonia’s lack of transparency, political favoritism, corruption, and mismanagement are historically serious obstacles for companies bidding on public tenders.  Some local and foreign companies reported that some government tenders were clearly written with a specific, politically connected company in mind and that those politically connected firms sometimes tried to deter competitors from bidding.  Businesses also reported late payments by the central and municipal governments for works, goods, and services.  While the European Union’s April 2018 report recommended that member states open accession negotiations with North Macedonia, it also suggested the country needs to do more to prevent irregularities and corruption during the procurement cycle and to ensure a transparent, efficient, and effective public procurement regime.

Addressing these historic obstacles, the reformed Law on Public Procurement entered into force on April 1, 2019.  It regulates public procurements in North Macedonia.  The central government, municipalities, and any entity receiving public funds must follow public procurement procedures outlined in that law.  The law guarantees equal treatment to local and foreign economic operators in public procurement; only a handful of tenders (especially in defense) are restricted to domestic companies.

The law authorizes different types of public procurement procedures: open procedure, restricted procedure, competitive dialogue, negotiated procedure (with or without prior publication of a contract notice), and simplified competitive procedure.  A simple tender, a two-phase tender, a silent auction, or negotiations with three or more potential contractors (one in exceptional cases) must precede an award, and the law mandates the use of electronic auctions.  The award procedure is divided.  There is a simplified procedure for small value procurements valued up to EUR 10,000 or construction projects valued up to EUR 20,000.  A separate, more complex procedure applies to goods valued up to EUR 70,000 and for constructions projects up to EUR 500,000.   The law does not specifically address other project values.

The law mandates that the main criterion for award decisions is the most economically advantageous tender, rather than the lowest bid.  U.S. companies producing higher quality, and initially more expensive, products (e.g., medical equipment) should benefit from this model.  The Public Procurement Bureau within the Ministry of Finance operates the e-procurement system.  Prior registration with the electronic system for public procurement (ESPP) is mandatory to participate in public tenders.  Economic operators can appeal procurement decisions with the State Committee for Appeals of Public Procurement Procedures.

North Macedonia’s public procurement suffers from low competition and annulments of tenders.  Any bidder can contest the bid evaluation process.  The Second Instance Commission reviews prospective tenders to ensure contracting authorities were not reducing competition through technical specifications.  This has made public procurements slower and more expensive for contracting authorities without increasing competition.

Many governments finance public works projects through borrowing from the Multilateral Development Banks.  Please refer to “Project Financing”  Section in “Trade and Project Financing”  for more information. 

Tenders financed by international financial institutions such as the World Bank must be conducted pursuant to the organization’s procurement guidelines.  The U.S. Commercial Service maintains Commercial Liaison Offices in each of the main Multilateral Development Banks, including the World Bank and the European Bank for Reconstruction and Development.  Requests for assistance regarding World Bank and EBRD tendering processes can be addressed to those liaison offices.
North Macedonia is in the process of acceding to the WTO Agreement on Government Procurement (GPA).
 

Prepared by our U.S. Embassies abroad. With its network of 108 offices across the United States and in more than 75 countries, the U.S. Commercial Service of the U.S. Department of Commerce utilizes its global presence and international marketing expertise to help U.S. companies sell their products and services worldwide. Locate the U.S. Commercial Service trade specialist in the U.S. nearest you by visiting http://export.gov/usoffices.


More Information

Macedonia Business to Government Legislation