Corruption and mismanagement are widespread in public procurement and present serious risk for companies. Investors report that bribery is common in public procurement and government projects (ICS 2017). Likewise, favoritism often taints the decisions of government officials when awarding public contracts and licenses (GCR 2017-2018). Small companies and investors operating outside the Technological Industrial Development Zones (TIDZs) report that under the rule of the last government led by the VRMO-DPMNE which has been in power since 2006, public procurement fraud was rife (ICS 2017). They allege that government tenders were awarded to parties linked to the ruling party, that they faced pressure to hire party members, faced retaliation when they were perceived to be supportive of opposition political parties, and payment for government contracts was selectively withheld (ICS 2017). Evidence suggests that the situation remains unchanged and that businesses that cooperated the most with the government routinely won government tenders (HRR 2016). Many contracting authorities do not publish their procurement plans (European Commission 2016), leading to concerns about direct tender awards. Detailed requirements also prevent competition in tendering (European Commission 2016). A quarter of all tenders had only a single bidder (European Commission 2016). The implementation of e-government (ESPP) in managing public procurement has decreased opportunities for corruption (ICS 2017). Over ninety percent of companies say they do not appeal tender awards due to high costs and lack trust in institutions (BTI 2016). Companies are recommended to implement special due diligence procedures to counter the likelihood of encountering corruption in the procurement process.
Macedonia’s Special Prosecutor has alleged that Vladimir Taleski, the mayor of Bitola, was part of a group of municipal officials, school administrators, and transport company employees that embezzled a total of EUR 365,000 by manipulating tenders designated to fund student transportation (NiT 2017). In another case, public outrage followed the allocation of a EUR 2,6 million contract for rubber transportation lines to Feroinvest, a company owned by Deputy Prime Minister Koco Angjusev (MIA, Sept. 2017). Angjusev denies any wrongdoing (MIA, Sept. 2017).