Slovenia’s fragmented procurement needs reform, OECD pushes for collaboration drive

Public procurement in Slovenia, as examined by the OECD Public Governance Directorate in co-operation with the Ministry of Public Administration of Slovenia and with support from the European Commission, represents a crucial economic function that accounts for 14.2% of GDP and nearly 28% of total government expenditure. Despite this significance, the system is deeply fragmented. Around 3,000 contracting authorities operate across the country, many of them small municipalities or public entities with limited administrative capacity. According to national procurement portals e-JN and e-Narocanje, the problem is stark: in 2024, almost two-thirds of authorities did not award a single contract, while more than four in five issued no more than five contracts. Over the period 2020 to 2024, about 41% of authorities did not award a contract at all. This lack of activity undermines efficiency, inflates costs, and reduces the state's ability to use procurement as a strategic tool to pursue sustainability, innovation, or inclusive growth.

Collaboration as a Solution

The OECD analysis underscores that collaboration is the most effective way for Slovenia to overcome its procurement weaknesses. In many OECD countries, collaborative models, whether through centralised purchasing bodies, joint tenders, co-ordinated procurement, or communities of practice, have produced measurable benefits, from lowering prices and reducing duplication to improving institutional learning. Slovenia, however, has not embraced these practices at scale. Between 2020 and 2024, joint procurement represented just 4.1% of contracts by number and 9.4% by value. In 2024, only five percent of procurement procedures above EU thresholds were conducted jointly, compared with an EU benchmark of ten percent and with far higher rates in Denmark, Finland, and Estonia. These figures highlight the distance Slovenia must travel to unlock the full benefits of collaboration.

Pooling demand not only generates economies of scale but also makes tenders more attractive to suppliers, driving up competition and improving value for money. Shared procurement can also reduce transaction costs by cutting duplication of procedures. Equally important, knowledge-sharing platforms allow smaller municipalities to learn from better-resourced peers, building confidence and professional capacity. Yet collaboration is not without its hurdles. It requires additional time for coordination, compromises on technical specifications, and risks of market concentration that could sideline small and medium enterprises. Despite these challenges, the OECD stresses that good governance and experience reduce risks, making collaboration a net gain for the public sector.

Four Models of Collaboration

The report outlines four models that Slovenia can consider. Centralised purchasing, carried out through a permanent central body, is already in place in the form of the Ministry of Public Administration, which serves as Slovenia's sole central purchasing body. It manages framework agreements across 17 mandatory categories for central government entities, including IT, vehicles, medicines, energy, and office supplies. While central government agencies must use these agreements, municipalities and schools are not obliged to participate, and uptake remains modest.

Joint procurement, in contrast, involves two or more contracting authorities joining forces for a single tender. This can take the form of full joint procurement, where all participants buy together, or piggy-backing, where one authority runs the tender but allows others to join later under the same conditions. Co-ordinated procurement is less binding, with authorities collaborating in the pre-tender phase, such as market analysis or drafting common specifications, before launching their own procedures. Finally, communities of practice act as knowledge-sharing platforms, enabling procurement officials to exchange templates, experiences, and guidance. These networks are already commonplace in other OECD countries and at the EU level, but Slovenia has yet to develop one domestically.

Immediate Priorities for Slovenia

Recognising that Slovenia's procurement landscape is not yet ready for complex collaborative practices, the OECD identifies two immediate priorities. The first is expanding the scope of centralised purchasing. Spending analysis shows that construction dominates municipal budgets, while food and beverages account for nearly nine percent of procurement in schools, hospitals, and care institutions. This category, currently fragmented across hundreds of small buyers, is an ideal candidate for centralised purchasing. The Chamber of Commerce has already developed a catalogue of food products that could be used as a foundation for such framework agreements. Enhancing the national e-procurement system to differentiate between central and subnational contracting authorities would also enable more targeted strategies.

The second priority is establishing communities of practice to help municipalities and smaller entities share knowledge and reduce isolation. Pilot initiatives could begin with municipalities that have similar procurement profiles or thematic clusters, such as green public procurement. Over time, such communities could scale up to involve broader groups, acting as incubators for more advanced collaborative mechanisms. Successful examples elsewhere provide guidance: Denmark's municipal purchasing communities, Finland's KEINO change agents, and Lithuania's performance scoreboards all demonstrate how structured collaboration can raise efficiency, foster trust, and professionalise procurement.

From Fragmentation to Transformation

The OECD's overall message is that Slovenia must shift its procurement culture from fragmentation to co-operation. Centralised purchasing and communities of practice are the stepping stones that can generate quick wins, build local capacity, and establish the trust necessary for more sophisticated collaborative models. While joint and coordinated procurement should remain long-term goals, immediate gains are possible through expanding framework agreements to critical categories like food, medicines, and IT services, while simultaneously creating forums for municipalities to exchange expertise.

If implemented effectively, these reforms could transform procurement from a burdensome administrative exercise into a strategic driver of value for money, sustainability, and innovation. By investing in collaboration, Slovenia would not only save costs and improve efficiency but also strengthen public governance, enhance competition, and bolster citizen trust in institutions. The OECD concludes that Slovenia's journey begins with modest but crucial steps: extending the reach of its central purchasing body and creating vibrant communities of practice. These initiatives, once established, will prepare the ground for a more modern, integrated, and resilient procurement system that supports the country's long-term economic and social objectives.