Selling to the Government
The procedure that state agencies and state-controlled companies follow for purchases is prescribed by the Public Procurement Act. Public tenders are the most frequently used form of procurement. In most cases, foreign and domestic bidders have the same rights. In public tenders funded by EU funds, the requirement usually mandates only EU origin goods or services. However, U.S.-owned companies can qualify if they have a representative office somewhere in the EU.
The public procurement process in Slovenia can be a frustrating experience for U.S. and other foreign companies. The most frequent complaints include insufficient time to prepare bids, extremely strict language requirements, lack of transparency as to the decision-making authority on tenders, dismissal of bids as non-compliant on grounds not substantive to a company’s ability to provide goods or perform services, and an appeal process insufficiently protected from political influence or even corruption.
The U.S. and the EU are signatories to the World Trade Organization’s (WTO) Government Procurement Agreement (GPA), which grants access to most public supplies and services and some work contracts published by national procurement authorities of the countries that are parties to the Agreement. In practice, this means that U.S.-based companies are eligible to bid on supplies and services contracts from European public contracting authorities above the agreed thresholds.
U.S. companies bidding on foreign government tenders may also qualify for U.S. Government advocacy. Within 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 in competition with foreign firms in foreign government projects or procurement opportunities. 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 agency officials expressing support for the U.S. exporters directly to the foreign government. Consult the Advocacy Center’s program web page on trade.gov for additional information.
Financing of Projects
Private capital investment in public infrastructure projects is rare, and project financing as a means of financing larger scale (mostly construction) projects is developing slowly in Slovenia, which lags behind the EU average in terms of project financing for public infrastructure projects. Public infrastructure projects are generally accompanied by state financial guarantees to the contractors, which in part helps explain Slovenia’s underdeveloped project financing system. Slovenia’s lack of public private partnerships, traditional drivers of project financing in other countries, also hinders the development of project financing for public infrastructure projects.
Project financing for the private sector is somewhat more evolved, with Slovenian banks routinely offering project financing services for construction and development projects. Under such financing, banks generally offer up to 70 percent financing, with 30 percent of the project cost typically required from the investor’s own sources. Banks also offer, and in some cases require, advisory services pertaining to Slovenian regulations on building and real estate sales as well as ownership transfers of mortgaged real estate. To ensure transparency, banks often require that investors establish a separate company and bank account to manage the project, through which all cash flows pertaining to the project are funneled. As collateral, banks usually require a mortgage on any real estate under development.