The global public procurement market is currently worth approximately US$13 trillion annually - a large percentage of which remains localized within each contracting institution’s geography. Although global statistics on cross‑border contracting remain comprehensive, there are examples of successful international tender participation that illustrate the potential for companies to expand beyond their domestic markets. 

One area that demonstrates significant openness to international procurement is the construction sector in Bosnia and Herzegovina (BiH). A recently published comparative study titled 'Strategic Entry of Czech Construction Companies into the Bosnian Public Procurement Market: A Comparative Analysis of Legislative Frameworks and Market Conditions' reveals that this BiH sector presents excellent opportunities for foreign construction companies seeking new business. 

Like any market, Bosnia’s construction sector has a broad range of idiosyncrasies, including its transitional economic status, specific procurement procedures, and regulatory complexities. The strategies mentioned in the study can serve as a blueprint for foreign companies aiming to navigate and succeed in international public procurement. 

What makes this research particularly valuable? It dissects the crucial intersection between marketing frameworks, legislative analysis, and practical implementation. For tender-hungry organizations, these insights could mean the difference between bidding blindly and strategically securing contracts. 

Let’s dive right in. 

Overview of Bosnia’s construction market

Bosnia's construction sector is leading the formation of the nation's economic backbone - it represented approximately 5.4% of the country’s GDP as of 2023. With 41,151 workers representing a substantial 7% of BiH's total workforce, this market is both an economic catalyst and a social barometer of sorts - this logic is applicable to transitional economies, since construction activity tends to grow, which is indicative of economic recovery.

In fact, as of December 2024, the Residential Construction Index for completed dwellings (surface area) was reported to be 116.100 compared to the same period in the previous year, indicating a 16.1% increase. 

Another interesting fact about the Bosnian construction market is that it is divided into four interconnected submarkets, which opens an array of possibilities for focused tendering:

  • Construction works: The primary battleground where projects materialize through investor-contractor dynamics. Here, your tender strategy must demonstrate the capacity to deliver across new builds, reconstructions, and maintenance works.
  • Construction materials and tech units: A critical supplier ecosystem connecting producers directly with investors and contractors. Tender applicants with innovative materials or technological solutions can carve specialized niches here.
  • Construction services: Further subdivided into design/consulting and equipment markets. European firms with advanced consulting capabilities hold distinct advantages in this knowledge-intensive space.
  • Real estate: The ultimate endpoint for many construction projects, increasingly influenced by sustainability requirements and EU alignment priorities. 

Tendering tip: Your tender positioning must precisely target which submarket aligns with your core competencies. Generic applications are more likely to fail; market-specific expertise is more likely to win. 

Bosnian SME classification factor

Another interesting fact about the Bosnian construction market is that it is overwhelmingly dominated by small and medium enterprises (SMEs), where nearly 95% hire less than 50 people - this is a valuable insight that can significantly increase your chances of winning tenders if leveraged correctly. 

The classification criteria differences between BiH and EU standards create strategic openings:

  • Micro-enterprises in BiH: Under 5 employees, profits under BAM 500,000 (~€255,000), balance sheet under BAM 250,000
  • Small enterprises: 5-50 employees, profits under BAM 2,000,000 (~€1,022,000), balance sheet under BAM 1,000,000
  • Medium enterprises: 50-250 employees, profits under BAM 8,000,000 (~€4,088,000), balance sheet under BAM 4,000,000

These differences in classification create unique tender opportunities considering their difference from, for example, the EU classification. A "medium" enterprise by EU standards might qualify as "large" in BiH, potentially accessing different tender categories or partnership configurations. 

Tender applicants must therefore strategically position their organizational size classification, particularly when forming consortia or joint ventures. Alignment with the correct classification can significantly improve eligibility for specific tender categories where local capacity gaps exist.

International organizations applying for Bosnian tenders must recognize that these size classifications don't simply categorize businesses - rather, they structure entire procurement frameworks. 

Tendering tip: Your tender success depends on understanding not just what you offer, but how your organizational profile fits BiH's specific market segmentation – particularly the SME classification.

Procurement procedures and the legislative environment in BiH

Bosnia and Herzegovina's procurement system lacks several sophisticated mechanisms that Czech and other EU companies take for granted. Most notably absent? Innovative partnerships.

While the Czech Republic legally supports these collaborative arrangements that are designed to foster scientific and research activities when no existing market solution meets the requirements, BiH's framework simply doesn't accommodate these. 

Similarly, concession procedures - those remunerated contracts where suppliers gain operational rights to the resulting infrastructure - are clearly defined in Czech law but remain nebulous in Bosnia's system. This creates both challenges and strategic opportunities for companies with concession expertise. 

What dominates instead? Open procedures reign supreme in Bosnia, accounting for a striking 71.42% of total procurement value. Negotiated procedures contribute just 11.44%, with other methods making up 17.13%. The market shows remarkably low competition, with an average of just 1.93 bids per tender - a figure that has consistently declined since 2016. 

Regulatory hurdles 

Bosnia's 2014 procurement law introduced important transparency innovations, but significant gaps persist. While largely aligned with EU standards, Bosnia's framework falls short in several critical areas:

  • Incomplete publication requirements - procurement plans aren't published on the central portal, and small-value contracts escape public notice entirely
  • Limited electronic infrastructure - despite recent progress, Bosnia urgently needs a comprehensive and effective system for electronic procurement
  • Evaluation criteria deficiencies - guidance for applying the "most economically advantageous offer" criterion remains underdeveloped.

However, the regulatory environment continues to evolve. A significant amendment in 2022 further aligned BiH's system with EU standards, although differences persist in "contract award criteria, types of procurement procedures, in-house procurements, and changes to bids and contracts". 

Market access for EU companies

Here's the opportunity foreign bidders should seize: EU companies face no restrictions in Bosnia's procurement market. While Bosnian entities cannot reciprocally access Czech tenders, European firms enjoy full participation rights in BiH processes. 

This open-door policy comes amid declining foreign participation - a counterintuitive trend that presents strategic openings for companies willing to navigate the market's complexities. 

Strategic navigation for foreign bidders

For organizations eyeing Bosnia's procurement opportunities, these practical approaches are essential: 

  • Master the procedural landscape – understand which procurement mechanisms are available and which familiar EU procedures (like innovative partnerships) aren't options
  • Leverage electronic systems strategically – Bosnia's e-Procurement platform, launched in 2014, integrates three existing systems, making tender documentation exclusively accessible through the portal
  • Develop transparency strategies – given the system's limitations, proactive communication and relationship-building with contracting authorities becomes doubly important
  • Consider the competition realistically – with over half (51.37%) of procedures receiving only one bid, well-prepared foreign entrants may find less competitive pressure than expected

The regulatory framework may be complex with one main law and 20 sublegal acts, but understanding these distinctive features will create a competitive advantage for organizations ready to navigate Bosnia's procurement opportunities. 

Applying these insights beyond Bosnia's borders

Bosnia's construction procurement landscape offers valuable lessons that transcend geographical boundaries. These insights can be applied strategically across various international markets:

  • Market structure awareness is crucial – understanding how construction submarkets are segmented locally (works, materials, services, real estate) enables precise tender positioning tailored to specific opportunities.
  • Size classification creates strategic advantages – local definitions of micro, small, and medium enterprises often differ significantly from international standards, opening unique consortium and partnership opportunities.
  • Competition analysis reveals hidden opportunities – low bid participation rates (Bosnia averages just 1.93 bids per tender) indicate markets where well-prepared foreign entrants face surprisingly limited competition.
  • Procedural adaptability drives success – recognizing which procurement procedures exist locally versus your home market allows for strategic adaptation rather than the rigid application of familiar approaches.
  • Electronic systems knowledge provides advantages – mastering local e-procurement platforms ensures you won't miss documentation or deadlines that could eliminate less tech-savvy competitors.
  • Relationship development overcomes transparency gaps – where procurement systems lack full transparency, proactive stakeholder engagement becomes a competitive differentiator.
  • Regulatory framework mapping is essential – understanding a market's legal infrastructure (Bosnia's one main law plus 20 sublegal acts) positions your organization to navigate complex requirements while competitors remain confused. 

The bottom line

Bosnia's construction market serves as a great example of the broader international procurement environment. It reveals both challenges and tremendous opportunities for cross-border tendering. The remarkably low competition rate of just 1.93 bids per tender signals an underutilized market ripe for entry by well-prepared foreign companies.

 Success in Bosnia or any international procurement environment demands more than just technical expertise. It requires intelligence: understanding local market structures, navigating size classification advantages, mastering procedural nuances, and building relationships that transcend transparency limitations. 

As the global procurement market continues its US$13 trillion expansion, organizations that adopt these lessons will discover competitive advantages in virtually any environment. The declining foreign participation in Bosnia's tenders represents not a warning but an invitation-revealing space where prepared entrants can thrive while competitors hesitate. 

The future belongs to procurement professionals who recognize that local market peculiarities aren't obstacles – they're strategic openings waiting to be leveraged by those willing to invest in understanding them.