by Maxim Nefyodov First Deputy /Minister of Economic Development and Trade in Ukraine
ProZorro’s succesfull show case may offer GPA members an effective solution to reducing barriers in international procurement
The world is now used to hearing disturbing news from Ukraine. However, today we are pleased to have something positive to share. Ukraine has developed an electronic system ProZorro – an effective modern solution to the important issue of corruption and inefficiency in public procurement. This solution has now become an example for Europe and rest of the world and many are now looking to follow our example and implement similar systems in their own countries. But we are also not standing still and ready to make a further step and offer the world another modern solution that will help bring international public procurement to a new level of efficiency.
There has been much attention to Ukraine in recent years. We are more than happy to share our problems and ask for help. But we are very happy that we also have occasions such as this, when we can share our success, that is not only beneficial to our neighbors, but also to World’s leading nations.
As in its approach to reforming of what traditionally has been a very corrupt area, as well as if taking the particular instrument separately, Ukraine’s showcase and experience is particularly revealing. The efforts resulted in world recognition with two prestigious international awards awarded to PoZorro team last year: World Procurement Awards in London for best public sector solution, and Open Government Award in Paris for the best open data solution. In addition, ProZorro is recommended by EBRD as a public procurement reform case study.
Still, international recognition is only the end result validating the system effectiveness. The use of the system and open data allow us to significantly improve the quality of public procurements. Here are just some of the data and results: the number of procedures in the system is now over 500 million, planed volume of procurement is over UAH 350 billion (approx. USD 13 billion). Among the procurers are ministries, departments and major state-owned companies, such as Energoatom and Ukrgazvydobuvannya – it’s budget only for special equipment in 2016 was about 28 mln USD . All relevant procurement information is open to all and can be monitored using an advanced analytics module, which is also available in English:
In addition, Ukraine has become a member of WTO’s Government Procurement Agreement (GPA) in end of last year. Thus, in compliance with GPA requirements, the tender documentation for large purchases in ProZorro is now also available in the English language.
Such a transparent approach has shown to be attractive to foreign suppliers. At end of December 2016, ProZorro had 30 active procedures with foreign entities participating, mainly from Romania, Germany, Lithuania, Estonia, Poland, Canada and the United States. Their chances of winning are usually very good. For example, only a single state owned company – Energoatom has had several successful tenders with foreign companies winning. In the tender for the supply of pump action aggregators, the winner was an Italian supplier TERMOMECCANICA POMPE, and in the tender for the purchase of generator spare parts – the Polish DIMIDA SPÓŁKA Z OGRANICZONĄ ODPOWIEDZIALNOŚCIĄ was the winner. Furthermore, world-renowned retailer METRO Cash & Carry, takes active participation in public procurement auctions via ProZorro and has already won a number of contracts.
Ukraine procures a wide range of goods and services: from sophisticated mining equipment, hospital supplies and furniture, to clothing and food. The annual procurement volume is over UAH 300 billion or approx. USD 11 billion. This is a vast new market for foreign companies.
We have also launched GPAinUA project office with an aim to assist Ukrainian companies in international public procurement via GPA and vise-versa, assist foreign companies in their first venture into ProZorro and Ukraine’s public procurement. Office experts help foreign companies to deal with the use of electronic system, advice on procedures and the tender requirements. All of this support is provided free of charge.
Why do we do this? Because we believe that creating an environment for fair competition is the only path to development. Open market with ease of access, equal rules for all and data transparency is the path to procurement effectiveness.
Reform of public procurement, changing the rules of the game, transparency and convenience of ProZorro system – all this opens up immense new opportunities for suppliers. Moreover, ProZorro experience can be invaluable to other countries that are planning to make a move to e-procurement. We are open and willing to share our successful experience. And while there is shortage of good news from Ukraine, sharing this positive experience is especially satisfying to us.
The next GPA committee meeting is scheduled for February of this year. For this, we have prepared a proposal. A solution that will facilitate companies’ access to the GPA market, as well as collect the full procurement data in the framework of GPA. We propose to create a single portal that will aggregate information on GPA member tenders, as well as data and analysis on these tenders. This is the basic principles of this pilot project, its objectives and the key elements of which, we will present at the committee meeting. We look forward to support from our partners. For our part, we are ready to use all ProZorro’s available resources and expertise to ensure the project’s development.
We have a living success story. We are open to share this experience and expertise. Come and join us.
Maxim Nefyodov
First Deputy /Minister of Economic Development and Trade in Ukraine