We, public consultants and journalists, are sometimes perceived as dangerous cops, particularly in procurement. We expose overpayments and different tender violations, first approaching procuring entities, and after they don’t reply, we escalate the difficulty to the State Audit Service or regulation enforcement and even report it within the media. For some motive, this a part of our job tends to form public notion of our mission. We additionally spotlight systemic issues and push again towards populist choices made by the authorities.
Apparently, few keep in mind that a few of Ukraine’s coolest reforms have resulted from collaboration between civil society and the state. Prozorro and public procurement reform usually, like many others, have been grassroots initiatives pushed by civic actors and companies. Sure, the state supported them—however solely after that did, they evolve into top-of-the-line public e-procurement programs on the planet.
Civil society is usually a invaluable associate for the state. It could tackle duties that governmental establishments typically lack the capability or experience to handle, suggest revolutionary options, and facilitate cooperation with different stakeholders, together with worldwide companions. At Transparency Worldwide Ukraine, we try to be precisely that sort of associate, particularly on points associated to European integration. Particularly, in issues associated to European integration.
Any new regulation is a joint effort
Over the previous 12 months, one in all our group’s key priorities has been to enhance Draft Legislation No. 11520, "On Public Procurement." That is the legislative framework meant to align Ukraine’s procurement guidelines with European requirements. After its adoption at first studying, the general public, together with TI Ukraine, was actively concerned in refining the draft.
Public procurement reform is a part of the primary negotiation cluster: the Fundamentals of the EU accession course of. In different phrases, harmonizing laws on this space is a prime precedence if Ukraine needs to hitch the EU. And it’s no small job. Regardless of main progress in aligning Ukraine’s procurement system with European requirements through the 2015–2016 reform interval, Ukrainian rules nonetheless diverge considerably from EU norms.
Nonetheless, past offering purely technical assist for adapting EU requirements, one in all our essential objectives is to make sure that the brand new regulation capabilities successfully in Ukraine’s real-life context—and that it genuinely improves the effectivity of public procurement.
EU integration, however not for its personal sake
Whilst we transfer towards the EU, it’s vital to keep in mind that European integration should not turn into an finish in itself. In the beginning, it’s a path of growth—one on which we should be cautious to not lose the achievements the place we could already be forward of Europe. For instance, in some EU international locations, procurement processes nonetheless depend on paper-based communication between procuring entities and suppliers. In the meantime, our system is absolutely digitalized, and a literal implementation of this facet of EU procurement apply would really be a step backward for us.
General, when adapting our rules to EU directives, it’s essential to take the native context under consideration. EU guidelines enable for the limitless use of non-price standards—letting procuring entities choose proposals based mostly on components aside from worth, reminiscent of supply time, guarantee, or power effectivity. Ukrainian guidelines additionally enable non-price standards, however they’re presently restricted to 30% of the evaluation rating. Even inside that restrict, in response to the analysis, most procuring entities in Ukraine barely use that instrument, primarily attributable to lack of capability or understanding. So, adopting the EU customary wholesale wouldn’t enhance issues considerably. Quite the opposite, it might open a brand new loophole for corruption, permitting a young to be awarded to a "most well-liked" bidder by assigning 90% to a non-price criterion.
One other controversial requirement is the optionally available use of auctions. Within the EU, contracting authorities are usually not obliged to conduct auctions; they’ll select whether or not to make use of them. However Ukraine has already examined this method through the largest energy outages. In accordance with our estimates, eradicating auctions for simply three months probably price the funds round one billion hryvnias in misplaced financial savings. That’s why we advocate holding necessary three-round auctions, whereas permitting restricted exceptions for genuinely particular procurement transactions.
Sharing our expertise
Ukraine is exclusive in that, due to our excessive stage of digitalization, we will really measure how adjustments to procurement guidelines have an effect on effectivity. This makes us invaluable to the EU—our system permits for real-time testing of what works and what doesn’t, enabling evidence-based refinement of the principles.
Actually, Ukraine has gone additional than Europe in lots of areas. So, along with adopting the most effective European practices, we will additionally suggest methods for the EU to enhance its personal guidelines. For instance, we submitted such suggestions through the public consultations on updating EU procurement directives. Apparently, regardless that we, KSE, and the Ministry of Economic system submitted our proposals individually, they have been carefully aligned in substance. So, we’re actively partnering with the state to advertise Ukraine’s greatest practices.
On the identical time, the civil sector maintains sturdy ties with worldwide companions, and in lots of instances, our experience is revered. Notably, the findings from our 2023 report on the state of public procurement in Ukraine have been mirrored within the European Fee’s 2024 Enlargement Report suggestions for Ukraine.
An opportunity to do higher
When it comes to the brand new regulation, we attempt to see it not simply as an train in aligning our guidelines with these of the EU—however above all, as a chance to make our public procurement system more practical.
That’s why we analyze the weaknesses of the present system to strengthen it. A big share of non-defense procurement spending now goes towards reconstruction, so we pay specific consideration to construction-related procurement. A lot of our suggestions for the brand new regulation focus particularly on this space.
For instance, we advocate for publishing the paperwork required for price estimates in machine-readable codecs, in addition to for disclosing work acceptance certificates. The previous would make it simpler for companies to take part in tenders. Our analysis exhibits that these paperwork are sometimes uploaded as scanned PDFs, and with tight deadlines, companies don’t have sufficient time to arrange correct estimates. Thanks to a different of our research, these deadlines have already been prolonged. The certificates, in flip, are wanted to indicate the actual costs on development initiatives, which regularly differ from these listed in contracts.
A complete method
By the way, we’ve recognized many of those issues by means of systematic monitoring of development procurement, throughout which we detect overpayments—a basic "dangerous cop" transfer.
Alternatively, one other key focus of our work is in-depth sectoral analysis, which the federal government typically lacks the sources to conduct. We steadily perform such research in response to particular inquiries. A current instance is our joint analysis with KSE on IT procurement, carried out on the request of the Ministry of Digital Transformation. The objective was to find out whether or not Ukraine wants another system for IT procurement (spoiler: we don’t) and to determine areas that also require enchancment.
In parallel, we assist and develop analytical instruments—together with the general public {and professional} BI Prozorro modules. These instruments assist us and authorities stakeholders assess how procurement guidelines work in apply and make data-driven choices. We’re additionally working to strengthen the institutional capability and effectiveness of the State Audit Service, the sector’s essential oversight physique. Once more, that is about partnership and collaboration.
Internally, we half-joke that our objective is to make ourselves out of date—to assist construct a public procurement system so clear and practical that our watchdog position is now not wanted. Till that occurs, there’s nonetheless a lot to do. And that work is about serving to the state turn into stronger, particularly on the trail to European integration.
Ivan Lakhtionov, Deputy Govt Director of TI Ukraine for Revolutionary Initiatives
This materials is funded by the European Union. Its content material is the only real duty of Transparency Worldwide Ukraine and doesn’t essentially replicate the views of the European Union.
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