A pilot project that allows to conduct public procurement tenders electronically was launched in Ukraine on Dec. 22. Some state companies can now list their needs, while private business can bid online at electronic platforms provided by the developers, several Ukrainian information technology companies.
The test version that is currently operating, allows bids on supply contracts under Hr 100,000 ($6,250) and services worth up to Hr 1 million ($62,500).
The National Bank, nuclear energy monopoly Energoatom, and State Affairs department, known by its Ukrainian acronym, DUSya are taking part in the initial test run. The first results of electronic procurement will be announced in about a week, says Oleksandr Starodubtsev, coordinator of the civic campaign “Transparent procurement” involved in the project.
“While there’s been a lot of talk about reforms, this is the first significant step to a more transparent and user-friendly procurement system. We’ve also engaged private companies which are not only providing service but covering big part of expenses,” Starodubtsev said.
The system was developed and funded by companies Prom.ua, IT-Enterprise, BMS Consulting and Netcast Technologies. The minimum cost of a viable system like that is $35,000 while the one that will able to maintain all public procurement procedures in Ukraine can cost up to $150,000. World Bank and Renaissance Foundation are expected to finance further development of the system, including a website that will allow anyone to monitor public tenders online, according to Starodubtsev.
Strategy for public procurement system reform
The new pilot project is a part of Ukraine’s strategy for public procurement system reform 2014-2015 developed by former head of procurement agency in Georgia Tato Urdzhumelashvili and his former deputy David Margania. In 2009 they implemented a similar electronic system in Georgia. It introduces online auctions to eliminate human factor from the tender process. The program picks the most reasonable offer and matches it with the requirements of the procurer. A special agency will be created that will engage representatives of the civil society, IT-companies and the government to develop and maintain the electronic system, according to the strategy.
Georgia saved more than $100 million in the first year after switching to a similar electronic system. Fathers of the strategy think that Ukraine, which spends some $30 billion on public procurement annually, can save a lot more. “Implementation of the electronic system of public procurement is to save at least 10 percent of spending already in the first year. In case of Ukraine this indicator can grow significantly as reasons of systemic corruption will be eliminated,” the strategy reads.
So far, European Union experts working in Ukraine are skeptical about the new procurement system, however.
Electronic auctions suggested in the strategy can be applied only to certain standardized products but not to something that has to be negotiated carefully, like oil or gas pipelines, says Eugene Stuart, team leader of “Harmonization of public procurement system of Ukraine with EU standards” technical assisstance project.
Kyiv Post staff writer Anastasia Forina can be reached at [email protected]
