Trends in ProZorro in 2016: the Business can’t Keep up with the Rapid System Development!

In 2016, competition in ProZorro procurement system decreased. The research on this problem was conducted by the Transparency International Ukraine and introduced to the public on May 11 in Kyiv.

The report “Public procurements reforms and results of the Prozorro electronic system” states that during the period of August-December 2016, competition decreased from 2.3 up to 2.05 in below-threshold, and from 3.3 to 2.8 on the open tendering. The authors of the research believe that the decrease in competition is caused by the rapid growth of the system itself. A number of the bids exceeds greatly the number of interested business entities.

The TI Ukraine project manager Yevhen Bilyk states that this trend will change in 2017 and competition is expected to level out. For instance, in 2016 in Georgia, a similar figure on the e-tendering was 2.1. The TI expert explained that in case of favorable conditions and proper public policy the indicator 2.9 can be much high.

The last year, there was an increase in the number of disqualified participants. From August to December 2016, this number increased from 7.7% to 8.5% for below-threshold purchases and from 14% to 16% in public auction. Yevhen Bilyk explained that it “may have an adverse impact on involvement of potential suppliers.” The great problem is that it is difficult to punish disqualifications as a result of biased judgments. The functions and duties of supervisory authorities are interwired and there are efficient tools to modify actions of dishonest customers.

According to TI Ukraine, there are some positive changes in public procurement recent years. The most important achievements of the ProZorro analystics are electronization of the public tenders, development of the standardized rules for Ukrainian and foreign businesses, no quotas. Technically, ProZorro has the following benefits admitted by TI Ukraine. First of all, it has hybrid architecture that consists of a central database and electronic platforms. Without doubt, the main advantage is an open API. The system is based on the machine-readable data. A unique application is free public and professional analytical modules. The remarkable feature of transparency is disclosure of all tender documentation system in ProZorro.

Transparency International Ukraine provides some recommendations for future system improvements. Because of the changes in legislation, it is important to clearly state the rules of below-threshold
procurement. According to TI Ukraine analysts, risk indicators should be based on the appropriate regulations. Technically, the system should be developed. First, all stages of the procurement process should be added to the system. The data published in the system becomes more complex, and the data input should be automated. As for public activists, TI Ukraine considers important to integrate the modules of the analysts risk indicators and join public displays in one platform (eg, DOZORRO).

The report contains a description of the ProZorro analysis system developed by TI Ukraine, and the system the organization asks the public activists to use in their work.

The Director of the Program of Innovative Projects, Viktor Nestulia, the first Deputy Minister of Economic Development and Trade, Maksym Nefodov, the deputy head of the EU project “Harmonisation of Public Procurement system in Ukraine with EU standards” Oleksanrd Shatkovskyi, and the deputy head of the “Transparency and accountability in public administration and services” (TAPAS), Lesia Chmil.

The full research is available at Transparency International Ukraine. Research carried out as part of the USAID, UK aid and the Eurasia Foundation “Transparency and accountability in public administration and services» (TAPAS).