Positive effect of CPOs
Information presented in this section descibes positive effects of CPOs that we managed to collect and confirm during the study. These positive effects are the achievements of individual centralized procurement organizations that were confirmed by customer feedback and Prozorro data. The creation CPOs itself does not guarantee the above positive effects. Nevertheless, their benefits could serve as a blueprint for newly established CPOs, as there is empirical evidence of success from existing central procurement organizations.

Positive effect

customers receive goods they need without a qualified authorized official on their staff.

Beneficiary: a procuring entity (a customer)

Beneficiary with confirmed effect:

  • ME "Centralized Procurement Organization" of Dnipro City Council
  • ME "Centralized Procurement Organization of Ivano-Frankivsk Oblast Council"
Challenge to address

customers, especially small institutions or organizations may have limited resources, experience, or qualifications for efficient procurements.

Confirmation

Lysychansk hospital which was moved to Dnipro does not have any professional customers but has many needs because almost all equipment and medicines have been left in Lysychansk. Therefore, local CPOs undertook to make procurements for them.

CPOs facilitate the work of AOs (ensuring procurements up to 100 thousand; AOs appeared only in January 2023, half-time) and cover personnel shortages and the need for professional procurements in open bidding.

"We contacted the CPO because the Lyceum does not have a procurement expert (100,000 or more). Since the Law changes very often, and an authorized official is not a professional buyer or lawyer, arranging and conducting procurements can be quite challenging."

"The CPO takes the burden from the Lyceum staff, since it arranges the whole procurement process, starting from the planning stage. From the moment of publication of the plan, the CPO ensures all procurement activities till the contract is awarded. An exception arises in cases where it is impossible to resolve a conflict that emerges during the procurement process without involving a buyer."

Positive effect

Availability of expert support for customers in complex aspects of procurement procedures.

Beneficiary: a procuring entity (a customer)

Beneficiary with confirmed effect:

  • ME "Centralized Procurement Organization of Ivano-Frankivsk Oblast Council"
  • SE "Medical Procurement of Ukraine"
Challenge to address

1. Lack of customers' competence resulting from limited experience in procurements;

2. The need to monitor all current amendments in the legislation regulating procurement.

Confirmation

"The CPO consults the Lyceum on all controversial procurement issues (drawing up the ToR and contracts, communication with the State Audit Service, and dealing with bidders' requirements). The Lyceum does not have a lawyer, so the help is "very valuable".

"The SE trained a lot of staff. SE is trusted, so other organizations and central executive bodies consult with it on procurements."

Positive effect

A single procurement instead of a large number of similar ones significantly saves time for training and qualification of customers.

Beneficiary: a CPO initiator.

Beneficiary with confirmed effect:

  • ME "Centralized Procurement Organization" of Dnipro City Council.
Challenge to address

Each buyer spends time for the typical procurements.

Confirmation

"Aggregation dramatically reduces time for procedures (some of them with absolutely similar terms of payment and specifications for procurement items) and simplifies the qualification procedure for CPO personnel. In the above examples, 3 aggregated procurements were made for 50 initiating customers. That is, by slightly extending the preparation time for tender documentation (considering the number of initiating customers, Technical Requirements, Specifications, and draft contracts are individually outlined in appendices within a single tender documentation), the overall time required for the announcement procedure and qualification process is significantly reduced.

CPO arranges procurements covering the part of needs of 160 schools in Dnipro, and also of cultural and sports institutions, libraries, etc., where the roles of AOs are played not by professional buyers but accountants and other personnel to whom that is an additional burden and not a main job.

Positive effect

A chance to cover more needs for the same funds.

Beneficiary: a buyer, a CPO initiator.

Beneficiary with confirmed effect:

  • CPOs with confirmed effect: SE "Medical Procurement of Ukraine"
Challenge to address

customers receive goods at higher prices than bidders are willing to offer.

Confirmation

According to the report of SE "Medical Procurement of Ukraine", the implemented experimental medicines (6 different items) procurement project in the interests of customers, CPOs managed to achieve budget savings for healthcare organizations. That is, for each item, CPOs successfully secured prices that were 24% to 70% below the average prices for equivalent items in the Prozorro system.