On August 1, the ProZorro e-procurement system celebrated its birthday. For 5 years now, it has been through it that all public procurement has been carried out in Ukraine. During this time, Prozorro managed to save more than UAH 188 bln.
Now businesses have equal access to tenders, and in 5 years almost 420,000 companies have worked with the country. At the same time, every citizen can see what the local or central government has acquired — everything from 1 kopiika.
We got used to e-procurement, to open data, and we perceive them as something mundane and completely usual. However, this was not always the case. Before the creation of Prozorro, procurement was conducted in paper format, and it was associated with corruption.
After the Revolution of Dignity, Transparency International Ukraine, together with businesses, volunteers, and government representatives, created the Prozorro system and the Public Procurement Reform in general. We remember very well what was before, and therefore decided to remind everyone why we should not go back to the past.
How were tenders announced and proposals submitted?
Announcements about tenders used to be viewed only in the paper “Public Procurement Newsletter.” In 2008, the tender.me.gov.ua. web portal, the ancestor of Prozorro, appeared. The information about procurement was published there, but it was impossible to participate in it online. Moreover, procuring entities (organizers of bidding) paid separately for some of the site’s functionality — the convenience of the basic free version, to put it mildly, was lame.
First of all, on tender.me.gov.ua, procuring entities used to publish information about the upcoming procurement transactions.
Companies that did find the tender announcement and wanted to compete for the contract had to send the procuring entity (by mail or in person) a stitched, numbered, and sealed package of necessary documents.
In turn, the tender committee manually entered all those who submitted bids for the auction in the register. Subsequently, it was published on the same portal, tender.me.gov.ua.
On the way to registering its package with the tender committee, the business could encounter unexpected obstacles.
Some procuring entities found many reasons not to accept documents on time. For example, to enter the procuring entity’s territory, you might suddenly need a pass that had to be ordered in advance. Therefore, there was no question of free access for businesses to tenders at that time.
Thanks to electronic bidding, this problem was solved — now businesses have all the information about tenders and can submit a bid online from anywhere in the country or even abroad.
How was the tender was?
Bids submitted — what’s next?
The next important day was the bid disclosure date. This was done at a scheduled time in a clearly defined office. Participants were invited to the process itself — they could come at will.
If one of the entrepreneurs joined, they could not sit very close to the tender committee during the disclosure of bids — so as not to see the confidential information of the competitors.
The tender committee took turns unpacking envelopes with participants’ documents and reading out the prices offered. Actually, this is the only information that everyone could find out. It was also published on tender.me.gov.ua.
There was no further auction. Whoever offered the lowest price from the very beginning became the winner if everything was in order with the documents.
In Prozorro, the situation is radically different: we can see in full detail what documents were submitted for the tender and how the business bargained during the auction. The final contract with all its terms and appendices is also accessible.
How did some procuring entities violate the rules?
A lot of information remained invisible, so, there were more opportunities to circumvent the procurement rules without being noticed. Most often, procuring entities tried to engage their own people in tenders.
For example, there were situations when during the disclosure of tender bids, procuring entities could first unpack the envelopes of competitors and find way round their prices, then open a bid of their person — and announce the amount that would be the lowest. Subsequently, the documents were carefully substituted, and it was almost impossible to recognize this trick.
Occasionally, the procuring entity independently prepared a tender bid for the participant, or simply ignored the lack of any documents. There are many options because opacity creates the temptation to benefit from procurement.
The introduction of Prozorro allowed us to shed light on such situations.
We cannot say that corruption in public procurement no longer exists, but the e-procurement system is neither a court nor a supervisory body. Prozorro reduces opportunities for abuse and makes them visible. Then the Anti-Monopoly Committee, the State Audit Service, law enforcement and judicial bodies of Ukraine should be involved.
How did the procuring entities go about?
Of course, not all procuring entities used to violate the rules at tenders. However, because of the fact that business and the public could not distinguish honest buyers from dishonest ones (there was too little information for this), the shadow cast on everyone.
Businesses understood that they might face corruption and discrimination at the auction, so, they were less willing to submit their bids. In general, there was a prejudice among the public that state auctions were not fair. Therefore, work with procurement was often overshadowed by distrust and reputational problems.
Now, in Prozorro, everyone can see why a particular company won the auction. There are much fewer reasons to suspect everyone of violations.
Previously, it was more difficult for honest procuring entities to conduct procurement with many competitors, in particular, because it was more difficult to simply inform the business about the tender. It was necessary to additionally place ads in the local press or call companies and invite them to the bidding. And before that, these companies and their contacts still had to be found somewhere.
Now, the system often does this instead of the procuring entity. If the tender is potentially interesting for a business, they will find it themselves.
If a procuring entity is still afraid that there will not be enough competition, potential suppliers can be found in a few clicks in BI Prozorro. Here you can also find examples of good tender documentation that will be beneficial both to procuring entities and businesses. Analytics is free.
Were there any statistics?
Before Prozorro, data on procurement was limited for citizens and businesses, let alone the country. Statistical information was obtained thanks to a special form No. 1-bidding “Report on public procurement.” It was filled out in each institution once a quarter, that is, the data was far from operational. In addition, its quality was strongly influenced by the human factor because the information was entered into the form manually.
The form itself contained general indicators and did not give an idea of the situation by spheres, procuring entities, or procurement processes. What balanced and reasonable decisions of the state can we talk about if there is no understanding of what is happening at all?
With the launch of Prozorro, the necessary information, in particular for forming a procurement policy, can be obtained in the public domain at bi.prozorro.org. This service is administered by Transparency International Ukraine, and there is no alternative to it at the national level.
If Prozorro had not been launched then, in 2014-2016, we would still be witnessing paper tenders, or, to be precise, we wouldn’t be witnessing anything.
Fortunately, the old days will not be back in full.
The Prozorro system is too firmly rooted in public procurement in Ukraine to be destroyed without a trace. However, every time the question arises of adding another point to the list of exceptions to the Law “On Public Procurement,” it is worth remembering why we started the reform and what we tried to achieve.
Therefore, for the fifth anniversary of Prozorro, we would like to wish all players of the sphere (especially those who want to change it) prudence. We need to move forward and improve the system, and not cling to old practices. And remember — everyone sees everything.
Source: www.pravda.com.ua
