Reconstruction Monitoring: Challenges and Valuable Lessons

Transparency International Ukraine has already started to implement reconstruction monitoring. Unlike the two competitions for subgrants announced by the Institute for Economic Research, we implement single monitoring: of both objects and procurement transactions. That is, we look at the formation of the project, and how the selection of the contractor takes place. If you read our methodology, you will see that there are several components to what we analyze: project initiation, project development, implementation, and procurement. I am sure that when you monitor the recovery, you still learn something about a specific procurement transaction and study it to get a general picture.

Given our monitoring experience, I have come up with seven points that I will share with you.

Lesson 1: Learn the law

It is necessary to learn the legislation. To understand the construction topic, you definitely need to study the regulatory documents related to construction. It will be an advantage if you are a specialized organization that deals with construction. Then you will monitor recovery projects.

This is a challenge for us because, as I said, we have combined all the components into single monitoring and approach it comprehensively. Therefore, the first important task for you is to study the legal framework.

Lesson 2: Learn to read estimates

The second lesson is about the estimate. It is very important to be able to read it. Payment will not always be made for the first variant of the project. For example, firstly, a project is developed that is transformed into tender documentation. Someone will participate in the tender and offer something. This estimate will no longer be the estimate that was originally planned in the project. It will be an estimate within the tender bid.

Most likely, it will also be changed because the participant will bid in the tender and offer some other prices. That is when you will have the third estimate. The final bid and the actual contract conclusion provide for another estimate. You have to read all of them.

However, this is not all because there will be another stage: service acceptance certificates. The most interesting thing is that not everyone publishes them. If we talk about an estimate (which also changes), it doesn’t mean that the prices included in it will be reflected in the certificate. The cost may be lower or higher. In general, the mechanism of transforming the estimate from the project into a service acceptance certificate is complex.

Lesson 3: Enlist the support of local authorities

The third point concerns the verification of implementation. You have to enlist the support of, for example, local self-governments because you need, first of all, to be allowed to the construction site, to be allowed to take pictures and get explanations about the stage of work.

It would be good to sign a memorandum with local self-government bodies. Then you are not just monitoring for the sake of monitoring; you are helping local governments.

In addition, do not count on the fact that you will find everything in the public domain. The information is only partially published. Therefore, you need to be prepared to work with requests for access to public information.

Requests on paper are still a thing: get ready to send a bunch of letters. In this case, good relations with local self-government bodies will also be an advantage. However, even this does not always mean that you will get an answer in time. Then it is necessary to engage the Parliamentary Commissioner for Human Rights to provide information and other levers.

Lesson 4: Communicate with the project initiator

The next such lesson is communication with the project initiator. It is necessary to cooperate with the initiators so that they know that you want to check something. You can at least call if the phone number is available. Prozorro provides it. It is always better to clarify something with a procuring entity or initiator if something is unclear. Some questions can be solved simply with a telephone conversation.

Lesson 5: Consider the specifics of reconstruction tenders

If we talk about procurement, we must understand that there will not be enough businesses that would rebuild the destroyed facilities. People always say that the same contractor always wins. But if you look at it from a different angle, it’s because other contractors don’t want to participate in these tenders. Or there are no other contractors who are able to cope with such a volume of work in your area now. Keep in mind that there are so many destroyed facilities that, in many places, the same companies will win. This will not always indicate abuse.

Moreover, we have come to realize that the deadline for submitting proposals in construction should be revised due to the complexity of the preparation of the tender bid. Currently, in public procurement, the minimum period for submitting bids is 7 days. We have a study that demonstrates that it should be reviewed. This is due to the fact that, objectively, the business that saw the tender does not have time to prepare documents.

Sometimes there is a favorite supplier who had received the documentation even before the procurement was announced. The supplier can prepare everything, even within one working day. To limit the competition and help the supplier win, the procuring entity can, for example, provide the estimate not in a machine-readable format so that the data entry process for participants is more complicated.

Lesson 6: Engage in public procurement reform

My next point is to enhance the work with government agencies. If you see a violation, report it to supervisory and law enforcement authorities, they will launch investigations or inspections. But eventually, this monitoring may end in nothing. A logical question will arise: what is wrong and what needs to be changed?

The system needs to be changed. Therefore, you have a unique chance to participate in reforms, in particular public procurement, to offer some mechanisms that will help improve the sphere so that the authorities procure more effectively, businesses participate more often in public procurement and feel that tenders are fair.

We now actively want to join the reform of procurement control, in particular, to promote the idea that the State Audit Service must monitor all expensive procurement transactions (for example, all tenders from UAH 10 million).

However, any changes should be based on calculations. One of the useful tools for analyzing data on public procurement is the BI Prozorro public analytics module. Organizations that deal with public procurement have probably already heard about it. We always use it for our research, based on which we propose changes to the legislation.

It can also be useful for routine monitoring since it is very convenient to upload the necessary procurement transactions according to your criteria: region, CPV, period, and procuring entities. Then, you can continue to analyze them manually.

Lesson 7: Communicate correctly and acknowledge mistakes

Well, my last point is communication. There are a lot of cases when an announcement took place according to the wrong procedure, something was unclear, or something was not published. It is important to understand that something that seems to be a violation and corruption is not always them. Therefore, you should not immediately take drastic actions. It is always better to check a hundred times, send requests, call the procuring entity. We do not work to cause unrest, but to prevent violations and make the system as a whole more efficient.

But this does not mean that you do not need to communicate about real violations. The results of your work indicate that the system is transparent enough so that corruption in it can be identified, prevented, and/or punished.

Finally, we return to the quality of our work: to the substantiation, to the study of legislation. To make it all objective and correct. We have had cases when we had to apologize for an article, where the issue of opening criminal proceedings was raised, but a mistake had been made somewhere in the analysis. It is important to communicate such mistakes publicly. This testifies to our transparency and honesty.

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So, the key lessons are to study the legislation, communicate with the authorities, use the available data, but also make requests, and and communicate your results.

This publication was prepared with the financial support of the European Union. Its content is the sole responsibility of Transparency International Ukraine and does not necessarily reflect the views of the European Union.