The Ukrainian chapter of the global anti-corruption organization Transparency International and the community of civil society organizations united around the DOZORRO platform have analyzed the Report of the Accounting Chamber of Ukraine (hereinafter AC) on the situation with public procurement in 2017. The experts of TI Ukraine and activists alike have doubts that the AC was objective and unbiased and, in certain cases, question the professionalism of the civil servants of the supervisory agency. The conclusions made by the Accounting Chamber are not consistent with the reality and lead to defamation of the electronic procurement system ProZorro.
Below is the joint stance of TI Ukraine and DOZORRO community on certain points of the Decision.
On falsity of information in ProZorro and failure of procuring entities to apply procedures stipulated by the law
TI Ukraine disagrees with the conclusion of the Accounting Chamber that the analytical information available in ProZorro is false. We also disagree that the respective central executive authority needs to be authorized to collect information on public procurement. The ProZorro system and business intelligence tools developed for its data are built open and transparent in principle, therefore, any citizen can use them at any time.
The tools bi.prozorro.org and bipro.prozorro.org, which belong to TI Ukraine, are developed on the basis of open API and available to anyone. Apart from the aforementioned tools, such systems as acm-ua.org, clarity-project.info, z.texty.org.ua, dozorro.org, youcontrol.com.ua, cep.kse.org.ua and many others all enable analysis of procurement in the system. Thus, the information that public authorities do not have the possibility to collect and analyze procurement data is incorrect.
Collection of statistical data mentioned by AC experts is not objective due to the way in which it is collected and processed. Nowadays, it makes more sense to use modern methods of information acquisition, such as use of ProZorro Central Database – an original source in public procurement. Besides, the next step that needs to be implemented is to unite the data of the national treasury and ProZorro. AC suggesting to go back to collecting information with pen and paper in XXI century serves as a vivid example of lack of professionalism exhibited by the agency’s experts.
AC’s conclusion on the system being unproductive based on the fact that 74% of procuring entities did not use the procurement procedures is not consistent with the reality and contradicts a different clause of the Decision, where AC says the value of the same indicator is 43%.
On the System Being Hosted Amazon Web Services
The statement from the report that information is hosted on the platform Amazon Web Services is not consistent with the reality. In March of 2018, SE Prozorro successfully moved all the information to the Ukrainian information processing center DeNovo. The migration process was executed in compliance with the Law of Ukraine “On Protection of Information in Telecommunication Systems.”
On Deliberate Avoidance of Tender Procedures
The introduction of the ProZorro system enabled low-price procurement to benefit from the electronic auction model. Thus, in 2017, numerous procuring entities held competitive pre-threshold procurement for amounts as low as UAH 3,000 (USD 112). However, the use of other procurement methods does not always mean that procuring entities deliberately break down the procurement item in order to avoid the competitive procedure, as stated in clause 5 of AC’s Decision. It is noteworthy that before ProZorro was introduced, there was no information on such procurement anywhere at all.
On Appointment of MEDT as Portal Administrator
TI Ukraine believes it is inadvisable to authorize the Ministry of Economic Development and Trade to perform administrator functions currently performed by SE Prozorro. The Law of Ukraine “On Public Procurement,” Art. 8, Cl. 6, sets forth the specific on web portal functioning. This standard does not restrict the choice of how this function will be performed, including selecting one of enterprises functioning under the MEDT. Furthermore, this function is connected with production and commercial activity, which is not characteristic of an executive public agency.
On Monopolization of Public Procurement Market
The statement that the market is monopolized by certain platforms seems biased. Functioning of 27 accredited electronic platforms seems rather to illustrate a high competition. Moreover, participants and procuring entities choose the platform at their own discretion, so monopolization can hardly be an issue.
The information of Ukraine’s AC on 6 platforms which are the most active attests only to their more professional and reliable work with their clients. At the same time, the existing business model has allowed to create an effective electronic procurement system in limited time, which has not only saved significant amounts of public funds, but has also been recognized as the best by numerous prominent international expert organizations. What is more, not a cent of public funds has been spent on its development. This model provides sustainable financing for administration and further development of the procurement system and makes it independent of external influence and manipulations around potential funding.
On Pointlessness of Further Support of tender.me.gov.ua
As for pointless spending of public funds on maintenance of the system IAS Public Procurement, we hereby inform that the period of system functioing and provision of storage of information within it has to last until full completion of procurement under the Law of Ukraine “On Execution of Public Procurement” and its inspection by State Audit Service. Which means the end of 2019, at the very least.
On Lengthy Review of Complaints by the AMCU
The statement on the Anti-Monopoly Committee of Ukraine using a variety of strategies when they review complaints appears controversial, since every case of procurement is different in its nature. The remark in the report on excessively long review of complaints on minor violations is not consistent with the reality, since the procedure and deadlines of such review are clearly regulated by the Law on procurement and cannot exceed 15 business days.
On “Effective” External Financial Control by the AC
According to the information received by TI Ukraine at its request, during 2017, the AC organized 95 measures of public external financial control, which resulted in three administrative protocols on Article 164-14 of the Code of Ukraine on Administrative Violations. What is more, none of those violations resulted in anyone suffering any punishment in court. Taking that into account, the Accounting Chamber’s attempt to highlight their own “effective work” in their report looks absurd.
To sum up the results of the report, representatives of civil society organizations recommend that the management of the Accounting Chamber of Ukraine change the strategies they use in their own analytical work, including existing methods of compilation of such reports, especially in the rapidly developing sector of public procurement. When they prepare conclusions, it is essential to take into account modern tendencies for digitization of all procurement processes.
Signed by:
Center for Public Monitoring and Research
Prozoro Media Investigation Center
Kryvyi Rih Investigation Center
Transparency International Ukraine
Institute of Analysis and Advocacy
Office of Regional Development
Women’s Anti-Corruption Movement
Development of Public Procurement CSO
Kharkiv Anti-Corruption Center
