dozorro_community - Transparency International Ukraine

DOZORRO Turns 8: Our Achievements in the Past Year

TI Ukraine — Wed, 06 Nov 2024 14:50:58 +0000

Often, in the whirlwind of important daily tasks, we forget to pause and analyze what we have actually done that is useful and important. The anniversary of the project is a great opportunity to sum up our interim results. We present the key accomplishments in various focus areas of the project over the past year to record what has already been achieved.

Civic procurement monitoring

We nicknamed our department of public procurement specialists “5%.” It searches for violations and reports them to procuring entities, supervisory bodies, and law enforcement officers. That’s because 5% of criminal proceedings that were opened in 2023 due to violations in the field of procurement were registered following our appeals.

Since the beginning of last November, 37 criminal proceedings have been opened following the requests of our specialists. In addition, their letters also led to a decrease in the cost of procurement transactions and the cancellation of some. Thus, as a result, we helped save more than UAH 1.5 billion of budget funds over the year.

Our senior analyst Yaroslav Pylypenko considers the rapid growth of our expertise in the field of construction procurement to be our greatest achievement. Last year, it was a new topic for our experts. So, we engaged external consultants and learned a lot. Nowadays, we find the highest number of potential overpayments in construction-related tenders, including in the construction of shelters.

Our studies

The best studies, in our opinion, are those that cause real change. Last year, we found that the short deadline for submitting bids for construction tenders negatively affected competition and recommended extending the deadline for submitting bids for procurement of works from 7 days to 15. The government heeded our recommendations and introduced appropriate changes to the resolution regulating procurement rules for the period of martial law.

Now, we are promoting the idea to oblige procuring entities to publish the files necessary for estimate calculations in the formats of specialized estimate programs based on our other studies and advocate the publication of service acceptance certificates within expensive construction procurement transactions.

Many of our findings based on the study of the procurement field in 2023 echoed the recommendations of the European Commission included in the latest EU Enlargement Report on Ukraine.

Analytical tools

Last year, we paid most attention to two focus areas within improving the BI Prozorro public analytics module—simplifying its operation and new sheets at the request of certain stakeholders.

At the beginning of this year, we have finally unified the functions and appearance of the modules for the last two years and for all years. In addition, they operate much faster. Although the one for all the years still takes a little longer to load.

In summer, at the request of large-scale procuring entities, Active Lots and Events in Lots sheets were created. They help managers to monitor important events in the procurement of their subordinate authorized persons to respond in time if necessary or to be sure that everything is going according to their plan. They can be useful for other users, for example, journalists who consistently monitor the procurement of certain procuring entities.

This year, together with the Ministry of Economy, the first version of the Procuring Entity Index was presented—a tool that, with the help of various groups of indicators, allows for a comprehensive assessment of the effectiveness of procurement. By the way, we are already preparing the first update based on the users’ feedback.

And of course, we continued to help users master the BI module: we published and updated guides, provided consultations, and conducted training. One of the largest trainings was conducted for those having great influence on changes in public procurement rules: SE Prozorro, SE Professional Procurement, the KSE, DOT (State Logistics Operator), and Ukrainian specialized systems. It lasted almost two weeks.

Legislation and development of the sphere

Of course, the most important thing in this direction that covered few months of our work is the improvement of the draft new law on public procurement. Our Head Ivan Lakhtionov and legal advisor Anna Kuts participated in the working group that worked out amendments to the draft law after it was approved in the first reading. We’ll have to see if all our suggestions have been taken into account when the second reading version is published. We still have to wait for the European Commission’s feedback on the interim version.

What’s important is that in late spring, we helped to improve the electronic appeal of procurement to the AMCU. Back then, we joined the development of the structure of a new electronic complaint form, which was launched in Prozorro in early 2024. It had a complex architecture and a number of inconsistencies with the legislation. Our Anna, together with the Antimonopoly Committee of Ukraine and the State Enterprise Prozorro, figured out how to fix this.

In addition, together with the KSE, we developed a Methodology for Determining the Cost of Direct Procurement Transactions for Above-Threshold Amounts. This is a document that contains a clear step-by-step guide that will help procuring entities determine the optimal cost of procurement items for goods, services, and works and separately for current repair services. It will also cover template forms for requesting and analyzing commercial and contractual price offers and other useful appendices.

In the summer, we submitted a number of proposals to the Temporary Investigative Commission of the Verkhovna Rada, which was established to investigate potential violations in socially important procurement transactions during martial law. The Commission appealed to DOZORRO and other stakeholders for recommendations on how to prevent corruption offenses in the field of procurement. Our proposals were added to the conclusions of the Commission’s report and recommended for implementation. They concerned the publication of estimates and service acceptance certificates in construction tenders, rules for determining the expected value, electronic contracts, improvement of monitoring, etc.

Together with the Digital Transformation Activity and the KSE, we signed a memorandum of cooperation with the State Audit Service. Over the next 4 years, we are going to help the body to improve business processes, automate them, and improve the professionalism of auditors. By the way, right now, we are looking for a lawyer and a business analyst who will help analyze the business processes of the body and reflect them in the terms of reference for the E-Auditor system.

We have not forgotten about the Accounting Chamber. The new law on its reform was adopted the other day. We advocated the update of the competitive procedure to select members of the body, enhance its financial and political independence, and increase the efficiency of the processes. A significant part of our recommendations was embodied in the final version of the law. Some issues, for example, the delineation of powers with the State Audit Service, have yet to be resolved.

Analytics

We also continued to research procurement in various areas and write about it for the media so that people know how their taxes are spent. Procurement is not always about violations and overpayments, but also about meeting the needs of the state. Although sometimes it is about violations and overpayments. We recommend reading:

Drones for Budget Money

Vague Figures: What the Largest Cities Spend on Supporting Ukraine’s Armed Forces

How Much Does the Square Meter of Recovery Cost?

Procurement by Kyiv Metro

How Shelters for Schools and Kindergartens Are Procured in Kyiv?

Hundreds of Millions from the Budget for Local Government Advertising during the War Instead of Supporting the Armed Forces

How Cities Prepare for New Blackouts

Billions Underground: the Construction of Hidden Schools

The post DOZORRO Turns 8: Our Achievements in the Past Year first appeared on Transparency International Ukraine.

NABU Serves with Charges in Case that Began with Feedback on DOZORRO

Катерина Русіна — Fri, 11 Nov 2022 11:13:02 +0000

On November 7, NABU and SAPO exposed the scheme of embezzlement of more than UAH 27 mln in the construction of a kindergarten in the suburbs of Kyiv. Five persons were served with charges. We are talking about a pre-school in the village of Hatne. The relevant tenders were tracked by villagers, who later, together with the DOZORRO community and lawyers of BiHUS.Info, contacted the NABU.

This story is a great example of how important open data, active public control, and independent anti-corruption authorities are in fighting corruption. Let us tell you more about it.

In 2018, a local activist left feedback about a violation on the DOZORRO portal. The CSO “Trypilskyi Krai” from the community began to work on this story. Olha Nos, a specialist of the organization, found potential abuses in the procurement of design documentation and the construction of the kindergarten itself. In particular, related participants competed in the tender for construction, and the winner’s documents did not meet the requirements. By the way, the founder of both companies was the church rector.

Analysts contacted the State Audit Service, which confirmed the violations. However, the village council did not correct them. Instead, it increased the expenditures for kindergarten from UAH 68 million to UAH 192 million. Additional money was spent not on tenders, but under the negotiation procedure, signing contracts directly.

“Trypilskyi Krai” together with BiHUS.Info lawyers and local activists appealed to the National Anti-Corruption Bureau. Community residents were actively involved in the case, were interrogated as witnesses, and in 2020, detectives came with searches to the accountant and the head of the village council.

In general, during the investigation, the NABU found that the kindergarten was still unfinished, and the certificates of the services rendered were forged, in particular, prices were inflated. Another company was paid for services that it did not provide at all.

At present, the National Bureau served five participants with charges in the corruption scheme: the then head of the village council, an accountant, and three directors of enterprises. The case will be considered by the High Anti-Corruption Court.

The material was prepared with the support of the USAID/UK aid TAPAS Project/Transparency and Accountability in Public Administration and Services.

The post NABU Serves with Charges in Case that Began with Feedback on DOZORRO first appeared on Transparency International Ukraine.

Dozorro Project Turns 5

Олександра Місюра — Mon, 01 Nov 2021 15:55:23 +0000

The DOZORRO project of Transparency International Ukraine, which fights for equal rules of the game in public procurement, turns 5.

It was on November 1, 2016, that the monitoring portal DOZORRO was launched. Here, all citizens can find procurement transactions, leave feedback on them, and check the appeals of civil society organizations to regulatory and law enforcement agencies.

The DOZORRO team also:

develops analytical tools: public and professional BI Prozorro modules
checks procurement transactions for violations and corruption schemes
thoroughly explores the field
proposes useful changes to the legislation and protects it from harmful ones
develops the DOZORRO community of activists in the regions that monitor local procurement

During these 5 years, the team checked tens of thousands of tenders, participated in the creation of a new version of the Law “On Public Procurement” and fought against the idea of localization of public procurement. You can learn more about the team’s performance over 5 years at the link.

The post Dozorro Project Turns 5 first appeared on Transparency International Ukraine.

Life Before Prozorro. Why Don’t We Want to Go Back?

TI Ukraine — Thu, 05 Aug 2021 10:28:05 +0000

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.

The post Life Before Prozorro. Why Don’t We Want to Go Back? first appeared on Transparency International Ukraine.

School Procurement. TI Ukraine’s Handbook for Parents

Олександра Місюра — Thu, 22 Apr 2021 14:34:29 +0000

For half a year now, TI Ukraine has been informing parents of ways to monitor school procurement. And now we present a special methodological handbook, which contains all the useful instructions for monitoring the work of schools in this field.

The best solution for parents to make sure that their children get everything they need is to independently monitor the actions of the authorities, especially the schools themselves and their governing bodies. This is exactly what the special project “What Your School Buys,”developed by TI Ukraine, is aimed at.

The main result of our project is an online map of school tenders, which shows schools and kindergartens in 24 regional centers of Ukraine.

However, we also paid attention to parents from other cities. TI Ukraine experts have prepared a number of instructions that will help them get all the necessary information on this topic…

In particular, we instruct on:

rules for parental contribution procedures,
tips for preparing procurement information requests to the Department of Education,
as well as instructions on how to find your school on the DOZORRO monitoring portal.

For the convenience of parents, we have collected all these instructions in a separate handbook “How to control school procurement,” which will help you quickly find the most effective way to analyze purchases of your particular educational institution.

From this handbook, all concerned parents will be able to get a detailed list of steps not only to check the tenders of a school or kindergarten, but also influence some of these decisions.

Anyone can download the Ukrainian version of this handbook from the link below.

For the convenience of parents, we have collected all these instructions in a separate handbook “How to control school procurement,” which will help you quickly find the most effective way to analyze purchases of your particular educational institution.

The post School Procurement. TI Ukraine’s Handbook for Parents first appeared on Transparency International Ukraine.

Ambulances to Fight COVID-19

TI Ukraine — Thu, 21 Jan 2021 10:44:44 +0000

How long should it take for an ambulance to arrive after your call? According to the current resolution of the Cabinet of Ministers, it should be 10-20 minutes, depending on where you live: in the city or in the village. However, according to the minister of healthcare, this standard is only met in about 30% of cases. There are many reasons for ambulance delays: calls are not prioritized, patients’ routes are built incorrectly and the network of emergency medical care centers (EMCC) is not ideal, car fleets are long outdated and there are simply not enough cars.

This year, the Government decided to address the problem of lack of quality specialized cars for EMCC. It is worth noting that ambulance cars were always purchased, gradually. From 2016 to 2020, 1,584 ambulance cars were purchased through Prozorro.

Ukraine’s 2020 national budget included UAH 0.9 in subventions to update the ambulance car fleet in the regions. Initially, they were to be purchased locally. However, in August 2020, within the budget program “Development of the emergency medical care system”, the designated recipient of budget funds was the state enterprise “Medical Procurement of Ukraine”, which belongs to the Ministry of Health.

At the same time, in March, the procurement of a number of goods, works and services required to combat COVID-19 was allowed to be carried out without taking into account the requirements of the Law of Ukraine “On Public Procurement”. To this end, the Government passed the special Resolution No. 225. The goods, works and services listed therein can be purchased under direct agreements without competitive procedures. Back in April, the purchase of ambulance cars was included in this resolution. Thus, 2020 brought two changes at once: vehicles for EMCC were purchased centrally and not through competitive auctions on Prozorro, but directly, only reporting on the purchase.

What Ambulance Cars Are Purchased

According to the state standards of Ukraine, ambulances are divided into three types: A, B, C.

Cars of A1 and A2 types are designed to transport patients whose cases are probably not “emergencies.” The difference between the two types is the availability of an additional chair for the medical worker.

The type B car is designed for medical care by a medical (paramedic) team, transportation and monitoring of the patient’s condition at the prehospital stage.

Type C is a resuscitation vehicle that is needed to transport patients in serious or critical conditions.

This year, ambulance cars of types B and C were purchased.

Centralized Procurement

Officially, Minister of Healthcare Maksym Stepanov announced the plans to purchase ambulance cars in the summer. Then, the Ministry decided to purchase 400 cars by the end of 2020. The procurement was entrusted to SE Medical Procurement of Ukraine, which had recently been granted the status of a central procurement organization.

First of all, according to Nashi Hroshi, the enterprise defended non-discriminatory technical requirements, allowing more suppliers to participate in the procurement. Initially, the expert state institution “Polytechmed” tried to include high engine power in the requirements. This condition would effectively narrow down the circle of potential participants to one company, Autospetsprom, which is already the main supplier of ambulance cars to the state. Luckily, Medical Procurement of Ukraine managed to prove that this requirement was not mandatory.

In addition, SE Medical Procurement of Ukraine decided to carry out market analysis first before entering into direct agreements. It did it as openly as possible, with the help of Prozorro. At the end of October, Medical Procurement of Ukraine announced 4 competitive tenders. They planned to buy two types of ambulance cars (types B and C) with all-wheel and front-wheel drive. Any bidder who could deliver ambulances in accordance with the specified requirements could submit his proposal. However, there were also complaints from the market.

A potential participant in the procurement of TOV BRIORSON MOTORS complained to the procuring entity about the discriminatory requirements of the technical part regarding the front-wheel drive of the car. The company wanted to offer “cars on a cost-effective offer that meet all national standards and are certified, but have a rear axle drive.” However, the complaint was not satisfied. As a result, TOV BRIORSON MOTORS did not participate in the procurement. The procuring entity probably decided to buy specifically ambulance cars with front-wheel drive because this type of cars has better off-road performance, especially in winter, on slippery or snowy roads. And this is important for ambulances, which should be able to drive anywhere in any weather conditions.

Another bidder, TOV VIDI UNICOMMERCE, complained to the procuring entity that “the expected cost of all-wheel drive ambulances is incorrectly formed and abnormally low. And the delivery deadline, November 4, 2020—December 31, 2020, is obviously impossible given the declared quantity of goods.” The procuring entity declined this complaint as well. Despite this, TOV VIDI UNICOMMERCE participated in the procurement, and in one tender, it even proposed the lowest price, reducing its initial proposal by UAH 181,000. However, no agreements were concluded with this company. After analyzing the market, participants continued to reduce prices, and finally another company gave the best offer.

4 to 6 companies participated in the tenders used by Medical Procurement of Ukraine to analyze the market.

At the end of December 2020, the State Enterprise “Medical Procurement” published 5 contracts for the purchase of ambulances on Prozorro.

The two largest contracts went to TOV Autospetsprom, the company which supplied the largest number of ambulance cars to the state throughout the entire existence of Prozorro. We estimate that in the last four years, the enterprise sold 1,152 ambulance cars to the state for a total amount of over UAH 2.3 billion. As part of these tenders, it will also supply 104 type C ambulances with front-wheel drive and 142 type B ambulances with front-wheel drive.

In addition to Avtospetsprom, 2 contracts were awarded to TOV Spets-Kom-Service: 75 all-wheel drive cars type B and 39 all-wheel drive type C. Another 56 type B ambulance cars will be supplied by TOV ADAMANT MOTORS ZAPORIZHZHIA.

With the help of preliminary market analysis in Prozorro, Medical Procurement of Ukraine managed to save over UAH 120 million while buying 416 ambulance cars. The final contract prices were much lower not only than the expected cost of procurement (which is the baseline used to calculate the savings) but also than the final prices proposed by suppliers as part of auctions announced for market analysis.

It is currently unknown how these ambulance cars will be distributed among the regions. Daria Pakhomova, a point of contact at the state enterprise, said on the phone that “the distribution of vehicles is not within the purview of the state enterprise and will be carried out by the Ministry of Healthcare of Ukraine.” We hope the cars will be supplied in time, and the distribution and quality will be satisfactory.

Who Else Purchased Ambulances

Despite large-scale centralized procurement, procuring entities on the ground decided to replenish their fleets of ambulances as well. They were purchased by executive committees of city or rayon councils, and mostly by emergency medical care centers (EMCC). We estimate that in total, 836 ambulances for UAH 1.6 billion were purchased in 2020. This is more than the total number for the past four years—748.

48%, i.e. 398 cars, were purchased under non-competitive procedures. The remaining 52% are still competitive procedures: 22 ambulances were purchased through open bidding and 416 cars were purchased centrally by Medical Procurement of Ukraine with preliminary competitive selection.

As for oblast distribution, the biggest quantities of ambulances in 2020 were purchased in Khmelnytskyi (36), Zakarpattia and Kyiv (35 each), and Lviv (31) oblasts. The fewest—in Vinnytsia (1) and Luhansk (6) oblasts. None were bought in Kirovohrad, Odesa, Poltava and Donetsk oblasts.

For instance, 12 type B ambulances based on Citroen Jumper were purchased by the Healthcare department of Dnipropetrovsk oblast state administration, 7 type C ambulances and 5 type B ambulances based on Citroën Jumper were bought by the Ministry of Defense.

EMCC alone managed to buy 344 type B vehicles (for UAH 688 million) and 41 type C vehicles (for UAH 108 million). Most commonly, ambulances were based on Citroën Jumper — 336 cars (86% of the total number) and Volkswagen Crafter — 30 cars (8%).

EMCC bought ambulances from 3 enterprises in 2020: TOV Autospetsprom, TOV KSENKO AUTO PRODUCTION, TOV ADAMANT MOTORS ZAPORIZHZHIA.

Who Bought Ambulances the Cheapest

Not surprisingly, the cheapest ambulances were purchased by the State Enterprise “Medical Procurement of Ukraine.” They saved over UAH 300,000 on one type B front-wheel drive ambulance, and over UAH 600 — on a type C ambulance. Of course, the price may be affected by the number of purchased vehicles and equipment installed therein, but the fact remains that competition pays off. The prices achieved by the State Enterprise “Medical Procurement” are pleasantly surprising in comparison with the prices offered by the same participants in separate tenders.

In total, Medical Procurement of Ukraine managed to save over UAH 120 million on the purchase of ambulances. Non-competitive procedures almost always lead to overpayment. For this reason, we are not sure why it would make sense to allow procuring ambulances without auctions. This practice needs to be done away with, returning to competitive procurement.

The state budget for 2021 includes UAH 1 billion for the purchase of 438 ambulance cars. The experience of the state enterprise shows that these funds can be spent reasonably and under clear, understandable rules. We hope that the Ministry of Healthcare and the participants will draw the right conclusions.

By the way, we believe that the list of goods, works and services that can be purchased under the COVID-19 procedure is long overdue for a review to exclude items the purchase of which can be safely planned. So far, this list has only been expanded.

The material was prepared in collaboration with public procurement specialist Yaroslav Pylypenko and analyst Oksana Dziavornyk with the support of UK Aid and the UK Government.

The post Ambulances to Fight COVID-19 first appeared on Transparency International Ukraine.

Ukraine Receives USAID Award for Procurement Ecosystem

Наталія Сліпенко — Wed, 21 Oct 2020 09:32:28 +0000

The United States Agency for International Development (USAID) has recognized the TAPAS project, of the Eurasia Foundation, and TI Ukraine, for development of the public procurement ecosystem, in particular the watchdog network. This has been part of the annual Digital Development Award.

Every year, the Award is granted to the best projects and measures using digital technologies to support ecosystems helping to implement qualitative reforms among all USAID-funded projects.

One of this year’s winners is USAID / UKaid project Transparency and Accountability in Public Administration and Services (TAPAS) for its joint work with TI Ukraine.

This year’s winners have been selected based on four criteria.

Integration in the strategy of the long-term projects with measurable KPIs;
Consistency with the Principles for Digital Development;
Impact and sustainability after USAID support ends;
Development of engagement.

The Ukrainian project has been recognized for building the Prozorro e-procurement system and the watchdog network DOZORRO. These two systems have turned around public procurement in Ukraine, making all the information public and transparent and saving billions for the national budget.

“USAID funds projects in various sectors across the world. Healthcare, justice, economy, education… Getting this award means that our public procurement reform has been recognized as one of the most effective ones in the world. This motivates us to work further and achieve more,” says TI Ukraine’s Director of Innovation Projects Ivan Lakhtionov.

The DOZORRO ecosystem consists of the monitoring portal dozorro.org, professional and public BI Prozorro modules, risk indicators and the DOZORRO community — a network of CSOs that monitor public procurement and report identified violations to supervisory and law enforcement agencies. It functions as an integral part of the Ukrainian public procurement system and accounts for civic oversight.

From October 1, 201 to December 30, 2019, the DOZORRO community analyzed almost 26,000 risky tenders and reported over 24,000 to supervisory agencies. This work ended in cancellation or changed terms in agreements on 3,523 tenders for a total amount over USD 436 million.

Apart from procurement monitoring and administering BI tools, DOZORRO experts also train procuring entities, business representatives, activists, and journalists. In the four years, over 22,000 people received this training.

Apart from Ukraine, USAID also recognized projects from Kyrgyzstan (electronic justice), Indonesia (an HR system in healthcare), Pakistan (a program for support of SME) and a project dedicated to oceans and fishing in Asia-Pacific.

The post Ukraine Receives USAID Award for Procurement Ecosystem first appeared on Transparency International Ukraine.

What Your School Buys: TI Ukraine’s New Project for Parents

Наталія Сліпенко — Tue, 06 Oct 2020 07:11:10 +0000

The new school year has made parents question how ready schools are for the educational process. Transparency International Ukraine presents the projects What Your School Buys, which will help parents find out more about procurement in their children’s schools.

Every year, parents buy school supplies, which are a mandatory component of high-quality education. This year has been more challenging than ever, with parents having to also buy masks, gloves and other protective equipment for COVID-19. But how ready are the schools themselves for safe education during the pandemic?

The best way to ensure that the children are getting everything they need is to control the schools themselves and the education authorities. That’s why Transparency International Ukraine has created the special project What Your School Buys.

In this project, TI Ukraine has developed an online map with schools and kindergartens of 24 Ukrainian oblast capitals. On the map, you can find almost all educational establishments in those cities. For residents of other cities, TI Ukraine experts have prepared some guidelines. They include advice on preparing information requests on procurement to the local education authorities and guidelines how to find your school on the DOZORRO monitoring portal.

The experts focused especially on the rules for formalizing charitable contributions to schools. Voluntary contributions are just one of schools’ sources of revenue, and their use requires special control.

“Financial issues in schools are often resolved through the so-called charitable contributions, and this practice is often perceived as mass and mandatory,” says TI Ukraine’s Director of Innovation Projects Ivan Lakhtionov. “Every year, the budget allocates more and more money to education, which means school procurement. So today we need to make sure that these problems really cannot be solved without parents getting involved. And our online map and useful guidelines can help with this.”

Everyone can leave feedback on the online map on the project website. If certain information is not accurate, you can leave feedback on the DOZORRO portal. If violations are identified, DOZORRO community representatives will send this data to supervisory and law enforcement agencies.

Financial issues in schools are often resolved through the so-called charitable contributions, and this practice is often perceived as mass and mandatory. Every year, the budget allocates more and more money to education, which means school procurement. So today we need to make sure that these problems really cannot be solved without parents getting involved. And our online map and useful guidelines can help with this.

Director of Innovation Projects Ivan Lakhtionov

The post What Your School Buys: TI Ukraine’s New Project for Parents first appeared on Transparency International Ukraine.

ABNORMALLY LOW PRICE HANDLING IN PROZORRO MUST BE REVISED

Наталія Сліпенко — Wed, 30 Sep 2020 10:17:33 +0000

Transparency International Ukraine has published the results of its recent study titled “Abnormally low prices in Prozorro: is the client protected?”. The report was compiled as part of Transparency and Accountability in Public Administration and Services (TAPAS), a large-scale USAID/UK aid project.

The functionality that filters out abnormally low prices in Prozorro is meant to deter disingenuous tender participants that might not properly fulfill the contract terms. It searches the database for prices determined by its algorithm to be “abnormally low” – that is significantly lower than the average offered by other tender participants. The participant offering such a price has one business day to provide a justification note, or otherwise the client must decline the offer.

DOZORRO experts have conducted an analysis of international practice regarding handling of abnormally low prices and the first 855 applications of related Prozorro functionality that occurred between June 10 and July 20.

Only 24% of justification notes by participants provide calculations backing up the viability of their offered price. However, only 10% of justified offers with abnormally low prices are declined for that reason.

“More than half of justifications are unconvincing. Sometimes participants simply write that the price is low because of ‘special production techniques’ or because ‘the participant is the manufacturer’. There is no barrier in place preventing the selection of such participants as tender winners,” says Artem Davydenko, public procurement research coordinator at TI Ukraine.

The Public Procurement Law does not determine requirements for the content of a justification note. As such, the system is unable to filter out cases in which it remains unclear whether the participant is able to fulfill the contract terms, and the efficiency of Prozorro functionality surrounding abnormally low price detection is undermined.

“Our research indicates that the legal framework for handling abnormally low tender prices must be revised. However, even in its current form it benefits the client. In the past, clients were obliged to choose the participant offering the lowest price, dumping prices as well. Now, the system warns clients in cases of potential dumping, and a choice can be made,” says Ivan Lakhtionov, the innovation project program manager at TI Ukraine.

The full results of the study with information on the uncovered problems and recommendations on handling them may be accessed in Ukrainian here.

DOZORRO is a project of the civil society organization Transparency International Ukraine designed to ensure fair play in the public procurement sector.

The project team has created and maintains the monitoring portal dozorro.org and the public and professional BI modules BI Prozorro. In addition, DOZORRO develops the DOZORRO community, a network of civil society organizations that monitor public procurement and report violations to supervisory and law enforcement agencies.

The post ABNORMALLY LOW PRICE HANDLING IN PROZORRO MUST BE REVISED first appeared on Transparency International Ukraine.

COVID-19 INSURANCE FOR HEALTHCARE WORKERS: HOW MUCH IS A LIFE WORTH

TI Ukraine — Mon, 14 Sep 2020 07:49:33 +0000

Medical personnel is at the highest risk of contracting COVID-19. Medical workers handle virus cases each day, and in the fight against the illness they often lose their own health and sometimes even their lives.

In Ukraine, over 12 thousand medical workers have now been infected with the virus, which is approximately 9% of all infection cases. 98 doctors died of virus-related complications, and yet only 12 families received financial compensation from the state.

At the height of the pandemic the Ukrainian parliament enacted a law approving the issuing of financial compensation to medical workers who have fallen ill with COVID-19 or died of associated complications. A month later, in June, the Cabinet of Ministers issued a decree regulating the provision of such compensation.

The law and the decree only apply to cases involving death or disability of the medical worker. As such, some hospitals in the country have begun the procurement of COVID-19 infection insurance for their personnel through Prozorro without involving government initiatives.

The companies with the most hospital insurance contracts signed are USI and Oranta. The first company belongs to entrepreneur Oleksii Kocherev, who in 2012 ran for MP as a member of Nataliia Korolevska’s “Ukraine Forward!” party. The other one has connections to Kazakh entrepreneur Kenes Rakishev, the son-in-law of Kazakh politician Imangali Tasmagambetov.

Read more on how the state supplies the front lines of the war against the coronavirus in this Ukrayinska Pravda article.

COVID-19 infection rates among medical workers

The highest rate of infections among medical personnel was recorded in April, when one in five of those infected with COVID-19 was a medical worker.

At the beginning of September the percentage of infected medical workers was around 9% (12 306 cases, according to Ministry of Healthcare data from September 9) of the overall number of people infected (143 030) in Ukraine.

Official data, however, might not accurately represent the true rate of coronavirus infections. Hospital administration sometimes pressures personnel to conceal incidences of COVID-19 infection.

State insurance for medical workers

During a May 7 emergency session, the Verkhovna Rada passed a bill expanding the rights of medical workers and their family members.

Legally, it equates doctors treating COVID-19 to “military personnel engaged in combat”, but it does not really protect them should they contract COVID-19.

The law does not guarantee insurance payouts to all medical workers who contract the coronavirus while at work, but only to those who become disabled or die of COVID-19 complications within a year since infection.

Insurance payouts are adjusted according to the severity of the disability and are scaled as such: UAH 630 thousand for a type III disability, UAH 735 thousand for a type II disability and UAH 840 thousand for a type I disability.

The medical worker’s family will receive UAH 1.5 million in compensation if the coronavirus case proves fatal.

At the beginning of summer the Cabinet of Ministers issued a decree that regulates the issuing of insurance payouts to medical workers in cases of COVID-19-related disability or death. The payouts will be handled by the Social Security Fund of Ukraine. UAH 233 million have been allocated for the effort.

According to Prozorro data from September 2, insurance was procured for 13 800 medical workers. Overall, more than 83 thousand medical workers in Ukraine are currently handling coronavirus cases.

The regions with the most insured doctors are the Sumy (3 861), Dnipropetrovsk (1 672) and Mykolaiv (1 343) oblasts.

In the Kirovohrad, Kharkiv and Khmelnytskyi oblasts, no Prozorro procurement of COVID-19 insurance for medical workers took place.

COVID-19 infection insurance for medical workers may also be provided by charities, volunteers or private enterprises.

In Lviv oblast a custom, regional COVID-19 insurance program took place. A relief fund was created through donations in a joint effort by the local authorities, businesses and private citizens. The money was then transferred to a private insurance company. The program allowed over 5000 medical workers in the region to obtain COVID-19 insurance.

In Ukraine, there are 240 designated “key hospitals” that accept COVID-19 patients. According to our calculations, Prozorro procurement helped insure 4999 key hospital workers in 15 regions.

The regions with the most insured key hospital workers are the Sumy (1 324), Zakarpattia (817) and Kherson (532) oblasts.

Insured event payouts for medical workers

Usually, the duration of COVID-19 insurance for medical workers is one calendar year. Depending on the company and the selected insurance plan, the payouts range between UAH 5 and 15 thousand in the case of COVID-19 infection and between UAH 10 and 40 thousand in the case of death.

It should be pointed out that some establishments obtained insurance policies with much higher payouts. The doctors of the Sumy emergency rescue center will be paid UAH 315 thousand should they fall ill or die because of the coronavirus.

According to our calculations, USI was the company that signed the most COVID-19 personnel insurance contracts with medical institutions. Between March and August, it signed 46 contracts and insured more than 4 thousand doctors.

USI was founded in 2003. The end beneficiary of USI as part of BK-Expert LLC, is Oleksiy Kocherev, who in 2012 ran for MP as a member of Nataliia Korolevska’s “Ukraine Forward!” party.

The second place for the most COVID-19 personnel insurance contracts signed goes to Oranta PJSC that insured over 3 thousand doctors with 30 contracts.

Oranta was founded in 1994. The end beneficiary of Oranta as part of BTA Bank is Kazakh venture capitalist Kenes Rakishev.

Kenes Rakishev is the son-in-law of Kazakh politican Imangali Tasmagambetov, who from 1993 to 2004 served in positions including the State Secretary of Kazakhstan, Head of the Presidential Administration of Kazakhstan and the Deputy Prime Minister of Kazakhstan. From 2004 to 2014 Tasmagambetov first was Äkim of Almaty and then of Nur-Sultan (formerly Astana). In 2014, he returned to higher positions (Minister of Defense, then Deputy Prime Minister). In February 2017, he was appointed ambassador of Kazakhstan to Russia.

***

Medical personnel is at the highest risk of contracting COVID-19. Medical workers handle virus cases each day, and often in the fight against the illness they lose their own health and sometimes even lives. The state only provides financial compensation when medical workers become disabled or die of COVID-19, and as such medical institutions are forced to insure their workers with their own funds or to ask for help from charities, volunteers or businesses.

The post COVID-19 INSURANCE FOR HEALTHCARE WORKERS: HOW MUCH IS A LIFE WORTH first appeared on Transparency International Ukraine.

COVID-19 PROCUREMENTS: APPROACHES NEED TO BE CHANGED

TI Ukraine — Tue, 01 Sep 2020 10:17:09 +0000

In March, public procuring entities were allowed to procure the most necessary goods and services required to fight against the coronavirus without auctions.

The Cabinet of Ministers approved a special Directive that defined the list of such goods and services as well as the procurement procedure.

This step was necessary at the beginning of the pandemic, when nobody was prepared for a sudden outbreak.

Transparency International Ukraine advocated to simplify the procedure, because people’s lives depended on it. As a result, hospitals did not have to wait a month to hold an auction and buy vital medicines, ventilators, masks.

With the simplified procedure, it is enough to find a supplier, sign a contract and publish it in ProZorro. According to the Directive, if necessary, this can be done in a day. By this procedure, procuring entities have been buying for almost half a year. During this time, 50 thousand procurements were conducted and published in ProZorro with an estimated value of almost UAH 6 billion.

How efficient is the Covid-19 procurement?

Efficient procurement is when a quality product is purchased at the lowest possible price, received on time and in full scope. With COVID-19 procurements, questions arise about each component of efficiency. Let’s recall few episodes.

Medical protective suits for doctors: price and quality

The purchase of medical protective suits by the Ministry of Health is one of the most high-profile scandals related to coronavirus procurements. The Ministry first assigned the SOE “Medical Procurements of Ukraine” with the purchase of medical protective suits. SOE analyzed the market and selected a Ukrainian company with the most favorable offer.

However, its products did not satisfy the Ministry, because they did not have the appropriate quality certificates. Then the Ministry of Health signed an agreement for the delivery of Chinese suits with the company “Meddiv”, which is famous for cooperation with organizations from the Ministry of Internal Affairs.

As a result, the Ministry of Health bought fewer suits for a higher price. This happened because the Chinese costumes had an international quality certificate. We sent a request to the Ministry of Health to provide this certificate but received only a typical response letter.

Ventilators that won’t be delivered

In April, we wrote about a significant number of canceled procurements of ventilators. The reasons were different: somewhere the customer made a mistake during the procedure, somewhere the transaction was canceled by mutual agreement of the parties. One company signed contracts with public procurers and then notified that it could not deliver the product.

LLC “Company elimited” received 9 orders for the supply of 15 ventilators, 4 of the 9 – for Zhytomyr. The contract had to be terminated, although under some agreements the contractor even received payment.

Typical violations

Our regional coordinator working on the project related to monitoring of medical procurements, Tatiana Rudenko, says that most of the violations occurred at the beginning of the epidemic. This makes sense, because customers did not know how to use the procedure, and it was necessary to procure urgently.

However, time passes, but violations do not disappear. Tatiana finds them in more than a quarter of the procurements that she analyzes. Often, they are quite typical.

Procurement of items not included on the list as set forth in the Directive

Some procurers unknowingly or intentionally buy something that cannot be purchased using the simplified COVID-19 procedure. For example, UC “Informatyka”, which is subordinate to the Kyiv City State Administration, tried to buy cameras to fight COVID-19 for almost UAH 65 million via a direct contract.

This happens not only in the capital. In Odesa, the hospital bought furniture, and in Dnipro, the hospital tried to procure repairs. There is nothing wrong with furniture or repairs, they are just not that important at the moment. That is why they should be purchased via open auctions and the contractor with the best price offer should be chosen.

Overpricing

At the beginning of the pandemic, the price gouging had a rational explanation: in the face of scarcity, suppliers sold their products to those who could offer and pay more money.

We have been monitoring the procurements of personal protective equipment since the beginning of the pandemic. The typical situation was the procurement of masks. Prices for them increased in March and did not change for several months. Some customers were forced to buy them for 25-27 UAH per piece.

This is normal when there is a shortage on the market, but now anyone can buy a mask at a pharmacy or supermarket for 8 UAH. So why do some customers still pay 15-20 UAH?

What can be done

The COVID-19 procedure was completely justified at the beginning of the epidemic, but now it is time to return to more effective and controlled procurements. Some customers have already started to conduct competitive procurement of goods to fight COVID-19.

In particular, Ukrposhta held an auction to buy 300 thousand reusable masks. The expected purchase price was 6.6 million UAH. At the same time, the cheapest offer was 3.5 million UAH. We hope that it will be possible to sign the contract at this price and save more than UAH 3 million.

The SOE “Medical Procurements of Ukraine” is also efficient in conducting procurement. In July, it procured medical masks. The winning price offer was UAH 2 million lower than the estimated value. The approximate price was UAH 2 per piece.

Such savings are the result of healthy competition on the market, which will help to use funds more effectively. By amending the Directive, the government can make COVID-19-related procurements more competitive. Another option can be to amend the Law of Ukraine “On Public Procurement”.

The situation changes and the procurement procedure need to be adjusted

The situation of uncertainty and panic is over. According to the Ministry of Health, the main hospitals are equipped with personal protective equipment for several months, even in the worst-case scenario, when the hospitals would need to operate at full capacity. Part of the procurements were centralized, and they are now successfully carried out by the SOE “Medical Procurements of Ukraine”.

Even in case the epidemiological situation will get worse, there are enough supplies, so procurements can be planned and carried out in advance, and their effectiveness should be monitored by controlling and law enforcement agencies.

State Audit Service: how effective is it

The State Audit Service should be at the forefront of the fight for efficient public procurement, but it pays little attention to coronavirus procurements.

The auditors explain that they do not have enough powers. In particular, they can’t react quickly to violations and initiate the audit whenever they want. They are allowed to check one client only once a year.

The situation can be corrected by making changes to the legislation, but the auditors themselves must determine such procurements as a priority. Otherwise, even expanding the powers of the main controlling body won’t change anything.

Huge amounts of public funds are spent on purchasing goods and services to combat COVID-19. It is very important to use them effectively. Almost five months of uncontrolled procurements via direct contracts is too much. It’s time to regain control and efficiency.

The post COVID-19 PROCUREMENTS: APPROACHES NEED TO BE CHANGED first appeared on Transparency International Ukraine.

ABUSE IN PUBLIC PROCUREMENT: HOW DO YOU REPORT IT?

TI Ukraine — Thu, 27 Aug 2020 08:33:35 +0000

Every day the Prozorro system handles between hundreds and tens of thousands of procurement reports. Most of them are filed by government agencies, meaning that such procurement is performed with taxpayer funds.

It could be the government buying food for your child’s school cafeteria or allocating resources towards major road maintenance. Any information regarding such procurement may be viewed on the Prozorro website.

As unfortunate as it may be, even the most transparent public procurement system does not guarantee protection from abuse of power. Corruption, procurement of low-quality goods and services, mishandling of public funds – if you suspect the involvement of these violations in public procurement, you should notify the authorities or related NGOs.

What kinds of violations are there?

The type of violation defines the regulatory body you need to contact and as such, it is highly important to recognize the most common violations in procurement.

Contract Terms Not Fulfilled, Partially Fulfilled, or Subpar Results

For instance, you know that your local department of public works paid a contractor to repave the asphalt in the yard of your condominium. You have the found the related report on Prozorro and reviewed the contract. According to it, the asphalt is supposed to have already been repaved, but in reality, the work has not even begun. What is to be done?

First, you must phone or write to the contractor. The procurement report page always has the contact information of the person responsible for the act. Perhaps due to unforeseen circumstances the contract fulfillment deadline had been extended and work is to commence tomorrow?

If the contractor cannot or does not want to provide an explanation for the delay, you should contact the necessary regulatory body. The government agency handling public procurement is the State Audit Service of Ukraine.

Auditors may begin monitoring the act of procurement and force the contractor to cease further violations. They may also decide to conduct a full-scale audit of the public works department or the contractor’s business.

Overcharging

For some inexplicable reason, repaving your yard cost the department of public works much more than repairing a perfectly identical yard in a different neighborhood, such as the one your friends live in. What is to be done?

Like in the previous case, contact the contractor first. The price is affected by a multitude of factors – work difficulty, cost of materials etc.

If you choose to investigate the matter further, you might discover a more sinister reason: perhaps the contractor that paves asphalt in your yard is a favorite of your public works department. The contractor paves all yards in your neighborhood, stifling companies willing to do the same for less.

In this case the mishandling of public funds by a government official may be of interest to the police.

Apparent Conspiracy

There were only two participants in the yard repaving tender: the company that belongs to your neighbor and the company that belongs to your neighbor’s wife. Relatives may not engage in market competition. Any attempts to do so are classified as conspiracy to commit fraud.

Unscrupulous tender participants represent two, three or sometimes even five companies. Those companies may have been founded by the same person or led by their relatives. Some particularly ingenious participants attempt to compete with their own companies by abusing the legal status of a private entrepreneur.

If you are aware of a conspiracy to commit tender fraud taking place, contact your regional Anti-Monopoly Committee office. Be sure to provide all the evidence you have in your letter.

The person organizing the tender should also be made aware of any potential conspiracy.

Procedural Violations

Your local public works department may have paid for yard repairs with COVID-19 relief funds. This is, of course, a violation, as repairs are certainly not on the list of things that may be purchased with those funds.

First, you should contact the contractor. This could have been a technical error and a wrong procedure was selected when the contract was being filed in the system (the procurement size would have to be less than 50 thousand UAH).

However, your local public works department may have deliberately done this to avoid conducting a fair tender. In that case, be sure to contact the State Audit Service.

Having difficulty? The DOZORRO community can help you

Our DOZORRO project has been monitoring public procurement since November 2016. The team behind it has created and maintains the DOZORRO community – a network of NGOs that monitor public procurement and report any detected violations to regulatory and law enforcement bodies.

If you discover any procurement-related violations, press “Review Procurement on DOZORRO” on the selected procurement’s Prozorro page. Provide all information regarding the violation that you possess. If our experts confirm the presence of a violation, they will report it to the necessary regulatory bodies.

On the DOZORRO website you may also find instructions on how to correctly prepare a letter to a regulatory body, should you wish to do it yourself:

Choose the type of procurement and the type of violation.

Upload the letter draft and fill in the necessary fields.

Print, sign and mail the letter to the regulatory body’s office address.

We must alert you of the fact that some instructions had not yet been updated to accommodate the changes introduced by the 19 April 2020 revision of the Public Procurement Law. To receive additional consultation, contact us at the DOZORRO Facebook page.

Do not let violations slide. Public procurement is a way of providing all of us with high-quality public services. It is performed with taxpayer funds. None of us enjoy seeing our money being squandered or stolen.

The post ABUSE IN PUBLIC PROCUREMENT: HOW DO YOU REPORT IT? first appeared on Transparency International Ukraine.

AUDITORS ASSIGN TOO FEW INSPECTIONS

TI Ukraine — Thu, 30 Jul 2020 13:32:18 +0000

“Auditors appoint field inspections only in 6.5% of cases when monitoring has confirmed a violation. That’s not enough,” says TI Ukraine’s Director of Innovation Projects Ivan Lakhtionov.

At the same time, representatives of the State Audit Service say they would like to use other control measures than preventative monitoring in as many violations as possible. Which makes it even less unclear why they do not engage in field work.

On July 28, TI Ukraine has published its report based on the research of the SAS’ work. Among other things, analysts have calculated that the auditors found violations in 92% of tenders they checked.

Lakhtionov points out this figure is not necessarily shocking.

“Auditors pre-select tenders for ‘official monitoring.’ This means that 92% of confirmed violations is not all that relevant. This approach kind of twists the original idea. Procurement for monitoring was meant to be selected at random. Then its results would really reflect how widespread violations are,” he explains.

In addition, Lakhtionov points out that, out of the 92% of confirmed violations, only 39% are eliminated, and 0.7% are partly eliminated. There is no information whether violations have been fixed in other tenders. Which means that the fact of the auditors finding a violation does not mean the procuring entity will fix it.

The post AUDITORS ASSIGN TOO FEW INSPECTIONS first appeared on Transparency International Ukraine.

LEADING THE FIGHT: HOW MUCH UKRAINE’S MINISTRY OF INTERIOR SPENT ON COVID

TI Ukraine — Thu, 25 Jun 2020 10:45:26 +0000

The coronavirus disease came to Ukraine in early March: the first confirmed case was recorded on March 3 in Chernivtsi. Just a week later, the government declared a national quarantine. The Anti-Coronavirus Fund was created to fight the outbreak, amounting to almost UAH 65 billion.

To redirect money to the Fund, the government had to cut funding for certain sectors. The biggest sufferer was culture, with funding reduced almost by half, or UAH 7 billion. They also reduced support for education by 5 billion. Even medical professionals took a toll, with reduced funding for continuing professional development.

Instead, the Verkhovna Rada increased the spending on the Ministry of Internal Affairs. Moreover, the Budget Committee of the Verkhovna Rada allowed allocating UAH 2.7 billion from the Fund to bonuses for law enforcement officers in connection with the pandemic.

This amount is greater than bonuses received by healthcare workers directly involved in taking care of the coronavirus patients.

Biggest Spenders

Since the beginning of the pandemic, Ukrainian doctors and public institutions have faced a shortage of high-quality medical equipment, as well as personal protective equipment. To speed up procurement, the government allowed the purchase of items necessary to fight against the virus under a simplified procedure, without holding a public tender. Certain crucial institutions still do not have enough protective equipment, even in our fourth month of the struggle against the virus.

However, as the DOZORRO project found out, the biggest procuring entity under the coronavirus procedure is — shockingly — the Ministry of Internal Affairs. Structures subordinate to the Ministry have already concluded agreements* for more than UAH 600 million through the coronavirus procedure.

For reference, primary hospitals and municipal institutions in Kyiv spent more than twice as little in the same period, UAH 230 million. Law enforcement accounts for over 14% of all coronavirus-related spending. This is more than the spending of 171 hospitals from 18 oblasts combined.

Law enforcement institutions used this money to buy PPE, disinfectants and medical equipment. A significant amount of spending has gone to medical institutions subordinate to Avakov. These are supposed to serve only former or current Ministry employees. The Ministry of Internal Affairs has spent over a third of the money on providing these hospitals with the necessary equipment: almost UAH 217 million.

Central MIA Hospital alone has been allocated over UAH 122 million. This money has been spent on the procurement of tests and PPE. At the same time, according to the Ministry of Healthcare, institutions subordinate to the Ministry of Internal Affairs are not considered “crucial,” or “key,” hospitals: when symptoms of the coronavirus disease are identified, law enforcement officers are also hospitalized in other medical institutions.

For example, overall, the “crucial” hospitals of the Chernivtsi region spent three times as little on coronavirus-related procurement as the Central MIA Hospital — UAH 38.3 million. This oblast has the highest number of identified coronavirus cases: as of the end of June, they were over 4,400. However, according to law enforcement officials, only about thirty people were treated in the MIA hospital during the entire pandemic.

The DOZORRO project has approached the Central MIA Hospital for a comment multiple times, but has not heard back as of the moment of writing.

What is more, medical establishments subordinate to the Ministry have been involved in journalist investigations about inflated prices in procurement multiple times. This includes the Central Hospital.

In early April, the MIA signed an agreement for the supply of ventilators with the newly created company Mriia Medical. Under the terms of the agreement, the company had to supply 50 foreign-made devices to the hospital. The price of one ventilator was more than UAH 1 million. In total, over UAH 51 million was supposed to be spent. However, journalists found that the market value of such devices was less than UAH 100-220 thousand per unit. After the outcry in the media, the procurement was canceled under the pretext that the equipment was no longer necessary.

The DOZORRO project found a similar situation with the procurement by Special Commandant’s Office for Security and Support of the State Border Service, also subordinate to the Ministry of Internal Affairs. The Office entered into an agreement for almost UAH 20 million with the Kyiv company Medgarant: it purchased three X-ray machines for healthcare establishments of the State Border Service for UAH 6.4 million each. When journalists requested a quote, Medgarant offered a much lower price for the same machine, UAH 4.6 million per unit. The Border Service claims it was their best price offer.

Procurement Where You Have to Know People

The main supplier of PPE for the Ministry of Internal Affairs is the state enterprise Fort, also subordinate to the MIA. Before the pandemic, Fort specialized in the development and manufacture of firearms and special equipment for law enforcement officers. But over the past few months, the state-owned enterprise has started supplying imported personal protective equipment to structures subordinate to the Ministry. During this time, more than a quarter of all MIA’s coronavirus-related expenses, almost UAH 154 million, ended up on Fort’s accounts. For this money, the company supplied protective masks and biohazard suits. As previously reported by Slidstvo.Info, Fort sold 1800 reusable respirator masks to the Service Center for the National Police of Ukraine divisions at inflated prices. The police bought respirators for UAH 4.7 thousand each, although before that, the Central Clinic of the Ministry of Internal Affairs bought such respirators 15% cheaper from the same enterprise.

Over UAH 60 million went to the company Technopolis 15. Before this year, the company had never won at public procurement. Notably, this company has ties to Viktor Polishchuk, the owner of Eldorado electronics chain and former owner of Mykhailivskyi bank, involved in a SIB criminal proceeding. Journalists of Bihus.Info have recently spotted the businessman visiting the Ministry building.

The coronavirus pandemic has affected not only those who are directly involved in overcoming the crisis. It also resulted in the closure of cultural projects and temporary suspension of educational projects. This includes the newly created Archive of National Memory. For the institution to start working, the building has to be reconstructed. Over UAH 57 million was allocated for this in the 2020 budget. However, this money was redirected to the needs of the pandemic. The Ministry of Internal Affairs, on the other hand, continues to work without cutting costs. In the spring, law enforcement officers announced a tender to renovate their hotel building in the center of Kyiv, allocating over UAH 37 million. The work was awarded to a person involved in a criminal proceeding and multiple journalist investigations.

Commenting on their spending, the Ministry explained that law enforcement officers were doing a high-risk job. According to Artem Shevchenko, head of MIA Communications Department, Ministry employees come in second by the coronavirus rate. He believes that the spread of the virus among law enforcement officials may undermine the national security. Therefore, the Ministry takes care of buying everything necessary to protect its employees and has prepared its healthcare establishments to receive the patients. Medical establishments subordinate to the Ministry have prepared over a thousand beds for former and current MIA employees.

* the entire text refers to current, terminated and completed agreements

The article was co-written by Oleksii Yarylchenko.

The post LEADING THE FIGHT: HOW MUCH UKRAINE’S MINISTRY OF INTERIOR SPENT ON COVID first appeared on Transparency International Ukraine.

Procurement System Under Threat

TI Ukraine — Wed, 03 Jun 2020 15:16:24 +0000

Attempts to revive the tender committee of the Ministry of Healthcare, the methodology of “Ukravtodor” and the resurrection of the idea to support the domestic manufacturer.

All these are ominous harbingers of further tightening of control over public procurement.

Unfortunately, this control is not aimed at the observance of fair rules; it is instead about deals with contractors who really want to get their billions.

Revival of the Tender Committee

Even though there is a special state-owned enterprise which is designated as the central procuring entity for the medical sphere, the Ministry of Healthcare has revived its tender committee.

The reason for this was the purchase of protective suits for medical workers, which has already become scandalous.

Over the past six years, centralized medical procurement has undergone a clear and logical evolution. At first, the Ministry moved away from the practice of the Yanukovych times when it conducted procurement through its own tender committee.

Back then, this allowed the Ministry’s management to manually control billions of dollars in procurement flows and led to completely inefficient spending. After the Revolution of Dignity, centralized procurement of medication was delegated to international organizations. The prices dropped by 40% on average.

The next logical step was the creation of its own procurement agency, which would conduct procurement no less effectively than international companies. State-owned enterprise Medical Procurement of Ukraine was meant to become this agency.

On April 10, it received the first order from the Ministry to purchase a large batch of protective suits. The company has signed a reasonable contract with the Ukrainian manufacturer “Tekstyl-Kontakt.” The Ministry refused to approve this contract because the suits did not have an international quality standard.

Interestingly, the terms of reference provided by the Ministry contained no mention of the international standard. The Ministry of Healthcare has effectively decided to revive its tender committee and conduct its own procurement of protective suits from China through a Ukrainian company.

The Dozorro team never received a response as to how the Ministry selected this supplier and how it checked its certificates. Finally, the Ministry bought 20 thousand suits fewer than planned and paid UAH 13 million more.

They bought it with a certificate of protection from infectious agents. Former director of Center of Public Health, however, has his doubts about whether this is important for protection against the coronavirus. Furthermore, the suits did not arrive in Ukraine in time prescribed by the agreement, by May 1.

Coincidentally, the State Audit Service of Ukraine is now intending to inspect state-owned enterprise Medical Procurement of Ukraine. It seems that the ministry is trying to recover “manual” control over centralized medical procurement by blocking the work of its own enterprise.

I hope the situation with the suits doesn’t happen again. The state-owned enterprise has already announced that it will be procuring personal protective equipment on behalf of the Ministry.

It seems that the ministry is trying to recover “manual” control over centralized medical procurement by blocking the work of its own enterprise.

Ivan Lakhtionov, Director of Innovation Projects

Road Construction

The 2020 budget included a massive amount for road construction and repair: UAH 85 billion for national roads and UAH 22 billion for local ones.

Ukravtodor cites problems that may play against the “big construction”: tender games, unfounded stalling of tender procedures through complaints, unqualified and dishonest contractors.

At the same time, Ukravtodor tries to overcome these problems by ignoring the basic principle of Prozorro: equality of participants. It insists that the Ministry of Economy should approve the mandatory methodology for road works procurement.

On the one hand, the methodology should help procuring entities make their procurement more efficient, and on the other hand, it may lead to reduced competition through discriminatory approaches. The Anti-Monopoly Committee, for one, has already identified a number of discriminatory requirements in the first version of the methodology.

What is more, even if the Ministry of Economy does approve the methodology as mandatory, procurement participants will be able to dispute discriminatory requirements with the AMCU. This will probably cause delays in procurement just as long as tender games do.

Similar initiatives may be adopted by other agencies, and the practice of legalizing discriminatory requirements may extend to procurement in other sectors.

A methodology is needed, indeed. There was even an attempt to develop it together with experts, entrepreneurs and Ukravtodor representatives as a working group under the Ministry of Economy. However, it has been a month since this version was filed with the Ministry, and its future fate is yet unknown.

The practice of legalizing discriminatory requirements may extend to procurement in other sectors.

Ivan Lakhtionov, Director of Innovation Projects

On Protecting the Domestic Manufacturer

We still remember the populist draft law “Buy Ukrainian, Pay Ukrainians.” The previous convocation of the Parliament passed it only in the first reading. Back then, lawmakers wanted public procurement participants to prove the level of their “Ukrainian-ness” with numerous certificates.

Local manufacturers would be winning at a tender even if the price offer was 20%-30% more expensive than that of the competitor. This would lead to extreme bureaucracy in the sphere, generate a number of corruption risks and additionally strain the budget.

Thanks to the criticism from economists, NGOs and even domestic manufacturers themselves, the draft law was not passed. However, there are still conversations about changing the principles of the ProZorro system.

This was discussed, for one, at the subcommittee on industrial policy meeting, while the Minister of Economy Ihor Petrashko called the globally lauded procurement system “weird” because it did not give any preference to the domestic manufacturer.

Indeed, public procurement can and should stimulate the internal market and support the Ukrainian business, especially in the times of a crisis. It can help to generate more jobs for locals, too.

However, arbitrary preferences will help well-connected manufacturers rather than the Ukrainian ones in general. It will also violate a number of Ukraine’s international commitments, including the Association Agreement with the EU. This is why Transparency International Ukraine has urged the lawmakers to refrain from arbitrary changes to the ProZorro system.

According to BI ProZorro, 99% of winners in the system are Ukrainian companies, so they are already a clear majority. Support of manufacturers through public procurement preferences will hardly be helpful. What can be done instead is tax deductions, access to cheap loans, and manufacturing support programs. This would allow Ukrainian manufacturers to become truly competitive instead of just winning by default because of legislative preferences.

Finally, I would like to remind everyone that the electronic procurement system is a tool which must ensure transparency of procurement and adherence to clear and easily understandable rules. However, the recent trends show new attempts to control this sphere. Can the reform be rolled back?

Support of manufacturers through public procurement preferences will hardly be helpful. What can be done instead is tax deductions, access to cheap loans, and manufacturing support programs.

Ivan Lakhtionov, Director of Innovation Projects

The post Procurement System Under Threat first appeared on Transparency International Ukraine.

How Hospitals Insure Their Staff during COVID-19

TI Ukraine — Fri, 08 May 2020 08:40:42 +0000

On April 7, the Parliament passed the draft law pursuant to which healthcare workers will receive insurance payouts if they become disabled or die because of COVID-19. In fact, some hospitals started insuring their staff not just against death, but also against the disease itself at the very start of the epidemic. We decided to research such tenders in Prozorro.

As of May 8, there are 2758 confirmed cases of COVID-19 among healthcare workers in Ukraine. 19 of them have died from complications. Most healthcare workers with COVID-19 are based in Chernivtsi, IvanoFrankivsk, Ternopil and Rivne oblasts.

What Has the Parliament Passed?

Yesterday, on May 7, the Parliament passed draft law No. 3376-1 to amend the Law of Ukraine “On Protection of the Population against Infectious Diseases.” The draft law has been supported by 340 MPs. The Law stipulates that the government provides insurance payouts if they become disabled as the result of COVID-19 or die from COVID-19.

If a healthcare worker becomes disabled, the government will pay them UAH 630,000. The family of a healthcare worker who dies from COVID-19-related complications will constitute UAH 1.5 million.

Procurement of Insurance against COVID-19 for Healthcare Workers in Prozorro

The Law passed on April 7 actually does nothing to protect healthcare workers if they just come down with COVID-19, since the financial assistance is provided only in case of disability or death.

However, some healthcare establishments have started insuring their staff against COVID-19 infection independently even before the Law was passed, buying such services via Prozorro.

As of April 7, 3,616 healthcare workers had been insured against COVID-19 in Ukraine. 23 tenders were held in Prozorro for a total amount of UAH 919,220.

Sumy, Dnipro and Zakarpattia oblasts have insured more healthcare workers than the others.

Sumy oblast is among the first that started ensuring its healthcare workers: the first tenders were held back in March. Three healthcare establishments insured their employees. Most tenders, however, were held in April.

The majority of tenders were done with the use of non-competitive procedures (through direct agreements with the insurance companies). Yet, there were some healthcare institutions which tried to procure services through competitive bidding. However, most tenders were unsuccessful, since no participants submitted bids.

For instance, Khmelnytskyi Oblast Center of Urgent Medical Aid and Catastrophe Medicine wanted to insure 1,215 healthcare workers against COVID-19 infection, but the tender was invalid because no proposals were submitted. The hospital has not yet announced any new tenders.

Insurable Event: Payouts to Healthcare Workers

The period of insurance of healthcare workers against COVID-19 usually constitutes one year. Depending on the company and insurance program, the healthcare workers may receive:

UAH 5,000-15,000 in case they contract COVID-19;
UAH 10,000-40,000 in case of death.

Taking into account the low salary of most healthcare workers, even this little money will considerably support the healthcare workers if they come down with COVID-19.

Company U.S.I Is Leader of Healthcare Staff Insurance in Prozorro

According to our calculations, U.S.I. entered into the highest number of agreements for insurance of healthcare workers if they get infected with COVID-19. During March, April and May it entered into 18 agreements for a total amount of UAH 778,000.

U.S.I. was founded in 2003. Its primary activity is other types of insurance (except for life insurance). In April 2020, U.S.I. merged with Ukrfinstrakh company.

According to YouControl, the final beneficiary of U.S.I. is Oleksii Kocherev. In 2012, he ran for the Parliament with Natalia Korolevska’s party.

U.S.I. participated in 190 tenders in 2019 and 2020 (90% of them being non-competitive), which resulted in 173 agreements for UAH 3.6 million total.

The company provides insurance services against COVID-19 not only to healthcare workers but to any individuals of ages 3 to 65; it offers two insurance programs.

The “in-patient” program offers insurance payment of UAH 200-400, and a payout of UAH 20,000-40,000 in case of disease.

In the “out-patient + in-patient” program, the insurance payment is UAH 460-960, and in case of the disease, the payout is UAH 23,000 to UAH 46,000.

It should be noted that there are agreements in the system where the procuring entity is a healthcare establishment, the procurement item is insurance services, but there is no agreement available in the system. It is possible that these are agreements for insurance against COVID-19 as well, but we disregarded them in our analysis.

DOZORRO is a project of Transparency International Ukraine designed to ensure fair play in the public procurement sector.

The project team has created and maintains the monitoring portal dozorro.org, as well as the public and professional BI Prozorro modules. In addition, the project is building DOZORRO community — a network of civil society organizations which monitor procurement and report violations to supervisory and law enforcement agencies.

The post How Hospitals Insure Their Staff during COVID-19 first appeared on Transparency International Ukraine.