ProZorro Electronic system of public procurement of Ukraine

2016

Mandatory use from August 1

All government purchases in Ukraine from August 1, 2016 must be made through the ProZorro system. Local authorities, utilities and other organizations that use taxpayer funds are obliged to use a single system for tenders.

tenders that exceed the thresholds shall be conducted through Prozorro. The state customer (authority, state or utility) must upload bids to ProZorro, thus announcing the purchase. Then he answers the questions of suppliers and conducts an auction or other procedure in the electronic system provided for by the Law "On Public Procurement," the message says.

The use of purchases worth up to 200 thousand hryvnia for goods and up to 1.5 million UAH for work in ProZorro is voluntary.

President Poroshenko signed the law "On public procurement"

In February 2016, President of Ukraine Petro Poroshenko signed the law "On public procurement," adopted by parliament back in December 2015.

The document provides for the introduction of an electronic system for all state purchases of goods and services, the cost of which should be equal to or more than 200 thousand hryvnia.

And for work - equal to or exceeds 1.5 million hryvnia (for customers operating in certain areas of management, the cost of goods and services is equal to or exceeds one million hryvnia and for work - equal to or exceeds five million hryvnia).

In addition, the law ensures the distribution of the electronic procurement system during 2016 in two stages:

• from April 1 - for the central executive bodies and customers operating in certain areas of management;
• from August 1 - for other customers.

2015: The beginning of work on the creation of the system

The start of work on the creation of an electronic procurement system ProZorro was given in February 2015 under the Cabinet of Ministers Arseniy Yatsenyuk. Initially, the Ministry of Economy of Ukraine planned to transfer all central authorities to electronic format until September 1, 2015, but the reform was delayed.

The shadow economy of Ukraine broke a multi-year record in 2015 - up to 42% of GDP. Losses from corruption and opacity in public procurement alone amount to about 50 billion a year. This is the amount the authorities wanted to save annually thanks to the innovation - electronic procurement.

They were organized by the Ministry of Economy, headed by Aivaros Abromavicius. Activists together with the department in February 2015 launched a pilot project for e-bidding - the ProZorro website. At this time, it operates selectively and is not regulated by law.

At first, the Ministry of Economy planned to transfer all central state authorities to electronic format by the end of 2016. But after criticism from the president, she pledged to do so by September 1.

By June 2015, only about a hundred government agencies and companies formally joined the system. These are almost all ministries, the National Bank, the State Administration of Affairs, the State Financial Inspectorate, the Kyiv City State Administration, the Lviv City Council, some universities, medical institutions, etc. At the same time, tenders there are held partially and by no means all.

The number of purchases in electronic format is still small. If, according to the State Statistics Service for the 1st quarter of 2015, transactions on public procurement for UAH 122 billion were concluded in Ukraine, then on the Prozorro resource, purchases that reached the auction amounted to only UAH 194 million (as of May 19). According to analysts, the expected savings from this amount are UAH 36 million or 18.6%.

In total, 356 purchases reached the electronic auction, of which only 32 signed contracts. The real savings on them so far amounted to only 200 thousand hryvnia or 12.2% of the planned price.

• Ministry of Defense of Ukraine: 66 tenders were held, preliminary savings - 30 million UAH. Contracts were signed based on the results of 6 tenders, savings - UAH 30,319.

• Ministry of Justice of Ukraine: 21 tender, preliminary savings - 103,828 UAH. An agreement was signed based on the results of 1 tender, real savings - 2029 UAH.

• Energoatom: 12 tenders, preliminary savings - 337,585 UAH. Contracts were signed based on the results of 3 tenders, savings - UAH 61,532.

• KGGA: 4 tenders, preliminary savings - UAH 85,890. Signed contracts based on the results of 2 tenders, savings - 61,200

• National Bank of Ukraine: 3 tenders, preliminary savings - 60 650 UAH. Contracts were signed based on the results of 3 tenders, savings - UAH 12,720.

• State administration of affairs: 3 tenders, preliminary savings - 10880 UAH.

• Odessa Commercial Sea Port: 1 held tender, preliminary savings - UAH 17,200.

• Lviv City Council: 3 unfinished tenders

• Ministry of Economic Development and Trade of Ukraine: 1 incomplete tender

• State Financial Inspectorate of Ukraine: No tenders

• Ministry of Health: 1 pending tender

The requests of the auction participants at the auction are very diverse - from envelopes for district administrations to lighting equipment for airports. Basically, at the auction, companies buy stationery, computer and office equipment, building materials.

Shopping sites, at first glance, look really affordable and easy to use. The prices provided by the participants (given that the customers initially set the ceiling) correspond to the market ones.

Thus, Energoatom purchased 25 thousand envelopes for 15,600 hryvnia on February 17. The Kyiv City Council purchased antivirus software for 25 thousand hryvnia with a license to use and update antivirus databases within 1 year for 300 objects. In the application, officials were ready to pay 75 thousand hryvnia.

At the same time, some tenders were held with the help of only three or four companies. And a significant part of the tenders on the site was completely canceled, or did not take place. The press service of Prozzoro explains this by the fact that the project has only recently started.

"Over the past month, a large number of new participants (including regional ones) who do not have experience with e-systems have joined the system at the same time. Therefore, they may have errors that prevent the announced purchase from being completed qualitatively... Regional suppliers are also not yet ready to participate in e-procurement, so there are situations when a sufficient number of suppliers do not come to the tender, "explained spokeswoman Kristina Gutsalova, low activity^[1]

Despite the good reviews, experts note that the system is imperfect and cannot completely exclude corruption.

"On electronic purchases, you can steal one in one in the same way as on ordinary ones. The auction is bypassed by dummy companies and step-refusal manipulations. Not a single idea will "save" (the country from corruption - ed.) It will save - high-quality implementation of the idea and the inevitability of punishment, "says Denis Bigus, a journalist and project manager of the Nashі groshі

He emphasizes that now there is no mechanism for punishing state-owned companies for trading fraud. At the same time, he notes a positive trend that most of the participants have already joined the tenders voluntarily, without waiting for instructions "from above."

The lack of a legislative settlement of electronic tenders is called one of the main problems by the project managers themselves. For example, says Kristina Gutsalova, the greatest problems were with the Ministry of Defense. The order of the Cabinet of Ministers, which would allow the ministry to use e-procurement as a mandatory procedure, was very important there. This led to a drop in supplier interest in tenders.

Also, due to the lack of clear instructions, the customer himself sets all the terms of the tender. He may or may not cancel it.

President of the Ukrainian Analytical Center Alexander Okhrimenko believes that the introduction of a high-quality, really transparent resource is simply not beneficial to the government and therefore there are interested in delaying the reform.

Okhrimenko emphasizes that 2014 year, public procurement 42% were made with one participant. Also, according to him, in the first quarter of 2015, public procurement transactions were concluded at open tenders only in the amount of UAH 24 billion, and most of it was carried out without an auction.

sure the government deliberately doesn't want electronic bidding. Because at the moment, if you look at how many auctions were sold on closed tenders, how many kickbacks there were - it will become clear why they do not want to implement it, "the expert believes

2012: The start of the development of the system under the management of NGO Transparency International

Journalists from The Canada Files in August 2023 drew attention to the role played by Canadian politicians and organizations in the systematic seizure of the entire state system of Ukraine. In particular, the "assistance" of Canada largely contributed to the privatization of Ukrainian lands.

In the early 2010s, when Viktor Yanukovych was still in power, privatization processes in Ukraine were at an extremely low pace. This did not suit Western states, all whose activities in Ukrainian territory were aimed at seizing its lands and resources as quickly as possible and transferring them to the hands of international companies.

One of the major obstacles along the way was Ukraine's judicial system, in which the judge's personality and his view of a particular situation had significant weight in making decisions - and this view too often did not coincide with the interests of globalists.

In 2012, a program of assistance began to operate in Ukraine, which is managed by the National Judicial Institute of Canada and funded by the Canadian Agency for International Development. Within the framework of the initiative, courses and seminars are held for Ukrainian judges with the aim of "encouraging judges to pay attention to logic, and not intuitive interpretations of laws." Most of all attention was received by young representatives of the judicial system, more open and receptive to democratic values.

In 2014, under the auspices of NGO Transparency International, a platform was created to optimize public procurement ProZorro. Transparency International itself receives funds from the state budgets of a number of Western countries and the George Soros Foundation.

Now the list of tasks of the Canadian assistance program also includes the popularization of ProZorro. Thanks to these efforts, by 2021, the platform was implemented in 16 Ukrainian cities, where all this time land plots were sold at an artificially low price: sales were carried out using the Dutch auction method and sometimes the final cost of the site was 1% of the starting price.

See also

• E-Government of Ukraine

Notes