New rules on public procurement monitoring

On 27 January 2018 new legislative rules on monitoring  as amendments to Ukrainian Public Procurement Law entered into the force. The novelties introduce public procurement monitoring as special rapid control exercise performed by State Audit Service (SAS) during ongoing procurement process in order to prevent violations of the law. Taking into account that in Ukraine all procurement process is electronic (Prozorro e-procurement system) the monitoring is also to be done on-line electronically.

The monitoring may take place under request of media, NGOs, parliamentarians, state authorities and under one initiative of SAS but only caused by risk-indicators (red flags) as special automated system (it is under preparation for now with participation of Transparency International Ukraine). The list of risk-indicators and methodology for use will be determined by joint act od  SAS and Ministry of Economic Development and Trade of Ukraine (PP regulator).

The monitoring envisages analytical review of relevant procurement process by SAS officers and if signs of possible violations are found a respective procuring entity will be asked to react and/or correct its actions in order to avoid violations. It is not binding for procuring entity and procedure in any case is not blocked but if a procuring entity ignores monitoring recommendations, SAS will have comprehensive control exercise regarding such procuring entity that may lead to administrative penalties of violations take place and are proved.

All information and communications associated with monitoring must be publically available at Prozorro that is quite unusual for activity of SAS as financial control body.

PROZORRO migration

During February-March 2018 all data base and modules of Prozorro e-procurement system migrate from Amazon IT cloud hosting to Ukrainian based data-center. It is quite unique situation because latest trends are about reverse migration (from national data bases to international IT cloudy hostings) but it is requirement of law in Ukraine that all information related to state sector must be kept in Ukraine.

Piloting of first centralized procurement body is completed

Centralized procurement bodies (CPB) are quite popular tool in majority of EU countries envisaged by relevant PP Directives (24/2014 and 25/2014) that has been proving its efficiency in EU market for certain procurement items (goods and services) for last 15 years. Despite of the fact that CPB is not mandatory element of Ukrainian EU harmonization programme within Association Agreement, the piloting and further scaling of CPB as perspective procurement practice was included in the National 2016-2022 Strategy of Public Procurement System Reforms (PP strategy, adopted in February 2016).

The first piloting CPB “Professional Procurements” was established by Government with support of EU in December 2016 and piloting period was set as 2017. During 2017 the newly established CPB managed to conduct 13 open tenders with 35 lots on behalf of 20 central executive bodies that resulted in 22 contracts for 13 bodies with near 6,8 mln UAH of total value and 1 mln UAH of reached savings (more than 13 %).

The products purchased through CPB were office paper, stationery, PCs, printers and multi-functional printers/scanners.

Positive results confirm further expediency to scale up CPB that will be done in 2018-2019 on both central and local levels as envisaged by the mentioned PP Strategy.