1. ProZorro: “a golden triangle of partnership” in public procurement reform in Ukraine

2. Let’s define public procurement
Public procurement (PP) refers to the process by which public authorities, such as government departments or local authorities, purchase work, goods or services from companies

3. What PP is in reality

4. Where is Ukraine on the map?

5. UA is one of the largest countries in Europe…
Population – 44 million (8th in Europe)
Area – 603 sq. km (2nd in Europe after Russia)
Nominal GDP – 130 billion USD (23rd in Europe)

6. …with extreme levels of corruption
In 2015 Ukraine ranked #130 by Transparency International for corruption perception (in a group with Cameroon, Iran, Nepal, Nicaragua, Paraguay, Nigeria, Guinea, Kenya, Laos, Papua New Guinea, Uganda)

7. Dissatisfaction led to the Revolution of Dignity…

8. … but amidst “no” trust toward institutes

9. Volunteers started working on PP reform
Just after the Revolution of Dignity, a group of volunteers decided to start a reform in public procurement
eProcurement system ProZorro seen as the key element of the reform
At times a team of up to 300 people worked on ProZorro
Кристина Гуцалова

10. In Ukraine PP is a synonym of corruption

11. Estimation of losses in public procurement (PP)
25B UAH (ca 1.1B USD) – conservative estimation of “corruption tax”
10%
10%
25B UAH (ca 1.1B USD) – losses caused by limited competition
250B UAH
(ca 11B USD)
At least 50B UAH (ca 2.2B USD) per annum – losses from corruption and limited competition

12. “Golden triangle of partnership” in the core
Government: “the rules”, professionalization and data storage
Civil Society: monitoring and control of procurement
Commercial platforms
Commercial platforms: suppliers acquiring and service

13. Our principles
Transparency (everyone sees everything)
Effectiveness (simplicity in solutions)
Teamwork (Agile groups)

14. History of the eProcurement system ProZorro
August, 2014
Georgians & concept review
April, 2015
Volunteers move into gov’t
December, 2015
New Law on eProcurement approval
June, 2015
First donor support
March 2014
Volunteers’ team setup
September, 2014
ePlatforms & final concept; first “seeding”
April-May 2014
First search & first concept
April, 2016
Law comes into force, system’s scale up
February, 2015
MVP development & launch
May, 2015
MinDefence & small procurements’ pilot

15. What pilot eProcurement system ProZorro is
ADVANTAGES OF THE SYSTEM
Open code, always available for audit, control, & scalability
Compulsory auction for effective price reduction
Transparent process on bidding and simple appeal process
Competition among platforms to improve services

16. What involvement of private platforms brought
The involvement of economic operators allowed to:
Secure the initial funding
Substantially reduced the cost of the development and maintenance of the system
Involve existing pools of suppliers and contractors registered on commercial platforms

17. ProZorro pilot results
8 commercial platforms & 3 in the process of joining
Savings come to 22M USD
contracting authorities
9200+ suppliers
Кристина Гуцалова
46k+ tenders for 284M USD

18. All information is available for everyone
BI modules are owned by Transparency International Ukraine

19. Reform is following startup phases

20. Gov’t becomes crucial for reform’s implementation
The law of diffusion of innovation
Concept & MVP
Pilot
Scale Up & Implementation
Gov’t
Low
Medium
High
NGO
Business