Ukraine's public eProcurement platform seeks transparency

Ukraine's Prozorro system launches new function to increase transparency in non-weapons defence procurement to stimulate fair competition, it is claimed

The Prozorro system, Ukraine's public electronic procurement platform, has launched a new function that will display information on non-weapons defence procurement, in a seeming effort to bring down costs and stimulate competition for tenders.

The feature was implemented under the new version of the On Defence Procurement law, which requires defence contracting authorities to report non-weapons procurement information starting at UAH 200,000 (US$5,400) for goods and services and UAH 1.5 million (US$40,700) for work.

It is claimed that this development is significant for several reasons.

Reported benefits of Ukraine's Prozorro system 

Firstly, it will provide greater transparency in the procurement process and help promote fairer competition. It will also allow suppliers to better understand the market and the procurement needs of defence authorities.

Secondly, it is said that the system will facilitate more efficient procurement, allowing the defence industry to acquire goods and services more quickly, reducing delays and costs.

Deputy Economy Minister Nadiia Bihun has confirmed that defence contracting authorities will report on non-weapons procurement, such as food, clothing, fuel, and more.

Reports will include limited information, such as the name of the customer, the subject of procurement, and the price per unit.

Furthermore, for catering services, procurement entities will be required to report on the price per unit of each product included in the service. This ensures greater transparency and accuracy in reporting.

In defence of transparency and fair competition

While defence customers have the option not to publish sensitive information such as the total amount and volume of purchases, delivery locations, and the name of the supplier, this new feature will still be instrumental in promoting transparency and fair competition in the defence procurement sector.

In addition, the ministry is currently working on creating a new procedure for framework agreements for defence needs, which will allow the defence ministry to conduct competitive selection of suppliers through the Prozorro system without compromising sensitive information.

The new procedure will promote transparency and accountability while also ensuring that defence procurement needs are met efficiently and effectively.

The Private-Public procurement dichotomy and mergence

The system is in fact a demonstration of the overlap between public and private procurement

In a piece entitled ‘how private engagement stimulates public procurement’, procurement magazine looked at Gareth Rhys Williams, UK Government Chief Commercial Officer (CCO) on how increased vendor profits in government procurement and public-private collaboration can benefit the wider economy.

Since public procurement is the process by which governments and public sector organisations purchase goods, services and works from suppliers, the goal is to secure the best value for public money, while ensuring fair and transparent competition among suppliers.

Williams argues that public procurement plays an important role in the economy by providing opportunities for businesses of all sizes to compete for government contracts.

It also helps to ensure that public funds are used efficiently and effectively, while promoting transparency and accountability in the use of public resources.

A recent example from the UK would be the public procurement bill. 

The UK public procurement bill

In light of all the regulations and laws that govern procurement in the UK, Brexit was a huge stimulus for change.

Since one in every three pounds of UK public money, some £300bn a year, is spent on public procurement, the UK government introduced the UK Procurement Bill, to adapt to the change and lay down the necessary framework for an effective domestic procurement system. 

The UK bill includes a number of regulation-making powers which are necessary to ensure that the legislation will continue to facilitate a modern procurement structure for many years to come and will allow the UK to keep pace with technological advances, new trade agreements and ahead of those who may try to use procurement improperly.

Williams says: “The Procurement Bill will replace the current EU regimen for public procurement. It promises simplicity, flexibility and transparency.

As part of the new bill, the government plans to create a simpler and more flexible commercial system in the hopes of better meeting the needs of the country while remaining compliant with international obligations. So this is a fundamental change.”

Whether it be Ukraine's new move within Prozorro, the CCO's role in the UK, or any other public procurement efforts, what is clear is that, market economics and the mechanisms of supply and demand in stimulating competition and potentially pushing down prices is always operative. The distinction between public and private procurement is becoming increasingly blurred and that perhaps need not have any negative connotations. 

The further potential of market forces to have positive effects on transparency is also in the ascendant, and the (perhaps) artificial distinction between private and public procurement is subject to further review and study.  


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