Officials name main problems that e-procurement system ProZorro faces



Experts discuss and explain the biggest problem ProZorro faces today: lack of stakeholder awareness of proper rules and procedures for submissions and processing of complaints.

Kyiv, July 25, 2016. Today, the biggest problem of the Ukrainian e-procurement software ProZorro is lack of stakeholder knowledge of proper rules and procedures. The most common errors among participants are incomplete submission of documents, violation of terms for submitting a complaint, and incomplete payment for the processing a complaint. “As of today, these are 80% of all complaints. […] Now we have about 200 complaints, of which about 160 have not been considered because they are not paid for,” said Svitlana Panaiotidi, State Commissioner of the Antimonopoly Committee of Ukraine (ACU), during a press briefing held at the Ukraine Crisis Media Center. Bidder complaints are rejected by penitentiary service due to errors in the appeal. “They appeal the rejection, but do not appeal annulment of the bidding. In this case, we cannot consider the complaint,” explained Agiya Zagrebelska, State Commissioner of the Antimonopoly Committee of Ukraine.  

Maksym Nefyodov, Deputy Minister of Economic Development and Trade of Ukraine, noted that more than 10 thousand suprathreshold procurements had been made through ProZorro. According to him, 200 complaints is a very small number for such bidding. “Complain more, otherwise the government may not know about the problem,” he stressed. Maksym Nefyodov added that about three thousand requests had been appealed at the informal subthreshold office over this time. “Of them – 1,400 are voluntarily satisfied by customers and 1,600 – not satisfied voluntarily, about 500 of them are legitimate,” he said.

The Importance of Active Participation

The ACU commissioners stressed the importance of active participation and involvement in the process to ensure justice and success of the system. “We can on no account interfere in a procurement that was not appealed – we are not a public procurement body, we do not control them, and do not check their legitimacy,” stressed Agiya Zagrebelska. “Based on this complaint, we can conclude that certain actions are discriminatory and violate the law or the complainant’s rights. We can make the customer reverse the decision and return to the assessment after the complaint was satisfied, but we do not force anybody to conclude contracts and do not interfere directly in the customer’s actions,” reminded Ms. Panaiotidi.

Agiya Zagrebelska noted that the administrative board faced the facts of unfulfillment of its decisions – when a customer was ordered to amend or cancel their rejection and return to the evaluation stage, but does not fulfill this decision. “But I have not seen any complaints from participants yet. (..) We cannot fight this without active participants, the public and the media,” emphasized Ms. Zagrebelska.

Increasing Efficiency and Transparency in the System

The ACU commissioners also stressed that the suspension of tenders after a complaint should not be considered or viewed as a “blocking” of bidding procedures by the Antimonopoly Committee. “The bidding procedure is suspended only with the aim to make it faster and to avoid unnecessary legal problems,” noted Agiya Zagrebelska. She explained that if the procedure is not suspended and the agreements are signed as a satisfaction of an appeal, these agreements will be canceled, and the whole process will be started from scratch. This will take about two months, while an appeal must be considered within 15 days.

Commenting on the situation with the scandalous purchase of mops for the oncological hospital, Maxim Nefedov and Svitlana Panaiotidi noted that the mere publication of such information is positive. “In this case, ProZorro fulfilled its function. The system enables everybody to learn about the situation when these mops have been purchased for years, – said Maxim Nefedov. – Our best weapon is to increase transparency, because in this method we show all cases and can filter them out even before they are closed. […] For example, using this method, it was announced that a similar purchase of mops was worth 162 instead of 123 thousand hryvnia, and the purchase was canceled by the client.”

Eliminating Customer Bias

Svitlana Panaiotidi added that due to the system’s easy accessibility, anyone would be able to analyze whether there is misuse of public auction. Among the typical signs of suspicious behavior of a client tender are: establishing conditions that only an exclusive circle of participants can meet; an obvious rejection of a bid of one of the participants; mass disqualification of participants; overly narrow requirements as compared to the previous tenders of the same customer. One of the hidden practices of discrimination is the frequent cancellation of bids. “This is a typical sign that he is dissatisfied with a winner,” noted Maxim Nefedov.  Lower de facto requirements imposed on some participants are also indicative of customer bias. This is seen when the same participant always wins the business of a certain customer, when a winner’s price is several times higher than the average market price.