Open Public Procurement (UA0064)

• Empowering Citizens as Watchdogs in Ukraine (May 29, 2019)

• Our Collective Imperative: Fighting for Democracy in the Americas (July 1, 2020)

Event: Provision of openness and transparency in public procurement.; Implementation timeframe: November 2016-March 2017; Entities responsible: Ministry of Economic Development, Ministry of Finance, Ministry of Justice, State Agency for E-governance, State Audit Service, National Police, Treasury.; Partners: Transparency International Ukraine and Eidos Centre for Political Studies and Analysis non-governmental organisations, Open Contracting Partnership Initiative, other civil society institutions and international organisations (by consent).; Expected results: Ensuring the: Publication of the application software interface of the public procurement electronic system in accordance with the international Open Contracting Data Standard (November 2016). Publication of the application software interface of the Unified State Register of Legal Entities, Individual Entrepreneurs and Community Groups with disclosure of the owners and ultimate beneficiaries (February 2017). Establishment of a multilateral monitoring group aimed at ensuring the independent monitoring of public procurement (November 2016). Introduction of a public feedback system to improve the integrity of the system (February 2017). Functional compatibility between the data on public procurement and use of public funds with treasury data in order to increase the transparency of the use of public funds by providing a link between the planned budget and budgetary classification, the results of tenders, agreements, certificates of work performed under these agreements and transactions under agreements, in particular through the publication of a unique agreement ID (March 2017).

✪8. Ensure openness and transparency in public procurement

Commitment Text:

Provision of openness and transparency in public procurement.

Expected results: Publication of the application software interface of the public procurement electronic system in accordance with the international Open Contracting Data Standard (November 2016). Publication of the application software interface of the Unified State Register of Legal Entities, Individual Entrepreneurs and Community Groups with disclosure of the owners and ultimate beneficiaries (February 2017). Establishment of a multilateral monitoring group aimed at ensuring the independent monitoring of public procurement (November 2016). Introduction of a public feedback system to improve the integrity of the system (February 2017). Functional compatibility between the data on public procurement and use of public funds with treasury data in order to increase the transparency of the use of public funds by providing a link between the planned budget and budgetary classification, the results of tenders, agreements, certificates of work performed under these agreements and transactions under agreements, in particular through the publication of a unique agreement ID (March 2017).

Responsible Institutions: Ministry of Economic Development, Ministry of Finance, Ministry of Justice, State Agency for E-governance, State Audit Service, National Police, Treasury.

Supporting Institutions: Transparency International Ukraine and Eidos Center for Political Studies and Analysis non-governmental organizations, Open Contracting Partnership Initiative, other civil society institutions and international organizations (by consent).

Start date: December 2016..                                     End date: August 2018

Editorial note: This commitment is clearly relevant to OGP values as written, has transformative potential impact, and is substantially or completely implemented and therefore qualifies as a starred commitment.

Commitment Aim:

This commiment aims to expand openness and transparency in public procurement. According to the Law on Public Procurement, an online public procurement system, ProZorro, should be used by all state bodies. Nevertheless, the system needed updating to ensure higher transparency and inclusion of tools for civil society monitoring. Therefore, the commitment envisioned four enhancements: (1) introduce the Open Contracting Data Standard, (2) require disclosing information about owners and ultimate beneficiaries, (3) establish a multilateral monitoring group and (4) establish functional compatibility between a set of public registries.

Status

Midterm: Substantial

By midterm, this commitment had made substantial progress. The Open Contracting Data Standard (OCDS), [135] with an updated application programming interface, had been introduced. The public procurement interface with the OCDS was available online, as was the associated Unified State Register of Legal Entities, Individual Entrepreneurs and Community Groups of Ukraine. [136] In April 2017, the Ministry of Economic Development and Trade created the multilateral monitoring group. The group consisted of members of the civil service and civil society. The ministry authorized the group to discuss public feedback received on procurement and develop policies to improve monitoring and enforcement. The government activated the public feedback mechanism through the DoZorro portal. This feature included both public and professional analytical modules. [137] DoZorro automated statistical calculations and displayed statistics for all appeals. It also served as a platform for dialogue among all parties. The Ministry of Economic Development and Trade advocated the functional compatibility of all financial flows, including compatibility between ProZorro and the State Treasury. This functional compatibility was delayed  because of the o lack of funding. For more information, please see the 2016–2018 IRM midterm report. [138]

End of term: Substantial

The second year witnessed further progress in implementing this commitment. According to the government representative, the Ministry of Economic Development and Trade introduced new procedures to ensure that the government publishes the data according to OCDS standards. [139] A civil society expert noted that the Unified State Register of Legal Entities, Individual Entrepreneurs and Community Groups discloses data in .csv format for free and via API for a fee. [140] A civil society member said that the creation of the multilateral monitoring group in 2017 spurred the formation of several other working groups. These groups were driven by participating parties from the government and civil society and met several times in 2018. [141] DoZorro, which can be named a full-fledged monitoring online portal, grew to include an additional analytical module. This module specializes in the monitoring of prices of medical products. [142] As described by a civil society expert, their NGO further extended DoZorro to include more nongovernmental organizations and local authorities. [143] The government requires each procuring authority to monitor public feedback. On 21 December 2017 Parliament adopted amendment #2265-VIII to the Law on Public Procurement. [144] The amendment introduced mandatory automatic risk indicators in public procurement, which will strengthen monitoring opportunities. These risk indicators are designed to be regularly updated through machine learning. [145] Artificial intelligence will help the State Audit Service identify procurements with violations while using less resources, examining bigger quantities, and working faster. [146] However, the government did not establish functional compatibility between the data on public procurement and the use of public funds and Treasury data. According to a representative from Transparency International Ukraine, the government did not complete this task because of lack of openness and willingness to implement this initiative by the State Treasury. [147] Overall, the completion of four out of five objectives merits a rating of substantial progess for this commitment.

Did It Open Government?

Access to Information: Outstanding

Civic Participation: Outstanding

At the onset of the action plan, the government had already established the online procurement system, but it needed further enhancement. The commitment involved raising the transparency bar by publishing procurement data in the Open Contracting Data Standard. The commitment also entailed linking this data with public databases of ultimate beneficial owners and the State Treasury. It also mandated publishing a unique ID for each public procurement contract to allow better tracking and cross-checking of information. According to the Ministry of Economic Development and Trade, the amount of open data on public procurement has increased. In particular, ESCO contracts and framework agreements started to be published. [148] An expert from Transparency International Ukraine stated that ProZorro established the best standard on open data procurement in the world. It publishes the structured data online, via datasets and API. [149] Outcomes include the following: The integration of the data with the Unified State Register of Legal Entities, Individual Entrepreneurs and Community Groups eliminated the requirement for companies to submit registration certificates. The integration also prevented fake companies from bidding in tenders. [150] The abundance of data initiated a burst of independent online monitoring initiatives. Already established were YouControl, [151] Opendatabot, [152] (which analyzed participants), E-data, [153] and .007 [154] (which overviewed financial flows). The second year witnessed the emergence of Anti-Corruption Monitor [155] and Clarity Project [156] (which focused on monitoring purchases themselves). This emergence of subsequent civil society projects demonstrates an apparent multiplier effect of DoZorro. These achievements represent an outstanding opening in the area of access to information on procurement. They also represent an outstanding progress in civic participation to monitor public procurement.

For proper monitoring of procurement, this commitment entailed the creation of a public feedback mechanism for reporting procurement violations. It also called for the establishment of a multilateral monitoring group to discuss feedback and determine follow-up steps for relevant public bodies. By March 2018, DoZorro had been used by over 300,000 users (social activists, investigative journalists, researchers, big procuring entities, ministries, and regulatory and law enforcement authorities). Every month, 24 monitoring civil society organizations identify and submit complaints concerning violations in over 1,500 procurements. [157] To strengthen their organizational capacities, ProZorro and DoZorro created a strong regional network of nongovernmental organizations (NGOs) and held over 350 training seminars in 2016–2017 for these NGOs. Over 20,000 participants attended the seminars. [158] The abundance of data initiated a burst of independent online monitoring initiatives (mentioned above). A Ukrainian multi-stakeholder team even started developing systems similar to DoZorro in Moldova. [159] These actions represent an outstanding change in civic participation in public procurement policy.

Carried Forward?

When this report was written, the government had not published the next action plan. Thus, it is not clear if this commitment has been carried forward. Given the importance of procurement reform and the achievements the commitment has already made, the IRM researcher recommends the government continue working on enhancing the features of the relevant platforms. For example, the State Fiscal Service could collaborate with the Ministry of Economic Development and Trade on the integration of the indebtedness certificate into ProZorro. With this action, bidders will not need to upload the information already possessed by the government, implementing the “once only” principle. The Ministry of Economic Development and Trade could analyze risk statistics and regularly update the methodology of automatic risk indicators. The Ministry of Economic Development and Trade could also integrate ProZorro and DoZorro so that the platforms send feedback and reports on findings directly to enforcement agencies or oversight authorities online. Civil society organizations could work to develop an analytical module monitoring the full cycle of violations of procurement and control—from a reported violation to its investigation, lawsuit, court decision, and enforcement.

[135] Open Contracting Data Standard, http://standard.open-contracting.org/latest/en/.

[136] Open Procurement API, http://api-docs.openprocurement.org/uk_UA/latest/.

[137] DoZorro, https://dozorro.org/.

[138] “Ukraine Mid-Term Report 2016–2018,” Open Government Partnership, https://www.opengovpartnership.org/documents/ukraine-mid-term-report-2016-2018-year-1/.

[139] Maksym Nefyodov (Ministry of Economic Development and Trade of Ukraine), interview with IRM researcher, 15 August 2018.

[140] Victor Nestulia (Transparency International Ukraine), interview with IRM researcher, 6 August 2018.

[141] Ibid.

[142] “Monitoring of Prices on Medical Products,” DoZorro, https://dozorro.org/medical_contracts.

[143] Victor Nestulia (Transparency International Ukraine), interview with IRM researcher, 6 August 2018.

[144] “The Law of Ukraine on Amendments to the Law of Ukraine ‘On Public Procurement’ and Other Laws of Ukraine on Procurement Monitoring,” #2265-VIII, the Verkhovna Rada of Ukraine: The Official Web-portal, http://zakon.rada.gov.ua/laws/show/2265-19.

[145] Maksym Nefyodov (Ministry of Economic Development and Trade of Ukraine), interview with IRM researcher, 15 August 2018.

[146] “DoZorro Story,” Transparency International Ukraine, 2018.

[147] Victor Nestulia (Transparency International Ukraine), interview with IRM researcher, 6 August 2018.

[148] Maksym Nefyodov (Ministry of Economic Development and Trade of Ukraine), interview with IRM researcher, 15 August 2018.

[149] Victor Nestulia (Transparency International Ukraine), interview with IRM researcher, 6 August 2018.

[150] Maksym Nefyodov (Ministry of Economic Development and Trade of Ukraine), interview with IRM researcher, 15 August 2018.

[151] YouControl, https://youcontrol.com.ua/en/.

[152] Opendatabot, https://opendatabot.com/.

[153] E-data, http://www.e-data.gov.ua/.

[154] .007, http://007.org.ua/.

[155] AKM, http://acm-ua.org/.

[156] Clarity Project, https://clarity-project.info/about.

[157] “DoZorro Story.”

[158] Ibid

[159] Ibid