Ukraine introduces e-procurement to fight corruption and save cash

2 March 2016

A new electronic public procurement system aimed at increasing transparency and cutting costs will launch in the Ukraine in April.

The Secretariat of the Cabinet of Ministers of Ukraine said the ProZorro e-procurement system had been successfully tested and it will become mandatory for all public procurement tenders.

Deputy minister of economic development and trade, Maxym Nefyodov, said a pilot of the system running since February last year had saved up to 900m Ukrainian hryvnia (UAH).

The first purchase through the system, which includes anonymous electronic bidding for tenders, was by the Ministry of Justice, with other participants including the Ministry of Defence, the Ministry of Infrastructure and the Kiev Municipal State Administration. 

Around 3,000 public authorities have voluntarily signed up for the system so far, representing 15% of all public sector buyers. Around 10,000 potential suppliers have also connected to the platform, which will ensure good competition, the government said. 

The Ministry of Finance said procurements through the system would attract more suppliers and this would lower prices and reduce government spending.

“From 1 April all the central executive bodies and large enterprises are to be transferred to this system, not voluntary as it was during the working pilot but obligatory,” said Nefyodov.

In November last year the government agreed a draft law on public procurement to facilitate the electronic system as part of a legislative reform package.

In January Ukraine prime minister Arseniy Yatsenyuk said public procurement had been a source of corruption.

“According to our estimates, losses from the direct corruption and poor management made up around 20% of the total volume of public procurement,” he said.

“We are transferring all the state tenders in the online format. All procedures, every step, every decision becomes public.”

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