E-procurement: Finding a Way for Ukraine

The so called e-procurement is one of the most promising segments of e-commerce, and it’s gaining wider use in public procurement markets of developed economies, the EU Common Market in particular.

In fact, e-procurement is more than just a new form of procurement process — it encompasses completion of and managing all stages of the procurement cycle in an electronic environment, including marketing research, identifying economic agents (potential suppliers), e-purchasing, e-ordering, e-sourcing and e-payment, e-budgeting and e-planning (drafting and execution of procurement budgets).

That is why internationally the generally acceptable definition of e-procurement is as follows:

The use of electronic methods in every stage of the purchasing process from identification of the requirement, tendering through to payment and potentially contract management. In practice, the use of the Internet and web-based interactive applications.

This statement summaries e-GP in a very clear and concise manner by explaining that e-GP is the use of electronic methods through every stage of the purchasing process from the identification of the requirement, tendering through to payment and potentially contract management. It then goes on to state that this will be achieved using the Internet and web-based applications. More precisely this involves the use of specifically designed web-site(s) and the exchange of standard electronic documents and messages between contracting authorities, economic operators and financial institutions. The following diagram shows the main stages in the e-GP cycle.

Article on e-procurement

The common mistake is to believe that e-GP is one specific procurement process or that e-GP is something completely new within the procurement process, or that e-procurement is simply e-auction.

It is important to understand here that e-auction as a stand-alone procurement procedure is applicable to only a limited range of procurements that require identifying detail specifications understandable by both contracting authorities and bidders. Another issue is that stand-alone e-auctions are seen and promoted as a way of eliminating corruption in the procurement process. Experience of the EU and other European countries (e.g. Macedonia, Albania) shows that this is just not true, as there are many reported incidents of collusion by economic operators to manipulate the final price and the eventual winner of the auction process. Thus, extensive use of stand-alone e-auctions in Russia does not provide good reading in terms of eliminating corruption, while in Macedonia significant decrease of nominal bidding prices driven by the introduction of compulsory e-auctions has later been levelled off by further sharp increase in the actual value of awarded contracts as a result of introduction of relevant amendments thereto.

In conclusion, stand-alone e-auctions may be useful as a short-term solution to reduce prices and make the procurement process more transparent, but in the longer term they will not solve the underlying problems in public procurement in Ukraine.

The key to understanding the whole concept of e-procurement is electronification of the procurement process which offers the following advantages as compared to traditional paper-based procedures:

  • Lower operating costs for contracting authorities and suppliers — hence, lower procurement prices
  • Quicker procurement process and time saving
  • Wider range of suppliers
  • Easier management of the procurement process due to automating routine tasks
  • Better clarity and transparency due to wider access to procurement information, registration and storage of such information eliminating any possibility of forgery for better traceability
  • Perception of the public sector as a competent modern and reliable partner

These advantages dominate potential risks associated with e-procurement, among which:

  • Increased risk of complaints and conflicts as a result of contracting authorities and suppliers becoming more dependent on provider(s) arranging the whole e-procurement process (e-publication, e-submission, e-evaluation services, etc.)
  • Additional (mostly initial) time and financial expenditures (installation of equipment and software, training, administration of IT systems, their regular update and maintenance)
  • Focusing on price only without paying due attention to other important factors of effective procurement
  • Laid-back approach to the traditional procurement process (doubtful or wrong concept of ‘electronic and automated means fine and objective’)

Therefore, to achieve an acceptable risk-benefit ratio, each risk and advantage must be thoroughly and consistently considered before the e-procurement system is fully operational.

The following are the various stages in e-procurement:

1)      E-planning: The preparation of annual procurement plans by contracting authorities that can be used for the monitoring and controlling of e-GP procedures and the subsequent publishing of these on a central public procurement website that is accessible via the Internet.

2)      E-notice: The preparation, creation and publication of electronic procurement notices on a central public procurement website primarily for the purpose of allowing economic operators to review and respond.

3)      E-access: The ability to obtain, from a central public procurement internet website, detailed procurement and technical instructions e.g. EOIs, RFPs etc. that relate to particular procurement notices through the use of electronic transfer or download by a registered economic operator.

4)      E-submission: The ability to record and submit on central public procurement internet website detailed EOIs, tender proposals etc. by registered economic operators using electronic transfer or upload. Included in this procedure is a ‘tender box’ encryption process that ensures that submitted proposals remain secret and secure until the appropriate ‘tender open date’ when they can be opened and reviewed by procurement officers of the appropriate contracting authority.

5)      E-awarding: The electronic awarding component supports the evaluation process of each submitted proposal. The e-awarding process includes the ability for tender committee members or procurement officers to review, query and finally to score each proposal remotely and electronically through the use of private Internet connections (i.e. Virtual Private Network connections).

6)      E-framework agreement and e-contract: Components for electronic framework agreements and contracts include functions for preparation, storing documents, approvals, applying digital signatures, amending, cancelling and closure of contracts/framework agreements by using electronic means on an online Government to business portal (or simply within an e-GP system) with interfaces provided for transfer of relevant data contained in the contract/framework agreement, such as contract item specifications, agreed prices, timelines for execution, places of delivery, etc.

7)      E-order: The electronic ordering component is used to manage the electronic issuing and receipt of purchase orders by the e-GP solution.

8)      E-invoice: The electronic invoice component implements functions for creating, registering, distributing and obtaining confirmation of receipt of invoices to be performed by economic operators, along with functions for receipt and acceptance of invoices by contracting authorities.

9)      E-payment: Electronic payment follows e-invoicing and includes support for the disbursement of funds to economic operators after accepting an electronic invoice.

Analysing experience of the EU countries allows identifying several forms of electronic procurements which have been codified in the laws of the EU, certain Member States and/or practiced optionally. They are:

1)        Electronic communication systems designed to announce tenders in the market: For example, TED (Tenders Electronic Daily) is the public procurement database of the European Union (www.ted.europa.eu), which is more of a passive service as potential suppliers search through it looking for interesting tenders. While some EU countries introduced more advanced active systems (mostly nation-wide) offering intelligent search and notification services to help users find only relevant information (search criteria: region, relevant goods, etc.). Thus, in Sweden such advanced service is offered by OPIC company (http://www.opic.com/eng/);

2)        E-catalogue is an electronic database about goods and services offered for sale, with detail description of these goods and services, prices for them, etc. Such catalogues may be provided via e-market platforms, e-mail, on data storage devices or web pages of suppliers. This sub-type of e-procurement is mostly associated with centralized purchasing under framework agreements — a practice widely used in the EU. For example, Danish government established that procurement for central executive bodies (ministries, agencies, etc.) by way of centralized purchasing under framework agreements arranged by a special institution (SKI: http://www.ski.dk) is allowed for the categories of products that, following the results of a tender, are presented in the form of catalogues of successful tenderers parties to respective framework agreements. Such products include:

  • Office furniture
  • Office stationary, paper, envelopes etc.
  • Cleaning services
  • Travel support services (study visits, business trips etc.)
  • Computers
  • Printers and other office equipment, cartridges
  • Anti-virus and graphics software
  • Hotel booking services within Denmark
  • Audiovisual equipment

Effective implementation of framework agreements brings time and transaction cost economies for contracting authorities as well as substantial savings for the state budget. Savings of around €162 million (12% of expenditures) between 2009 and 2012 were achieved due to using the centrally managed framework agreements in Portugal. The Treasury of Cyprus estimates between 5% and 40% saving on total spend and efficiency savings of some 3,000 man days through using central framework agreements and elimination of separate competitive tendering exercises;

3)        Electronic auction is a specific type of a procurement procedure which is introduced to negotiate prices for the announced procurement object within the set term, and to award a contract to the bidder with the most advantageous offer.

According to the EU Public Procurement Directives, e-auction may be used in open, restricted and negotiated procedures or for awarding contacts under framework agreements. Contracts in these procedures may be awarded using e-auctions if so decided by the contracting authority. E-auction is based on either the price criterion only (where the contract is awarded to the bidder that offered the lowest price) or price criterion and other quantitative and measurable parameters. Contracting authorities must publish details of the e-auction in a relevant tender notice in advance, indicating the evaluation criteria, automatic evaluation formula, technical parameters of the system, electronic means applicable, etc. Bidders compete offering ‘improved’ bids all through the auction process, the system sends notifications to all bidders indicating the offered prices, number of bidders who already submitted their bids, however, without revealing their names;

4)        Dynamic purchasing system is a type of an electronic auction in which new bidders are allowed to submit their bids at any time throughout the period when the system is valid, and change (improve) their bids.

All these forms of e-procurement are regulated by the EU acquis communautaire. Presently, the EU has two Public Procurement Directives:

  • Directive 2004/17/EC coordinating the procurement procedures of entities operating in the water, energy, transport and postal services sectors;
  • Directive 2004/18/EC on the coordination of procedures for the award of public works contracts, public supply contracts and public service contracts.

At the same time, in spring 2016 new Directives will come into force: Directive 2014/24/EU (new Public Procurement Directive), Directive 2014/25/EU (new Utilities Directive). And the brand new Directive 2014/55/EU of 16 April 2014 (on electronic invoicing in public procurement) that will come into force in autumn 2018.

It is these Directives that allow the possibility and lay down the specific rules of e-procurement. E-procurement is primarily regulated by Directive 2014/25/EU. Ukrainian translations of these Directives and the Report on EU Gap Analyses of the Ukrainian Procurement Legislation are available on the website of the EU-funded Project “Harmonisation of Public Procurement System in Ukraine with EU Standards” (www.eupublicprocurement.org.ua).

Coming back to the situation in Ukraine, it is important to mention that despite wide media coverage in recent years, no comprehensive strategy has yet been developed in Ukraine to coordinate activities in this sector. Instead, attempts to initiate e-procurement development were sporadic and inconsistent.

Thus, legal framework for electronic reverse auctions was established in 2012. It prescribed the mandatory use of reverse e-auctions as a stand-alone procedure and further required the elaboration of secondary legislation. However, these rules were rather just a populist step to show attempts to simplify the procurement process and combat corruption — the spotlight issues at that time, and their form and concept caused doubts about the genuine objectives behind them. It seemed that they were meant to lobby the interests of the operators of e-platforms in the attempt to set up a new business around the procurement process. Those doubts were based on the fact that a significant part of those rules described relations between e-platforms that, in addition, had a quite serious and arguable impact on the procurement process (e.g. verifying compliance with registration requirements and authorizing access, denying access in case of failure to pay a registration fee or guarantee), contracting authorities, tenderers in terms of financial settlements, control and supervision over the platform operation. Moreover, introduction of these rules required adoption of 11 acts of secondary legislation which a priori discredited the declared simplifying effect of the introduced e-auctions. Drafting the relevant secondary legislation was suspended, and no documents were adopted in the long run, but this proves that the chosen approach has been sporadic and irrational from the very outset.

In April 2014, the above-described multi-platform solution was abandoned as a result of adoption of a new version of the Law of Ukraine “On Public Procurement”. Instead, the new version of the Law laid down basic rules building on the concept prescribed by EU Public Procurement Directives. It suggests that e-procurement must be deemed as a means of performing public procurement utilising modern information and telecommunication technologies. Moreover, e-auction is meant as an instrument of selecting suppliers among parties to a framework agreement.

At the same time, two acts of secondary legislation provided for by the Law (to lay down requirements to electronic means and e-communication in e-procurement process and specific rules of the use of e-auctions under framework agreements) have not been approved yet.

Although no relevant secondary legislation is in place yet to enable the pilot introduction of existing e-procurement solutions, several draft laws were developed in late 2014 (a series of draft laws introduced by members of the Parliament and the Government’s draft law No. 1551) on the introduction of amendments to the Law in order to expand the scope of the legal and regulatory framework for e-procurement. Thus, the draft law No. 1551 suggested by the Government provided for the introduction of mandatory e-auction as a procedural instrument applicable to certain products and available to certain contracting authorities the list of which was supposed to be approved by the Government. The Government was also supposed to approve a detail procedural regulation on e-auction. However, due to strong criticism of the ambiguous concept of the proposed initiatives (in terms of both compliance with EU standards, and legal gaps in the text of the draft law spotted by expert and legal departments of the Verkhovna Rada of Ukraine) and of abnormally quick lobbying thereof without proper public discussions, this draft law was withdrawn by the Government to be further improved in terms of legal regulation of e-procurement.

Current lack of legal certainty regarding e-procurement (as a result of both the Government’s failure to approve the two regulations mentioned above and the need to further expand the basic requirements to e-procurement as laid down in Article 12, paragraph 2 of the Law) was not an obstacle though for the development of initiatives in the field of e-procurement.

Today, stand-alone e-auction system ProZorro (www.prozorro.org) is perhaps the most dynamic and popular initiative for procurements below certain threshold levels for supplies and services (i.e. up to UAH 100,000 for procuring entities under the Law “On Public Procurement” and up to UAH 1,000,000 UAH for contracting authorities under the Law on “On Peculiarities of Procurement in Certain Spheres of Economic Activity”) — the so called sub-threshold values. This system was initiated and developed in partnership with volunteers and IT business structures with the active participation of experts from Georgia (which is itself a distinctive present-day trend) is being utilised on a pilot basis by a few contracting authorities, including the Department of Administrative Management (DUS), Energoatom NJSC, the Ministry of Defence, Kyiv City State Administration, Lviv City Council, etc. A separate Memorandum has been signed between the e-auction software developers and Transparency International Ukraine to confirm that the resulting software used in this pilot would be transferred on a free-of-charge basis to Transparency International Ukraine, for further use by the Ukrainian Government if the system and the solution prove to be effective, efficient and viable. Apparently, certain legal initiatives will be required in the latter event. Pursuant to the Ordinance of the Cabinet of Ministers of Ukraine of 20 May 2015 No. 501-p “On the implementation of a pilot project introducing procedures of e-procurement of supplies” (although it doesn’t name the ProZorro system, it is quite evident that since no other system exists that is compliant with the parameters specified in the Ordinance, it is precisely ProZorro that it refers to) contracting authorities are free to decide on participating in this pilot project. At the same time, in spring this year the National Reform Council decided on binding all ministries and other central executive bodies to use the ProZorro system to make sub-threshold procurements.

The ProZorro solution consists of a single database that utilizes NOSQL open source software and a single central e-auction system that can be accessed through six separate private sector ‘terminal operators’. These six private sector operators normally receive income by charging fees to each economic operator participating in the auction process.

The Ministry of Defence has a quite interesting experience in using the ProZorro system to make procurements through a negotiated procedure. Article 39, paragraph 2, sub-paragraph 3 of the Law authorized the Ministry of Defence (and other defence and security agencies) to use a negotiated procedure to procure supplies (services, works) for the needs of the ATO throughout the whole period of its duration. The new procurement team of the Ministry of Defence consisting of volunteers whose support to the Army and military forces deserves particular gratitude, has made a good point about the competitive aspect of a negotiated procedure that allows negotiating with more than one bidder. In this case, it is precisely the ProZorro system that allows the Ministry of Defence to select a competitive range of suppliers of products and other easily identifiable goods with standard specifications through holding an e-auction as pre-qualification procedure and, in fact, as marketing analysis. This, in fact, allowed them finding out the estimated value of contract. At the same time, further negotiations result in selecting the successful bidder and accepting the price offered in the e-auction. This pro-active approach was approved by the Cabinet of Ministers in its Ordinance of 31 March 2015 No. 416-р “On experiment use of electronic means in a negotiated procedure”.

Zovnishtorhvydav Ukrainy State Enterprise authorized by the Ministry of Economic Development and Trade to administer the official web portal on public procurement (www.tender.me.gov.ua) plays an important role in developing e-procurement initiatives. This web portal enabled automation of the first two stages of e-procurement — e-noticing and e-access. At the same time, Zovnishtorhvydav designed an IT solution enabling automation (electronification, primarily in terms of e-communication, e-evaluation, drafting procedural and reporting documents) of procurement procedures that also offers an optional e-auction facility. Consultations are in progress regarding possible interoperability between the ProZorro system and the official web portal on public procurement, and the use of Zovnishtorhvydav’s developments relating to electronification of procurement process in the course of introduction of the e-procurement system.

However, since it is quite obvious that no initiative, however good, can dominate a comprehensive approach required for complete transition from traditional paper-based to modern electronic procurement which affects all components of the national public procurement system, a certain strategy is necessary to regulate the process of introduction of the e-procurement system. According to experts of the EU-funded Project “Harmonisation of Public Procurement System in Ukraine with EU Standards”, co-author of this writing Mr. Graham Fiveash in particular, who analysed the prospects for the development of e-GP in Ukraine in March 2015, the development and implementation of such strategy may build on the following considerations.

To be able to perform e-GP successfully the local commercial sector in Ukraine must be ready and able to cope with this new technology. In short, contracting authorities and economic operators in Ukraine must be able to use and exploit this new technology. In particular, this means that the majority of local SMEs and contracting authorities in Ukraine must have some in-house IT capacity with access to a local computer that is linked to the Internet using a broadband connection. Quick transition to (more or less) mandatory e-GP before this level of capability is readily available to such SMEs and contracting authorities is likely to have an adverse effect on the success of the system and largely exclude them from participating in the procurement process.

Therefore, readiness is assessed in the following categories:

1)        Technical: This is the current technical ability to understand, develop, deliver and operate the technology aspects of e-GP implementation. This should consider factors such as available skills, resources, technical infrastructure and any legacy applications.

2)        Regulatory & Legal: This covers the entire legal framework from laws to regulations down to contracts and licenses for e-GP implementation.

3)        Organisational: The current readiness of the procurement oversight bodies and contracting authorities to support the operation of e-GP. This should include aspects such as standard operating procedures, change management, training, business culture and prior experience of implementing government e-services.

4)        Market: This is the readiness of economic operators (including SMEs) in Ukraine to have the necessary resources and facilities to fully utilise the e-GP system. This should also consider their technical, legal and organisational readiness to fully utilise the facility as well as demand and preferences.

There is also a lack of professional capacity at all levels in the public procurement system. Accordingly, there is a particular need for institutional development within public authorities, the judiciary, controlling bodies and contracting authorities, as well as suppliers, i.e. economic operators. Currently procuring activities in Ukraine are being organised and carried out by tender committees, which must consist of at least five selected employees from the relevant contracting authority and sometimes include external advisors. Members of these tender committees often lack knowledge or qualifying skills in procurement or purchasing and there is very little incentive for them to ensure best value for money in the public procurement process. They also face the continuing complications that are associated with the ever-changing legislation.

Corruption is one of key issues in public procurement in Ukraine and the introduction of an e-GP system is now seen by many in Ukraine as the sole solution to this problem. However, this is quite wrong, as the introduction of an e-procurement system only will automatically make the public procurement process in Ukraine more transparent and therefore reduce the opportunities for corruption — but it is only part of solution to the complex problem of corruption. The introduction of an e-GP system in Ukraine has to be performed in parallel with a comprehensive program of capacity building that starts with the recognition that public procurement requires skilled procurement specialists and adequate remuneration for them. The role of a procurement specialist within the public procurement system in Ukraine needs to be defined and recognised. The availability of continuing procurement training programs for procuring entities will also be key element for improvements in the effectiveness and efficiency of public procurement in Ukraine. A good example of where this has been achieved is Chile that completely transformed the role of the procurement specialist in the public sector over a 3–4 year period and where now nearly 50% of the applicants for the role of procurement specialist have a relevant university qualification. Finally, as for the anti-corruption attempts in the public procurement sector, it is important to mention that non-governmental organizations in Ukraine have free and full access to information about public procurements and can conduct monitoring of public procurement activities, however, many representatives of the civil society simply lack relevant knowledge to perform such tasks. That is why the capacity of interested external parties needs further development, in particular, by allowing civil society to play a more significant role in the legislative drafting, in the promotion of the best international practices, in highlighting the anti-corruption dimension of the system and in reinforcing the effective monitoring of public procurement.

Introduction of the e-GP system this way or another affects other public administration systems and must allow interoperability with the public finance management system in order to coordinate activities in the budget-based public procurement system. This could for example lead to automated systems for preventing procurements that are planned and commenced without a basis in appropriate budget allocations or when no reasoned need exists. Beyond financial management, the e-GP system should be linked up to public registers for the purpose of having the e-GP system as such identify and provide various standard documents concerning the bidder and in this way relieving the bidder of collecting such documents in connection with each tender. Therefore, it is important that the e-GP system from the outset is designed for the purpose of optimal compliance with other e-government systems, for example through the standardised data and information structuring.

The current landscape, in terms of e-GP in Ukraine, appears to be virtually ‘greenfield’ which presents Ukraine with the opportunity to introduce an e-GP system in its simplest form, without any limitations of needing to harmonise with existing systems or developing environments.

Instead, there is a high risk that the implementation of multiple platforms in what is largely an e-GP ‘greenfield’ environment will cause considerable additional costs, particularly:

  • Implementing multiple systems/platforms to support the common requirements to e-GP in Ukraine will require an oversight procurement body to be established that will certify each platform to ensure that it complies with particular requirements set forth in procurement laws and procedures;
  • Each certified platform/system will need to have additional interoperability facilities in order to communicate with a central database system to ensure compliance with consolidated management reporting requirements. This solution also presents a major challenge to any future interoperability with other government systems envisaged in the e-Government Implementation Plan in Ukraine;
  • There is a need for a separate central consolidated management reporting database system;
  • Each contracting authority will need to individually select their e-GP platform/system which puts a great deal of additional responsibility on these authorities most of which will be relatively inexperienced in the selection of software solutions and particularly e-GP solutions;
  • Contracting authorities and economic operators will need to learn how to use the multiple platforms to perform the same procedure, e.g. prepare or submit tenders online, manage framework agreements etc.;
  • Data collection and reporting may pose a challenge. Ensuring interoperability between the various e-procurement platforms and the central management reporting database for the purpose of storing procurement information may also be a problem.

Authentication/confirmation in terms of data transmission in the e-GP system should not be neglected either. Thus, there is no mandatory requirement to use digital signatures or digital certificates in the e-GP system in the EU countries. Instead, international best practices offer the following solutions:

  • Use the HTTPS protocol when signing onto the e-procurement web portal;
  • Use of a multi-factor or two-step authentication procedure;
  • Selection of an approved e-procurement package solution that employs secure encryption techniques when storing tender proposal documents.

The above solution is less expensive and easier to implement, allowing any registered economic operator (supplier) to access and submit tender proposal documents without incurring additional costs and wasting time to obtain a digital signature/digital certificate, which is also very important for foreign tenderers.

Generally speaking, in view of the aforesaid and taking into account international experience, an e-GP system like any other special IT system may be developed and implemented in one of the four ways described below:

  • Big bang. The new system replaces the old in a ‘big bang’. For example, the new system is installed over a weekend/holiday and goes live at 9 am on Monday and any existing systems are shut down and no longer available. The benefit of this approach is that it forces the organisation to face all the problems at once (though the same may be interpreted as a disadvantage as well). The down-side though, is that there is no opportunity for learning and gradual familiarisation which could pose significant risk to the overall adoption of the system.
  • Parallel working. The existing and new systems are required to work together for an agreed on, and limited, period. The advantage of this approach is that there is a gradual changeover reducing risks significantly. A major issue, however, is that it is difficult to wean users from their customary dependence on the old system.
  • Phased incremental approach. The new system is introduced by functionality. For example, the document and/or tender proposal preparation module might be followed by the tender (evaluation) module and so on. It also allows users to move along a learning curve and the stakeholders can develop a feeling of satisfaction as each phase is successfully accomplished. Other ways of phasing involve training users in stages so that they, rather than the systems developers, are the ones to convince their colleagues that the new system is a good thing. This is especially useful when there is resistance to change amongst the user group at first (at least because this is something brand new). Or, the new system can be introduced by geographical regions (pilot town/county/region).
  • Pilot study. This involves the trial introduction of a partially finished version of the whole system in one part of the organisation. The main objective is to learn what the difficulties of a full installation will be. The proper installation begins when these lessons have been learned and associated changes made. The advantage of this approach is that it promotes learning. However, depending on the nature of a system, a pilot study approach may not always be possible. It is critical to note, though, that a pilot study differs from a phased approach. A pilot study is the trial installation of a limited version of the software, whereas a phased approach involves the actual installation of the new system in parts.

In this context, it should be noted that the new EU Directive 2014/24/EU on public procurement prefers the incremental phased approach. At the same time, considering the current situation in Ukraine, particularly the existing initiatives and declared strong readiness of the Government, and understanding the complexity, nature and scale of the project of introduction of the e-GP system in Ukraine, experts of the EU Project recommend combination of the phased approach and pilot study which could help significantly mitigate relevant risks.

Consequently, the recommended approach to the strategy of e-GP system development in Ukraine suggests making this system fully operational in four phases. Each phase would be progressively introduced to the majority of the contracting authorities before moving on to the next phase which would allow a progressive build-up in capacity in both the public and private sectors. So, the suggested phases are the following:

Phase 1. Preparation & tendering

  • E-registration (including electronic communication with the company registration system and the tax system in Ukraine);
  • Publication of procurement plans;
  • E-noticing;
  • E-access;
  • E-submission;
  • E-evaluation;
  • E-awarding.

Phase 2. E-auctions (including dynamic purchasing systems) and e-catalogues.

Phase 3. E-contract management & AMCU complaints review process.

Phase 4. E-purchasing, e-invoicing, e-payments.

Upon completion of the fourth stage, the final step should be full electronic integration of e-GP system with both the budgeting and financial management systems in the Ministry of Finance and the payments system that is currently managed by the State Treasury Service of Ukraine.

Whatever be the Government’s decision on the way of introduction of the e-GP system, drafting an appropriate roadmap is a complex task which requires comprehensive systemic approach to avoid mistakes or even failure of successful implementation of such ambitious project. In view of the aforesaid, development of a realistic roadmap for the introduction of the e-GP system should be based on the practical aspects described above rather than on political popular targets (e.g. never-ending combating of corruption).

Authors: Oleksandr Shatkovskyi, Graham Fiveash

The contents of this article are the sole responsibility of the Crown Agents and its Consortium partners and the opinions expressed in this article are not to be understood as in any way reflecting an official opinion of EUROPEAID, the European Union or any of its constituent or connected organisations.

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