Procurement is not all the time nearly procurement — a story from Ukraine


Although a couple of of us discover the subject fascinating, for many within the U.S., authorities procurement is a fairly sleepy space. Positive, there’s some huge cash at stake (and for distributors to the federal government, procurement is a crucial subject). However we usually take without any consideration a system that proceeds with out political drama.

My colleague Chris Yukins, a contracting regulation skilled at George Washington College, is particularly concerned with worldwide procurement, not too long ago despatched me the story of a procurement system in Ukraine known as ProZorro. The phrase doesn’t come from a TV present of my childhood, however is quite Ukrainian for “transparency.” It’s principally a simple system to present broad publicity to procurements and to solicit digital bids utilizing reverse public sale expertise.

Ukraine’s latest historical past makes this method a reasonably large deal.

After the collapse of the Soviet Union and the emergence of an unbiased Ukraine, the nation was dominated for a few years by a clique of corrupt oligarchs headed by Ukraine’s model of Vladimir Putin. In 2014 the oligarchs have been overthrown by a well-liked democratic revolution that was so vital that the Chinese language authorities has been obsessive about it ever since as one thing they fear about coming to China. Ultimately that revolution produced the election as president of Volodymyr Zelensky, a TV comic from the nation’s historically persecuted Jewish minority who was about so far as you may get from earlier rulers of the nation.

Most People will probably be puzzled to study that one of many first priorities of the brand new authorities, beginning virtually as quickly because it got here to energy, was to develop a brand new procurement system for the nation.


The reply is that authorities procurement was an necessary a part of what was flawed with the outdated system. That system made little info obtainable to the general public about how authorities cash was being spent. And extra importantly, the system was rife with corruption – and procurement bribes have been a foremost supply of the wealth of the normal oligarchs.

In 2014, the identical yr because the revolution, the brand new authorities handed a brand new procurement regulation. It had two easy, however revolutionary targets – to extend procurement transparency and to cut back corruption. ProZorro was the primary software for these adjustments. It was about fundamental adjustments in an entrenched procurement system that was dysfunctional, if not evil. The fundamental aspect of ProZorro was a one-stop store platform that publicized procurement solicitations, shared requests for proposals, and allowed individuals to bid in reverse auctions (reverse auctions are the place bidders bid decrease and decrease costs quite than greater ones as in a daily public sale).

According to the emergence of the brand new authorities from in style protests, Ukrainian non-governmental organizations and personal software program corporations who wished to assist out to assist out their rising nation performed a significant position in truly creating the brand new system. A precedence was to make the system simple for sellers and authorities patrons to make use of – in discussing how the brand new system was architected, I heard the phrase “user-centered design.” For instance, reverse auctions have been historically very sophisticated to make use of; the system architects created an public sale system that did not even require coaching.

Earlier than 2014 about 14,000 distributors offered to the Ukrainian authorities; the quantity is now as much as 200,000. The system has gained various Europe-wide procurement awards.

There are some methods ProZorro is definitely extra superior than our system within the US. Amazingly, most procurements at the moment are performed utilizing reverse auctions, which appear to be a real characteristic of the system, whereas within the U.S. we now have been speaking about this for a very long time, however on the federal degree not getting very far.

We wouldn’t have a single web site as Ukraine is making an attempt the place individuals can get RFPs on-line and submit bids – a souped-up model of – although to make certain Ukraine has a a lot smaller and less complicated set of procurements than we.

Bear in mind there was no unbiased Ukraine earlier than the breakup of the Soviet Union. Ukraine has made revolutionizing its procurement system a part of democratization and nation constructing. It has turn out to be the house for this new system – nothing this superior exists in another European nation on a nationwide degree — as a result of, greater than virtually each different nation in Europe, it was a newly rising (democratic) nation.

It’s wonderful that Ukraine is making an attempt some advances in doing procurement that really transcend we’re within the U.S. Having mentioned that, and admiring the thrilling issues Ukraine has finished, my total response to studying about what’s going on over there’s to return to the start of this submit and observe that we must always depend ourselves very fortunate that within the U.S. authorities procurement is so boring.


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