Regional - EBRD UNCITRAL Public Procurement Initiative - Strengthening public procurement regulation in the Commonwealth of Independent States (CIS) and Mongolia
The EBRD Legal Transition Programme carried out a five-year project with the United Nations Commission on International Trade Law (UNCITRAL) to support reforms of public procurement regulation in the Commonwealth of Independent States (CIS) region and Mongolia from 2011-2016.
Governments in the region were aware that outdated public procurement regulations were hurting their economies and stopping taxpayers from getting a good deal for key public services. They wanted to transform their public procurement laws and delivery of public procurement function to create a dynamic market that allowed for efficient domestic and cross-border trade based on extensive use of electronic public procurement tools.
As several CIS countries had legislation based on the 1994 UNCITRAL Model Law on Procurement of Goods, Construction, and Services, the project’s starting point was to help countries upgrade public procurement regulation to UNCITRAL’s new regulatory standard - the 2011 UNCITRAL Model Law on Public Procurement.
The EBRD UNCITRAL Public Procurement Initiative had three stages:
- Legal analysis of national public procurement legislation was prepared for key countries. This work identified regulatory gaps and informed reform agenda for each country.
- Policy workshops for government officials to introduce and explain policy standards of the UNCITRAL Model Law, and explore possibilities for modernising public procurement took place in Armenia, Azerbaijan, Moldova, the Kyrgyz Republic, Tajikistan and Mongolia.
- Tailored country projects in Armenia, the Kyrgyz Republic, Tajikistan and Mongolia were designed and delivered to help governments reform laws and adopt ground-breaking e-procurement systems.
The work resulted in development and adoption of new public procurement laws enabling or extending use of electronic public procurement systems in Armenia (ARMEPS), the Kyrgyz Republic (National eProcurement Platform), Tajikistan (National Single Electronic Procurement Portal) and introduction of electronic framework agreements in Mongolia.
In 2016 the EBRD UNCITRAL Public Procurement Initiative was extended beyond the CIS region and collaboration with governments of Egypt and Tunisia was initiated. Latest technical cooperation activities focus on promoting transparency in public procurement through use of open data in electronic public procurement systems and experimenting with specialised digital purchasing tools for central purchasing bodies, such as framework agreements, electronic auctions and e-catalogues (Moldova and Ukraine).
Tunisia - Unleashing the potential of online public contracts for SMEs
“TUNEPS is helping me to save time and money and is making the entire procurement process more transparent…. Today, a public tender notice published by the Ministry of Health caught my attention and I was able to access full technical specifications of the tender online and easily prepare the bid.”
Rachid Dagdoug, manager of Day Machines, a small business that makes medical supplies in the Tunisian city of Sfax.
After Tunisia’s Jasmine Revolution in 2011, officials in the new Tunisian government began reforming public procurement in an effort to give taxpayers better value for money for key public services. Public procurement accounts for 18 per cent of Tunisian gross national product. To drive the economy forward and ensure the public has confidence in its officials, it is critical that this huge market is as open, dynamic and fair as possible.
The key innovation was the Tunisia on-line E-Procurement System (TUNEPS), modelled on very successful Korean KONEPS system and implemented in Tunisia by KOICA, the Korean International Cooperation Agency. However, when TUNEPS was first launched, small value procurements (contracts worth between €17,000 to €69,000) were conducted outside the TUNEPS. This meant the bulk of the procurement market was still using the inefficient and opaque direct award system, which favoured face-to-face interaction and existing suppliers. Micro and small firms make up 90 per cent of all companies in Tunisia and employ some 56 percent of Tunisian workers, so creating new procurement opportunities for SMEs through TUNEPS represented an important economic benefit.
The EBRD Legal Transition Programme (LTP) was tasked with extending the TUNEPS system to provide for online shopping – a simple and easy-to-use online price quotation procedure - aimed to open new business opportunities to small and medium-sized enterprises (SMEs) and companies outside the capital area of Tunis.
The EBRD technical cooperation with TUNEPS focused on four elements:
- updating the legislation so that TUNEPS system covered small value procurements;
- improving the TUNEPS system e-Shopping Mall for processing small value purchases and connecting small suppliers with buyers across the country;
- developing a new TUNEPS Help Desk to assist small businesses trying to get to grips with the online shopping system;
- reaching out to SMEs and public buyers in municipalities all over Tunisia in order to help them understand the benefits of TUNEPS and how to use it.
The project delivered 46 training workshops throughout Tunisia. Within 12 months these drew almost 1000 small businesses who never competed for public contracts and about 800 representatives of contracting authorities, including procurement officers from local schools, hospitals and local public administration in regional towns in Tunisia. It also launched an online campaign publicising the benefits of e-procurement to potential new users.
“Bidding for government contracts is something that was totally new to the small entrepreneurs who attended our workshops,” says Philip Engels, the LTP project officer. “We had to explain to them that, under TUNEPS, they stood a good chance of winning these contracts, which they had previously thought were out of their reach.”
Moldova - Changing the face of public procurement
Moldova has been trying to reform its public procurement system for over 20 years. To achieve this, with advice and support from EBRD, in April 2017 the Ministry of Finance of Moldova launched a pilot of MTender; a ground-breaking digital procurement system which is radically transforming the way public funds are spent. It proves that the corruption and cronyism which costs the Moldovan state up to US $183m each year in the procurement sector could be drastically reduced. But it is not just about stopping corruption - the MTender system will make public procurement easier for government officials and better for its citizens.
Learning from success of Prozorro in Ukraine and developed collaboratively by civil society, government and local IT companies in Moldova, MTender is taking the concept of open source, open data and open contracting data standard further, to provide for the ‘end-to-end’ digital public procurement, covering all aspects of the public procurement cycle from budget planning to payment processing.
MTender makes public tenders accessible online and decisions of contracting entity published in real time in the open data format of OCDS. Every business and citizen in Moldova can monitor online who gets a public contract, what they were paid for it and whether they are suitable for the job. This means Moldovan taxpayers get the more reliable and ‘clean-hands’ companies to deliver key public services like schools, railways and hospitals, now and in the future. It also increases business opportunities for domestic companies - especially small and medium-sized enterprises run by women and other poorly represented groups. This helps creates healthy, innovative and inclusive markets that will allow its economy to leap ahead and become more attractive to foreign investors in future.
In its pilot stage (full development will be sponsored by EuropeAid later in 2019), MTender offers three procurement methods (electronic reverse auction, request for quotation and open tender) as well as procurement planning and e-contracting modules it has been made available to public sector entities in October 2018. Despite short time since its introduction, some 2,670 public sector authorities registered to use MTender to advertise their public contracts, and 3,730 local businesses participated in online bidding. To date, some 29,795 electronic tenders were published and 15,801 online contracts have been signed and registered in the Treasury of the Republic of Moldova using MTender.
With MTender pilot price tag at EUR 580,000 so far and total cost estimated at EUR 1,200,000, the MTender digital service has already generated savings of 35,830,000 Lei (EUR 2m) for the government and taxpayers of Moldova.
Regional - EBRD GPA Technical Cooperation Facility
Working in collaboration with the World Trade Organisation (WTO) Secretariat, the EBRD Legal Transition Programme is supporting governments that are interested in or committed to accession to the Agreement on Government Procurement (GPA). Since its launch in 2014, trade experts and procurement policy advisers engaged by the EBRD GPA TC Facility have assisted eleven EBRD countries of operations: Armenia, Azerbaijan, FYR Macedonia, Georgia, Jordan, the Kyrgyz Republic, Moldova, Montenegro, Ukraine, Tajikistan and Turkey.
The completion of the GPA accession process generally involves two key elements. First, the acceding WTO Member must agree with the existing GPA Parties on the trade coverage offer. The trade coverage offer, which needs to be negotiated in a series of bilateral and plurilateral consultations, sets out which public bodies of the acceding country are obliged to tender which kind of procurements (that is, goods, services and works) in accordance with the GPA requirements, and which exceptions and derogations apply. Therefore, the coverage under the GPA depends on the respective coverage commitments. Second, the GPA obliges the acceding countries to ensure conformity of their public procurement laws, regulations and electronic procurement systems with the mandatory policy standards of the GPA (a requirement to accede to the GPA).
Benefitting from the technical assistance provided by the Bank, three countries acceded to the GPA: Montenegro in 2015 and Moldova and Ukraine in 2016 and Armenia has ratified the revised 2012 text of the GPA. Three other countries, the FYR Macedonia, the Kyrgyz Republic and Tajikistan, are currently in the process of accession, having submitted their revised or final offers respectively to the WTO Secretariat.
The EBRD GPA TC Facility continues expanding its geographical reach and in 2017 engaged in technical cooperation with Belarus and Kazakhstan. More information about EBRD GPA TC Facility can be found here.
Ukraine - Supporting Ukraine’s ProZorro revolution
In Ukraine the stakes for taxpayers are huge – annual public procurement budget is valued at up to US$ 20 billion. Following decades of concealment and corruption, which allowed the country’s ruling elite to exploit the state procurement system in their interests, 2015 brought two seismic shifts: Ukraine joined the World Trade Organization’s (WTO) Agreement on Government Procurement (GPA), and introduced an electronic procurement system for state purchasing of goods, works and services.
The EBRD Legal Transition Programme worked with the government on both initiatives throughout a time of great political turbulence in Ukraine. The GPA accession introduces governance standards and stimulates competition and growth by allowing businesses from other GPA countries to bid for Ukrainian public contracts. At the same, becoming a GPA member hugely increases the size of the procurement market available to Ukrainian businesses globally.
From 2012 the EBRD Legal Transition Programme (LTP) worked with the Ukrainian government to navigate the complicated GPA negotiation process and promote adoption of the WTO public procurement policy standards in Ukraine. Upon successful completion of the GPA negotiations in September 2015, the focus of the EBRD support shifted to meeting GPA transparency standards in practice by introducing electronic public procurement and independent complaints mechanism.
Recognising innovative ideas of civic activists from Maidan, the Bank supported the pilot of “ProZorro”, a new concept of the e-procurement system based on Open Contracting Data Standard. Prozorro means transparent in Ukrainian, and the system launched in February 2015 aimed to achieve full transparency of public procurement decisions by making “everyone see everything” online. To achieve that the ProZorro system connected a new open source and OCDS-based central database to the existing commercial electronic platforms in Ukraine to ensure online public procurement data exchange and publication in the open data OCDS format in real-time. This approach is making procurement information literally open to anyone and reduces corruption risks significantly. At the same time real-time access to procurement data is very efficient - procurement officers across Ukraine call pull information on suppliers and contracts or publish new online tenders in a few minutes, something which would take days in many richer countries. The ProZorro pilot has been very successful – it attracted almost 1000 contracting entities within first three months of operation. Local suppliers started to trust the public procurement market for the first time, which means competition has grown and Ukrainian taxpayers started to get better value for money.
Made mandatory on 1 April 2016, the ProZorro system won several international awards and is today used by 157,000 domestic and international businesses and publishes annually about 1 mln electronic tenders from about 30,000 public buyers in Ukraine. It is estimated that since its launch the ProZorro has saved 3 billion hryvnia”. The LTP continues to work with Transparency International Ukraine on prototyping specialised tools for ProZorro and exploring opportunities behind open source and open data solutions in public procurement.