Prozorro - The System Revolutionizing Government Procurements: A Story of Creation

The Prozorro project was recently approved by Ukrainian legislation. Its aim is to reduce the growth of corruption in government procurement by providing the public access to monitoring trading activities. The system also enables the buyer to obtain the most advantageous combination of cost and quality.

The initial version of the program was launched in February 2015. Over the year, it underwent rigorous testing and was fully prepared to service government procurements. Through the system, the Ministry of Economic Development and Trade of Ukraine conducted 14 thousand transactions and agreements totaling $4.1 billion.

In 2016, the Ministry transitioned to an open electronic format. This transition enhances the transparency of trading activities and minimizes corruption in government procurements, ultimately saving budgetary funds.

System Operation Concept

The Prozorro system functions as a database that cannot be accessed directly. It is connected to six platforms through which trading activities are conducted. There are plans to increase the number of platforms in the near future. These platforms are websites where government buyers announce trading activities. Anyone interested can register and offer their goods or services for sale. The cost of proposals can vary based on competitors’ pricing.

Each platform adheres to its own operational regulations, but their basic principles are similar. The standard trading procedure follows this structure:

1. Announcement of procurement: The customer or any government organization creates a free tender request, which is published on all platforms. The request includes product/service requirements, cost, and collaboration conditions. The participation fee for auctions is $6. If the auction amount is less than $1,250, participation is free.
2. Verification: Suppliers and customers ask questions and engage in a dialogue during this period.
3. Submission of proposals: Participants do not see each other's names or proposed prices, preserving competition and incentivizing participants to continue bidding.
4. Price reveal and auction management.
5. Approval: Participant information is disclosed.
6. Determination of the winner.

Electronic auctions are a pivotal step allowing Ukraine to align with European practices. Read about how a regular manager created Ukraine's most prominent online store. Don't forget to share this article with friends on social media!