UKRAINEGOVERNANCE ASSESSMENT

2006

Sigma Ukraine governance assessmentSigma Ukraine governance assessment

PUBLIC PROCUREMENT

Peder Blomberg

Overall ConclusionsOverall Conclusions

A significant deterioration of the public procurement system during the past 12 months

The new PPL will NOT promote efficient, transparent and cost-effective public procurement

Risk undermining the credibility and integrity of the procurement system

May not contribute to closer EU integration or WTO membership

New Structure-Key PlayersNew Structure-Key Players

The Antimonopoly Committee (partly replacing PPD)

The Special Control Commission under the Accounting Chamber (complaints review)

The Tender Chamber- non-public organisation

Centre for Tender Procedures- association of private procurement consultancy firms

Specific Findings New StructureSpecific Findings New Structure

Key functions of the government as the executive transferred to bodies under the umbrella of the parliament

Policy-making and regulatory functions appear missing in the new structure

Risk that public procurement becomes politicised

Confusion of roles and mandates, including duplications, within the new institutional structure

The role of the Tender Chamber strongly questionable

The level of control enhanced without observing development aspects

Monopolised market for procurement services

Loss of scarce capacity and institutional memory with the abolition of PPD and, possibly, the PBE (The Bulletin)

Main Conclusions Procedural Main Conclusions Procedural FrameworkFramework

Extensive use of open or competitive procedures (good)

Increased rigidity with the new amendments (e.g. mandatory tender securities)

Domestic protection policy and preferential treatment questionable

Inappropriate (over-) coverage (commercial and industrial enterprises 50% publicly owned)

Certain inappropriate procurement procedures (e.g. open tender with auction)

Inappropriate selection and award criteria and methods

Capacity and FunctionalityCapacity and Functionality

Contracting entities need strengthened methodological support and training

Private sector operators need information and guidance to improve understanding of the PPL

The market and competitiveness appear satisfactory, but certain areas remain a problem (construction sector)

RecommendationsRecommendations Initiation of a comprehensive public procurement reform

Objectives: Establish a credible and sound institutional structure with a natural

division of functions Establish a central Public Procurement Office within the government

structure for policy making, implementation support, monitoring and coordination

Create an independent administrative review mechanism with final recourse to court (separate from the PPO).

Further support of capacity development at the operational level

Consequently: Re-consider the role of the Tender Chamber Abolish the monopolised market for procurement services Re-consider the role of the Special Control Commission under the

Accounting Chamber Re-consider the role of the Anti-monopoly Committee Make use of the knowledge and resources of the PPD and PBE

Align the legislation procedurally more closely with EC Directives and internationally good practice