How Ukraine Can Significantly Save on Public Procurement Through Reform of Prozorro
Ukraine’s national budget continues to face a looming deficit in 2024, with estimations indicating the need for over 300 billion hryvnias to fund key sectors and program implementations.
Amidst the rapid economic challenges and limited financial resources, experts and practitioners with direct experience in public procurement highlight the potential for substantial savings by leveraging transparent tendering tools.
In particular, the Prozorro and Prozorro Market platforms — electronic public procurement systems introduced nationwide since 2019 — play a critical role.
Despite their growing adoption, issues of participant discrimination based on various criteria persist, reducing competition and leading to unjustified cost increases.
An analysis of over 3,700 purchases of interactive panels for schools, conducted across both platforms, shows that transparent contests lead to more economical procurement outcomes.
For instance, Prozorro has conducted 952 auctions with a total expected value exceeding 469 million U.S.
dollars, achieving savings of approximately 24 million hryvnias — about 5% of the entire budget.
Conversely, non-competitive and discriminatory tenders resulted in marginal savings of just 1.5-2%.
Prozorro Market provides a more promising picture: with a budget of over 754 million hryvnias and savings surpassing 85 million, competition remains high, with more than 60% of procurement activities involving two or more participants.
In such cases, price reductions reach up to 27% when more participants are involved.
These findings demonstrate that discrimination can be substantially minimized or eradicated through improved procedures.
The government plans to implement a standard contract and a U-1 origin certificate for goods, which will further ensure fairness and transparency.
These measures will allow the state to save even more funds and will significantly reduce discrimination in procurement processes, ultimately leading to more effective and economical utilization of public resources.