The transparency provided to corporations using digital procurement solutions provides greater insight into spend — a way to capture more efficient ways of using corporate money — and it’s all about the bottom line.
In public procurement, however, that transparency is vital to hold governments accountable for the use of public funds. In Ukraine, officials are using an eProcurement solution in an effort to enhance transparency and combat corruption.
Reports in The Wall Street Journal on Thursday (May 19) said Ukraine officials are implementing digital procurement solutions offered by ProZorro.
In addition to cost savings — the nation’s deputy minister for economy development and trade told reporters that it will provide savings as the government spends about 9 percent of GDP on procurement — officials are looking to drive out corrupt players in government procurement happenings
“The online procurement drives prices down, drives shady business out and gives jobs to legitimate businesses,” said the deputy minister, Max Nefyodov.
Reports said Ukraine’s federal procurement budget was about $11 billion in 2014. About 10 percent of that spend was linked to some form of corruption, reports said. Another 10 percent was wasted on expensive deals due to a lack of competition in the public procurement space.
ProZorro went into pilot implementation for a year, and after that test, analysts said the government saw 12 percent in savings. The service often leads to more bidders for government contracts; since using the tool, reports said, more Western businesses have competed for contracts in the nation, a phenomenon that Nefyodov said points to improved reliability and transparency of the processes.
ProZorro was built from volunteers on open-source software, according to reports. It was a result of the 2014 revolt against President Viktor Yanukovych, while officials adopted the tool last year in a broader effort to combat corruption.