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UKRAINE GOVERNANCE ASSESSMENT 2006

UKRAINE GOVERNANCE ASSESSMENT 2006. Sigma Ukraine governance assessment. PUBLIC PROCUREMENT Peder Blomberg. Overall Conclusions. A significant deterioration of the public procurement system during the past 12 months

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UKRAINE GOVERNANCE ASSESSMENT 2006

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  1. UKRAINE GOVERNANCE ASSESSMENT 2006

  2. Sigma Ukraine governance assessment PUBLIC PROCUREMENT Peder Blomberg

  3. Overall 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

  4. New 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

  5. Specific 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)

  6. Main Conclusions Procedural Framework • 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

  7. Capacity 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)

  8. Recommendations • 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

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