Measuring results from open contracting in Ukraine

Kathrin Frauscher, Karolis Granickas and Leigh Manasco at the Open Contracting Partnership: “…Ukraine is one of our Showcase and Learning (S&L) projects, and we’ve already shared several stories about the success of Prozorro. Each S&L project tests specific theories of change and use cases. Through the Prozorro platform, Ukraine is revolutionizing procurement by digitizing the process and unlocking data to make it available to citizens, CSOs, government, and business. The theory of change for this S&L project hypothesizes that transparency and the implementation of the Open Contracting Data Standard (OCDS), combined with multi-stakeholder collaboration in the design, promotion and monitoring of the procurement system, is having an impact on value for money, fairness and integrity.

The reform introduced other innovations, including electronic reverse auctions and a centralized procurement database that integrates with private commercial platforms. We co-created a monitoring, evaluation, and learning (MEL) plan with our project partners to quantify and measure specific progress and impact indicators, while understanding that it is hard to attribute impacts to distinct aspects of the reform. The indicators featured in this blog are particularly related to our theory of change.

We are at a crucial moment in this S&L project as our first round of comprehensive MEL baseline and progress data are coming in. It’s a good time to reflect on key takeaways and challenges that arose when defining and analyzing these data, and how we are using them to inform the Prozorro reform.

Openness can result in more competition and competition saves money.

One of the benefits of open contracting appears to be improving market opportunity and efficiency. Market opportunity focuses on companies being able to compete for business on a level playing field.

From January 2015 to March 2017, the average number of bids per tender lot rose by 15%, demonstrating an increase in competition. Even more notable, the average number of unique suppliers during that same time grew by 45% for each procuring entity, meaning that agencies are now procuring from more and more diverse suppliers….

High levels of responsiveness can benefit procuring entities.

Those agencies that leverage their opportunities to interact with business and citizens throughout the contracting cycle, by actively responding to questions and complaints via the online platform, tend to conduct procurement more smoothly, without high levels of amendments or cancellations, than those who don’t. Tenders with a 100% response rate to feedback have a 66% success rate, while those with no response, show a 52% success rate. The portal provides procuring entities with the resources needed to address questions and problems, saving time, effort and money throughout the contracting process.

People are beginning to trust the public procurement process and data more.

According to a survey of 300 entrepreneurs conducted by USAID, most respondents believed that Prozorro significantly (27%) or partially (53%) reduces corruption. Additionally, fewer respondents who participated in procurement said they faced corruption when using the new platform (29%) compared to the old system (54%). These numbers only tell a part of the story, as we do not know what those outside of the procurement system think, but they are a necessary first step towards measuring increased levels of trust for the public procurement process. We will continue looking at trust as one of the proxies for health of an open procurement process.

Citizens are actively seeking out procurement information.

Google search hits grew from 680 in the month of January 2015 to more than 191,000 in the month of February 2017 (tracking 43 related keywords). This means the environment is shifting to one where people are recognizing that this data has value; that there is interest and demand for it. Implementing open contracting processes is just one part of what we want to see happen. We also strive to nurture an environment where open contracting data is seen as something that is worthwhile and necessary.

The newly established monitoring platform also shows promising results…..

The main one is feedback loops. We see that procuring entities’ responsiveness to general questions results in better quality procurement. We also see that only one out of three claims (request to a procuring entity to amend, cancel or modify a tender in question) is successfully resolved. In addition, there are some good individual examples, such as the ones in Dnypro and Kiev. While we do not know if these numbers and instances are sufficient for an effective institutional response mechanism, we do know that business and citizens have to trust redress mechanisms before using them. We will continue trying to identify the ideal level of institutional response to secure trust and develop better metrics to capture that….(More)”.