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The first centralized procurement organization is established in Ukraine
25.09.2019 | 13:59 | Directorate for relations with state bodies and public.

Today, on September 25, on the initiative of the Ministry of Economy, the Cabinet of Ministers of Ukraine designated the State Institution “Professional Procurements” as a centralized procurement organization for tendering and procurements under the framework agreements for goods and services (except for minor repairs) for customers.

“The decision to designate the State Institution “Professional Procurements” as a centralized procurement organization is a step towards streamlining the entire procurement process, because by transferring their procurements to a centralized procurement organization the customers will be able to significantly save their money due to combining similar items within a single procedure. Moreover, during the pilot project – the State Institution “Professional Procurements”, we have been convinced of its efficiency and effectiveness. In particular, the concluded contracts resulted in savings of over 13% of the expected value of the procurement items. At the same time, the average number of participants amounted to 3.65, which is 1.5 times more than the average indicator for the electronic procurement system”, First Deputy Minister of Economic Development, Trade and Agriculture Pavlo Kukhta commented on the Government’s decision.

In 2017-2018, within the framework of the pilot project, the State Institution “Professional Procurements” performed functions of a centralized procurement organization. Therefore, given the knowledge and experience in tendering for the benefit of other customers, as well as positive results of the implementation of the aforementioned pilot project, the State Institution “Professional Procurements” will continue to perform functions of a centralized procurement organization for the benefit of customers who have expressed a will to transfer the procurement function to a professional organization.

It should be noted that the establishment of a centralized procurement organization will help address the following public procurement problems, in particular:

  • professionalization of public procurement sector (there are over 30 000 contracting organizations operating in Ukraine, most of which proved to be ineffective. Therefore, a centralized procurement organization is a powerful driver for the professionalization of procurement sector due to the availability of professional staff);
  • increasing cost savings through volume aggregation (more than 30 000 contracting organizations make essentially similar purchases of consumer goods. Combining such items into a single procurement through aggregation will result in a better price and significantly reduce the administrative cost of procurement procedures);
  • procurement standardization (it is assumed that a centralized procurement organization will actively work with potential suppliers, which will significantly reduce the risks of appeals and delays in supply);
  • reducing the corruption level (centralization of procurements creates more opportunities for public control, monitoring and implementation of preventive control measures due to consolidation of the procurements and significant reduction of the overall number of the procurement procedures).

For reference: State Institution “Professional Procurements” is accountable to the Ministry of Economy and is a non-profitable organization that aims to receive income for the purpose of self-sufficiency from the services provided within the scope set by the charter and the law.

Ministry for Development of Economy,
Trade and Agriculture of Ukraine
01008, Ukraine, Kiyv city,
Grushevsky str., 12/2