Worldwide, public procurement remains vulnerable to corruption risks.
Qualitative data control helps mitigate those risks
Qualitative data control helps mitigate those risks
Civil tools for public
procurement analysis
procurement analysis
High-quality data analysis helps to:
identify risky procurement transactions and isolated cases of violations in time
identify systematic threats and weaknesses of the public procurement system
to improve the sector
to improve the sector
It therefore makes sense that CSOs from different countries develop their unique BI tools to track and control corruption risks. We will present you the tools, best practices, and detailed guidelines on how to use procurement analytics developed by CSOs in Ukraine, Poland, Hungary, and the Czech Republic.
DOZORRO project by Transparency International Ukraine, Ukraine
DOZORRO
The most important prerequisite for public procurement analytics is open data. In Ukraine, information on all public procurement became public in 2016, when the Prozorro e-procurement system was launched. Its API code is open to all. Transparency International Ukraine supported and administered the development of the system.
Analytical instruments
DOZORRO bot
Public procurement monitoring can also be facilitated by less common technologies, such as messengers.
To monitor specific tenders more effectively and track specific procuring entities, TI Ukraine has developed the DOZORRO bot app. Using the bot, you can subscribe to a specific procuring entity, supplier or tender and get notifications via email and on Telegram about any updates to the relevant tenders on Prozorro.
To monitor specific tenders more effectively and track specific procuring entities, TI Ukraine has developed the DOZORRO bot app. Using the bot, you can subscribe to a specific procuring entity, supplier or tender and get notifications via email and on Telegram about any updates to the relevant tenders on Prozorro.
Civic engagement
in public procurement monitoring
in public procurement monitoring
DOZORRO Community
To make public oversight over public procurement more effective and ensure its sustainability, the DOZORRO team has developed a network of local NGOs. Activists monitored public procurement and appealed to law enforcement and regulatory agencies in case of violations.
Since November 2017, the team has processed approximately 41,000 risky tenders, sent approximately 37,000 appeals to regulatory authorities and buyers, and "fixed" more than 5,800 tenders. Their total value exceeds USD 273 million.
Since November 2017, the team has processed approximately 41,000 risky tenders, sent approximately 37,000 appeals to regulatory authorities and buyers, and "fixed" more than 5,800 tenders. Their total value exceeds USD 273 million.
Engagement of the public and journalists
Another focus area of DOZORRO is engagement of the public and journalists in public procurement monitoring and analysis. To this end, an online map of school procurement and a COVID-19 procurement BI module have been developed based on the public BI module. The tools enabled the public and journalists to learn more about procurement and conduct their own mini research on the effectiveness of spending by public authorities. DOZORRO also collaborated with journalists in the regions, who regularly wrote stories on corruption and overspending in local public procurement.
Another practice of citizen engagement in public procurement oversight was DOZORRO Landing Force. This project entailed the team traveling to one of Ukrainian cities to inform the citizens how they can influence procurement in their city and control it. During the trip, activists also conducted a series of trainings for suppliers and investigative journalists on how to analyze public procurement using BI tools.
Do you have any questions? Would you like to find out more about the work of the DOZORRO team?
Contacts:
Anastasia Ferents
DOZORRO regional coordinator
Development of the civic oversight system
ferents@ti-ukraine.org
ferents@ti-ukraine.org
Project of Moje Panstwo Foundation, Poland, and K-Monitor, Hungary
TENDERS.GURU
About the project
The TENDERS.GURU project was launched by 5 CSOs from four countries: Moje Panstwo Foundation, Access Info Europe, Civio, K-Monitor, Funky Citizens.
They created the BI portal Tenders.Guru. There, you can analyze the procurement transactions in these four countries and even compare them. Since every country has its own data publication format, the Tenders.Guru portal collects information on procurement from each national procurement portal and combines it into one database.
They created the BI portal Tenders.Guru. There, you can analyze the procurement transactions in these four countries and even compare them. Since every country has its own data publication format, the Tenders.Guru portal collects information on procurement from each national procurement portal and combines it into one database.
Functionality of TENDERS.GURU
On the Tenders.Guru portal, users can filter purchases by various parameters, such as the duration of the procure-
ment process, the number of partici-
pants in the tender, competitiveness and the largest procuring entities. The functionality helps to identify problems in the public procurement sector and corruption risks.
ment process, the number of partici-
pants in the tender, competitiveness and the largest procuring entities. The functionality helps to identify problems in the public procurement sector and corruption risks.
The danger of corruption can manifest itself as the short duration of bidding, the presence of only one bidder, documentation that clearly points to a particular contractor, many sub-threshold purchases from one procuring entity, as well as conflicts of interest.
Within the project, the consortium members created a risk indicator database. It is useful for government officials, civil society, active citizens and journalists. In addition, they are taught to monitor procurement to make the process more fruitful.
To combat inefficient spending and reduce corruption risks in public procurement, project members work with investigative journalists, researchers and community activists who use the Tenders.Guru BI portal to oversee public procurement in their countries. In addition, research develops recommendations for legislators and policymakers, both at national and EU level. For instance, they work on improving the public procurement sector, as well as access to information, monitoring of EU funds, and protection of corruption whistleblowers.
To combat inefficient spending and reduce corruption risks in public procurement, project members work with investigative journalists, researchers and community activists who use the Tenders.Guru BI portal to oversee public procurement in their countries. In addition, research develops recommendations for legislators and policymakers, both at national and EU level. For instance, they work on improving the public procurement sector, as well as access to information, monitoring of EU funds, and protection of corruption whistleblowers.
Contacts:
K-Monitor project, Hungary
RED FLAGS
In 2015, the Hungarian organizations K-Monitor and Transparency International Hungary launched the Red Flags project to increase the transparency of above-threshold procurement in their country. K-Monitor created the tool called Redflags.eu. It allows supervisory bodies and journalists to identify suspicious tenders even before contracts are signed. Activists and journalists often use this tool to report problematic tenders to the media, but in addition, Redflags.eu is a valuable resource for in-depth analysis.
How the portal works
1
40 algorithmic indicators
The Redflags.eu tool is based on 40 algorithmic indicators developed by K-Monitor and Transparency International Hungary. Most indicators relate to procurement notices, but some of them analyze procurement transactions based on concluded contracts.
2
System harvests information from EU database of tenders
The Redflags.eu harvests information on public procurement from the EU database of tenders (TED). On the website, you can subscribe to filters to receive notifications on new tenders. Redflags.eu is an open source resource, so all application documentation is freely available. There is also open API access to a database of over 50,000 Hungarian tenders conducted in line with the EU legislation.
3
Most indicators are based
on corruption risks
on corruption risks
Risk indicators were chosen based on consultations with a group of experts representing the government, business, and the academic community. Subsequently, the effectiveness of all indicators was checked manually and confirmed by analytics. Most of them were developed on the basis of corruption risks inherent in the Hungarian public procurement system. Almost all risk indicators use information published on the TED portal, as there is simply no more open data in Hungary, such as open company registers or access to court decisions.
4
Smart indicators
In addition to the standard red flags, the portal also features "pink flags": they indicate procurement made or won by businesses that are included in the database on corruption and misappropriation of budget funds from the organization K-Monitor.
What are the risk indicators
There are a total of 40 risk indicators on the portal. Those relating to procure-
ment announcements highlight tenders with an extremely high expected value or actual contract value, or, in the case of framework agreements, transactions with a small number of suppliers.
ment announcements highlight tenders with an extremely high expected value or actual contract value, or, in the case of framework agreements, transactions with a small number of suppliers.
Another risk is unreasonably long duration of the contract or the possibility of renewing it several times, the presence of "additional" conditions for suppliers. Other risk indicators analyze the duration of the tender period or the type of procurement procedures.
Closed or accelerated procurement procedures are considered risky, especially if they are insufficiently justified.
At the contracting stage, red flags may be triggered in case of a small number of procurement participants, failed procedures, a significant difference between the expected and actual value of the agreement, and if the procurement was held without prior notice.
K-Monitor continues to develop the analytical tool and has already launched several add-ons to the tool. For instance, a few years ago, the organization created an information panel based on Redflags.eu, which shows procurement risks of the largest procuring entities in Hungary. The analysis showed typical corruption risks that regularly occur in certain types of procuring entities, primarily in the construction sector.
At the contracting stage, red flags may be triggered in case of a small number of procurement participants, failed procedures, a significant difference between the expected and actual value of the agreement, and if the procurement was held without prior notice.
K-Monitor continues to develop the analytical tool and has already launched several add-ons to the tool. For instance, a few years ago, the organization created an information panel based on Redflags.eu, which shows procurement risks of the largest procuring entities in Hungary. The analysis showed typical corruption risks that regularly occur in certain types of procuring entities, primarily in the construction sector.
Drum Machine
Two years ago, K-Monitor developed a drum machine based on risk indicators, as an experiment, and even organized infomusic concerts based on procurement data with the participation of Hungarian jazz musicians.
Contacts:
EconLab project, Czech Republic
ZINDEX
In addition to procurement analysis and the development of risk indicators, another effective way to increase the efficiency of public procurement is to rank procuring entities. For 10 years now, the Czech Republic has the rating of procuring entities Zindex—a unique tool enabling comparison of work indicators of various public procuring entities. It was created by the Czech think tank EconLab, and during its existence, the rating has significantly improved the conduct of tenders in the Czech Republic. The tool had a significant impact on the activity of over 50 procuring entities—municipalities, hospitals, ministries. The Zindex project has received awards and recognition from the European Commission, the Open Society Foundation and the Open Contracting Partnership.
How the Czech rating of procuring entities works
Zindex ranks procurement organizers, highlights their main shortcomings, and encourages improvement through public awards to the best procuring entities.
In order to avoid comparing apples and oranges, before procuring entities are ranked, they are divided into categories. In this way, the developers of the rating compare small towns with other small towns, hospitals with hospitals, government agencies and enterprises with other government agencies and enterprises.
In addition, within some categories, experts also distinguish between large and small procuring entities.
It is important to note that the creators of the rating do not publish the ranks of all procuring entities. They focus only on the top 50% of all procurement organizers. Other procuring entities are published in a random order. Why is there no information about who is the worst? The developers of the rating found that this practice increases the negative perception of the rating and does not encourage procuring entities to compete with each other to improve their position in the rating. As a result, the media are reluctant to cover the rating. Overall, more than 50% of public procuring entities said that the results from Zindex.cz served as valuable feedback for them (21% more than before). Each year, approximately 10% of assessed procuring entities commit to improving their procurement practices.
It is important to note that the creators of the rating do not publish the ranks of all procuring entities. They focus only on the top 50% of all procurement organizers. Other procuring entities are published in a random order. Why is there no information about who is the worst? The developers of the rating found that this practice increases the negative perception of the rating and does not encourage procuring entities to compete with each other to improve their position in the rating. As a result, the media are reluctant to cover the rating. Overall, more than 50% of public procuring entities said that the results from Zindex.cz served as valuable feedback for them (21% more than before). Each year, approximately 10% of assessed procuring entities commit to improving their procurement practices.
Three steps in the development of the rating methodology
Consultation
Informing procurers about rating results,
launching a hotline for consultations
launching a hotline for consultations
Publication
Publication of the finalized rating
Informing procuring entities on the preliminary results of the rating is an essential stage. At least 2 months before the publication of the finalized rating, experts send preliminary results to procuring entities and open a kind of hotline for them. They provide procuring entities with an opportunity to inquire about their assessment. This approach has several advantages, as procurement organizers can better assess the effectiveness of their procurement and are motivated to make the necessary changes to improve their position in the rating. This usually results in buyers improving their procurement practices by 20–30%.
After all the feedback is taken into account, EconLab awards the best organizers with a statuette "Neplejtvák" (this name can be translated as "fish not lost in vain"), which is something like an Oscar in the world of public procuring entities in the Czech Republic. The main idea is to promote positive competition in public procurement based on best practices.
After all the feedback is taken into account, EconLab awards the best organizers with a statuette "Neplejtvák" (this name can be translated as "fish not lost in vain"), which is something like an Oscar in the world of public procuring entities in the Czech Republic. The main idea is to promote positive competition in public procurement based on best practices.
Extending the rating of procuring entities to other countries
EconLab experts helped implement a similar initiative in Slovakia. There, they had to change about 25% of the rating to adapt it to the legislation, data sources and practices of another country. The volume of work turned out to be smaller than the analysts expected, so they are considering further promotion of the tool among countries.
Contacts:
The project is co-financed by the Governments of Czechia, Hungary, Poland and Slovakia through Visegrad Grants from International Visegrad Fund. The mission of the Fund is to advance ideas for sustainable regional cooperation in Central Europe.
Transparency International is an anti-corruption organization founded in 1993 in Berlin by Peter Eigen, former manager of the World Bank. Delia Ferreira Rubio is currently the chair of TI. Transparency International operates in more than 110 countries worldwide. The organization is best known for the Corruption Perceptions Index and the Global Corruption Barometer. According to the Global Go To Think Index Tank Report for 2020, Transparency International was ranked 3rd best out of 143 among the world's independent think tanks. It also ranks second among 71 global think tanks dealing with Open and Good Governance.
