An aggregator of medicine prices, a red flag engine that automatically alerts watchdogs to irregularities, and a price-comparison tool that rates buyers and suppliers – these are just some of the solutions that will be developed by the eight teams selected as finalists for the Eastern Europe and Central Asia (EECA) Open Contracting Innovation Challenge 2021.
In total, 42 teams applied from Kazakhstan, Kyrgyzstan and Moldova, which shows a huge interest in public procurement data and demand from both business and non-governmental organizations in those countries.
The Innovation Challenge was launched by the Open Contracting Partnership with the support of the European Bank for Reconstruction and Development, the BHP Foundation, and the Open Government Partnership to help various actors take advantage of the rapid developments that are occuring in the public procurement environment in the EECA region.
More and more countries are improving their public procurement systems. Along with the well-known Georgian eGP system, Ukraine’s Prozorro, Moldova’s MTender, advanced electronic public procurement systems have been developed in Kazakhstan, Kyrgyzstan, Uzbekistan, and Tajikistan in the last five years. And most of them provide access to machine-readable data on public procurement via API protocols.
This creates a variety of opportunities for government, business, and non-governmental actors. Open contracting has the potential to:
- Promote opportunities for businesses by enabling them to understand what the government buys and what past contracts look like.
- Improve value for money by enabling government agencies to analyze key procurement indicators to find ways to save public funds.
- Improve public integrity, including identifying red flags by scrutinizing who wins and delivers contracts, when, how, and for what.
But this does not happen on its own. Procurement data should be properly structured, analyzed, and converted into tools and applications that are easy for the intended user to work with. That’s where the Innovation Challenge comes in.
The applications gave us insights into the field of open contracting and our community:
- 85% of applications were of a decent quality. This means that teams are well aware of problems in the public procurement sector of their countries. Many of these applications are not the right fit for the Innovation Challenge program, given that this program aims to develop IT tools based on public procurement data. But we will try to find opportunities to support promising teams and ideas.
- 20% of the applicants were focused on the development of tools for price-per-item comparison. This might have several use cases – for example (1) improve procurement planning by simplifying market analysis or (2) identify contracts with above-market prices and demand for a tool for a wide user-base.
- Most of the applicants perceive a lack of integrity in public procurement in the region. There is dissatisfaction with the efforts of control agencies to provide a high level of scrutiny. 10 teams (24%) wanted to explore transitioning to risk-based monitoring in public procurement. They proposed several approaches to develop red flags engines, ratings and scoring systems, customer-relationship management (CRM) systems that might send alerts about contracts with high risks to interested parties like control agencies, businesses, media, and investigative journalists.
- Participants recognized the need to educate and train public procurement officers. Six projects were devoted to the preparation of different training materials. It’s clear relevant civil servants should improve their competencies. This need is even more urgent at the rural and district level. Procurement officers should know how to apply the legislation and boost their skills in strategic planning, category management, supplier relationship management, ethical standards, and working with analytical tools.
- The ease with which suppliers and commercial entities can access information about public procurement was at the core of six proposals (15%). This may signal a lack of existing efforts and motivation to make public procurement portals user-friendly for business.
- Both civil society and businesses have shown interest in introducing open contracting practices in the region. Non-governmental organizations submitted 50% of applications, business entities prepared 40%.
After a one-month support program, 17 teams (40%) significantly improved their project ideas and pitched them using structured presentations. It was very hard to pick finalists among such strong and motivated teams (more than 140 people were involved in the Challenge in total!). At the end of the day, eight teams from Kazakhstan, Kyrgyzstan and Moldova were selected to develop their projects during the incubation phase.
Here are the teams and their projects:
- Datanomix – proposed a comprehensive approach that includes building a CRM system which will identify unjustified restrictions of competition and signs of manipulation of competition in tenders (e.g. collusion) and automatically generate letters to alert buyers and control agencies.
- OpenTender.kz – will improve the tool for price-per-item comparison by adding a library of user selections, risk indicators, ratings of buyers and suppliers, and CPV selection feature.
- Burkitvis – seeks to create an open-source red flags identification engine and an engine for context analysis of tender notices and contracts.
- Kloop Media – aims to set up a red flag engine and a communication channel with the bidders, media, and control agencies to inform them about violations of procurement regulations and procedures;
- BAA.kg – will design the analytical dashboard that will collect information about the medicine prices from the national database of medicines, state statistical service, public procurement portal and pharmaceutical distributors.
- IT WIN – will focus on developing instruments for price per item comparison and enhancing it with a module that may detect the collusion of suppliers via the affiliation in the national company register.
- Positive Initiative – will construct a price aggregator for vital medicines from several sources in Moldova. It will provide access to the public analytical module that enables information on price-per-item comparisons, competition analysis, procurement methods, and procurement efficiency.
- AGER – will develop a set of risk indicators to detect potentially fraudulent procurement procedures. The team will strengthen the tool with a solution for profiling the buyers and suppliers. It should help collect and structure the data about violations of the procurement law by both parties.
Participants will take part in online workshops, meetings with procurement practitioners, donors, and decision-makers in the region to strengthen their projects. They will receive financial support of US$5000 each and tailored incubation support during Phase 2 of the Challenge. During the 12-week development and training phase, their main aim will be the delivery of the minimum viable product of their IT solution.
In September, teams will pitch their solutions and three winners will receive $15,000 each to fully implement their projects. We are very excited to continue our journey with such strong and motivated teams and are looking forward to helping them to develop their instruments and promote their solutions. We are sure that such tools and instruments will contribute to the shift of procurement practices in the region to more data-driven decision-making, will empower investigative journalists and law enforcement, and increase civic awareness and engagement.