DATE OF PUBLICATION
Public procurement plays a strategic role in a country’s economy and the quality of services that the government provides to its citizens. OECD countries spend on average 12% of their GDP in the procurement of goods, services and works.
Due to the size of the involved financial flows, public procurement is exposed to risks of collusion among suppliers as well as fraud and corruption. In Ukraine, bid rigging is an administrative offence and has long been an enforcement priority for the Ukrainian Competition Authority, AMCU. Against this background, and in the context of the OECD project Supporting the Energy Sector Reform in Ukraine, with the financial support of the Government of Norway, the OECD assessed the procurement practices of Ukrenergo, the Ukrainian energy state-owned enterprise and national-grid operator, against the Recommendation on Fighting Bid Rigging in Public Procurement.
The report shows that procurement at Ukrenergo is already highly professional but that more can be done to target the problem of bidder collusion in tender design and preparation, and to detect bidder collusion. The report proposes ways of achieving this objective. The recommendations can be used by other SOEs in Ukraine to benchmark their own practices and adjust them accordingly.
The report “Fighting Bid Rigging in the Energy Sector in Ukraine: A Review of Ukrenergo” was launched during a virtual event on 15 June 2021.
8-9 November 2021 - Follow-up workshops
The OECD, with the support of Ukrenergo and the AMCU, is offering two additional two-day workshops on the prevention and detection of bidder collusion in public tenders. The workshops are intended for procurement level staff of Ukrainian State-Owned-Enterprises, and will take place as virtual trainings. Translation English/Ukrainian will be provided. There are 80 seats available, and participation is free of charge. To register, please contact Sabine Zigelski ([email protected]) and Mariia Melnyk ([email protected]).
The OECD was invited to assess the procurement practices of Ukrenergo, the Ukrainian state-owned enterprise and national-grid operator, against the OECD Recommendation and Guidelines for Fighting Bid Rigging in Public Procurement.
During the process, the OECD assessed the main rules governing public procurement in Ukraine and the procurement practices of Ukrenergo. The OECD’s assessment was presented in a report including recommendations to improve competition in public procurement at Ukrenergo and an accompanying highlights brochure.
As part of the project, the OECD also:
Bid rigging in public tenders involves firms conspiring to raise prices or lower the quality of their bid. It is an illegal anti-competitive practice that costs governments and taxpayers billions of dollars every year across the world.
A significant share of cartel enforcement in many OECD countries concerns bids rigging cases. This shows that there is awareness of the importance of stopping collusive practices, but also that there is room to improve compliance with competition rules in public procurement and ensure that the public sector buys the right thing, at the right price.
The OECD Recommendation and Guidelines for Fighting Bid Rigging in Public Procurement were designed to reduce the risks of bid rigging through careful design of the procurement process and to help detect bid rigging conspiracies.
OECD project team meets Ukrenergo's officials