Share

Competition

Fighting bid rigging in public procurement in the energy sector in Ukraine

 


Ukrainian 

Fighting Bid Rigging in UKraine 2021 cover

DATE OF PUBLICATION
15 JUNE 2021

Downloads

Report: English l Ukrainian

Highlights brochure: English l Ukrainian

Press release: English l Ukrainian

PresentationEnglish l Ukrainian 

OECD DSG SpeechEnglish l Ukrainian

 

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. 

 


17 June 2021 - Follow-up workshop

A public virtual workshop for interested Ukrainian stakeholders will be held on 17 June 2021, 8:30-15:30 Paris time. It will introduce the main findings of the OECD’s Review of Public Procurement at Ukrenergo, and the OECD’s main principles and recommended good practices in more detail, with case examples from OECD member countries.

If you are interested in participating in any of the events, please contact Sabine Zigelski (SABINE.Zigelski@oecd.org) and Mariia Melnyk (MARIIA.Melnyk@oecd.org), OECD.

Presentation
The project

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:

  • trained senior public procurement officials on the risks of bid-rigging, the forms it can take and OECD good practices to design competitive tenders;
  • trained senior officials from various public organisations on collusion risks in procurement;
  • trained senior procurement officials and officials from various public organisations on advanced detection and screening techniques to detect bidder collusion; and
  • delivered a training manual for procurement officials.

B‌ackground

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 which 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 staff meets Ukrenergo officials

OECD project team meets Ukrenergo's officials

Project stages

The OECD project team:

1

Analysed the procurement practices of the Ukrainian state-owned energy company Ukrenergo against the backdrop of Ukraine’s public procurement laws and regulations.

2

Interviewed national stakeholders to collect facts and insights.

3

Identified good practices on fighting bid rigging from other jurisdictions.

4

Recommended improvements to Ukrenergo’s current procurement practices.

5

Provided capacity building in preventing and detecting bid rigging and delivered a training manual.

Links

Fighting Bid Rigging in Public Procurement

OECD Recommendation on Fighting Bid Rigging in Public Procurement

Competition Law and Policy in Ukraine 2016

OECD-GVH Regional Centre for Competition in Budapest

OECD competition home page

 

Related Documents