Public Procurement Policy Workshop in Bishkek, Kyrgyz Republic PRINT E-mail
Public Procurement Policy Workshop in Bishkek, Kyrgyz Republic
The Public Procurement Policy Workshop in Bishkek, Kyrgyz Republic was organized by the World Bank, Asian Development Bank, European Bank for Reconstruction and Development and the United Nations Commission on International Trade Law in cooperation with the Government of Kyrgyz Republic, World Trade Organization, the Office of the Coordinator of OSCE Economic and Environmental Activities and the Anti-Corruption Network for Eastern Europe and Central Asia, OECD. 
dsc_8392The Government of Kyrgyz Republic adopted Strategy on Public Procurement reforms and the action plan based on the world best practices earlier in present year. One of the decisions was to apply for support to the International Financial Institutions. Answering to the request of the Government the joint team of the WB and ADB started their work on Country Procurement Assessment Review. The EBRD UNCITRAL Initiative joined the effort of diagnostic work and drafting reform recommendations. Moreover the Initiative tried to address the WB CPSR recommendations by means of the 2011 UNCITRAL Model Law and open doors for the Kyrgyz Republic to the WTO Government Procurement Agreement accession. The joint workshop was considered as good platform to present current findings and outline further steps towards strengthening the Public Procurement framework in the country.

The workshop was opened by the First Vice Prime Minister Mr. Joomart Otorbaev, he greeted participants and guests of the workshop. He told that the public procurement reform became the first priority of the Government since huge sums of the State money is allocated to the public procurement. In 2011 the volume of public procurement reached 16 billion soms, while only for 8 months of the current year the level of procurement exceeded already 17 billion. In spite of such considerable growth of procurement the level of transparency leaves much to be desired, which in its turn leads to the situation, when from 25 to 30 percent of public procurement was left in the shadow sector of economy.

01Then the head of the WB Resident Mission Mr. Alexander Kremer has given the floor to the Minister of Finance Olga Lavrova. She informed the audience that the Ministry of Finance is the Authorized Body, which should detect the problems, conduct the proper monitoring, create conditions for sound competition. She told that the Ministry established the working group for development of the public procurement reform. They recently conducted the round table on arranging the legislation in compliance with the recently developed strategy. She also told about the electronic portal, which was recently demonstrated to the public.

Then Mr. Alexander Kremer told about the achievements of different countries and levels of economy of resources due to introduction of the e-procurement. He said that introduction of the e-procurement in Kyrgyzstan may save ten billion soms per year, which is equal to two thousand soms for each citizen of Kyrgyzstan.

Then Mr. Alexander Kremer has given the floor to the Deputy Head of Bishkek Resident Office of the EBRD Ms. Jyldyz Galieva, who greeted the representatives and guests of the workshop and introduced the representatives of EBRD UNCITRAL Initiative team. Ms. Galieva then has given the opportunity to speak to Ms. Caroline Nicholas, Senior Lawyer, UNCITRAL, who shortly outlined the work of EBRD UNCITRAL Initiative team.

Then the floor was given to Ms. Rie Hiraoka, Country Director, ADB, who informed the audience that in February of the current year the Government of the Kyrgyz Republic applied to the ADB with the urgent request for assistance. The bank rather efficiently reacted to the request and the decision was made to assist Kyrgyzstan in terms of providing assistance in the sphere of e-procurement, which should be compatible with the reformed Public procurement law. The bank decided to allocate for this purpose two million dollars.

dsc_8461After the introductory speeches the floor was given to Mr. Majed El-Bayya, Lead Procurement Specialist, who was the head of the WB team during conducting of the Country Procurement Status Review in February of the current year. Mr. El-Bayya shortly told about the situation during the Review and commended the Government of the Kyrgyz Republic on the efficient and timely action in implementing the action plan for correcting the drawback in the system of public procurement. He said that there was very resolute political will, which allowed the Government to quickly hire an international procurement lawyer, who now works together with the local public procurement specialists and the working group in terms of considerably amending the Public procurement Law and introducing the e-procurement. The Government organized the study trips of procurement and IT specialists to Albania and Georgia, where they could actively acquire the needed knowledge and appropriate skills.

Then Mr. El-Bayya asked his team member Ms. Lisa Miller, Senior Council, Lawyer of the WB to give several comments on the Review system. She shortly described the Review system as a whole consisting of three tiers: Procuring Entity, Independent Body, and Judicial Review. She made special focus upon the issue of Independent Body. She said that the Independent Bodies in different countries report to different agencies.

After Ms. Millers comments Mr. El-Bayya shortly enumerated the drawbacks, which were detected during the Country Procurement Status Review. He specially emphasized that financial management of public procurement leaves much to be desired. Procurement procedures are sometimes started before the allocation of funds, leading to the long arrears in payment. The team didn't find the traces of monitoring public procurement procedures. There was no published information on review cases or cases of corruption. The Database of Unreliable Suppliers (Contractors) included only one company during the last years. He also said that the Law includes the concept of an "Authorized Body", which is rather convenient to use in case of changing the agency. Initially it was an Agency on Public procurement, now it is a Department in the Ministry of Finance. Mr. El-Bayya also mentioned that there were no regulatory bodies in the oblasts. Compiling the annual report on Public procurement is rather problematic for the Authorized Body now, while introducing the e-procurement may make this procedure much easier.

dsc_8492Mr. El-Bayya stated that the WB annually allocates the budget for training purpose for all levels of its employees. There is no procedure of allocation financing for regular training in the Kyrgyz Republic. Apart from general training there is a need to conduct specialized training of procurement of health and education products. There is an urgent need of training the law enforcement bodies and the Chamber of Accounts on conducting public procurement audits, because the lack of the proper knowledge of representatives of these agencies may lead to big problems for the procuring entities. The main problem is that the work of public procurement is performed by ordinary engineers, who have maybe some knowledge, but there are not many professionals. The training is mostly dedicated to procuring entities, much less time is allocated to training of suppliers and contractors. It is not one side process, the suppliers should also know how to compile bids in the proper way to have the general procurement in proper order.

Then Mr. El-Bayya has given the opportunity to speak to Ms. Alia Kim, Financial Management Analyst of the WB, who shortly told about the procedures of internal and external audits. There was a question from local consultants, whether there is sense in conducting the external audit before awarding the contract, which is five times higher than the maximal threshold amount (Article 13 (1-1.) of the Kyrgyz PPL). Mr. El-Bayya answered that he would not recommend to conduct the external audit for each procurement.

dsc_8414Then the floor was given to Ms. Eliza Niewiadomska, Legal Transition Programme EBRD, who shortly told about the Country Assessment conducted by the EBRD in 2010, in the countries of EBRD operation, focusing on the process of benchmarking. Then she shortly mentioned the issue of Review procedures and made focus on the difference of legislative provisions of the country and actual procurement practice.

Then the opportunity to speak was given to Ms. Caroline Nicholas, Senior Lawyer, UNCITRAL, who shortly told how to address the WB CPSR recommendations by means of the 2011 UNCITRAL Model Law and open doors to the WTO Government Procurement Agreement. Introducing the provisions of the UNCITRAL 2011 Model Law Ms. Nicholas has given a good example of the recent case of a huge railway procurement in the United Kingdom, which failed due to the lack of proper attention of procurement specialists to the contents of procurement procedures.

dsc_8530The representative of the WTO GPA Secretariat Mr. Philippe Pelletier enlarged upon the details of accession requirements to GPA, giving very last examples of accession of quite different countries. He emphasized the fact that Kyrgyzstan started the way to accession to the GPA in 2002, but then due to some circumstances the process was stopped. Then the Kyrgyz Republic resumed its efforts for GPA accession in 2009. Probably due to the last revolution the efforts in this direction were also stopped. At the end of his speech Mr. Pelletier specially emphasized the fact, if Kyrgyzstan manages to arrange its public procurement legislation in compliance with the UNCITRAL 2011 Model Law, it will be a very good opportunity to enter the GPA, since the requirements of the GPA are very similar to UNCITRAL Model Law requirements.

After the speech of Mr. Pelletier local consultant Ms. Saina Abdymomunova asked a question, regarding the purpose of the Public Procurement Law. As Ms. Abdymomunova stated the purpose of the law is the economy of public resources. In her opinion the term "economy, efficiency" should be replaced by some other concept like "value for money" or something like this. Since the purpose of the PPL is economy, the inspecting bodies are looking for the lowest price, which is the main criteria of economy for them. If the price is not lowest, then they have suspicions that there is some kind of corruption. They could not accept the lowest evaluated cost, which is something quite unclear for them. Somehow the question was not answered properly probably due to some misunderstanding, though the probable answer to this issue is to educate the inspecting and law enforcement bodies on the proper understanding of the public procurement law.

dsc_8578After lunch the floor was given to Mr. Melis Ak Jigit uulu, the deputy head of the Public procurement Methodology Department (PPMD) of the Ministry of Finance, who told the audience about the changes in the public procurement law, bylaws and Standard Bidding Documents during the last three years. He also told about the evolution of public procurement websites. The IT specialists of the Ministry of Finance were developing the websites starting from 2010, there were already three versions of the websites.

Mr. Melis Ak Jigit uulu specially focused upon the action plan, which is being implemented in compliance with the Country Procurement Status Report recommendations. After the creation of the public procurement reform Strategy, the working group, consisting of the biggest enterprises and agencies in the Republic was established, which is now taking very active part in the process of amending the public procurement law. He shortly told about the workshop with broad participation of the working group, which was conducted on October 2 in the HoliDay Hotel. Mr. Melis Ak Jigit uulu specially emphasized the fact that the majority of recommendations from the CPSR coincide with the vision of the Kyrgyz Republic Government. Some recommendations were already accepted even without discussion.

Mr. Melis Ak Jigit uulu enlarged upon the issue of protests and complaints. In the time when in all the Ministries was the process of laying off the employees with the view of saving resources, at the beginning of the year the PPMD established special Independent Committee on considering protest and complaints, which included members of the Public Supervision Board of the Ministry of Finance, NGOs, and representative of public organizations. Now the PPMD is trying to obtain some material resources for stimulation the members of this Independent Committee in terms of incentives. When the public learned that the protests and complaint could be submitted through the e-portal, the quantity of complaints considerably increased. The e-procurement portal is constantly being improved. Now the bidders may easily download the Bidding Documents from the Ministry of Finance portal. Unfortunately the portal is available only in the Russian language, the work is being conducted on translation the portal into the State and English languages.

dsc_8493Then the floor was given to representative of the PPMD Mr. Manas Jakshibaev, who is currently in charge of e-procurement in the PPMD. He made the presentation of the portal. Taking into consideration the importance of planning in public procurement, Mr. Jakshibaev said that without publication of the procurement plan, no procurement entity could publish the announcement on procurement. Now the portal allows the procuring entities to publish their announcements and bid opening minutes themselves. The bidders may also publish their protests and complaints themselves. Mr. Jakshibaev also told that the IT specialists and representatives of PPMD visited in the form of study tour Albania and Georgia, where they managed to study the latest developments in the sphere of e-procurement in these countries, they also studied the Italian and Portuguese models of e-procurement. Mr. Jakshibaev said that now in the PPMD portal they have established the forum, where all the interested parties could communicate and may directly apply to the PPMD with their proposals and suggestions. At the end of his speech Mr. Jakshibaev promised to start the work on the reverse auction already in one month time.

Then the floor was given to Mr. Tony Andrison, International Consultant, Procurement Specialist and Lawyer, hired by the Ministry of Finance with a view of reforming the Public Procurement system of the Kyrgyz Republic. He shortly outlined the action plan, which he is going to implement, which includes five focal points such as reinforcing the database of unreliable suppliers (contractors), which will be used with the help of the Independent Body; electronic reverse auctions, frameworks agreements, dispute resolution, procedural matters and public access to public procurement information. He also specially emphasized the need for Procurement Manual, which he is going to develop with the team of local consultants.

At the end of the workshop during the Q&A session many questions regarding the new methods of procurement such framework agreements, reverse auctions were asked. All the questions were answered by representatives of the WB and EBRD UNCITRAL Initiative. The final discussion showed the level of mutual understanding and general consensus regarding further reforming of public procurement legislation of the Kyrgyz Republic and successful accession to the GPA of the WTO. 

 
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