Professional procurement: how the state in general and the Ministry of Defense in particular save money
7 February 12:07
In January, the state saved UAH 2 billion due to procurement through Prozorro Market. This was reported by the Ministry of Economy, "Komersant Ukrainian" reports.
As noted in the report, in January, customers made purchases through Prozorro Market for UAH 16 billion, and saved on
– consumer goods – saving UAH 1.7 billion;
– medicines – UAH 300 million savings.
For comparison, UAH 4 billion was saved in the previous year.
About 13 thousand customers are currently actively using Prozorro Market. In total, in 2024, public procuring entities purchased consumer goods worth over UAH 41 billion through Prozorro Market. This is four times higher than in 2023.
Procurement through the electronic catalog is administered by Professional Procurement.
The Ministry of Defense also has experience in effective procurement
The Defense Ministry has a special procurement agency, the State Logistics Operator (DOT) . For example, they use a regional model for fuel procurement and are currently improving it by increasing the number of lots.
“The state allocates significant funds to provide the Armed Forces with fuel and lubricants. In particular, in 2024, the State Defense Department purchased fuel and lubricants for UAH 28.2 billion. Deepening the regional model allows us to ensure an uninterrupted supply of fuel to the troops,” said Hlib Kanevskyi, Director of the Procurement Policy Department of the Ministry of Defense.
The regional fuel procurement model provides for the division of supplies into four regions: Eastern, Southern, Central and Western.
The number of bidders and the level of savings at auctions (reductions) confirmed the effectiveness of this procurement model. That is why, to increase competition and optimize the logistics processes of potential suppliers, the State Logistics Operator is deepening its regional model. Previously, a region covered 4 to 6 supply points. From now on, the number of lots will double: instead of four large regional lots, there will be eight smaller ones with fewer supply points (from 1 to 2).
“The fuel market in Ukraine is marked by significant security risks due to the constant threat from the Russian Federation. Therefore, suppliers do not store large volumes in Ukraine. The deepening of the regional model helps to reduce security risks for business by reducing the volume of fuel required for bidding. This opens up opportunities for new market players and increases the level of competition, which, in turn, has a positive impact on the cost of products for defense needs,” explained Maryna Yeremieieva, Director of the Fuel and Lubricants Program at the State Defense Enterprise.
As a result of the bidding for the procurement of Arctic diesel fuel, the average savings from the expected cost was 2.7%, while the average savings from the expected cost was 7.5% for lots with more than 2 bidders. In monetary terms, this resulted in additional savings of UAH 15.8 million. The total savings at the Arctic diesel tender amounted to more than UAH 82 million.
The Ministry of Defense explains that Arctic diesel fuel differs from winter diesel fuel in that it is more resistant to low temperatures and is less present on the country’s market. At the same time, in April, the State Defense Enterprise will start supplying summer fuel, which is expected to increase the presence of market participants in the auction.
