How Ukraine’s procurement appeals tool Clarity App promotes fair competition

Appeals are an important element of any procurement system, as they enable businesses to defend their rights to compete for and win tenders. They also help maintain the private sector’s trust in public procurement.

The Antimonopoly Committee of Ukraine (AMCU) is responsible for reviewing complaints from businesses in Ukraine. The procurement system and appeals process continue to operate even during the full-scale war. In 2023 alone, businesses filed 10,500 complaints with the AMCU, 69.5% of which were successful. This suggests both that discrimination is widespread in tenders and that businesspeople have faith that achieving a just outcome is possible even in such dire circumstances.

The Prozorro e-procurement system allows participants of an auction to review competitors’ documents, which makes it possible to dispute errors in their tender proposals. After all, no one is more interested in finding a mistake or inconsistency in an offer than a company’s competitor.

The Clarity App is designed to help vendors win appeals. The service works on a subscription model and provides access to the AMCU’s online database. Users can get a full-text search for any appeal decisions via a Google-like interface by entering keywords in the search box, including additional filters, such as date, status of complaints, or complaints by certain complainants, buyers, or procedures. In addition, users can save a library of decisions and subscribe to updates for certain appeals. So before filing a complaint, a business can search previous decisions by the procurement review body in similar cases and understands how to build a winning appeal.

Lawyers and developers unite

The idea for the Clarity App emerged from challenges in collecting and analyzing public procurement appeals data. Initially, appeals were published on the AMCU website in a single database. When Prozorro was introduced, decisions on complaints were added to each separate tender, in a non-machine-readable PDF format.

It became clear that a single, full-text searchable database was needed to help search and analyze appeals data. So in 2018, Yaroslav Garaguts, an open data expert, developed the initial version of the product. A year later, he was joined by Mykola Smirnov and Oleksandr Nikitenkov, lawyers and practitioners in procurement appeals. The project began to develop actively.

“Getting to know previous practices is a classic legal approach and is very important to help protect clients’ interests. Without a single database and the ability to do full-text search, it was very difficult to effectively analyze AMCU decisions in the past. It was a challenge that made me start looking towards developing a solution. As a result, we managed to create a unique product that the Ukrainian market needed,” says Mykola Smirnov, public procurement expert, lawyer, and co-founder of Clarity App.

Two key factors — understanding the problem and IT expertise in the field of open data — helped to launch the first service in Ukraine with a complete database of AMCU decisions.

Be sure of victory

With the help of the Clarity App, a business can successfully challenge procurement conditions “created for a particular market participant” or non-standard tender specifications. Complaints can also be made for wrongful disqualification or a tender awarded to an unsuitable vendor or for unjustified reasons.

Suppliers (often referred to as economic operators in Ukraine) need to be sure of their appeal because the fee for filing a complaint is only returned if it is successful. Most often the fee is about 0.3% of the expected value of the procurement, but no more than UAH 85,000 (around $2000). Companies stand to benefit by familiarizing themselves with previous appeals and decisions, even in typical cases. Not everything that appears to be a violation actually is one. So understanding the principles of the appeals system helps ensure businesses are not spending money in vain.

Sometimes winning a tender can depend on a successfully submitted complaint. This is well demonstrated by the example of Slavresurs LLC, a solid fuel supplier, that has been operating in the public procurement market since 2011.

“In one of the tenders (supply of hard coal and briquettes), at first the buyer recognized another supplier as the winner. However, some of his documents did not meet the buyer’s requirements. Therefore, we decided not to give up and fight for a just decision. With the help of the Clarity App, we prepared a complaint to the Antimonopoly Committee. And this brought victory not only in the appeal but also in the tender,” says Ruslan Osobenko, Director of Slavresurs LLC.

Slavresurs received a sizable contract to supply hard coal and briquettes for a Ukrainian school. A successfully filed complaint helped to ensure fairness and compliance with the principles of fair competition in the tender. And Slavresurs is no exception. According to Clarity App, their clients submitted 1,410 complaints in 2023, with a success rate of 80%. In the same period, 953 complaints were filed against buyers who use Clarity, and in 34% of cases they managed to defend their decisions. Clarity App users generated 13.4% of complaints submitted to AMCU in 2023. 

Moving towards data-driven decisions for buyers and the state

Information from the procurement appeals system contains insights for buyers as well. For example, when preparing for a purchase, before putting a unique product requirement in the tender documentation, a procurement officer should check whether such a requirement has been challenged before. In this way, it is possible to avoid time spent on appeals and conduct the procedure more efficiently without discrimination of business. Or when deciding whether to reject a tender offer, the procurement officer can make sure that such disqualifications have withstood the appeal previously. At the appeal stage, the buyer should familiarize themselves with the practice of the appeal body in order to add arguments in defense of his position.

Clarity App users include many buyers, including Ukrposhta — the state-owned postal company of Ukraine.

“Clarity App is a tool that Ukrposhta has been actively using for many years. For us, this is an opportunity to reasonably defend our position during appeals. The functionality is also useful for providing answers to questions or suggestions of procurement participants regarding the requirements of the tender documentation. Thanks to the Clarity App, we can refer to the specific practice of AMCU to explain the rationale for our decisions.” — Svitlana Anisiforova, head of the tender department of Ukrposhta

Clarity App is now much more than a comprehensive appeals decision database. It collects information on procurement procedures monitored by the State Audit Service (SASU), which is responsible for compliance with public procurement rules and regulations. Buyers can look for practices to check their purchases are above board, and use this information to write replies to the financial control body.

Immediately after launching the tool, Clarity App signed a memorandum with the Better Regulation Delivery Office (BRDO), an independent expert-analytical center focused on supporting public administration reforms. Within the framework of the memorandum, AMCU employees received free-of-charge access to the Clarity app to help them maintain the consistency of AMCU decisions. Access was also granted to stakeholders at Prozorro and the Ministry of Economy of Ukraine. This demonstrates high-quality cooperation between business, the public, and the state.

“For the AMCU staff, it is important to maintain consistency of practice in appeals. The Clarity App helps to quickly and conveniently familiarize yourself with the decisions of the tender board that have already been made. This greatly simplifies work processes, in particular with the search for information on atypical complaints that occur rarely. We save a lot of time and can better research past appeals practices to factor them into our current decisions.” — Agia Zagrebelska, ex-state commissioner of the AMCU.

An interesting side effect of Clarity’s appearance was the creation of a public calendar of meetings on appeal. Since the texts of the AMCU decisions on appeals have dates in them, the Clarity team automatized the data collection and publication of the AMCU calendar on decisions and opened it free of charge for all interested parties, and AMCU posted on its website, to effectively inform the business about the expected date of complaints.

Improving the procurement landscape

In just over five years, the Clarity team improved Ukraine’s purchasing landscape not only in terms of procurement appeals but also in terms of access to procurement analytics.

Clarity helps build business confidence that procurement discrimination is worth fighting and that through appeals one can achieve justice and defend their interests. Thus, it strengthens the credibility of the procurement appeal body. Access to appeals analytics helps to increase the integrity and accountability of AMCU and reduces the likelihood of decisions being made that are inconsistent with procurement appeals practices, and makes it much easier to challenge in court if such decisions are made.

A large number of complaints may indicate buyers lack insufficient qualifications. Therefore, the use of analytical tools such as Clarity helps to avoid unnecessary mistakes in the procurement process and to increase the professionalism of the authorized persons who are responsible for organizing and conducting procurement.

Looking ahead

The Clarity App team sets ambitious goals for the development of the project. There are plans to integrate data from court proceedings in cases related to public procurement and procurement appeals. They will be displayed next to information about an AMCU or SASU decision. This will allow users to conveniently study appeal practices and all court rulings in one place.

“Our project is unique for Ukraine because it is the only complete online database of AMCU decisions and SASU monitoring. However, we have no intention of stopping. We plan to become number one in the field of open data on public procurement, which will be available in a convenient and easy to understand form,” says Oleksandr Nikitienkov, public procurement expert and Clarity App co-founder.

The Clarity App team’s future plans include entering the Balkan market to prove that procurement data analytics can improve the experience of businesses participating in procurement elsewhere in the world.