Procurement: the missing puzzle piece to follow the money in Kyrgyz Republic

A growing movement of transparency advocates in Kyrgyz Republic is shining a light on how corruption and mismanagement in government spending affects people’s lives and the economy – from dangerously run-down schools and overpriced medical supplies, to politically connected vendors and high-level embezzlement schemes.

Their work is made possible thanks to the government’s transparent public procurement system, which is used by more than 3600 contracting authorities to carry out purchases of goods, works and services, and which publishes real-time open data on the tenders and contracts that can be accessed by anyone.

The system and the emerging network of civic procurement monitors that rely on its data, have proved invaluable for saving money for government agencies with limited funds, devising strategies to correct systemic problems in the procurement system, and exposing high-ranking officials and their associates who plunder the public budget. 

Savings of more than KGS 26 billion (around US$232 million) or 13% have been reported on competitive awards, according to an analysis of the data using Alliance for Budget Transparency and Open Contracting Partnership’s Business Intelligence tool, which calculates savings by comparing estimated tender prices to contract prices. Most deals are awarded through competitive procedures, with the share of direct contracts by value dropping from 12% in 2020 to 4% in 2021. As of 1 June 2022, the database covers more than 371,000 procurement procedures worth over KGS 285 billion (around US$3.5 billion) dating back to 1 January 2019.

Over the last two years, civil society has adopted various strategies to encourage public oversight of government contracting, not only by a few experts but by a coordinated coalition of organizations and actors who are motivated to see public funds spent in the public interest.

Using data from the government procurement system, NGOs and media organizations have built a number of public third-party websites to make contracting more accessible to taxpayers and government oversight authorities. These platforms feature user-friendly search tools and dashboards that allow users to answer important questions about procurement spending at the click of a button: how much do different agencies spend on contracts? Which tenders are suspicious and why? What is the price of a certain cancer drug in one region compared to another? The sites process large volumes of data from various sources, including real-time open contracting data sourced directly from the government’s database thanks to an Application Programming Interface (API) added in December 2020.

Leveling up with data tools: Civil society has built at least eight user-friendly platforms that source data from the government open contracting database via API

At the same time, civil society organizations are training budget monitors, citizen rights advocates, auditors, and other actors how to use these data platforms to monitor contracts to detect problems like corruption risks and inflated prices, and recommend improvements. 

In recent years, dozens of groups concerned with budget transparency, the rights of patient communities and other citizen-led initiatives have gone from collaborating informally through WhatsApp groups and other fora to mobilizing through an organized Transparency and Accountability Forum, which meets regularly and includes 90 civil society organizations as well as subject-matter experts and representatives from government bodies such as the chamber of accounts, ministry of finance and prosecutor’s office.

Working collaboratively, this civil society coalition can amplify common concerns and advocate for better buying and competitive procurement practices.

New law a double-edged sword

One of the biggest concerns of the coalition at present is a long-debated amendment to the procurement law. Members of civil society were involved in parliamentary hearings on the draft in April, which they saw as a win for public participation in decision-making about procurement. 

There are a lot of benefits to the new legislation, which was signed by the president later that month. The Public Procurement Department now has a mandate to take disciplinary action against contracting authorities and participants who violate the procurement law, citizens have a right to report complaints to the procurement department, and information on the implementation phase of contracts awarded through competitive methods will be made available to the public for the first time.

But there’s a big catch: it exempts state-owned enterprises from following the procurement law. Although the full consequences of the changes aren’t yet clear, civil society groups fear that information about these entities’ dealings – representing 40% of the value of the procurement market – will no longer be published on the government procurement platform and will become impossible to track. As the media outlet Kloop reported in a recent editorial, this is worrying because a number of complex corruption and collusion schemes involving state-owned enterprises have only come to light because the details were published on the government procurement portal. Perhaps the most well-known of these is an investigation by the journalism outlet Temirov Live, which revealed relatives of the powerful state security chief had profited from corrupt deals involving a state oil company. Shortly after releasing the exposé, the outlet’s owner, Bolot Temirov, was detained on criminal charges that he and rights activists say are politically motivated.

“One warrior doesn’t make an army”

By joining forces the civil society coalition can not only push important issues up the public agenda, they can also create pressure to counter vested interests in politics and resist attempts to reverse progressive reforms. After the new law was signed, the 90 organizations rallied together and voiced their concerns in an appeal to the president. As Edil Eraliev from the non-profit legal firm Partner Group Precedent describes the attraction of this strategy: “one warrior doesn’t make an army.” It’s an approach that also worked last year, when evidence-based advocacy by civil society led the government to shelve plans to remove a transparency clause from the procurement law.

Different actors within this oversight “ecosystem” have different strengths that complement one another — there are legal experts who can advise on legislative amendments, access to information and procurement rules. Community-led organizations have the trust of vulnerable and marginalized groups and understand their needs. There are tech and data experts, health professionals and other sector-specific advisors, budget experts, and journalists who can reach a wide audience and contextualize data-driven research through engaging stories. Through the CSO Forum, these groups have a formal channel to discuss concerns with government agencies in charge of oversight and accountability — the Chamber of Accounts, Ministry of Finance and Prosecutor’s Office — and track how such concerns are acted upon. Their collaboration is founded on a common goal: to uphold citizens’ rights and ensure their well-being by advocating for public funding and wise spending in critical and desperately underfunded sectors such as healthcare.

Many of the groups are prominent local organizations who have years of experience in advocating for budget accountability. Procurement monitoring offers them a way to follow the money after it is allocated and advocate for improvements to tendering processes to make funds go further.

“Monitoring is one of the key instruments to fight corruption,” says Edil Eraliev. “We are working to make the process as transparent as possible, not only in the budget process or public procurement, but overall. We want the state to work openly so people can see what they are doing.”

Health spending is an important sector and one where civil society has had some of its biggest successes to date. The patient-rights group Sotsium (Социум) and the consortium of health NGOs and associations known as the Budget Advocacy Coalition actively participate in parliamentary hearings at the formation stage of the budget. Their first victory as a coalition was in 2019, where they successfully lobbied against cuts to the health budget, secured 160 million soms (about US$2 million) for cancer treatment and hemodialysis treatment for all patients with kidney failure (more than 1,500 people).

Sotsium’s director Batma Estebesova told OCP, “we realized that if we all unite and act in the same direction, if we prepare for the annual budget hearings, we could achieve a lot. We participated in the development of a budget resolution for a parliamentarian, where we made our proposals. Maybe not all of them were taken into account, but about 40-50% of the proposals we made were.”

In 2020, they secured an increase in the health budget to 20 billion soms (around $252 million) instead of the planned 18 billion (US$225 million). In 2022, it went up to 28 billion (US$352 million). In particular, the oncology budget was 28 times bigger than the previous year, and for the first time a sum of 1 billion soms (around $12.5 million), will be used to buy medicines for patients with diabetes, viral hepatitis and other rare conditions. This will give tens of thousands of people access to medication. For example, 10,000 patients with hepatitis B and C will receive free treatment thanks to the additional funds.

Along with developing tools and collaborating on research and advocacy, the civil society partners have a strong focus on developing skills and building relationships through education. Last year, Sotsium worked on a BAA.kg project to launch a platform for monitoring medicine prices, and has started training its members and government officials on how to use the procurement business intelligence tools, developed by the Open Contracting Partnership in close cooperation with the Alliance for Budget Transparency.

In May, Partner Group Precedent, which is the non-profit arm of a commercial law firm, started a procurement training school to teach civil society actors how to conduct high-quality research and engage constructively with authorities. The 15 module curriculum was developed with the Open Contracting Partnership and includes topics such as the basics of Kyrgyz procurement laws and practices, citizens’ rights to access information, using data tools and other techniques to monitor popular sectors and recognize violations, and working with the media and courts to report findings.

Similarly, the media outlet Kloop is training procurement monitors to contribute to their reporting, recruiting from a pool of hundreds of volunteers who originally took part in their election monitoring coverage. They use an innovative approach to manage these volunteers and the editorial process: their red-flagging software supported by the Open Contracting Partnership automatically detects risky tenders and sends an alert to a team of reviewers, who conduct further research. Each team consists of a data verifier (usually a volunteer) who checks the data, and if there are credible problems with the tender, forwards the case to a story editor and community manager (Kloop staff at this stage). The story editor and community manager then scrutinize the tender in detail and publish their findings on Kloop’s site while also sending alerts to the relevant government oversight authorities. Kloop has found that using structured data and systems allows volunteer monitors to quickly learn specific research tasks and they can review many more procurement projects than Kloop’s staff could alone. But recent issues with the source API would need to be fixed for them to launch the system at scale.

Although Kyrgyz procurement law doesn’t allow external parties to file legal appeals about violations, civil society can share their feedback and recommendations to the government through other channels. These include roundtables convened by the Ministry of Finance in which they discuss their research and recommendations on issues such as corruption risks, medicine prices or COVID-19 emergency spending. Proposals developed by Partner Group Precedent to introduce liability for procurement violations were discussed with the procurement department and enshrined into law this year. Some civil society representatives also hold formal positions as advisors on government procurement committees.

The Open Contracting Partnership (OCP) has supported many of these activities, including helping the government to publish open contracting data, building key data-driven tools like the business intelligence platform, organizing training for government staff and civil society and competitions for journalists and data-tool builders, advising civil society organizations on monitoring specific sectors such as COVID-19 contracts and medicine prices, and securing high-level commitments to open up procurement in international fora like the Open Government Partnership, to name a few (see below for a comprehensive list). 

How it began: A government champion’s story

All these changes were made possible through an unlikely partnership between civil society and reform-minded civil servants in a country marred by political instability and where once-vibrant spaces for independent voices, relative to its neighbors in Central Asia, appear to be shrinking. 

One pioneer of the reforms was Nurida Baizakova, who ran the government’s procurement department from 2019 until August last year, when she took on a new role convening the civil society procurement coalition. 

When Baizakova was appointed head of the public procurement department, she had been a civil servant in the finance ministry for over twenty years. She had seen other procurement directors come and go, and knew her time to make a difference was limited. As were her resources: the department had 22 staff, only five of whom were responsible for monitoring contracts – over 100,000 annually – for their compliance with procurement rules and regulations.

Baizakova was under pressure to prove to her bosses, the finance minister and president, that her efforts were having an impact. But gathering that evidence was slow: it sometimes took a couple of days to download and prepare the performance statistics from the old procurement portal. So when the European Bank for Reconstruction and Development (EBRD) approached Baizakova with the idea of using middleware and adopting Open Contracting Data Standard (OCDS) to quickly perform the same analysis and more, she thought it was “like magic”. Not only could she show the country’s leaders how the procurement system was performing, she could ensure everyday decision-making in the procurement department was based on evidence from real-world data.

But Baizakova didn’t stop at introducing software that she and her colleagues could use. Inspired by her earlier experience at the finance ministry working to increase budget transparency and involve civil society in budgeting processes, she worked with Open Contracting Partnership to make the information from the procurement system available to the public, adapting tools created by Ukrainian transparency advocates after the Maidan revolution to suit the Kyrgyz context.

Many government employees are wary of engaging with civil society because they “always criticize,” Baizakova told OCP, chuckling. But she saw these complaints as an opportunity to have a constructive dialogue and find out what the real problems were. 

“When someone criticizes, we can improve. We can communicate with them and maybe take on their recommendations to change the system. The finance ministry has the same interests as civil society organizations. They want to use public funds more efficiently and effectively too.”

Baizakova knew the funds allocated from the state budget weren’t enough to effectively reform the procurement system so she found other ways of making her resources go further by collaborating with international organizations and donors who offered technical assistance, including EBRD, ADB, USAID, Soros Foundation – Kyrgyzstan, OCP, and OGP. This led to Kyrgyzstan’s preparation for accession to the WTO Government Procurement Agreement and commitments to procurement reform through Open Government Partnership National Action Plans. To encourage smaller businesses to participate in procurement, an e-catalogue, Tandoo, was created for government entities to purchase common items like stationery (similar to an Amazon store for government).

And when the coronavirus pandemic hit in 2020, Kyrgyzstan was ready to respond more rapidly than many other countries, as almost all government contracts were available through the Zakupki portal in OCDS format. In OCP’s review of countries’ implementation of commitments to the IMF on the transparency of COVID funds, the Kyrgyz Republic received one of the highest marks. 

In August last year, Baizakova took on a new role convening the Transparency and Accountability Forum to promote civil society participation in public procurement, on behalf of the USAID’s Fiscal Accountability and Sustainable Trade (FAST) program and its contractor DevTech. 

Her vision is to see the government and civil society work constructively to build a healthy environment for dependable suppliers to enter the market so citizens have access to quality goods and services, and the economy prospers too. 

Building an ecosystem of procurement advocates 

To continue developing the skills and bonds among the various civil society groups, a series of events are set to take place over the coming year, inspired by the approach of Ukraine’s formidable civic procurement monitoring community Dozorro. A TenderFest will be held in September, including a journalism award for stories that use contracting data. OCP together with CSOs partners also have plans to create a digital platform that will be a one-stop-shop for civic procurement monitoring, featuring guides, templates, stories, lessons learned, advocacy statements, CSO profiles, and other useful information for partners and citizens.

The data on the government procurement system still has its shortcomings (detailed well here by Kloop). Data quality and coverage issues mean that monitors must verify and corroborate the data with other sources. As journalist Ekaterina Reznikova says, when you follow a lead in the data, “sometimes you are left with more questions than answers,” as illustrated by her quest to learn whether a hospital in Ala-Buka really bought soap for KGS 2500 (US$30) a piece. 

Moreover, an upgrade to the government’s data system is required to ensure every procurement transaction is publicly available both through the online portal and the API. Improvements made to the system, which added functionalities related to a new law, have led to the API missing data for about 5% of procurement transactions. It is important for the current leadership of the Ministry of Finance to prioritize this API upgrade. Such maintenance is critical to ensure both the government and third-party tools that rely on the data work effectively.

The full impact of the revised procurement law also remains to be seen. But the Kyrgyz Republic’s transparency advocates, activists and journalists aren’t easily deterred. 

“Of course, we have some challenges, like the state-owned companies being excluded from the procurement law,” says Nurida Baikova, the former public procurement director. “But I know this is  temporary and we can overcome such challenges together with civil society. Corruption will increase, but I hope our top level politicians will finally change their minds and we will improve the system. With so many civil society organizations we can move like one force.”

Feature image courtesy Facebook/Partner Group Precedent