Interview with Serhii Sahun

An all-out war has brought many changes in online e-bidding procedures, and businesses have had to face a lot of challenges. Everyone had to adapt to new demands and conditions, the market was partially suspended and resumed its work again, and the legislation changed. In this interview, Serhii Sahun, CEO of the SmartTender.biz electronic platform, will tell how 2022 turned out for the industry, how it affected the activity of state organizers and suppliers, and how the SmartTender team coped with the challenges of the first months of the war.

The year 2022, and especially its first half, seemed difficult for the entire online trading ecosystem. At the onset of the full-scale invasion, most of our customers were forced to stop their procurement and auction operations. Nobody understood how to proceed, especially those customers and suppliers located in the occupied territories and in places close to active combat zones, almost all standard supply chains were destroyed. We were aware of all this, which is why already in the first days of the war we contacted all government customers who make purchases through our platform, and hundreds of suppliers who were registered with us and were in touch. Our managers reminded them that the site and the Prozorro system continue to work, and the team is ready any day and time to help with posting a purchase, searching for an order or submitting an offer. In fact, the first month we worked 24/7 and during air raids.

During this year, our team learned to work productively from any corner of Ukraine and from abroad, during blackouts, and even in conditions of a complete blackout. What's more, now our clients can come to our office to participate in a purchase or auction, if they themselves do not have such a technical possibility, because we have stocked a generator and connected Starlink.

1. How did the events of 2022 affect the results of the Prozorro system?

The period from February to June affected the dynamics of electronic public procurement the most. Let me remind you that with the beginning of full-scale hostilities, the government allowed tenders to be held without the use of an electronic system, as a result of which the number of procedures announced on Prozorro decreased almost simultaneously by ten times.

But already on June 24, after amendments were made to Resolution No. 169, the situation began to level out: the majority of state customers were obliged to conduct purchases in the electronic system. Thanks to this, already in September, a third of public tenders took place on Prozorro. In total, in 2022, the state conducted 2.73 million procedures with a total expected cost of UAH 723.94 billion.

Interview with Serhii Sahun

2. Many entrepreneurs during the war transformed their business in accordance with the new conditions. Has something changed in the way SmartTender works?

Our main activity has not changed – we continued to do everything possible to ensure fast and comfortable interaction between customers and suppliers during electronic procurement. Of course, we quickly adapted the system, for example, information on some sensitive purchases was closed for security reasons to public access during martial law.

Starting in March 2022, we opened a new area on the site for 6 months – the opportunity for representatives of territorial defense and charitable foundations to announce tenders on SmartTender.biz free of charge. In this way, they had access to our large base of suppliers (I remind you that we have more than 100,000 registered companies) and were able to quickly purchase the necessary goods. We continue to work with many of them, already as with commercial customers of Smart Procurement.

Also, in March, together with Prozorro SE, we launched a new platform for procurement during martial law – Prozorro+. Initially, it functioned as an add-on to Prozorro Market, allowing customers to quickly buy humanitarian goods to support citizens and the military, or leave a request to find a supplier of such goods. But later, when public procurement became mandatory again, the concept of Prozorro+ was transformed – now the platform is used to allow customers to publicize their need for essential goods to receive donor funding for the purchase.

Recently, we created a new page of tenders for the reconstruction of Ukraine on the site. Now it accumulates purchases related to goods, services and works related to the repair and construction of various objects in the population centers of our country. We hope that in the future tenders will be held on Prozorro for the restoration of housing stock and infrastructure damaged by hostilities – in this case, they will be displayed on this page.

Interview with Serhii Sahun

As for our communication in the infospace, here we began to place greater emphasis on wartime procurement and, in general, on areas that help the state cover urgent needs (Prozorro public tenders) and replenish the budget to ensure the existence and work of the army and citizens (Prozorro.Sale auctions for the implementation of state property).

In March-April, during the occupation of the Kyiv region by Russian troops, some of our managers were volunteers of the hotline of the Kyiv Regional State Administration. They received calls from people who needed help. Until mid-March, these were mainly requests for the delivery of medicines and food, and later – for evacuation. All applications were added by our colleagues to a special file, which was further processed by representatives of the Regional State Administration. On the same hotline, managers could also receive information about the movement of enemy equipment in the territories of the Kyiv region and pass it on to the military.

In May, our colleague – SmartTender.biz development director Andriy Syabro, together with other volunteers, launched Front-U – a charity initiative that deals with the purchase of various technological means for the Ukrainian military on the front lines.

The marketing team of our site is involved in the development of the fund – they help with the promotion of the site, support social networks and e-mail correspondence for the sake of transparent communication of the fund and attracting more people to support warriors in various hot areas. And our lawyer Dmytro Bayov coordinates work with applications from military units in Front-U, drawing up acts of receipt and transfer of goods and material values. And, of course, the fund is also supported by other members of our SmartTender team – like all conscious Ukrainians, they regularly donate to support the defense forces of Ukraine.

3. How, according to your observations, has private business adapted to the new needs of the state?

In 2022, construction materials, food products, energy resources, medical equipment and repair services were purchased most often. As expected, with the start of active hostilities, the distribution of demand in Ukraine changed. Customers focused more on the urgent needs of the military and ordinary citizens.

Accordingly, business representatives had to adapt to new market demands to be able to continue working and developing while supporting the Ukrainian economy:

- companies changed the focus of their activities on those products that had a higher demand (for example, they began to produce clothes for the military);
- companies switched from the sale of goods to works or services;
- many companies relocated to safer areas.

Thanks to this, the number of suppliers who participated in procurement during 2022 is quite large – 176.79 thousand.

Our team wrote in more detail about the work of the public procurement department in the "Prozorro Results and Major Changes in the System for 2022" article.

4.What role did Prozorro Market play in providing the state with necessary goods?

In 2022, especially in its second half, the Prozorro Market electronic catalog was the most convenient and fastest tool for public procurement. After all, it presents a large assortment of widely used goods, which often need to be purchased "for yesterday".

Purchasing in the catalog lasts from two days and does not require suppliers to prepare tender offers – it is enough to qualify for the required category once. So thanks to the simplicity of the marketplace, more and more business representatives chose Prozorro Market to sell their products. In turn, customers (especially those who do not have a large staff) chose it in situations where it was necessary to close the needs faster than with the help of open tenders or simplified procurement.

The following product categories had the greatest demand:

- oil and distillates;
- office equipment and accessories;
- electrical energy.

In June 2022, Prozorro Market was allowed to sell not only goods, but also services. Among them are security, maintenance, cleaning, transportation, etc. services. We hope that over time this direction will become more popular and will simplify the work of even more suppliers and customers.

Our team has prepared a report article on the results of the work of SmartTender.biz users on the marketplace. I suggest you read: "What Were the Purchases on Prozorro Market During 2022 and What Has Changed in the Catalog?"

5. Did the auctions take place in the Prozorro.Sale system? Or the government decided to put sales on hold?

With the beginning of the full-scale invasion, most of the Prozorro.Sale auctions were canceled or postponed to other dates, and some of the routes were completely stopped due to reasons of state security.

Thanks to the defense forces, the occupied regions of Ukraine were liberated one by one, and this immediately affected the resumption of auctions in those places. Also, in September, tenders for small-scale privatization resumed, and at the end of the year – for the sale of scrap metal. So, in general, in 2022, the sale and lease of property brought UAH 10.31 billion to the budget, which became additional funds to support the state economy and finance public procurement.

Charity auctions, at which private individuals or companies exhibited interesting lots, and the proceeds were sent to support the army, became an important trend that resumed in 2022. For example, the pen used by US President Joe Biden to sign the Lend-Lease Law (UAH 600,000) and the anti-tank missile tube decorated with the Petrykiv painting (UAH 155,000) were sold this way. As of December, such auctions allowed to collect UAH 6.9 million.

Interview with Serhii Sahun

A new direction was also launched – the sale of assets of state banks NPL (non-performing loans). Currently, only one organizer works in it, but we expect that other banks will be interested in such auctions over time.

And, of course, one of the most striking changes for the Prozorro.Sale system was the official transfer of large-scale privatization procedures to it. So already in 2023, we expect the publication of the first announcements and the first large-scale and transparent trades between participants.

You can learn more interesting things from the final article from the team of our site: "The Results of the Prozorro.Sale System and the Most Interesting Auctions in 2022".

6. Last year was the most difficult since the independence of our country. What is the main lesson you learned from it for yourself?

The main conclusion for me has not changed: the main thing is people. It is impossible to imagine a successful business without responsible specialists who really care, and are involved in their work. From February 24, 2022, we worked without days off for two months. Colleagues who did not need relocation or who had already moved to safer regions helped close additional volumes. Also, the usual timing was violated in many respects, so some customers on the weekend performed those actions in the procurement system that they usually performed on weekdays. Therefore, we have provided support work on weekends and extended working hours to evening hours.

We did not make cuts. Immediately after the outbreak of full-scale war, we paid double advances, and also gave time to everyone who needed to evacuate, either to take leave for the necessary period, or to continue working already from abroad. Many of our colleagues who stopped working in the spring or summer of 2022 for various personal reasons have already returned to us. Now, almost the entire team works remotely, although in general, the Covid-19 pandemic prepared us for this format of work.

Five of our colleagues joined the ranks of the Armed Forces of Ukraine – we are proud of them, thank them for their courage and, of course, look forward to their return.

7. What helped you to continue working in the most difficult months of the war? How did the company work during the first blackout?

All the time I stayed in Kyiv, ensuring the office and those processes that remained here. At the beginning of March, when there was a risk of blocking the city, I helped my parents leave for Transcarpathia. Personally, my family, work and colleagues helped me – we all held together. Our site is part of critical infrastructure for the state, as all public procurement and sales auctions are conducted using an electronic system. Also, many private businesses use e-procurement to continue their work and production, so we had to provide them with reliable work and technical support under all circumstances.

I will never forget the silence of a completely empty office and the parking lot next to it in March 2022, in which only the sound of a few computers, which were used as remote workplaces and which we had not yet managed to evacuate to our additional office in the Lviv region, could be heard.

From the very beginning of the first blackouts in October, we, together with our colleagues, turned the office into our point of business integrity. We installed a backup optical Internet and additionally connected Starlink, made gas reserves for a tourist burner, a generator, and a fuel reserve. Everyone was absolutely sure that we would also get through this winter and only become stronger. I can say with confidence that last year united us even more and showed that we are able to quickly adapt to any challenges.