Procurement efficiency is the degree to which the procurement process complies with the originally formulated needs. In other words, it is the assessment of the results obtained, thanks to which you can analyze them, identify problems, solve them and ensure their absence in the future.

The essence of procurement efficiency

The procurement performance indicator is closely linked to the responsibility for performance, which is very important in the case of a government order. The Accounting Chamber and The State Audit Service can check the ways in which budget funds are spent at any time, so customers primarily come from the need to obtain certain results.
That is why all procurement actions should be preceded by thorough preparation, which is implemented in the form of planning. According to the Law of Ukraine "On public procurement", subthreshold procurements are accompanied by the compilation of the addendum to the annual plan, and abovethreshold ones need the annual plan. The subject of subthreshold procurement does not exceed UAH 200 thousand for goods and UAH 1.5 million for works and services; the rest fall under the abovethreshold category.

Desired results

The principle of efficiency comes from having the notion of the desired results. The contract of each customer is individual, refers to its own branch and pursues its own goals, but all of them have common features provided by the ProZorro system, where government procurements should be placed. First of all, it concerns the principles of transparency, openness and competition, which should ensure the absence of discriminatory conditions and the possibility of public monitoring.
The law does not give a concrete definition of the concept of efficiency, because it is calculated subjectively in each specific case. Therefore, it happens that even with the availability of modern electronic trading platforms and advanced technological solutions, many customers cannot understand the concept of procurement efficiency. Since it is directly related to the targeted use of public funds, it is possible to give it an estimate based on financial considerations.

Budget side of the coin

The Smarttender.biz platform recommends – considering the concept of efficiency, it is best to start from the aspect of financing.
The customer must ensure that the goals set for the satisfaction of state needs are met at the lowest possible cost. The greater the difference between the planned and final price, the greater the savings and, accordingly, the better for the state budget. From this statement, we can conclude that if the allocated funds were spent in full, but the result was not sufficient to satisfy all the originally formulated needs, procurement was not effective.
Or otherwise, the result was achieved, but this entailed much larger costs than expected.
Speaking about the violation of the ProZorro principles, we can give the following example. The result was achieved and the funds were spent rationally, however, in the course of the tender, the customer, without explanation, rejected the bids of the participants, whose conditions were suitable for all requirements.
It is important to note cases of unreasonable efficiency, which are of particular importance in matters of public procurement audit. Such efficiency may be due to the initially overvalued contract or unfair actions of the tender winner.
As already mentioned, the control and audit authorities have the right to monitor public procurement for violations and impose appropriate sanctions in case of their discovery. In addition, anyone can follow the course of the tender – the ProZorro system provides such an opportunity.