Public procurement in the Kyrgyz Republic accounts for more than 12 percent of GDP. Given the large volume of government funds and bureaucracy dedicated to this sector, procurement is vulnerable to irregularities, fraud, and corruption. These liabilities result in the wasting of taxpayer money and have a negative impact on the development of the country’s social and economic infrastructure, the provision of public services, and the confidence of citizens and business representatives in the government. Under the USAID-funded Fiscal Accountability and Sustainable Trade (FAST) project, DevTech recently completed work with the Government of the Kyrgyz Republic to improve their public procurement systems by making them more efficient, accountable, and transparent.
To achieve this objective, USAID FAST adopted a holistic and comprehensive multi-pronged approach that aimed to strengthen and improve multiple facets of the public procurement process (refer to Figure 1). Importantly, rather than taking a top-down approach to designing and implementing these activities, FAST ensured that these processes were guided by partner priorities, recognizing that partners are best placed to know the activities needed to operate sustainably in their unique context.
Figure 1: Activities undertaken under the FAST project in the Kyrgyz Republic
Government stakeholders also shared their priorities for improving the public procurement system. Following the workshop, the FAST team developed a workplan made up of technical activities aimed at increasing accountability and transparency in the procurement system. These included supporting the creation of an e-Contract Management Module allowing for procurement contracts to be administered electronically, assisting with the development of an updated legal framework in alignment with the new public procurement law launched in 2022, strengthening procurement audit guidelines, and updating materials for both the “Basic” and “Advance” training certification courses provided by the Ministry of Finance’s (MOF) Training Center for procurement stakeholders. This workplan was reviewed and approved by the Government prior to implementation.
During the project’s implementation phase, the FAST team continued to ensure that the Government was highly involved throughout, whether in evaluating and providing feedback to draft regulations or in identifying and hiring local technical experts to help implement the project and lead trainings. Working with local experts proved invaluable to the project, both because their knowledge of the local context ensured that the proposed solutions were well aligned with local needs, thus supporting impact and sustainability, and because their facility in building trust with Government counterparts enabled the project to run more smoothly than it might have with only international experts.
For its work with civil society aimed at reducing corruption by strengthening oversight, the FAST team used an approach to capacity strengthening that emphasized relationships, networks, and peer learning, particularly grounded in a local context. Specifically, the team acted as a facilitator by working in collaboration with the international non-profit Open Contracting Partnership (OCP) and with civil society organizations (CSOs) from throughout the country to establish the Public Procurement Transparency Accountability Forum (PPTAF).
Officially launched in June 2022, the PPTAF brings a key group of CSOs together in a formalized setting, allowing them to hold regular meetings, form joint positions, and monitor procurement activity, thereby improving overall procurement transparency, accountability, and the management of public funds. The PPTAF is also intended to serve as a platform where CSO members can engage procurement officials from the Ministry of Finance to share their concerns on specific procurements, and demand transparency. Additionally, the FAST team worked to connect PPTAF with journalists to support greater collaboration between them, including on such efforts as conducting joint investigations to identify corruption schemes in public procurement.
While the long-term effects of USAID FAST’s work will take some time to fully take shape, certain improvements in the Kyrgyz Republic’s public procurement ecosystem are already clear.
- The simplification of public procurement processes as a result of the consolidated regulatory framework has closed gaps that allow corruption to thrive. According to Bayaly Dosaliev, Director of the Kyrgyz Republic’s DPP, “Thanks to the tireless efforts of the DPP [Department of Public Procurement] staff, with technical support from the USAID FAST project, significant progress has been achieved. One of the notable achievements is the consolidation of regulations into one document, making it easier for both procuring entities and suppliers to navigate through the regulations. Additionally, efforts are underway to implement the e-contract module, which will move the procurement system closer to a fully electronic end-to-end system, which is our one of the main goals.”
- The development and update to the “Basic” and “Advance” training certification modules, as well as the conducting of relevant training of trainers sessions, has ensured that trainers from the MOF’s Training Center can sustainably make sure procurement professionals are equipped to apply the new public procurement law and relevant regulations. Abdukarov Tolubai, one of the trainers from the MoF’s training center, explained “these modules have made it easier to adapt to the new tools and in general to the innovations associated with the public procurement law. We continue to successfully use the modules in our training. I would like to express my gratitude to the Training Center, as well as to the USAID FAST project for their support in developing the modules.”
- Auditors are better equipped to identify potential irregular or fraudulent procurement activities and procurement entities are better able to navigate the new procurement requirements ensuring fairness and transparency. In a recent report published by the DPP, Kulmuratov Sanjar, the DPP’s Head of the Public Procurement Monitoring Unit, was quoted as saying: “At the end of 2022, with technical support of the FAST USAID project [a] Public Procurement Monitoring Manual was developed. According to our Monitoring Unit report, in the first quarter of 2023 [the] Manual facilitated the monitoring of 1,632 tenders by DPP, resulting in 510 cancelled tenders, 547 tenders with violations that were eliminated, and 13 tenders with noted violations. We take pride in the results achieved through this monitoring, which demonstrates a tangible improvement in the field of public procurement. We extend our heartfelt gratitude to the FAST USAID project for their invaluable support.”
- The launch of the e-Contract Management Module and its subsequent roll out to government ministries and agencies will significantly increase efficiency, increase transparency, and strengthen accountability in the management and administration of procurement and contracting. The module will enable suppliers to navigate the procurement process through an online portal, bypassing onerous, bureaucratic processes. This will entail logging into the portal and uploading required deliverables to obtain necessary approvals from government counterparts and receive payment. Transforming the process into an electronic one will significantly reduce corruption and increase efficiency.
- CSOs are better equipped to monitor public procurements, identify corruption risks, and expose corrupt practices. This is made clear by recent mass media publications developed collaboratively between journalists and CSOs highlighting suspicious public procurement transactions, including construction services for hospitals and health facilities, among them a maternity hospital reconstruction project. For example, an investigation in the medical sector uncovered a shortage of suppliers and rampant fictitious competition affecting the procurement of medicines and medical devices. Overall, these investigations flagged key issues ranging from limited vendor participation to inaccurate descriptions and fictitious competition, which are not only indicative of wasteful and potentially corrupt practices but could also have implications for service delivery.
USAID FAST, implemented by DevTech Systems, supported the Government of the Kyrgyz Republic to improve the efficiency and transparency of public procurement and aimed to enable civic engagement and oversight of the public procurement system. To find out more about FAST, read the 2023 USAID FAST Annual Report.