Fatih Şahin Фатіх Шахін Ukraine, business and international experience — since 2004
Reconstruction & Recovery

Keeping reconstruction procurement clean

Very large sums spent quickly through construction contracts is the classic setting for procurement failure. The safeguards are known and they have to be built in advance.

(17) RESIDENTIAL DISTRICT IN TOWN OF BAR REGION OF VINNYTSIA STATE OF UKRAINE PHOTOGRAPH BY VIKTOR O LEDENYOV
Photo: Viktor O. Ledenyov · CC BY-SA 4.0

Reconstruction combines every condition under which procurement goes wrong: urgency, very large sums, technical complexity, and a strong political reason to avoid delay. Nothing about that is unique to Ukraine, and the safeguards are correspondingly well known.

The four mechanisms that work

Open electronic tendering with published results. Ukraine has this and it is the single strongest asset the country brings to the problem: who bid, who won and at what price is a matter of record.

Beneficial ownership disclosure for bidders, so that a company cannot conceal who is behind it and a conflict of interest can be detected rather than alleged.

Price benchmarking against unit rates. A road, a school or a substation has a defensible cost per unit, and a bid far outside the range is a question to ask before signing, not after.

Independent supervision engineers who certify work done before payment is released. This is the least glamorous control and the one that most reliably prevents paying for work that does not exist.

Where the pressure comes from

Emergency procedures. Every crisis produces a justified case for skipping steps, and every skipped step is where a problem later appears. Emergency procurement should be time-limited, separately logged and audited afterwards as a matter of routine.

Why this matters beyond honesty

Because reconstruction is financed by external partners whose own parliaments are watching. A visible, documented procurement record is not only right in itself; it is the condition on which the next tranche arrives.

Clean procurement is a question of cost as much as of honesty: in a dirty tender the price is the price of the risk rather than of the work, and everyone pays it. Bidding into tenders I have learned that where the rules are clear more firms bid, and where more firms bid the price falls. Oversight is not an expense line but the most effective saving available.

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