On September 5th, 2016, CEELM reported that Axon Partners had assisted Ukraine’s state-owned ProZorro public procurement electronic system in Ukraine on its transformation into an IT company. As the in-house legal team of ProZorro was not involved in the matter, we asked Director Nadia Bigun to answer several questions about the matter.
CEELM: Axon Partners reported that "as a result of public procurement reform, ProZorro has become subject to compulsory implementation in Ukraine." What does that mean, and what value does the ProZorro platform add?
N.B.: ProZorro has some specific attributes that make it a novelty in the procurement world. Firstly, everything is open. All information related to the tender process, including suppliers’ offers, can be accessed and monitored by anyone. The system is open source, and all data is structured in line with the Open Contracting Data Standard, making cross-country data comparison and analysis possible.
Secondly, ProZorro is a “hybrid model” e-procurement system, which means the information is stored in one central database, but suppliers and contracting authorities can access the data from a number of different platforms, choosing the one that best serves their needs. Using an API, these interfaces are connected to the central database so that all the information is synchronized across all platforms.
Finally, the key actors in the project play their own, unique role in what we call the “golden triangle of partnership.” Government actors are responsible for setting general rules and protecting information; businesses are responsible for providing services to contracting authorities and suppliers; and civil society is responsible for managing business intelligence modules and developing risk-management methodologies. This style of cooperation has significantly improved trust among all key stakeholders.
CEELM: Have you already launched the system?
N.B.: We have already launched the e-procurement system and it is obligatory for use by all public procurers in Ukraine. But it does not mean that the IT product is completely done, we still have a lot of plans how to develop its functionality further.
CEELM: What were the legal riddles needed to be solved in relation to transforming the public procurement system into an IT product?
N.B.: The list of open issues is big but the main issue is connected with transferring intellectual property rights. ProZorro as IT product was partially developed with donor's money and partially by volunteers. At the very beginning all the intellectual property rights belonged to NGO Transparency International. Then they were transferred to SoE ProZorro. The challenge was to transfer the right while the product was still under development. Second big issue is transferring of the brand rights. To promote our reform we plan to allow institutions to use the our brand in cases when they do not get commercial profit. In cases of getting the commercial profit we plan to give the right on commercial basis. For the first group we can provide operating licence.
CEELM: Why did you choose to work with Axon Partners?
N.B.: We started working with Axon Partners even before this company was actually born. At first, we were looking for someone experienced in IP and IT law. We found out that there is one team of innovative lawyers, which, by the way, worked in another law firm at that time. As we were informed, besides working with IT companies and startups, the team was supporting some legal initiatives by drafting IT and IP connected laws. When we addressed these lawyers, they agreed to provide us with a due diligence of ProZorro IP rights transfer.
Probably, they had some inner motivation because they quickly became engaged into our working processes and promptly answered all of our requests.
Consequently, when Axon Partners was created, we decided to continue cooperation with the new company. It’s all about the people, you know.
CEELM: According to Axon Partners, ProZorro was "being transformed into an IT company implementing innovative projects in Ukraine." What are those other projects?
N.B.: Reform of sale of the illiquid bank's property was launched this summer under the ProZorro brand. We have other projects too, and we will tell you about them soon.