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MTender digital procurement system – Moldova

MTender is a revolutionary tool which will transform the way public funds are spent in Moldova, a country with a long history of corruption.

The world’s first fully digital public procurement system, MTender uses open data to manage every element of the public contracting system. This enables officials to do their jobs better, citizens to hold the government to account, taxpayers to get a better deal, and businesses to compete on a level playing field.

Innovation Summary

Innovation Overview

Moldova has been trying to reform its public procurement system for over 20 years. This would make government more efficient, ensure taxpayers get value for money, reward businesses that want fair competition and foster innovation. It would also help tackle the corruption and cronyism in the procurement sector which costs Moldovan citizens up to US $183m each year. EBRD has supported the Ministry of Finance throughout this process. Drawing on its expertise in business intelligence, the bank has developed world’s first fully digital public procurement system, which was introduced in 2017. It should allow the country to leap ahead of others in ensuring public funds are spent wisely and accounted for properly.

Building on the success of the Prozorro system in Ukraine, MTender is designed to make the awarding of public contracts more open, efficient and accountable at every stage of the process. It uses open, clearly structured data that enables better processing, accounting and auditing throughout the procurement cycle. It was jointly developed by civil society, government, business and IT companies, and has now been made available to all key central government ministries. The service is free of charge to all public sector and commercial buyers in Moldova.

At present:
14067 electronic tenders are advertised on the system; 2195 electronic tenders are being processed;6209 contracts have been generated, signed and made publicly available via MTender;1170 public sector and commercial buyers are actively using MTender to procure goods; 2430 suppliers are openly bidding for contracts on MTender.

It will soon be rolled out across government, and is already delivering a range of benefits:

1.For government and citizens:
It uses internationally approved data standards to make government processes much more efficient & has adopted the Open Contracting Data Standard (OCDS) as a starting principle, allowing users in any government department to extract consistent, reliable and machine readable data directly from public procurement transactions. Data can then be interrogated and re-purposed by other government departments, businesses and civil society. Officials managing and auditing the procurement system can perform tasks in minutes that take their peers in other economies several days. Public sector and commercial buyers have saved over US 1m using electronic bidding.

It reduces corruption and builds trust in government institutions and officials. MTender means all public tenders are accessible online, and every public procurement decision is openly published in real time. Auditors can monitor and counteract risks and inefficiencies in the system in real time. Citizens can monitor who gets a contract, what they paid for it, what connections they have, and whether they are suitable for the job.

It helps public and private sector collaborate and share costs. MTender is a community of stakeholders – it enables business, civil society and government to work together to deliver quality public services to the people of Moldova. The government shares administrative costs with commercial platform operators and charges a single flat transaction fee for users.

It uses Open Source technology to reduce costs and improve efficiency. The application of Open Source principles in building the government’s central procurement database and the web portal of the MTender reduced the cost of the system by an estimated 30 per cent, and prevented the Ministry of Finance being locked into a single IT provider.

2. For business
It increases competition and innovation. By making all public tenders available online, MTender removes all barriers to companies except their suitability to do the job. This creates opportunities for SMEs and encourages them to innovate. This means Moldovan citizens get better companies to deliver key public services like education, transport and health care.

It encourages foreign investment. By creating a level playing field for businesses to operate, MTender encourages foreign direct investment and a transition to a thriving market economy. The more investors see the benefits MTender brings in terms of transparency and accountability, the more confidence they will have to invest more.

It’s inclusive. Creating more open markets for public contracts drives economic growth and opens up new opportunities for groups who are poorly represented within established economic structures and systems, like women. This creates more opportunities and brings more potential employees, leaders and ideas into the market for public contracts. It fosters inclusion, innovation and sustainable economic growth.

With a clear plan in place to roll this out across government, the early payoffs should increase exponentially. Government can deliver substantive reforms for its own people and show the rest of the world what is possible in applying open government principles to public contracting processes.

Innovation Description

What Makes Your Project Innovative?

MTender is the most comprehensive system of its kind anywhere in the world. It builds on the success of the Prozorro system in Ukraine, in which EBRD was also instrumental, but goes much further. Every element of the public procurement system – from planning to payment – can be managed within the system, using open, structured data. The system has been designed in consultation with the private and public sector, resulting in a hybrid system which draws on the best existing commercial platforms in Moldova, but houses and manages the data in a central government repository.

This enables government officials responsible for procurement processes to do their jobs much more quickly, and to get a snapshot of activity across the entire system to spot new risks or opportunities. This means Moldova’s government can deliver substantial concrete benefits for its own people and show the rest of the world what is possible in applying open government principles to public contracting processes.

Innovation Development

Collaborations & Partnerships

EBRD designed and managed the project, drawing on its knowledge of international business best practice and experience in Ukraine.

The Ministry of Finance changed the laws and delivered training for government agencies using the new system.

Private sector companies fed their understanding of delivering IT projects and submitting bids to government in Moldova into the system design.

Civil society provided insights into how citizens could use MTender to hold government to account.

Users, Stakeholders & Beneficiaries

Public officials can show taxpayers they are getting value for money. They save huge amounts of time and can manage risks proactively using automated tools.National companies face fewer barriers to entry, especially SMEs .
International businesses have a level playing field to operate within, while foreign investors have more confidence to invest in an open, thriving market economy. Civil society can monitor government spending and hold officials to account. This builds trust in the state.

Innovation Reflections

Results, Outcomes & Impacts

Moldova’s state-of-the-art digital procurement system works for both public and private sector needs. Anybody can access the platform and check what contracts are being done by whom with public funds. Still in its pilot phase, the project has already delivered tangible benefits which are listed in the overview section.

Private companies and banks can now show that they are operating transparently in a level playing field. This helps to create a more open market with more women and small businesses in it, and drive up investment. Citizens are already using the system to question why a government department has made specific purchases.

With a plan now in place to embed and standardise the system across government, these early payoffs should increase exponentially. All procurement information will be available from planning to payments. The data for all previous transactions and companies will be searchable, so risks can be detected quickly and any inefficiencies weeded out.

Challenges and Failures

The project grew out of a sustained period of corruption and bad governance in Moldova. Administrative systems on which this tool was built had been neglected or abused. EBRD worked closely with reformist officials to ensure continued buy in, and to identify capacity building and training needs. The new government is being lobbied to ensure continued support for the reforms during this critical next phase.

There were practical challenges too. In many remote areas where the goods and services are destined technological infrastructure and computer literacy are both low. A series of training programmes was delivered to ensure usable data was generated.

This had never been done before. Globally, public procurement is still done using paper or analogue systems. Transitioning to a digital system was a huge challenge with unforeseen complications. These were addressed in consultation with public and private sector stakeholders

Conditions for Success

A project of this kind needs both the right regulatory framework and the best possible tools. It takes sustained political will and financial investment from government decision makers.

It is critical to ensure that all stakeholders are genuinely consulted and engaged. MTender’s success is rooted in cross-sector collaboration. This means the system works for both public and private sector. Establishing and maintaining this common ground takes time and specific skills. Dedicated project managers with experience managing such projects are essential, and they need to be given time to do their jobs.

Similarly, adapting open-source tools and business intelligence tools to a specific context takes time and expertise. People skilled in IT implementation and adoption in low-tech environments are needed, who can adapt principles so they work in practice.

Technological innovation on this scale needs time to adapt and evolve. Contingency time should be planned in for this.

Replication

MTender is designed to work for any public procurement system that supports the Open Contracting Data Standard (OCDS).

It is constantly being improved as more data is gathered on its effectiveness and problems ironed out or new opportunities for reform spotted.

Using OCDS to design and build new digital procurement tools helps other governments understand the potential value open data can offer in public procurement.

This is helping to drive interest in designing similar systems to help governments show their taxpayers how they are spending their money. EBRD is currently working on similar systems in Belarus & the Kyrgyz Republic.

This will in turn improve the quality, quantity and usability of procurement data across the board, as governments see what is possible and adopt systems that wherever possible use open data rather than documents. This raises standards and expectations internationally, helping to cement a norm of openness as default best practice.

Lessons Learned

It is critically important to understand both the practical, technical requirements for a project like this and the underlying social and economic conditions needed for change. The tools are vital, but only useful if people know how to use them.

The hidden costs of the project were difficult to estimate at almost every stage of the project. We would strongly urge anyone implementing a project like this to invest in understanding the training and user adoption needs before beginning the design. It would also be wise to include significant contingencies in the timeline and budget for unforeseen challenges and costs.

Related to this is the challenge of securing data that will work in a digital system from an environment that is often remote and entirely analogue. The end users or beneficiaries of this system – whether they are officials in the auditing department or people responsible for buying school and hospital materials – need to be trained in how to use the system, and incentivised to do so. This means being clear about the benefits the system will bring.

Supporting Videos

Year: 2017
Organisation Type: International Organisation
Level of Government: National/Federal government

Innovation provided by:

Date Published:

12 April 2019

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