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Policymakers: Case 3. Conducting an Analysis of the Effectiveness of Government Procurement at a National, Regional, or Market Level

Before we get to the actual implementation, let’s formulate a list of potentially interesting themes for study:

  • Economic dependency on the government procurement system
  • The level of competition within the government  procurements  system
  • Duration of government procurements processes  

For an in-depth analysis, we need the capability to sample data across the entire nation, specific regions, and industries.

Initially, let’s consider the “Overview Dashboard,” which presents key performance indicators (KPIs) in the procurement process that can be leveraged for analysis.

Government procurement is a part of the broader economy. Policymakers might be interested in understanding how the national procurement system contributes to economic development. With data on Gross Domestic Product (GDP) or Gross Regional Product (GRP), the share of the government procurement market within the broader economy or individual regions can be determined.

Examining metrics like “Number of Procuring Agencies” and “Number of Suppliers” in comparison with business registry data allows us to gauge the level of private sector engagement in public procurements.

 It’s important to note that suppliers in this context are companies that have participated in procurement processes, not necessarily those that have added value or generated income. However, filters can be applied to distinguish between winning bidders and companies that had any form of contracts.

In a previous case, we examined the impact of legislative changes aimed at reducing sole-source procurements and explored the “Non-Competitive Procurements” tab. 

For this case, let’s investigate the level of competition and the competitive procurement market. We’ll start by examining the “Competition” tab under the analytics group: 

  1.  Pre-calculated metrics reflecting the level of competition are displayed at the top of the tab. For example, we can see that more than half of all procurements nationwide are conducted through competitive methods, providing an average ratio per procuring agency.
  2. The “Rankings” chart allows us to sort data based on selected measures from a dropdown list. Let’s see which procurement methods are most popular among suppliers by selecting the “Method of Procurement” and setting the parameters.
  3. The “Market Concentration” chart helps identify supplier market share across various markets. Industry-specific segmentation is presented at the top, while the bottom part shows the market share of top suppliers. Within the distribution of participants, the top 19 suppliers are displayed, and the 20th position represents the collective share of all remaining participants. The smaller the gray portion, the higher the market concentration among the top 19 suppliers.
  • For example, in the “Information and Communication Services” industry, the market is largely controlled by the Corporation “National Information Technologies” (NIT). We can filter the data by this industry and delve into sub-industries. As we’ll see, NIT is particularly active in two sub-sectors: “Communication Services,” where they hold around 50% of the market share, and “Computer Programming, Consultation, and Other Services,” with a 15% share. It’s also important to note that some markets have supplier dominance regulated by law. For instance, “Kazakhtelecom” is a natural monopoly, and NIT was established by the government as an e-government system operator and is listed in the registry of entities with special rights. We can exclude such companies from the data set if we need to calculate the market structure without such firms.
  • A crucial performance indicator in procurement is the duration of procurement processes and the timelines of each phase. The longer these procedures take, the higher the costs incurred by businesses. On the “Procurement Stages” sheet, we can find out how long each phase of the tender procedures takes, depending on who is purchasing, what is being purchased, and the method used to procure goods or services.

As part of studying this case, we explored potential directions for analysis, familiarized ourselves with the content, and learned methods for working with topic-specific sheets.