- What is it? What is the purpose of the GosZatraty project?
- What are the goals and tasks of the GosZatraty project?
- Who is behind the GosZatraty project?
- The history of the development of the GosZatraty project
- What are the dangers of government contracting violations?
- Is this project motivated by partisan interests?
- Who is this project designed for?
- What is the state of government contracting transparency in Russia?
- Government contracting problems do not affect me
- What does the law say about government contracting transparency?
- So what is the problem anyway? Everything functions according to law. Everything is transparent!
- The “violations” detected by you are not violations of procurement laws. What are alternative ways to refer to suspicious contracts?
- Why do the loopholes for manipulating procurement information remain?
- What are the abuses that you detect in government contracting?
- How do you detect violations?
- Why would you create yet another website while there is plenty of other government contracting sources?
- How is ClearSpending different from other similar projects?
- Are you tough enough for this task? There are already FAS, the Public Prosecution Office, the Audit Chamber.
- What info sources have been used to create the GosZatraty website?
- What is the quality of information of the GosZatraty project?
- Why is it that the number of contracts on your site sometimes does not meet that on the official zakupki.gov.ru?
- How often is the information on the GosZatraty portal updated?
- What is the period of time that the GosZatraty portal has information for?
- Am I really able to make a difference in government contracting?
- I have ideas for the GosZatraty site
GosZatraty is a non-government project to raise public awareness about public expenditure. The automated monitoring system allows examining, understanding and detecting violations and using public expenditure data repeatedly. This refers specifically to grants, federal and municipal contracts. We are full of determination to compel the authorities to find and implement ways to solve public expenditure problems and eradicate government contracting abuses. (Back to the questions)
The ultimate major goal of the GosZatraty project is to improve living standards for Russian citizens.
General goals of the GosZatraty project:
- to promote honesty among public servants;
- to improve the efficiency of budget spending;
- to improve the accountability among those making decisions in public expenditure;
- to impede corruption with evidence;
- to increase trust in the state among businesses and citizens;
- to enhance control over federal and municipal bodies;
- to promote a more open, democratic and transparent Russian society;
- to promote public control over authorities and minimize decision-making risks;
- to improve the performance and efficiency of the public sector ;
- to develop the public information market and create demand for it;
- to systematize and facilitate access to public expenditure information for citizens;
Direct goals pursued by the GosZatraty project in government contracting:
- to achieve justice – to help the state to ensure conditions for equal participation of suppliers in their competition for government tenders;
- to improve the administration of government contracts;
- to improve access to federal and municipal contracting information;
- to reveal typical violation mechanisms in the process of federal and municipal contracting;
- to highlight the problem, to detect violations in federal and municipal contracting and assess their scale;
- to reveal existing defects in federal and municipal contracting;
- to draw civic attention to federal and municipal contracting;
- to decrease competition restrictions in tendering;
- to assess the efficiency and transparency of federal and municipal contracting;
- to further develop procedures for the placement of federal and municipal contracts;
- to work out recommendations to improve federal and municipal contract placement;
- to improve procurement legislation;
- to improve customer discipline in procurement;
- honesty is a curbing factor against corruption in federal and municipal contracting;
- to assess the correctness of contract placement for public and municipal use;
- Оценка качества размещения заказа для государственных и муниципальных нужд;
- to save public funds allocated to the creation of similar mobile and web services for citizens;
- to detect defects and work out recommendations for government contracting;
- to carry out an independent public analysis (audit) of public expenditure. (Back to the questions)
The project is promoted by the citizens who are not indifferent and seeking good order in government procurement and government contracting. You can be one of them, too.
The GosZatraty project has been created and supported by the non-profit partnership “Informatsionnayah Kulturah” on behalf of the “Komitet grazhdanskich initsiativ” (“The Committee for Civic Initiative”).
The Committee for Civic Initiative is a civic organization, a non-partisan association of professionals in key spheres of life (economy, science, education, health care, culture). It was established in 2012 by Alexey Kudrin and a number of other public persons “in order to determine and implement the best scenario for the development of the state”.
The non-profit partnership “Promoting the Development and Establishment of Info Culture ('Informatsionnayah kulturah'” (the non-profit partnership “Info Culture”) is a civic non-profit organization aiming to develop and popularize the concepts of the Open State and Open Information, involve citizens in taking international, national and municipal decisions and raise awareness among them.
We aspire to efficient use of information to advance social progress and support the state in presenting information, to enhance access, transparency and accountability.(Back to the questions)
Prior to 2006
Public expenditure had been to a large extent a behind-the-scenes thing. Over the years a system had emerged which was not transparent and a layer of “the chosen” companies had appeared that utilized non-market mechanisms to win government contracts.
January 1st, 2006 marks the entering into force of the Federal law adopted July 21st, 2005 entitled 94-FL “On placing contracts for goods, works and services for federal and municipal use”. That was revolutionary in all the federal and municipal contracting market. The law enshrined public access to information on government contracts and government procurement as mandatory. From that moment on the information on public expenses made through government contracts as part of the open budget spending at all levels has been available for citizens on the Internet. Ivan Begtin, the ideologist behind this project, has begun developing algorithms to automatically detect “traces” of abnormal situations in government spending based on open data.
In spite of the absence of explicitly defined requirements for publishing information on grants and far fewer details about them available for open access the authorized operators of the Civic Chamber began publishing all the information on allocations to non-profit organizations on their official websites.
The Institute of Contemporary Development launches the “RosGosZatraty” portal (http://www.rosspending.ru/). It is a project designed to analyze and monitor public spending. It combines data on all government contracts funded through the federal budget, federal subject budgets as well as municipal contracts and government grants.
Changes took place in the Russian government approaches to publishing information on government contracting. On January 1, 2011 a unified zakupki.gov.ru website began functioning. It was an integral website for all government bodies that collected information on all the purchases and contracts made at every authority level. The RosGosZatraty project made available the information on government contracts made by municipal and regional authorities.
To develop the project further it received funding from the Kudrin fund of the promotion of civic initiatives. The name was changed to GosZatraty (ClearSpending.ru).
The portal was completely modernized. The navigation as well as map visualization were improved. The searching speed was considerably improved along with the quality of data.
Now the citizens and organizations concerned have access to specialized contract database slices, weekly updated analytical reports and digests. Thanks to the new API developers can now create projects of their own to monitor the expenditure of public money.
A more visual, comprehensible and convenient portal leads to a more transparent state for its citizens. That creates a new tool to fight corruption and fund embezzlement. All these combined makes the GosZatraty project unique not only for Russia but for the rest of the world because only in the USA there is currently a project similar in its ideology and the way in which it delivers information, USASpending.gov. (Back to the questions)
Government contracting abuses are one of the biggest impediments for the development of our country. It constitutes the fertile soil for inequality and injustice that get in the way of marketing.
Procurement problems lead to the deterioration of quality of services provided by federal and municipal sectors and growing tariffs of natural monopolies.
Moreover, technical manipulations with contract data compromises the credibility of analytical findings based on the existing data which can result in considerably limited opportunities for supervising bodies to detect production that can be considered a misappropriation of funds. (Back to the questions)
This project is a free, unbiased and politically neutral tool for analysis and raising awareness among citizens who have the right and should know how and on what federal and municipal finances are spent.
The GosZatraty website is not part of anyone's election campaign or political strife between various branches or bodies of power or a demonstration of influence. (Back to the questions)
We sincerely hope that the ClearSpending.ru website will be helpful for the broadest possible audience of active citizens of 14 years old and older who are interested in the development of civic society in Russia.
The main users of the GosZatraty portal are:
- professional developers of web and mobile applications, info systems and products,
- students and professors of economic higher education institutions,
- data journalists and information graphics specialists,
- political analysts, researchers,
- public servants,
- non-profit organizations that have learned to operate open data. (Back to the questions)
The situation around the publishing of government expenditure information is complicated. As in any complex issue there are many nuances to it.
On the one hand we enjoy a very high level of transparency. The transparency in federal and municipal contracting in Russia excel that in an overwhelming majority of developed countries. Detailed data has been published since 2006 on the official government expenditure website and in contract registries. And on January 1, 2011 an all government bodies' unified website (zakupki.gov.ru)began functioning. It comprises all purchases and contracts made at all authority levels both federal and municipal. The system of such complexity is unprecedented in the world.
On the other hand such information systems on government contracting are not supported with info analysis systems inside them. They also lack data verification and comparison based on different sources failing to create an objective image of what is taking place.
It resulted in the detection of “the Roman characters in government procurement”, incorrect requisites of suppliers in the registry, untrustworthy contractors, letters inside words separated with spaces, notifications containing names of contracts without key words. A great number of contract subjects were put up without needed specifications, etc.
There are many examples of products such as medical products classified as “Construction works” or “tesla” used as a measure unit in gasoline procurement or “flat” used to refer to an organization that won a tender if its name was not specified. .
They very much do. They considerably affect you in particular. Only indirectly.
The key goals of government procurement are to protect citizens as:
The poorer the organization of government procurement is, the less competition and more corruption it has the higher the prices and costs will be and the more you will personally have to pay the government as a consumer and the fewer services (and of reduced quality) you will get in return as a taxpayer (reduced quality of health care and education, security, etc).
The welfare of our citizens is also affected by the regulation of tariffs of natural monopolies. These tariffs are based on the raw material expenses and the poorer the organization of federal and municipal procurement is the higher prices you will personally have to pay for utility bills, electricity and gas. (Back to the questions)
Federal and municipal contracting in Russia is enshrined in law. On top of that, transparency is declared as an extremely important core principle in the very first lines of the laws regulating federal and municipal contracting:
for instance, the federal law of the Russian Federation passed on July 21, 2005 № 94-FL “On placing contracts for goods, works and services for federal and municipal use” sets out the following subject and goals: “...one procedure for contract placement to achieve uniformity of the economic space in the Russian Federation, efficient use of budgets and non-budget assets, broader opportunities for private persons and legal entities to place contracts and stimulate such participation, develop honest competition, better federal and municipal body performance in contract placement and prevent corruption and other abuses in contract placement”.
At the same time Article 3 of the Federal law of the Russian Federation passed July 18, 2011 №223-FL “On procurement of goods, works and services by certain kinds of legal entities” declares the principles and main provisions for the procurement of goods, works and services that customers are guided by:
- open information on a purchase;
- equality of rights, justice, non-discrimination and no groundless restrictions on competition towards those taking part in purchasing;
- purposeful and economically efficient spending to acquire goods, works, services (taking into account the price of the service life if needed) and working towards customer expenses minimization;
- 4. no access restrictions on participation of purchasers through the establishment of requirements that cannot be measured
And finally the Federal law of the Russian Federation passed April 1, 2013 №44-FL “On the contract system of purchasing of goods, works and services for federal and municipal use” “...regulates the relations aimed at meeting federal and municipal needs to improve efficiency and performance in procurement of goods, works and services, to ensure publicity and transparency of such purchases, prevent corruption and other abuses in such purchasing” (Article 1, part 1).
Article 6 reads “the contract system of purchasing is based on the principles of publicity, transparency of information on the procurement contracting system, competition, customer professionalism, stimulation of innovations, integrity of the procurement contracting system, accountability for the quality of the meeting of the federal and municipal needs and procurement efficiency”. And under Article 7 of the law the aforementioned principles of publicity and transparency are explained as follows:
- In the Russian Federation free and unpaid access is ensured to the information on procurement contract system.
- Publicity and transparency of the information specified in part 1 of this Article are ensured specifically through the publishing of that information in the integral information system.
- The information provided for by this Federal law and published in the integral information system shall be full and valid.
It is worth noting some important provisions on procurement transparency contained in the UN Convention against corruption (see Article 9 – public procurement and management of public finances):
Each State Party shall, in accordance with the fundamental principles of its legal system, take the necessary steps to establish appropriate systems of procurement, based on transparency, competition and objective criteria in decision-making, that are effective, inter alia, in preventing corruption. Such systems, which may take into account appropriate threshold values in their application, shall address, inter alia:
- The public distribution of information relating to procurement procedures and contracts, including information on invitations to tender and relevant or pertinent information on the award of contracts, allowing potential tenderers sufficient time to prepare and submit their tenders;
- The establishment, in advance, of conditions for participation, including selection and award criteria and tendering rules, and their publication;
- The use of objective and predetermined criteria for public procurement decisions, in order to facilitate the subsequent verification of the correct application of the rules or procedures;
- An effective system of domestic review, including an effective system of appeal, to ensure legal recourse and remedies in the event that the rules or procedures established pursuant to this paragraph are not followed;
- Where appropriate, measures to regulate matters regarding personnel responsible for procurement, such as declaration of interest in particular public purchases, screening procedures and training requirements (Back to the questions)
Transparency of information does not equal its credibility.
The apparent accessibility and “transparency” of information on federal and municipal procurement, the formal fulfillment of customer responsibilities to publish information on bargaining in fact turn out to be a formality in many cases.
Upon a careful analysis of the data on a whole range of purchases it turns out that during its publication there were concealment or distortion of data that directly affects the ability of potential suppliers (contractors and performers) to search for the information on a contract and other abuses.
The abuses in federal and municipal contracting are extremely diverse. Let us take the contracts showing signs of corruption as an example (see more in the “Under surveillance” section). Corruption may manifest itself in the following ways:
- Abuse of authority;
- Nepotism (favoritism or patronage granted to relatives or friends);
- Nontransparent distribution of public assets and funds;
- Nontransparent financing of political structures, parties and movements;
- Old boy networking (making favors to relatives, friends and acquaintances).
Not all of these corruption manifestations lead to criminal, administrative or even disciplinary punishment. Some of them are only violations of morality norms. (Back to the questions)
Indeed, the law is not violated formally. Nevertheless, the fraud and manipulations that we detect have become possible due to the loopholes in procurement legislation.
n a nutshell it is not always possible to give an explicit definition of a problem but often such suspicious contracts (depending on its characteristics – whether it is a mere mistype or an outright abuse) are referred to as:
- subject to manipulations,
- subject to tricks,
- subject to abuses, (this particular word is used in the definition of the goals in the Federal laws 94-FL, 223-FL, 44-FL),
- subject to catches,
- subject to fraud,
- subject to embezzlement,
- requiring attention,
- requiring surveillance. (Back to the questions)
Government contracting problems persist for the following reasons:
- the system of the provision of information on Russian government contracting is imperfect;
- the legislation in this sphere is imperfect. For example, the №94-FL only regulates the system of contract placement but does not monitor the result and allows for the conduction of a tender which favors a specific supplier. Under 94-FL it is very difficult to procure, for example, the works of art or scientific research because the price is the main criteria for choosing the supplier;
- the control exercised by the responsible government bodies, the Federal Treasury, Ministry of Economic Development and Federal Antimonopoly Service over the credibility and quality of data published by government customers is insufficient;
- there are no methodical documents that explicitly describe the requirements for the publishing of data that allow customers to make a preliminary preview of the procurement data and create criteria for the detection of “suspicious” purchases by the supervising bodies, potential suppliers and civic society;
- there are no comprehensive actions on the part of the supervising bodies aimed at the detection and publishing of abuses and pressing charges against those responsible.
(Back to the questions)
There are various types of government contracting violations subdivided into 4 major groups:
- Purchases with distortions of information to decrease the chance of detection;
- Contracts with incomplete or distorted information;
- Purchases with indications of ineffective use of budgetary funds;
- Indications of competition restrictions and corruption.
The regularly updated list of violations is contained in the “Under surveillance” section. (Back to the questions)
We use open data being our main tool for civic and expert control to detect violations.
It is not us who detect violations but our computers that vigilantly examine government contracts. The approach that we make use of is fully automated. The algorithms that we use to detect violations have been developing since 2006 when the №94-FL was brought to effect.
Our algorithms process all the government contract database. You can learn about the results in the “Under surveillance” and “Analytical findings” sections. (Back to the questions)
Its worth noting that we are the first in Russia to have used computational algorithms to detect suspicious procurement.
We believe that the more Internet resources that highlight government contracting problems there are the bigger civic feedback and benefits will be. (Back to the questions)
All existing government contracting websites fall into 2 categories:
- Projects designed to support suppliers of goods, works and services in federal and municipal contracting;
- Projects designed to manually expose corruption and fund embezzlement.
We are closer to the 2nd category but we are essentially different though using a technological approach: the time and efforts necessary to manually interpret and classify all the numerous and isolated pieces of federal and municipal contracting information that exist are excessive. The distinctive feature of our GosZatraty project is that we work in a comprehensive manner based on open source data on contracts instead of using manual mechanisms. We use Big Data (daily processing all available information on hundreds of thousands of suppliers and customers and millions of contracts).
- The GosZatraty website focuses on the contracts that have already been concluded instead of examining the conclusion of contracts or contract placement procedures;
- We run the fully automated daily monitoring of the contracts that have been concluded. We automatically detect all violations and not isolated suspicious contracts such as those with a certain amount of contract value such as, for example, contracts of over 1 bln rub. Our computers do not care if a contract is expensive or not so much. We are interested in all contracts as opposed to only major ones; we are independent and stay out of politics;
- We are independent and stay out of politics;
- We are creating an ecosystem that may give birth to hundreds of projects watching government spending. We give away API to developers and are ready to provide our free database slices of key interesting topics of government contracting in Russia upon the request of any research organization, non-government organization, university, etc.;
- We do not follow someone's agenda but create one of our own. (Back to the questions)
We do not take upon ourselves any task beyond what is provided for by law.
The 44-FL “On the contracting system for the procurement of goods, works and services for federal and municipal use” (entered into force January 1, 2014) contains a number of anti-corruption elements (specifically, see page 102) specifying the regulations for public control activities.
We believe that a key sphere such as public expenditure must be watched, hopefully, by multiple groups but from different perspectives. It is excellent when the cooperation between non-government organizations, law enforcement agencies and official monitoring bodies creates a synergy.
We coordinate our efforts in improving the government contracting system. The more control over government spending there is the more accountable the officials will be and the more effective federal and municipal procurement will be. (Back to the questions)
Only open official and publicly available sources of information.
Open government contracting information formatted in XML which is fit for computer processing is taken from the Russian official website FTP-server available on the Internet which is used to store contract placement information on the procurement of goods, works and services - http://zakupki.gov.ru/
According to the official http://zakupki.gov.ru/ website “contract placement information is absolutely open for all interested users for public monitoring to ensure effective use of budgets, honest competition, publicity and transparency of contract placement”.
On the GosZatraty portal we also use all-Russia reference books and classifiers, statistical and macroeconomic indicators. (Back to the questions)
When uploading and processing data we always verify that it is non-contradictory. However, one cannot guarantee it is 100% accurate if only because initial official data often contains errors at the stage of keyboard input.
Working with the information of the GosZatraty system it is important to keep in mind some limitations:
- The uniqueness of government customers in the database is achieved not only through their requisites but also their positions in the power structure. If an organization's position is changed it may lead to a common mistake which is incorrect input of TRN and RRC or leaving out RRC. This may create more than one organization profile;
- Official federal contracting data is usually more detailed than that on municipal contracting. That is why reports on federal spending are more in-depth.
We have also experienced the following problems connected with information:
- information inconsistency and “information disruptions” in delivering information on government expenditure and government contracting;
- incomplete and insufficient classification of contract subjects;
- insufficient official information on contracts;
- lack of standard product monitoring. (Back to the questions)
Our website combines data on placed federal (municipal) contracts according to the №94-FL.
The information related to the implementation of the №223-FL provisions has not been presented yet due to the fact that the data relating to FL-223 and suitable for computer processing cannot be put up for downloading from the official website http://zakupki.gov.ru/ (Back to the questions)
The data on the GosZatraty portal is updated daily. (Back to the questions)
The data presented on the GosZatraty site includes government contracting information since 2011 (Back to the questions)
Indeed, you can help by making your own contribution to improving government contracting transparency and accountability of those who allocate budgetary finances.
Here are some specific ways:
- Tell your friends and relatives about the situation in federal and municipal procurement, namely how this system works and affects their wellbeing;
- Find your company and see if there have been any contracting violations;
- Write a letter to a newspaper agency;
- Initiate a petition;
- Help inform lawmakers by attending their reception offices;
- Involve experts;
- Write a letter to the non-profit partnership “Infokulturah” and/or Committee for Civic Initiative;
- Suggest ideas for this site. For example, what is lacking in the “Analytical findings” section;
- Create your own civic project using the data from this site;;
- Suggest your recommendations to improve government spending;
- Send an official request for updated information on a federal or municipal contract to the customer;
- Join our group on Facebook;
- write a post in your blog and/or on your social network page. (Back to the questions)
Click the link in the bottom of the page to inform us of potential errors on the site including problems dealing with data or wrong links to documents.