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ORGANIZING AND DEVELOPING PUBLIC PROCUREMENT IN
THE REPUBLIC OF UZBEKISTAN
Norquziyev Abdulla Marqaboy o’g’li
Master’s student at Tashkent State University of Economics
Abstract: This article explores ways to enhance the efficiency of public
procurement in Uzbekistan and its role in improving the effectiveness of public budget
expenditures and financial management.
Keywords: e-procurement, green procurement, ESG, OECD.
Today, like in many countries around the world, special attention is being paid
to the reform of the public procurement system in the Republic of Uzbekistan. In order
to ensure transparency, openness, and efficiency in procurement processes, the
government has implemented a number of practical measures, such as the use of
electronic trading platforms and the wider involvement of business entities to enhance
competition. Consequently, developing modern procedures and mechanisms within
the procurement system has become a critical necessity. The improvement of public
procurement is directly linked to creating a robust legal framework and developing it
in line with international practices.
Ensuring the effectiveness of public procurement in Uzbekistan is of
significant importance. In the context of economic modernization, the volume of
government purchases has increased, which in turn heightens the responsibility for
the efficient use of budgetary funds and financial resources of state-owned enterprises
and institutions. In almost every country, public procurement accounts for a large
share of government budget expenditures, thereby highlighting the necessity of
developing a sound procurement management system. From this perspective,
improving the management of public procurement is essential to ensure the efficient
use of budgetary resources, increase transparency in order placement, foster fair
competition, and prevent corruption.
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The
2024 State Program
aims to elevate the state policy on implementing
“green” public procurement for environmental sustainability to a new level. It also
provides for the creation of a legal framework that prioritizes green procurement
practices. Achieving these goals depends significantly on the integration of
environmental, social, and governance (ESG) standards into public procurement.
The role of procurement in public financial management has evolved,
becoming central to resource efficiency, increasing value for money, and promoting
accountability. Overall, the reforms target increased efficiency of procurement
systems and procedures, transparency in award processes, and greater
competitiveness and cost-effectiveness through digital procurement. Additionally,
procurement has started to play a strategic role in shaping policies aimed at enhancing
the well-being of citizens, including economic, social, and environmental objectives.
Impact
of
Procurement
on
Public
Financial
Management
Public procurement is embedded in public financial management and therefore affects
a broader set of processes, systems, and institutions. While these may vary depending
on a country's institutional structures and economic context, procurement generally
influences how public administration manages its resources. In this context,
procurement is described as the set of rules, processes, and information systems that
support planning, selection, and contract management.
Improving procurement systems can address several issues:
Facilitate expenditure planning aligned with budget forecasts;
Ensure reliable and efficient flow of resources and transactions;
Generate critical data to improve accountability and support sound
financial decision-making.
Procurement systems enable agencies to acquire goods and services in a
timely and cost-effective manner. Through electronic catalogs—online repositories
of verified suppliers and price comparisons—agencies can purchase goods and
services that best match their needs in terms of price and quality. Furthermore,
ensuring timely contract payments helps reduce penalties and debts associated with
late payments, while the planned delivery of goods and services improves the quality
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of public service delivery. These processes must be integrated with treasury cash
management systems via unified procurement and payment platforms.
The integration of public procurement systems with various information
systems is critical to improving transparency and outcomes. This integration
contributes to enhancing the overall effectiveness of procurement. Below are
examples of how OECD countries integrate their procurement systems with other data
sources.
Figure 1.
The most common central government information systems
integrated with procurement systems in OECD countries
1
Over the past twenty years, public procurement has developed significantly.
Traditional and legally regulated procurement processes were primarily based on
procedures that governed the selection of goods and services through various
purchasing categories, while also aiming to minimize abuse and conflicts of interest
through open bidding processes. The majority of procured goods and services
consisted of basic administrative supplies and relatively simple services.
However, in the past two decades, public procurement has undergone
substantial transformation. Information and communication technology (ICT) has
1
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played a major role in developing sophisticated procurement tools and systems.
Efforts toward economic integration and trade liberalization have aligned systems on
a global scale. Moreover, the establishment of the Agreement on Government
Procurement (GPA) and the drafting of the Model Law on the Procurement of Goods
and Services have promoted global standards and best practices in procurement.
The rapid expansion of the internet and the reduction in the cost of systems
and databases—alongside ICT development—have driven governments to modernize
their operations. From a procurement perspective, ICT was initially developed to
facilitate online dissemination of information. It enabled procuring entities to publish
their procurement plans to the public, thereby increasing business opportunities.
Today, ICT tools are tailored to the needs of procuring entities and help governments
strike a balance between scalability and flexibility in designing procurement
systems—something unimaginable decades ago. These tools include transaction
portals that support reverse electronic auctions and electronic catalogs, as well as
online procurement plans and supplier registries. The efficiency and transparency
enabled by these tools have enhanced competition through open tenders.
Additionally, improvements such as online contract tracking, supply chain
management, and the use of e-payment systems have greatly simplified the
contracting process.
In Uzbekistan, ESG standards play an increasingly vital role in green economy
financing, attracting foreign investment, international loans, and grants from
international financial institutions, foreign national financial bodies, and other non-
repayable foreign assistance. Companies operating in Uzbekistan face potential
environmental risks tied to institutional development. Going forward, ESG standards
will be critical for businesses in achieving sustainable growth and securing a strong
market position, as more investors and countries are opting to fund only those projects
that align with these standards.
Companies must strive to adopt best practices in minimizing environmental
impact (E – Environmental), enhancing social development and labor conditions (S –
Social), and ensuring corporate governance and business transparency (G –
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Governance). Discussing and widely promoting ESG principles is not only relevant
but also essential for avoiding common mistakes and for adapting global best
practices within Uzbekistan’s ESG ecosystem.
REFERENCES
1.
Law of the Republic of Uzbekistan No. ORQ-684 dated April 22, 2021, “On
Public Procurement”
2.
Resolution No. 276 of the Cabinet of Ministers of the Republic of Uzbekistan,
dated May 20, 2022, “Regulations on the Procedure for Organizing and Conducting
Public Procurement Procedures”
3.
Jumaniyazov, I. T. (2021). “Transparency Is A Key Indicator of the Activity of
Sovereign Wealth Funds.” The American Journal of Management and Economics
Innovations, 3(05), 30–37.
4.
U. Urokov. “The Importance of Procurement Models in the Effective
Organization of Public Procurement.” IMRAS, 2023.
5.
Uchkun Urokov. “Peculiarities of Implementation of Public Procurement in
Uzbekistan Through the Agreement Procedure.” Journal of Economics and Business
Management, 2023.
6.
Urokov U.Y., Shodmonov E., Bobobekova D.
Government Procurement
Management
. Tashkent, 2022.
