The provision of troops, the state of shelters, and the evacuation of the population are what is mentioned most often in discussions of readiness for a full-scale war. It is expected because these are basic safety matters. At the same time, the preparation for Russian aggression covers many more issues, one of which is public procurement. Not only in the meaning of what has already been purchased, but also how we will close the needs in the future. It depends on these procedures whether the hospital will have the necessary medicines, urban transport — fuel, and how quickly it will be possible to find a contractor to repair the road after shelling or shelters for civilians.
Before February 24, well over 5 million procurement transactions per year were published in Prozorro — from small direct agreements to million-worth tenders. We in the DOZORRO project of TI Ukraine studied how this sphere changed during the first 6 months of the full-scale war.
How did we manage to survive the first months?
There were no special instructions in the event of an invasion — how to conduct procurement in such a case — at least as far as most procuring entities are concerned. We are not talking about procurement for defense here because this is an entirely different story. Therefore, the government had to urgently change the rules, and on February 28, it approved resolution No.169. The Cabinet of Ministers allowed it to buy everything necessary directly with it, without any tenders or other procedures, and to publish these contracts after the end of martial law. Back then it was a well-founded decision because the country had to live and confront the enemy. In March, 85% of businesses cut or suspended operations, and the state had to close the needs promptly — so it was impossible to fully conduct the usual tenders.
However, the resolution №169 was not trusted by all: in general, all acts of the Cabinet of Ministers have lower legal force than the laws. Eventually, some procuring entities continued to use the main Law of Ukraine “On Public Procurement,” or at least partially published information. In fact, at least one procurement transaction in the first month of the full-scale war was published by 54% of procuring entities, compared to the number in March 2021. In general, the indicators of the western regions changed the least. For example, in Ivano-Frankivsk, Chernivtsi, and Khmelnytskyi oblasts, procurement was published by more than 80% of procuring entities.
However, despite doubts about the legality of Resolution No.169, we lived with it until mid-October. During this time, the document had 10 revisions.
Return to competition
Over time, the first shock passed, and people adjusted to the new working conditions. Therefore, the risks of direct agreements — overpayments and contracts for “the chosen” — began to outweigh the pros. Businesses had almost no chance to offer their goods or services to the state on their own because for the most part, in the system, they saw the already signed contracts, and sometimes not even all of them. However, when Ukrposhta in May announced a simplified tender for the selection of a supplier of furniture for mobile offices, 24 participants took part. There was a similar story with batteries — 19 bids, and signboards — 18.
Discussions about returning to competition grew, and eventually ended with June amendments to the resolution and clarifications to them from the Ministry of Economy. Thus, 3 main ways were paved for procuring entities.
- planned procurement not related to martial law should be carried out under the Law of Ukraine “On Public Procurement”;
- needs that arose due to the full-scale invasion had to be closed using easier and faster methods — simplified procurement or requests for quotations, without limits on the amount;
- procurement with sensitive information was still allowed to be conducted directly.
After that, procuring entities began to be much more active in conducting competitive procurement. Thus, in the regions that have not experienced occupation or active hostilities, in August 2022, 1.15 times more simplified tenders were announced than in August 2021. The same situation was with requests for quotations — their number increased 1.52 times.
In addition, the increase in the number of competitive lots was significantly influenced by the deoccupation of Kyiv region — about 25% of such tenders were announced by procuring entities of the capital.
So, are tenders possible during the war?
The short answer is yes. Even during the full-scale invasion, you can buy transparently and competitively:
- in the first months, procuring entities voluntarily continued to publish information on Prozorro, that is, at least some of them were able to do so;
- procuring entities promptly reacted to the change in the rules, and began to conduct competitive procurement when they were obliged to do so by the resolution.
Of course, it will not be possible to limit ourselves to standard rules and procedures because the circumstances are completely different. The situation was slightly similar during the COVID-19 pandemic — at that time, the necessary things were also allowed to be purchased directly, and then — using simplified procurement. But after that story, we didn’t do our homework, and during the full-scale war, we were unprepared. The Cabinet of Ministers had to urgently look for ways to regulate the sphere and then constantly correct the rules to adjust them to the changing situation.
We need to develop separate mechanisms for public procurement in case of extreme conditions: war, large-scale natural disaster, pandemic, or some other crisis, which so far seems very unlikely to us. This should be a set of procedures that will allow optimal procurement under different conditions, quickly, transparently, and competitively if possible.
Then there will be no need to immediately adopt regulations and numerous amendments to them to settle the situation, and the risk of legal conflicts will be reduced. Moreover, all players of the sphere will be able to prepare for emergency situations in advance, and they will have fewer doubts and questions about the rules (if at all).
And given the years of the pandemic and almost a year of the full-scale war, Ukraine already has a lot of experience to immediately make these mechanisms as effective as possible.
This publication was prepared with the financial support of the European Union. Its contents are the sole responsibility of Transparency International Ukraine and does not necessarily reflect the views of the European Union.
