At the beginning of the full-scale invasion, the government simplified public procurement rules as much as possible and sacrificed their transparency for the sake of quick implementation. In March-August 2022, the total number of lots on Prozorro decreased 2.6 times compared to the same period in 2021. The number of competitive ones fell more than 4 times. However, over time, we all learned to live in the conditions of a full-scale war, adapted to new challenges, and procurement began to come back to a competitive public plane.
In October 2022, the government approved Resolution No.1178, defining the features of public procurement during martial law. We still use it. Effectively, through this resolution, the Cabinet of Ministers adapted the rules of the specialized law to the features of martial law. In particular, a separate competitive procurement procedure was created: open bidding with features. It is simpler than standard open bidding, has shorter terms, and takes place even with one participant (and not at least two, as before). However, the threshold for using such a procedure in the case of the procurement of goods and services is lower: UAH 100,000 instead of UAH 200,000. Despite martial law, procurement participants can challenge procurement transactions to protect their rights, and the State Audit Service can monitor them. Similarly, the government defined the features of defense procurement in Resolution No.1275.
Therefore, 2022 ended with the restoration of transparency and competition.
This report describes the course of public procurement in 2023. What were the main changes to the rules? How did the system respond? What happened to competition and transparency? It also mentions important updates in the first months of 2024 that took place while we were drafting this report.
The first part covered the changes introduced in the legislation on public procurement and technical changes to the Prozorro system. It is the rules and the electronic system that set the boundaries in which public procurement functions. Further, we described the state of competition and transparency in 2023, as well as how procurement centralization and public-private partnerships evolved. The next were the control and protection of rights in the field, i.e., the State Audit Service, the Antimonopoly Committee, and the courts. We then covered plans and legislative initiatives in the field of public procurement.
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