Vinnytsia Village Plans Combined Service-Cultural Center for Nearly UAH 200 Million

Stryzhavka Village Council announced its intention to enter into an agreement with Mark Stroy LLC for the construction of an administrative building, where there will be a children’s educational center and a creative and educational center for UAH 198.6 million.

Mark Stroi LLC is the only bidder and offers a price 0.5% lower than the expected cost.

By the end of 2025, the contractor must build an administrative building on Sorokarichchia Peremohy Street in the village of Stryzhavka, Vinnytsia region. The construction will be financed by the local budget (UAH 33.6 million) and supplemented by a subvention (UAH 165 million) from the state budget to local budgets, as part of the Ukraine Recovery Program.

The Dream platform states that a multifunctional hub will be established in the community. This hub will combine an Administrative Service Center, educational services, children’s clubs, and a shelter.

Ukrbudproektrestavratsiia began working on the project and estimate documentation at the end of 2021, costing UAH 404,000. At that time, the plan was to construct only an Administrative Service Center. In April 2023, there was a proposal to allocate an additional UAH 199,000 to the company for adjustments in the documentation. However, the contract was terminated in June. The following month, the procuring entity announced a new adjustment agreement, with a cost of UAH 1.27 million. The vendor was tasked with developing documentation for the construction of an administrative building for the Administrative Service Center, as well as multifunctional public spaces for educational and creative purposes.

Potential overpayment

In the summary of resources of Mark Stroy LLC, a significant portion of the funds is allocated for hot-rolled reinforcing bars of various diameters, priced between UAH 47,051.54/t to UAH 53,261.89/t (all prices inclusive of VAT). Metinvest-SMC sells 12 mm reinforced bars at UAH 34,200/t, Kt-Stal at UAH 39,420/t, and Parytet Trading House at UAH 31,995/t. This single item alone could lead to an overpayment of UAH 2.9 million.

 In addition, the B25 [M350] concrete mixture was estimated at UAH 4,242.11 per cubic meter, whereas Momont Beton offers it for UAH 3,440 per cubic meter, and PL2T for UAH 2,975 per cubic meter. Possible overpayment for concrete mixture is UAH 1.6 million.

The overpayment for these 10 items may reach UAH 7 million.

The project includes high-end multimedia equipment, which is scarcely available in the commercial market in Ukraine. Potential overpricing of these items can also be traced.

For instance, the JADE floodlight was priced at UAH 199,961.44 per piece in the estimate, whereas it is available for UAH 110,292 per piece on a foreign website. The situation is the same with the 37×40 W RGBW floodlight, which was included in the estimate at UAH 414,012 per piece. Abroad, its cost is nearly half. Of course, these prices do not include delivery to Ukraine or associated customs clearance fees. Additionally, items from the tender documentation bearing the notation “or equivalent” were included in the estimate. That is, it is quite likely that there will be other makes and brands of equipment in delivery certificates.

The total probable overpayment for the construction of the administrative building is approximately UAH 10 million.

“It is interesting that the project included expensive multimedia equipment, which is difficult to find in Ukraine and even in EU countries. Overall, there’s a question about the prices for construction materials included in the estimate, which was used to determine the anticipated procurement costs. The contractor inflated the prices because the expected cost allowed that”, Yaroslav Pylypenko, a specialist in public procurement monitoring at DOZORRO, comments.

At the same time, the draft contract states that the price is dynamic. Therefore, it can be adjusted during the implementation.

This is the second attempt to conduct the procurement; in March, the procuring entity had already announced special open bidding. Only ZhK-Garant LLC submitted an offer of UAH 195 million, but it was rejected due to non-compliance with the technical requirements for the proposed laptop. The bidder appealed to the Stryzhavka Village Council through Prozorro regarding the illegality of rejecting the offer but received a refusal from the procuring entity.

Mark Stroy LLC was established in 2015 in Poltava. The company owner is Volodymyr Shaikovskyi. Since 2016, the company has received contracts worth almost UAH 1.5 billion, including UAH 946 million from the Department of Construction, Urban Planning and Architecture, Housing, Utilities, and Energy of the Poltava Regional State Administration.

The company is implicated in a number of criminal proceedings. It is suspected, in particular, of colluding with officials from the Construction Department of the Poltava Regional State Administration to misappropriate budget funds during the overhaul of surgery departments at Sklifasovskyi Regional Hospital of Poltava Regional Council.

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