In recent years, Ukraine’s public procurement sector has undergone significant transformations: in 2022, processes were restructured due to Russia’s full-scale invasion; in 2023, transparency and competitiveness in procurement were gradually restored; and in 2024, negotiations on EU membership began, prompting more intensive efforts to align legislation with European directives.
This report outlines the state of public procurement and its development in 2024, focusing on key regulatory changes, sector indicators, oversight mechanisms, and the protection of rights and interests. It also offers recommendations for enhancing procurement processes and their monitoring.
This is the second report of its kind within the framework of Ukraine’s European integration. The first report for 2023 can be accessed here.
Executive summary
In 2024, transparency and competition in Ukrainian public procurement increased. The average number of participants increased by 18%, reaching 1.88 bidders per lot. For some procurement methods this indicator is more than 3 participants and 1.26 for special open bidding. The share of lots and their estimated value accounted for by competitive procurement methods has also increased. The volume of procurement transactions through the Prozorro Market e-catalog experienced rapid growth. The number of procurement transactions using this mechanism has more than tripled, while the estimated value has increased more than fivefold, reaching UAH 111.3 billion. For the most part, such an increase was induced by tenders required to be conducted only through Prozorro Market under the resolution of the Cabinet of Ministers (these include certain medicinal products, medical devices, and several types of food products).
Prozorro continues to develop. In particular, the first stage of integration with the DREAM was completed, the functionality of procurement with donor funds was improved in the system. By the end of the year, the system added the capability to designate procurement transactions under the Ukraine Facility program and continued the digitalization of tender documentation.
To improve procurement efficiency and transparency, changes were introduced to the regulatory framework of the sector. For example, the minimum deadline for submitting bids for the procurement of works was extended from 7 to 14 days, and the obligation to publish prices for material resources in a machine-readable format was implemented. Some changes, such as new grounds for direct procurement of above-threshold amounts and the ability to modify essential conditions in certain contracts, were made to address energy needs promptly amid ongoing Russian attacks.
However, some changes are debatable, such as the obligation for procuring entities to acquire certain products exclusively through an electronic catalog or the tightening of formal requirements in the localization rules.
In general, in 2024, the normative regulation of public procurement in Ukraine progressed at a more moderate pace compared to the previous year. The total number of changes in the field of procurement has decreased: while Government Resolution No. 1178 on the specifics of applying procurement rules during martial law was amended 12 times in 2023, it was adjusted only 7 times in 2024.
Positive trends are also evident in defense procurement, including greater transparency in defense procurement and increased use of competitive methods, which should help prevent abuse and price inflation. The introduction of the 24-hour error correction rule in simplified defense procurement and the specification of grounds for non-competitive procurement methods are also notable improvements. At the same time, the State Anti-Corruption Program (SAP) delayed the development of a draft law on the protection of classified information in procurement after the end of martial law. This draft law should address the volume of information about defense procurement transactions that must be published in Prozorro, as well as the procedures for their declassification. Therefore, we believe it is essential to address these issues in a reasoned manner without delay. The implementation of the SAP activity on the formation of an interdepartmental working group to improve the legal framework and reform the defense procurement model, with the involvement of representatives of public organizations, was also delayed.
In addition, in 2024, Parliament approved the draft of a new law on public procurement (Draft Law No. 11520) in the first reading. It is designed to improve procurement processes and align Ukrainian regulations with EU directives. Transparency International Ukraine generally supports the concepts outlined in the draft law but emphasizes the need for significant revisions before its consideration in the second reading. It would also be advisable to provide broader communication to procuring entities and business regarding potential amendments to the legislation.
Work continued on Draft Law No. 7508 on public-private partnership. Despite the amendments made, the draft law still contains shortcomings that need to be addressed before the second reading or develop the whole draft anew.
Another challenge remains the implementation of the operational plan for the execution of the Public Procurement Reform Strategy. Most of the planned activities are carried out with delays, in particular due to the fact that it is advisable and/or possible to implement them after the adoption of the new law on public procurement. Therefore, it is necessary to review the relevance of tasks and deadlines, adjust them if necessary, and make up for the backlog.
In 2024, centralized procurement organizations announced 3,600 lots with a total estimated value of UAH 44 billion. Seventy-three percent of the lots were successfully awarded. The average number of bidders in tenders arranged by CPOs is 1.62, with some CPOs seeing higher participation rates: 3 bidders for the Special Medical Supply Base of Kyiv City Council and 3.05 for SI “Professional Procurement.”
Control over public procurement remains weak and requires improvement. In the fall of 2024, new automatic risk indicators were approved and launched, marking a positive step forward in improving procurement monitoring quality. However it still has post-control function: according to TI Ukraine estimates, the State Audit Service and its territorial offices initiate 81.8% of procurement monitoring only after the conclusion and publication of the procurement contract. On average, it took 58 days from the publication of the contract to the start of monitoring (55 days for direct procurement contracts). Therefore, there is a high likelihood that the contract will be fully or partially fulfilled by the time monitoring begins. There are also unresolved issues regarding monitoring priorities, identifying significant violations, and establishing a clear list of methods for their elimination.
As for the complaint review, in 2024, two additional commissioners were selected by the Anti-Monopoly Committee to consider complaints in the field of public procurement, enabling the formation of two commissions with different personnel to review procurement complaints. According to the law, it is necessary to select 4 more commissioners. Participants actively used the appeal mechanism to protect their rights, filing 10.5 thousand complaints in 2024, of which 70.1% were granted. In 2024, an updated electronic appeal form was introduced.
According to TI Ukraine, for the development of public procurement in the coming years, it is especially necessary to focus on:
- European integration of the sector
This sector includes not only the harmonization of legislation with EU directives, but also the implementation of new rules in the electronic system, the development of centralized procurement organizations, and the professionalization of contracting authorities, among other aspects.
For effective use of these new procurement tools and methods, it is essential to focus on the professionalization and to coordinate the positions on the practical application of innovations between the Ministry of Economy, the State Audit Service, the Anti-Monopoly Committee, and other authorities.
To develop centralized procurement, it is necessary to address several issues, including determining the estimated value of procurement items conducted by CPOs, clarifying the division of responsibilities between procuring entities and CPOs, and resolving procedural shortcomings in their cooperation.
Ukraine can not only learn from the experience of European countries but also share its own, particularly in the areas of electronic procurement and conducting procurement in emergency situations. This can also be attributed to the start of public consultations by the European Commission aimed at preparing new public procurement directives.
- Improving public procurement monitoring
It is necessary to shift the focus of procurement monitoring by the State Audit Service from post-control to prevention, focus on monitoring expensive procurement transactions and identifying significant violations. The State Audit Service should define a clear list of methods for eliminating violations and standardize practices across its regional offices.
In the coming year, it is also necessary to reconsider the relevance, deadlines, and status of activities in the Public Procurement Reform Strategy for 2024-2026. It is important to clarify performance indicators, focusing on the outcomes, not processes. Also, it is necessary to develop an operation plan for 2026 and start preparing the strategy for subsequent years, considering the need to coordinate it with future new sectoral legislation and focusing on involving businesses in public procurement.
Regarding the legislation and its practical implementation, the key is to finalize the new public procurement draft law (No. 11520), considering the EU Directives and preserving Ukrainian achievements. It is recommended to set safeguards against abuses, for example, while using non-price criteria for bids during the transitional period. It is also important to reconsider the grounds for direct contracts, implement an appeals process for qualification and procurement through Prozorro Market, and improve the transparency of contract implementation. And finally, it is necessary to finalize the public-private partnership (PPP) and concession laws to prevent potential risks.
This report was prepared with the financial support of the European Union. Its content is the sole responsibility of Transparency International Ukraine and does not necessarily reflect the views of the European Union.
