In June, the DOZORRO team managed to prevent the inefficient use of almost UAH 51 million — the outcome of requests our team sent to procuring entities in earlier months. Since the beginning of the year, we have helped save over UAH 410 million.

This month alone, our analysts identified new potential overpayments totaling another UAH 136 million. The most striking cases and typical violations are summarized in our monthly report.

86 Procurement transactions worth UAH 4.5 billion: Analyzed and identified the risks

In June, DOZORRO analyzed 86 procurement transactions and found violations in 50 tenders.

The most common issues related to inflated estimated contract values or risks of overpayment — such problems were found in 36 transactions. A telling example is the construction of a new wing with a radiation shelter for the Zaporizhzhia Regional Children’s Hospital. The state enterprise “Local Roads of Zaporizhzhia Region” signed a contract worth UAH 439.5 million with Kalmius Construction Company LLC — a firm founded only two months earlier. Our experts identified a potential overpayment of UAH 32 million on this project.

In 13 other cases, we found procedural violations: procuring entities unjustifiably rejected participants or, conversely, awarded contracts to bidders with questionable offers.

Over UAH 50 million saved in June

Contract amounts reduced

The largest saving this month — UAH 6.2 million — came from the reconstruction of huts for basic national resistance training. The Lviv Regional Council’s utility company “Technical Supervision” procured the works for the Karpaty tourist base in the village of Kamianka. Only one bidder — Elitbudpro LLC — participated, offering a price UAH 150,000 below the estimated value. The contract was signed with them.

We noted inflated prices in the cost estimate: for sandwich panels alone, there could have been an overpayment of nearly UAH 2 million. DOZORRO sent the Lviv Regional Council’s utility company a letter with detailed calculations, asking them to adjust the prices. The result: the contract amount was reduced by UAH 6.2 million. The State Audit Service also reviewed this procurement and launched monitoring. The auditors asked for justification of the payment terms and warranty conditions. The procuring entity reported that the violations had been rectified.

For the reconstruction of a building in Cherkasy, our request helped save UAH 3.1 million. Cherkasymiskbudproekt LLC had planned to do the work for almost UAH 43 million. The prices for construction materials were inflated. For example, Ceresit cement plaster was listed at UAH 18.72 per kg (including VAT), while Epicentr offers it for UAH 8.16 per kg and Leroy Merlin for UAH 6.96 per kg. We had previously noted price inflation in projects with this contractor. In May, DOZORRO identified a potential overpayment of UAH 3 million in the reconstruction of a courthouse building in Cherkasy.

Another UAH 1.9 million was saved for the Central Base for Production and Technological Equipment of the National Guard of Ukraine. They announced a procurement for the construction of external engineering networks — pipelines, communication lines, and power supply lines. They planned to spend up to UAH 27 million. Grandtowerbud Construction Firm LLC was the sole participant and offered a bid almost half a million below the estimated value. Even so, DOZORRO found inflated prices in the cost estimate, which were adjusted accordingly. Nashi Hroshi had previously reported a likely overpayment in another procurement with this contractor.

Terminated contracts

At DOZORRO, we try to prevent potential overpayments at the stage before a contract is signed. If violations occur anyway, we then shift our focus to fixing the situation. We have explained before what we consider savings and how we calculate these figures.

In June alone, over UAH 26 million in possible inefficient spending was avoided through contract terminations.

For example, UAH 7.2 million was saved on the construction of a radiation shelter for Specialized School No. 44 in Kyiv. A year ago, the Education Department of the Holosiivskyi District State Administration in Kyiv announced a procurement to build the protective structure, planning to spend up to UAH 122.6 million. Only one bidder — BMBUD LLC — submitted a bid to carry out the work for UAH 121.7 million.

We noted inflated prices for construction materials. The cost estimate listed concrete mix at one and a half times the market price, with a potential overpayment of UAH 7.3 million just on that item alone.

The State Audit Service also reviewed this procurement and found violations. The procuring entity failed to publish procurement information on time, and the tender documentation did not meet legal requirements. Another irregularity was that the Education Department did not reject the winning bid, though it should have done so. The monitoring outcome: the procuring entity terminated the contract with BMBUD LLC.

The same happened with the procurement for the construction of a kindergarten in Hatne. DOZORRO reported on this long-delayed project back in April. Our experts found potential overpayments of UAH 5.8 million in the cost estimates — avoided thanks to the contract termination.

Additional savings of UAH 5.3 million, UAH 4.8 million, and UAH 3.6 million were achieved on the construction of an apartment building in Dnipro, a reconstruction project in Kharkiv, and an insulation project in Dnipro, respectively.

Criminal proceedings

We believe that if prevention fails and funds are already spent inefficiently, those responsible must be held to account. In such cases, our experts forward information about potential overpayments not only to procuring entities but also to law enforcement. In June, there were two such cases.

Following our report, criminal proceedings were opened regarding the procurement for the construction of a radiation shelter at the Arkhanhelske Vocational Agrarian Lyceum. Here, DOZORRO identified a potential overpayment of UAH 3.2 million — this amount is counted as savings.

The second case concerns the reconstruction of the Putyla Multi-Profile Hospital building. We informed law enforcement about inflated prices totaling UAH 1.8 million. Our materials were added to an ongoing criminal case.

________

This material is funded by the European Union. Its content is the sole responsibility of Transparency International Ukraine and does not necessarily reflect the views of the European Union.