The Ministry of Development’s Dangerous Experiments in Reconstruction Procurement: What Are the Risks?

The Cabinet of Ministers has recently adopted new rules for pilot procurements in construction. One procedure applies to the CPO under the Agency for Restoration (Resolution No. 521 of April 24, 2026), the other to regional state administrations, their structural divisions, and local self-government bodies (Resolution No. 520 of April 24, 2026). Both resolutions allow pilot participants to enter into special framework agreements for construction procurement instead of using the standard procurement procedures. 

Our analysis of the new procedures has identified a number of substantial risks to competition, transparency, the protection of participants’ rights, legality and — as a consequence — the preservation of what has been achieved in the procurement sector. These procurements will lack a number of important anti-corruption safeguards. This analysis examines them in more detail.

Summary: 

To enter into a framework agreement, participants in both pilots will undergo a qualification selection. To then choose the contractor for a specific procurement contract from among the parties to the agreement, they will be able to use one of two tools: open tenders or a request for proposals. 

Our analysis of the new procedures has identified the following risks and conflicts:

1. No right to appeal to the AMCU in qualification selections and requests for proposals, meaning that an entire procurement may proceed with no possibility of AMCU appeal at all. 
2. Limited coverage of these procurements by State Audit Service monitoring.
3. Too broad a range of contracting authorities participating in the pilot. 
4. Conflict with the Law, with Procurement Specifics No. 1178, with Directive 2014/24/EU, and with other Cabinet of Ministers resolutions — and the Cabinet of Ministers exceeding its powers.
5. Other risks of abuse, including overly short deadlines for submitting proposals, the option to set an unlimited financial-capacity criterion, no requirement to disclose payment terms, and ambiguous rules on the contents of contract conclusion and amendment reports in the Prozorro system.

We call for Resolutions No. 520 and No. 521 to be canceled. If the efficiency of the CPO under the Agency for Restoration needs to be improved, framework agreements for it can be provided for in Procurement Specifics No. 1178 — but only with the right to appeal to the AMCU, with State Audit Service monitoring, and provided the other risks are addressed.

Who will buy what, and how?

Under Resolution No. 520, the contracting authorities will be local self-government bodies, regional state (military) administrations and their divisions, and local-level military administrations. They will procure construction works, technical inspections and engineering surveys, demolition, the development and expert review of design documentation, author and technical supervision, consulting engineer services, and turnkey projects combining design with construction and other works or services as needed. These procurements are intended to restore settlements and facilities damaged by the war. 

Resolution No. 521 will be applied by the CPO under the Agency for Restoration. On top of the works and services listed above, it will procure routine repair services, material resources, the modernization of a range of facilities, works at state border crossing points, road maintenance, and various road works. 

To enter into a framework agreement, participants in both pilots will undergo a qualification selection. This will, in effect, be the first stage of the framework agreement. Businesses will be able to take part in it throughout the term of the agreement by submitting an application and documents in line with the qualification documentation. The scope of requirements at this stage may vary — from purely qualification-based requirements to technical specifications for the subject of procurement. The contracting authority or CPO will include candidates that meet the selection requirements in the framework agreement. At the second stage, to choose the contractor for a specific procurement contract from among the parties to the agreement, one of two tools may be used: open tenders or a request for proposals. 

Conceptually, these approaches would look promising — and the framework agreements would resemble European dynamic procurement systems — were it not for some critically substantial risks. 

Risk No. 1: Qualification selections and requests for proposals cannot be appealed to the AMCU

The qualification selection — the only way to enter the new framework agreement — is not a procurement procedure within the meaning of the Law of Ukraine on Public Procurement (the Law). Its terms, and the decisions, actions, and inaction of the contracting authority or CPO during the qualification selection, therefore cannot be appealed to the AMCU. The same applies at the second stage of the framework agreement, when a request for proposals is announced. As a result, the only part of this whole structure that can be appealed to the AMCU is an open tender at the second stage of the framework agreement — and only if the contracting authority or CPO actually chooses to use one. If, after the qualification selection, the contracting authority or CPO opts for a request for proposals instead, the entire procurement from start to finish will be without recourse to AMCU appeal. In that case, participants will have no way to challenge either the procurement terms (in particular, the terms of the qualification selection and the decisions taken within it, technical requirements, the draft contract, or the contract-price negotiation procedure attached to the request) or groundless rejections — other than through the courts.

In the resolution for local governments and regional state administrations, the Government has stated outright that qualification selections and requests for proposals are appealed through the courts.

In the resolution on the CPO under the Agency for Restoration, by contrast, the Government added that these are “appealed to the review body under the procedure determined by the Cabinet of Ministers of Ukraine.” Yet no such appeal procedure for qualification selections and requests for proposals exists. Even Procurement Specifics No. 1178 sets out an appeal procedure for open tenders only. And the “pilot” resolutions contain no deferred entry into force tied to the adoption of a new AMCU appeal procedure for these special framework agreements. This is to say nothing of the basic untenability of an arrangement in which the Cabinet of Ministers grants itself the power to determine the appeal procedure for specific above-threshold procurement methods. Moreover, the powers of the AMCU as the review body are defined by the Law of Ukraine on the Antimonopoly Committee of Ukraine, which also refers to the Law on Public Procurement. Its powers are therefore set only at the statutory level, and the Cabinet of Ministers has no authority to expand them. 

The resulting situation around appeals against framework agreements under Resolutions No. 520 and No. 521 conflicts with European Directive 89/665/EEC. The directive requires ensuring: 

• that the contracting authority cannot conclude the contract before the review body has issued its decision — yet a procurement cannot be suspended where the appeal is brought before a court; 
• enough time for effective review of contract-award decisions — yet a procurement contract under a request for proposals may be concluded as early as the day the winner is determined, leaving no window for appeal;
• effective enforcement of decisions taken by review bodies — yet enforcing a court decision within the Prozorro system is problematic, since a completed procurement cannot be returned to an earlier stage, the winner re-selected, and so on. 

The lack of an effective appeals mechanism in construction procurement will create extremely high corruption risks. It will make it possible to admit only companies close to the contracting authority to the framework agreement.

Risk No. 2: Unpredictable outcomes and limited State Audit Service monitoring 

As with AMCU appeals, the Law extends the option of monitoring specifically to procurement procedures. Paragraph 23 of Procurement Specifics No. 1178 also brings into scope simplified procurements and those for which a report on a procurement contract concluded without using the electronic procurement system is published in that system.

Unfortunately, neither the qualification selection for the framework agreement under Resolutions No. 520 and No. 521 nor the request for proposals falls into any of these categories.

At present, the State Audit Service can monitor framework agreements concluded under the Law precisely because, under the Law, they are concluded on the basis of open tenders. Open tenders, as a procurement procedure, therefore fall within the scope of monitoring regardless of whether they are used to conclude an ordinary procurement contract or a framework agreement. 

The framework agreements provided for in Resolutions No. 520 and No. 521, by contrast, will be concluded in a way that differs from what the Law prescribes — through a qualification selection, not open tenders. This raises a number of questions: will auditors monitor qualification selections at all? If so, on what legal basis? Our assumption is that if such monitoring activities do appear, their findings will be challenged. That will make the performance of framework agreements and procurement contracts less predictable for all parties.

Risk No. 3: Too broad a range of contracting authorities in the pilot

The pilots will remove a significant portion of procurements from the mandatory application of the procedures set out in the Law and in Procurement Specifics No. 1178. A project framed as a pilot in fact covers far too broad a range of contracting authorities and their procurements.

 According to the public BI Prozorro analytics module, in 2025 alone roughly 2,000 local self-government bodies announced over 61,400 construction procurements and signed contracts worth more than UAH 46 billion. 

At the same time, NACP research finds construction and land relations to be the area with the highest prevalence of corruption — according to the experience of both the public and businesses. Public procurement also appears on the list of areas most affected by corruption.

Stripping anti-corruption safeguards en masse from construction-sector public procurement, and framing this as a pilot, therefore creates a double risk of abuse. 

An experiment of this kind makes sense only in a limited form — for a single contracting authority, SE Infrastructure Projects. This newly established centralized procurement organization for construction genuinely needs new tools, which will otherwise take at least another year to arrive — until the new Law comes into force. The standard framework agreement under the current Law does not allow for procuring works or prequalifying potential contractors on an ongoing basis. So this CPO is precisely where such new instruments can be piloted. 

Risk No. 4: Conflict with the Law, Procurement Specifics No. 1178, and Directive 2014/24/EU — and the Cabinet of Ministers exceeding its powers

The divergence of the pilot rules from the Law and from Procurement Specifics No. 1178 is itself a risk worthy of attention. The framework agreements will differ from those provided for by the Law and the Procurement Specifics in the following ways:

1. Under Resolutions No. 520 and No. 521, a framework agreement is concluded on the basis of a qualification selection. Article 15 of the Law, however, provides that framework agreements are concluded on the basis of open tenders. Even paragraph 7 of Procurement Specifics No. 1178 explicitly states that CPOs organize and conduct procurements under framework agreements on behalf of contracting authorities in accordance with the terms set by the Law — not in some pilot manner devised by the Cabinet of Ministers. What is more, for the CPO under the Agency for Restoration in particular, Procurement Specifics No. 1178 sets out the available procurement methods, framework agreements among them — and only under the Law:

“Pursuant to a decision of the Cabinet of Ministers of Ukraine, a centralized procurement organization that is established during the legal regime of martial law in Ukraine and that falls within the management domain of the Agency for Restoration may conduct procurements of services and/or works on behalf of contracting authorities by way of open tenders under these Specifics and procurements under framework agreements in accordance with the terms set by the Law.”

Resolution No. 521 thus creates a conflict, contradicting not just the Law but other resolutions as well. 

1. The Law does not envisage the use of framework agreements for the procurement of works. And while this option is mentioned in Procurement Specifics No. 1178 for the CPO under the Agency for Restoration, no such exception is available to other contracting authorities. Procurement Specifics No. 1178 permits them to use framework agreements for public procurement of goods and services only. And again — only under the terms set by the Law.
2. The Constitution of Ukraine requires the Cabinet of Ministers to act only on the basis, within the limits of the powers, and in the manner prescribed by the Constitution and the laws of Ukraine. The Law does not give the Cabinet of Ministers any authority to create new procurement procedures or methods for particular categories of contracting authorities and subjects of procurement. And while the Law does grant the Cabinet of Ministers the power to designate CPOs and set the specifics of their operations, it also makes clear that CPOs “organize and conduct tenders and procurements under framework agreements on behalf of contracting authorities in accordance with this Law” — not in a manner determined by the Cabinet of Ministers.

These conflicts breach other provisions as well — for example, Article 3(10) of the Law, which prohibits procuring goods, works, and services before or without conducting the procurement or simplified procurement procedures set by the Law.

The conflict with the Law in turn produces non-compliance with Directive 2014/24/EU, which permits concluding framework agreements only where the procedures set out in Directive 2014/24/EU are applied. Even if the pilot framework agreements are treated as the equivalent of dynamic procurement systems, in the EU these must follow the rules of the restricted procedure. The process described in the resolutions, however, departs from that procedure in terms of the right to appeal to the review body, the deadlines for submitting tender proposals (and proposals), and other elements. 

Adoption of these resolutions therefore takes domestic regulation further away from EU requirements and risks undermining Ukraine’s European integration progress, drawing a negative response from the European Commission and international partners — especially now, when bringing Ukrainian procurement legislation in line with the EU acquis is a central focus of the Ukrainian state’s attention and efforts.

Risk No. 5: Overly short submission deadlines, unlimited financial requirements, undisclosed payment terms, ambiguous reporting rules in the system, and more

Beyond significantly limiting the ability to challenge abuses during procurement, the pilots contain a number of features that could actively encourage such abuses: 

• Overly short minimum deadlines for submitting tender proposals (as little as 7 days in tenders announced by the CPO) and proposals in response to a request (as little as 3 days for all participants in these pilots). TI Ukraine had advocated for — and successfully secured — an increase in the minimum deadline for submitting tender proposals in works procurement to at least 14 days. 
• CPOs and contracting authorities setting up framework agreements will be able to set the financial-capacity criterion on the basis of an “approximately calculated” — and therefore potentially inflated — estimated value. For example, they could require candidates to show UAH 1 billion in income for the previous year while in fact announcing procurements worth only UAH 50 million. This approach risks limiting business access to procurement.

• Neither the qualification selection stage nor the request for proposals requires disclosing information on payment terms.
• While the winner of a request for proposals is given 4 days to submit their documents from the moment they are named, the procurement contract may be concluded as early as the day of that determination. This allows for a situation in which a contract is signed with a party whose absence of a criminal record, corruption offenses, and so on has not yet been confirmed. 
• For local governments and regional state administrations, the resolution effectively introduces alternative (and curtailed) content requirements for the notice of amendments to a procurement contract concluded under a request for proposals. The substance of and grounds for the amendments, along with the prices of material resources, drop out of the report. For the CPO, by contrast, the requirement to disclose price changes did make it into the resolution. Even so, disclosure of information on material resources in machine-readable formats when concluding a contract looks problematic in both resolutions. That is because, instead of referring to the requirements of the Law, Resolutions No. 520 and No. 521 contain their own requirements for reporting on the concluded contract and publishing it — and these contain no separate requirement to disclose prices of material resources in machine-readable format (!). Pilot participants will therefore do this only if they apply the Law’s requirements on disclosing procurement contracts directly. (That said, under the Law these are only contracts concluded as a result of procurement procedures and simplified procurements, whereas contracts under Resolutions No. 520 and No. 521 are not concluded as a result of either.) 

Conclusions and recommendations: how to fix the situation

In sum, the pilot resolutions will remove a substantial share of procurements from the procedures set by the Law, from AMCU appeals, and from State Audit Service monitoring. They conflict with the Law, with EU Directives, and even with other resolutions, and they set overly short submission deadlines and inadequate disclosure requirements. Their implementation will create risks of abuse that cannot be effectively or promptly stopped, and may also harm Ukraine’s European integration progress.

The very fact that the Cabinet of Ministers is introducing — for specific categories of procurement and contracting authorities — a procedure different from the one prescribed by the Law sets a dangerous precedent that destabilizes the legislative framework and cannot be left unaddressed by civil society. Procurement Specifics No. 1178 is expressly provided for in the Final Provisions of the Law. By contrast, allowing the Cabinet of Ministers to set “as a pilot” a procedure different from the statutory one — taking thousands of procurements out of full appeal and monitoring coverage — is not provided for in the Law on Public Procurement, in the sector-specific Law on the Cabinet of Ministers of Ukraine, or, ultimately, in the Constitution of Ukraine. This could become a dangerous precedent that destabilizes the legislative framework and gives rise to a whole series of court disputes.

To fix the situation:

1. We call for the cancellation of Cabinet of Ministers Resolutions No. 520 and No. 521 of April 24, 2026, which approved the procurement procedures under framework agreements in pilot projects for the CPO under the Agency for Restoration, local governments, and regional state administrations. Contracting authorities that want to use dynamic procurement systems should wait for the new Law of Ukraine on Public Procurement (Draft Law No. 11520) to come into force. In that law, such systems will come with appropriate safeguards. 
2. Since there is demand to improve the efficiency of the CPO under the Agency for Restoration, framework agreements for it can be provided for in Procurement Specifics No. 1178 — but only with the right to appeal to the AMCU, with State Audit Service monitoring, and provided the other risks are addressed. 

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.