A Step Forward, but Not the Finish Line: What the European Commission Said about Ukraine’s Procurement

The European Commission has published its annual report on Ukraine as part of the EU Enlargement Package. The report assesses how closely the country follows European approaches overall and how far it advanced on EU integration between September 2025 and September 2026. This time, the Commission upgraded its public procurement assessment for the first time in several years. It also pointed to a number of systemic problems.

Legislation

One of the main reasons for the upgrade was the adoption of the new Law on Public Procurement. It is the most significant step toward harmonization with the EU procurement directives since 2019. The Law updates the thresholds for competitive procurement, introduces new procurement procedures, transforms Prozorro Market, and changes the rules for amending contracts. The DOZORRO team at Transparency International Ukraine helped draft the bill and successfully advocated for over 40 substantive amendments to it. 

We are still waiting for the European side to assess how far the updated Law aligns with the EU directives. Its comments will likely come by the end of 2026.

On the positive side, the Europeans also noted the new obligation to disclose the ultimate beneficial owners of the winning bidder. 

The rollout of the Strategy for Reforming the Public Procurement System for 2024–2026 also helped the assessment. That rollout slowed, however, because the new procurement law was delayed. Several measures only made sense once the law was in place.

The European Commission also highlighted weaknesses:

1. Ukraine has yet to align its rules on procurement by contracting authorities in special sectors with the EU rules.
2. Harmonization in the area of public-private partnership (PPP) is also incomplete. For example, the selection of a private partner is governed by a separate piece of secondary legislation. The EC considers that its content goes beyond the EU rules.
3. There is still no clear distinction between public and defense procurement.
4. Ukraine keeps introducing exceptions to procurement rules. The Commission’s example is the exception for procurement to protect critical infrastructure. We believe it is more useful to focus on cases that are clearly unjustified. For instance, direct contracts were recently allowed with the winners of the Tysiachovesna art contest. We also share the Commission’s concern about separate framework agreements created for construction procurement outside the usual rules, with limited scope for monitoring and appeal. These were set up by Resolutions No. 520 and No. 521, whose repeal we have called for.

Procurement practice

The European Commission noted that the value of contracts concluded through competitive procedures has grown. It also pointed out that most of this value came from procurements with a single bidder. As we pointed earlier, average competition in 2025 was 1.9 bidders per lot. Framework agreements and Prozorro Market procurement had the highest rates. 

The EC noted that in defense, decentralized procurement allowed military equipment to be delivered faster, but oversight was limited. 

The Commission also stressed the need for further professionalization in the sector and for better procurement processes within contracting authorities overall. Over the past year, Ukraine updated its training materials for contracting authorities and businesses. It also launched dedicated programs to train procurement specialists in military units.

Countering corruption

The European Commission mentioned high-profile corruption cases in procurement, including Operation Midas, which exposed a criminal organization in the energy sector. It stressed that contracting authorities’ capacity to counter corruption remains weak, as do internal and external controls in this area. This is especially true at the regional level and in state-owned enterprises. 

The Commission believes we must keep strengthening integrity checks on bidders and the application of exclusion grounds. Monitoring and enforcement mechanisms also need strengthening. The Commission expects two documents to help resolve these problems. One is the Public Procurement Development Strategy. The other is the Anti-Corruption Strategy, which has a dedicated section on public procurement. Parliament, however, has yet to approve the Anti-Corruption Strategy.

State Audit Service oversight

The Government approved the Roadmap for Strengthening Public Procurement Oversight and its action plan for 2025–2027. This is a positive and important step, and a large share of the planned measures matches TI Ukraine’s recommendations. The European Commission pointed out that only a minority of procurement monitoring was launched on the basis of risk indicators. In 2025, the figure was 26.16%. The Commission also noted that contracting authorities rarely challenged monitoring conclusions in court and mostly lost those cases. According to BI Prozorro, in 2025 contracting authorities challenged 8.7% of the monitoring conclusions that found violations. No aggregated statistics on the outcomes of these challenges are publicly available. 

The EC also noted that the State Audit Service has improved its procedure for obtaining violators’ personal data. 

Appeals

Legislation on review procedures is fairly well aligned with the EU rules, but gaps remain. The EC mentions certain problems with complaint deadlines, though we have not identified this issue before. Its reference to a problem with automatic suspension of the procedure when a contracting authority’s decision is appealed is also unclear. 

The EC’s three key recommendations for the coming year are:

1. Complete the harmonization of all procurement legislation and bring it in line with the EU acquis, according to Ukraine’s plan. This covers in particular defense procurement, procurement by contracting authorities in special sectors, concessions, and public-private partnership. For most of these types of procurement, we must do this by the end of the third quarter of 2027. Only defense has a separate deadline. The Commission put particular emphasis on making sure EU companies are not discriminated against in Ukrainian PPP projects.
2. Keep improving Prozorro. This includes introducing the new procurement procedures in the system, launching e-contracting, and reducing the number of procurements conducted outside it.
3. Implement the Public Procurement Development Strategy for 2027–2030 and adjust it where necessary.

These recommendations echo TI Ukraine’s own advice for improving the sector. Among our priorities, however, we also named improving the State Audit Service’s monitoring.

Overall, this year’s European Commission report can be described as cautiously positive. The Commission sees that we are working to bring procurement in line with the EU and are not standing still. It also says frankly that a great deal of work lies ahead and that we cannot afford to slow down.

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.