Last year, more than 53 thousand companies participated in competitive bidding on Prozorro. The business that is going to participate in public procurement this year can expect quite a few pleasant innovations. On April 19, a new version of the Law “On Public Procurement” came into force, eliminating many inconsistencies and opening up new business opportunities.
- Pre-Tender Consultations
The new version of the law encourages procuring entities to conduct preliminary market consultations with businesses. This way, procuring entities can prepare better tender documentation, and suppliers can provide their recommendations on technical requirements for the procurement item and qualification criteria. Such consultations will help to make the procuring entity’s requirements as objective as possible and prevent discrimination even before the auction starts.
In addition, suppliers can expand their sales market with new procuring entities. If they have never worked with the government before, they will be able to find out how it works and see that public procuring entities can be reliable customers.
Participants also receive information about what the procuring entity is planning to purchase, so they will be able to offer their products and prepare for the tender in advance.
- More Tenders in Prozorro
Since April 19, procuring entities are required to conduct all purchases from UAH 50,000 through Prozorro. They can’t just sign a contract with the chosen supplier. Therefore, there will be more tenders available for participation in Prozorro.
The law introduces the new concept of “simplified procurement.” It is essentially a tender that takes place faster. However, if only one participant submits an offer, the system automatically proceeds to the stage of reviewing the offer. And if there are two or more offers, an electronic auction takes place.
- Prozorro Market
The electronic catalog “Prozorro Market” is a convenient tool that helps public procuring entities to buy consumer goods quickly and easily for amounts that do not exceed the thresholds established by law.
But it is convenient not only for procuring entities. Businesses no longer need to prepare for each tender separately and collect piles of documents. The supplier only needs to pass the qualification check once, add their products to the website, and then receive orders from government buyers and sign contracts.
Prozorro Market was a pilot project that proved successful. Because of that, the new version of the law inroduced and regulated the concept of “electronic catalogs.” The catalogs already offer a wide range of products: paper and office supplies, computer and printing equipment, pharmaceutical products and medical materials, oil and distillates, etc.
Suppliers can expand their sales market with new procuring entities. If they have never worked with the government before, they will be able to find out how it works and see that public procuring entities can be reliable customers.
- Fixing Errors
Quite often, procuring entities rejected offers from participants with the best prices for minor discrepancies with the requirements to the tender documentation. Now, if a procuring entity finds an error in a participant’s offer, they must report it to the participant via the Prozorro system. This applies only to the qualification criteria and confirmation of the right of signature at competitive above-threshold auctions. It is possible that in the future the list of documents that can be changed will be expanded.
The participant has 24 hours to correct the error. If this does not happen, the procuring entity rejects the participant’s tender offer and proceeds to consider the next one.
- Fighting against Price Dumping
According to the new law, procuring entities can reject participants with abnormally low prices. What does it mean?
According to the practice established in public procurement, some participants offered very low prices in order to win the tender. Of course, they won, since the only or the main criterion for choosing the winner is usually the price. But then they entered into additional agreements with procuring entities and raised the price.
Since April 19, Prozorro automatically highlights abnormally low price offers. And the participant must explain this price within one day.
If it fails to provide justification or provides inadequate justification, the procuring entity must reject such a tender offer.
Thus, participants who violate competition rules and play dirty will not be able to stop honest business from offering its goods and services at market prices.
- Accountability of Procuring Entities for Violations
As we can see from practice, quite often procuring entities violate the law, but they do not bear any responsibility for this. For instance, over the past year, the State Audit Service and its territorial bodies have drawn up and sent to the court 539 reports on administrative violations.
Only in 43 cases, the court imposed administrative penalties (fines of UAH 11,900) on the officials of procuring entities.
The new version of the law increases the responsibility of procuring entities for violations. It expands the list of violations for which officials and managers of procuring entities will be brought to administrative liability and increases the amount of fines for such violations.
For example, failure to comply with the decision of the AMCU, which is a new and very important innovation, provides for a fine of the head of the procuring entity from UAH 34,000 to UAH 85,000.
If the procuring entity does not reject an offer which should be rejected under the law, or rejects an offer arbitrarily, its authorized officials may be fined in the amount of UAH 25,500 to UAH 51,000.
Overall, the new version of the Law is intended to make public procurement more efficient and fair. Businesses get more opportunities to participate in public tenders and protect their rights if public procuring entities violate them.
However, the innovations will not fully protect the sphere from violations. Therefore, if you encounter corruption and discrimination, contact DOZORRO. Our experts will help you understand the situation and protect your rights.
Quite often, procuring entities rejected offers from participants with the best prices for minor discrepancies with the requirements to the tender documentation. Now, if a procuring entity finds an error in a participant’s offer, they must report it to the participant via the Prozorro system.