Summary

Positive aspects of the audit:

• It was the first official public audit of the experimental comprehensive restoration project.
• It documented systemic problems previously highlighted by TI Ukraine, including the lack of strategic planning, the non-transparent selection of participating settlements and restoration facilities, and funding delays.
• It went beyond documenting individual violations and identified systemic shortcomings in the project management model itself.

Limitations of the audit:

• The audit covered only the central level of the experimental project’s management—the implementation of restoration measures in three of the five settlements participating in the experiment was not included in the sample.
• The procurement findings are incomplete because they were based on incomplete source data and did not consider additional indicators relevant to assessing the respective aspects of procurement.
• The assessment of the actual state of restoration of facilities under the project could have been more detailed. To provide a more comprehensive account of the results, it would have been appropriate to present not only the minimum and maximum levels of construction readiness but also the distribution of facilities by readiness level.

Recommendations

After the experimental project is completed, it is important that the comprehensive restoration of settlements remain a priority for the state and that the experience gained and problems identified be taken into account in future recovery policy. To enable a more comprehensive assessment of the project’s results in the future, it would be advisable to:

• assess not only compliance with established procedures but also the actual achievement of the planned results, the quality of project management, and whether the decisions made meet the needs of communities;
• ensure that the largest possible number of restoration facilities under the experimental project is covered, including through the remote analysis of documents and data where on-site control measures in the relevant settlements are not possible;
• apply a comprehensive approach to procurement analysis, taking into account the full range of indicators relevant to assessing competitiveness, transparency, and efficiency;
• regulate approaches to implementing experimental projects at the legislative level, including by requiring the authorities responsible for their implementation to assess the results achieved and by establishing a mechanism for independent/external assessment by a higher-level authority.

Selection of restoration objects 

The audit’s key finding on the selection of objects is that the experimental project was launched without a proper system of strategic planning, which left the declared comprehensiveness of restoration largely on paper. The Ministry for Development of Communities and Territories failed to submit the draft plan for the restoration and development of the regions on time, and comprehensive restoration measures began without a clear strategic and planning foundation. The ministry submitted the detailed schedule of pilot projects for six settlements seven months late. As a result, there was no clear system of priorities, no criteria for selecting objects, no sequencing of restoration, and no division of responsibility among those involved.

Looking at the outcomes of selection, the audit found that the lists drawn up by RMAs lacked any transparent logic of prioritization and often failed to reflect what communities had actually proposed. The Accounting Chamber established that proposals from three communities covering 126 objects — including 108 in Moshchun — were disregarded, while 332 objects made it onto the lists without any proposal from local self-government bodies; 95% of these came from the Kherson and Kharkiv RMAs. The selection mechanism was thus not merely vague: it effectively allowed decisions to bypass the real needs and proposals of communities.

Equally revealing is the finding that two different approaches—the comprehensive and the facility-by-facility approaches—were applied in parallel in the same settlements. In Borodianka and Trostianets, some facilities were selected according to the experimental project’s comprehensive restoration approach, while others were selected under separate government decisions as part of facility-by-facility reconstruction. This contradicted the very idea of the experiment: instead of ensuring the comprehensive restoration of the territories, the project’s implementation was effectively reduced to a collection of fragmented construction projects.

Another fundamental problem the Accounting Chamber pointed to was the systemic failure to observe basic requirements for compiling the lists of objects to be restored. The lists included property that had not even been entered in the Register of Damaged and Destroyed Property: 118 such objects in 2023 and another 41 in 2024. The RMAs submitted lists without key information about the objects. Not one administration provided full descriptions, justifications for restoring them, or an assessment of whether they could be financed from sources other than the state budget. The absence of financial calculations made matters worse: information on the estimated value of works was supplied for only 40 of 627 objects. The project effectively started without proper preparation, which greatly complicated the launch of restoration works and led to delays across the experiment. 

Moshchun in Kyiv Region is a telling illustration — the village ultimately dropped out of the experimental project altogether. As the Accounting Chamber established, of the 108 objects submitted for the list in May 2023, 21 were excluded at first and later all the rest, with no alternative restoration mechanism offered. Only from 2024 was the restoration of the village’s private housing stock shifted to the compensation mechanism. 

The Accounting Chamber’s findings on the selection of objects under the experimental project largely confirm the problems TI Ukraine has highlighted in earlier studies. We noted that the mechanism for including settlements in the experiment was opaque and inconsistent: some communities entered the project on an RMA submission, others effectively after intervention by the country’s top political leadership. Approving the objects dragged on for more than three months, prioritization criteria remained unclear, and selection approaches were uneven — the same types of objects were included in the lists in some communities but not in others. Moshchun became a telling example, dropping out of the experiment precisely because there was no single, consistent approach to selecting objects.

Funding 

The financial part of the audit exposed one of the key systemic problems in the project: the inability to use the funds earmarked for restoration effectively. 

Because approvals dragged on between the Ministry for Development of Communities and Territories, the Ministry of Finance, and the Ministry of Economy, decisions on allocating funding were made with considerable delay. In 2023, nearly UAH 3 billion, or 88.3% of the annual funding, was allocated only on December 4. The picture repeated in 2024, when the Agency for Restoration distributed UAH 1.65 billion, or 74.3% of annual appropriations, only on December 2. Spending such sums before the end of the budget period was effectively impossible, and unused funds were returned to the state budget. Over the two years, more than UAH 4.5 billion went back: UAH 2.8 billion in 2023 and UAH 1.7 billion in 2024. Trostianets is a case in point: of the UAH 284.8 million earmarked, UAH 154.6 million was never used. As of the end of September 2025, almost UAH 1.7 billion remained undistributed and unused. 

Here the Accounting Chamber draws attention to the problem of dividing powers and responsibility in the management of budget funds. After amendments to the relevant government resolution in August 2024, the Agency for Restoration remained the chief spending unit yet effectively lost any influence over how expenditures were shaped. The Ministry for Development, in turn, gained the power to determine funding volumes but exercised no direct control over how the money was used or whether the project delivered results. This model severed the link between planning expenditures and answering for their implementation.

Protracted approvals of government decisions on project lists and funding volumes compounded the problem: roughly two months in 2023 and six in 2024. Funds reached implementers with substantial delay, which directly affected when works could start and how they proceeded. In October–November 2024, for instance, the restoration services had only 3.8% to 28.4% of their approved appropriations available. Much of the funding arrived when the scope for using it fully and effectively within the budget year was already sharply limited.

TI Ukraine has also flagged problems with the release of funding. Although the state formally financed the experimental project to the tune of UAH 10.82 billion, or 93% of its estimated value, only UAH 2.23 billion — roughly 20% of the project’s estimated value — had actually been used as of May 2025. By our calculations, over almost two years the contracting authorities had a real opportunity to pay for works during only about six months. We linked this not only to procedural delays, in particular the drawn-out selection of restoration objects, but also to political instability and changes in the leadership of the Ministry for Development of Communities and Territories and the Agency for Restoration. 

Against this backdrop, the audit’s finding that the project’s planned performance indicators were not met because the budget process was organized without regard to the real timelines of restoration projects is an important one.

Regarding irregularities in the use of funds for the experimental project, the Accounting Chamber also identified isolated cases in which budget resources were used for purposes not permitted by law, although these cases are not a determining factor in the overall structure of the project’s problems. In 2023–2024, UAH 106.2 million from the Fund for the Elimination of the Consequences of Armed Aggression went toward developing design documentation, even though such spending was not among the permitted uses of the fund. In Yahidne, a further UAH 2.1 million was spent on technical inspection of residential buildings, which likewise fell outside the funding purposes set by law.

Procurement

In the context of procurement conducted under the experimental project, the Accounting Chamber assessed exclusively whether contracting authorities complied with the statutory principles of openness and transparency when procuring works and services. Among the key problems, the auditors identified a low level of competition and a significant share of procurement conducted outside the electronic procurement system. In their view, this created risks of market monopolization and limited opportunities for budgetary savings.

The audit found that the Restoration Service in Kyiv Region conducted more than 70% of its procurement (27 of 37) without using the electronic system. Although this formally complied with the law, the Accounting Chamber points to the attendant risks to the competitive environment. In 5 of the 9 audited Kyiv RSA objects, open tenders drew a single bidder, which likewise limited potential savings. In all five cases the bidders did offer a price below the estimated value, though the reduction was slight — between 0.1% and 1%.

These findings, however, need more context and do not fully reflect the overall structure of procurement under the experimental project.

TI Ukraine’s analysis shows that, of the 610 procurements conducted by all contracting authorities under the project, 404, or 66%, were indeed non-competitive. But these were mostly procurements of services for developing design documentation and for technical and designer supervision of construction — services for which direct contracts are common practice in urgent restoration.

In value terms, the share of such procurement was relatively small — around UAH 350 million, or just 2.75% of the total estimated value of procurement under the project. The bulk of the funding — almost UAH 8.11 billion, or 97% — went through special open tenders. The key construction contracts were therefore awarded through competitive procedures, so the conclusion that non-competitive approaches dominated calls for a more balanced assessment.

On competition, TI Ukraine’s analysis likewise does not bear out the claim that it was critically low. In the first year of the experimental project, special open tenders attracted an average of 3.6 bidders. In the second year the figure fell to 2.25 per procurement, but even so it was nearly double the average level of competition in construction tenders across Prozorro.

Competition was highest in the procurement of the Restoration Service in Kyiv Region, which averaged more than three bidders per lot. The lowest figure was in Sumy Region, at roughly two bidders per procurement.

Competition also delivered an economic effect. Over the two years of the project, notional savings — the difference between the estimated value of a procurement and the price of the contract signed — averaged 14.25%. The highest figure was at the Restoration Service in Sumy Region, where savings on competitive procurement reached 22.6% of the estimated value.

This underscores the key shortcoming of the Accounting Chamber’s audit. Security constraints kept it away from objects in Sumy, Kharkiv, and Kherson Regions — three of the experimental project’s settlements at once — which accounted for roughly UAH 2 billion in funding. That substantially narrows the representativeness of the audit’s conclusions, particularly on procurement, competition, and the efficiency of spending across the experimental project as a whole.

Construction

The Accounting Chamber’s report confirmed the absence of meaningful progress in the experimental project: most objects whose restoration began in 2023–2024 were not completed within the set deadlines. From the project’s launch through September 2025, only three objects in Borodianka, Kyiv Region, and Yahidne, Chernihiv Region, were completed and commissioned.

At the same time, the actual number of facilities completed under the experimental project is higher than reflected in the audit, which may be explained by the fact that not all participating settlements were covered. According to data available to TI Ukraine and taking into account the audit findings, after more than two years of the experimental project’s implementation, construction and repair works had been fully completed at no fewer than 58 facilities across the five settlements, representing approximately 8% of their total number. Meanwhile, the project’s implementation in Tsyrkuny, Kharkiv Oblast, was effectively suspended due to the security situation.

The Accounting Chamber separately recorded a number of problems at the contract performance and construction stage. Auditors identified breaches of contract terms and of urban planning legislation, including:

• contractors’ late return of advance payments under terminated contracts;
• insufficient effort to pursue claims for penalties;
•  overstatement of the cost and volume of completed works, in particular by including unperformed works or surplus materials in acceptance certificates, or paying for fictitious use of construction machinery;
• construction works carried out without the requisite permits.

The irregularities identified by the Accounting Chamber were neither systemic nor widespread. At the same time, due to the sample of facilities covered by the audit, the report’s findings may not fully reflect the overall state of the project’s implementation.

Conclusion

The compliance audit of the experimental project for the comprehensive restoration of settlements found that the project had failed to achieve its stated objectives. At the same time, its significance lies primarily in the fact that it was the first official public audit of the experiment and confirmed what civil society has been saying since at least 2024: the experiment never became an effective model for comprehensive restoration.

The audit’s value is in documenting systemic problems TI Ukraine had already flagged: the absence of strategic planning, the opaque and inconsistent selection of objects, problems with budget planning and the allocation of funds, and funding delays. It is also important that the audit did not stop at individual violations but exposed systemic flaws in the project’s management model.

At the same time, despite its generally relevant and timely findings, the audit of the experimental project had certain limitations. Due to security factors, it did not cover facilities in Sumy, Kharkiv, and Kherson oblasts—that is, three settlements participating in the experimental project, whose restoration accounted for approximately one-third of the funding actually used, or around UAH 2 billion. This reduced the representativeness of the audit findings, particularly with regard to the assessment of procurement processes and actual restoration results.

Moreover, some findings were based on incomplete source data and did not take into account indicators relevant to assessing the respective aspects of the experiment. In particular, a low level of competition and a high share of procurement conducted outside the electronic procurement system were identified as key problems. However, this finding was based exclusively on quantitative indicators—the number of procedures. In terms of value, by contrast, approximately 97% of the total funding—almost UAH 8.11 billion—was used through open tender procedures with special conditions. Given that the audit assessed procurement based on contracting authorities’ compliance with the statutory principles of openness and transparency, the failure to consider that the vast majority of the allocated funding was used through competitive procedures makes it impossible to form a complete and objective view of procurement under the experimental project.

One of the questions addressed by the audit was whether the measures applied had ensured the restoration of facilities in the settlements covered by the experimental project. However, the use of broad ranges of construction readiness in the report—from 3% to 100%, or from 1.2% to 64.8%—makes it difficult to assess the actual state of implementation of the facilities. These ranges reflect only the extreme values and do not provide a complete picture of how facilities are distributed by readiness level, including the number of facilities that are nearly completed or have only recently entered the construction stage.

Despite the shortcomings identified in the experimental project, its implementation may provide the state with valuable practical experience by highlighting key problems in the planning, budgeting, coordination, and organization of restoration processes. Taking these lessons into account is an important prerequisite for developing effective state policy and implementing future post-war reconstruction programs.

In our view, the next audit of the project, which will be implemented as a public investment program over the next four years, should be comprehensive and should:

• cover the largest possible number of restoration facilities under the experimental project;
• apply remote analysis of documents and data where the physical presence of auditors is not possible;
• separately assess not only compliance with procedures but also the achievement of results, the quality of management, and the impact of decisions on community needs.

This would make it possible to formulate comprehensive practical recommendations for improving the state restoration policy.

Importantly, in addition to the problems directly related to the implementation of the experimental project for the comprehensive restoration of settlements, the audit also highlighted a broader systemic need—to regulate by law the approaches to implementing experimental projects in general. In particular, it would be advisable to require the authorities responsible for implementing such projects to assess the results achieved and to establish a mechanism for higher-level authorities to conduct an external assessment of experimental project implementation. A corresponding measure is already included in the draft Anti-Corruption Strategy for 2026–2030, which is currently under consideration by Parliament.

Adapting to EU legislation

The EU directives do not provide for an electronic catalogue in the format that currently exists in Ukraine. So, while draft law No. 11520 was being prepared, the question arose as to which European procurement method it resembled and how to adapt it. That method turned out to be the dynamic procurement system (DPS). In the draft law, the electronic catalogue became one of its options, under the name electronic marketplace.

A dynamic procurement system is, in essence, similar to a framework agreement, but one that is always open for businesses to join. Competitive procurements are announced among the qualified candidates admitted to the DPS. A similar method already exists in Ukraine in defense procurement, but it is available to only a few contracting authorities. 

The DPS has two stages:

1. qualification selection of candidates;
2. competitive selection, or a request for proposals.

Prozorro Market, then, has been written into the Law as one type of the DPS’s second stage. Qualification of candidates by the CPO will take place as the first stage of the DPS, while the actual request for participants’ proposals (this is what it will now be called) will be a form of the second stage. This is what a procurement through the Prozorro Market electronic marketplace will be.  

The marketplace will allow the procurement of not only goods but also works and services — this, too, is a consequence of adapting to the EU directive.

Administering the marketplace

Only central procurement organizations designated by the Cabinet of Ministers will be able to set up the DPSs that operate as an electronic marketplace — where contracting authorities announce requests for participants’ proposals. This is what will set them apart from classic DPSs, which any CPO or contracting authority may announce. The CPOs designated by the Cabinet of Ministers will create categories and profiles of goods, works, and services, along with their libraries, and will qualify candidates. A CPO’s decisions, actions, or inaction regarding the inclusion or exclusion of goods, works, and services in or from the library and the qualification of candidates, as well as the terms of the qualification selection themselves, may be appealed to the AMCU. The qualification stage may also be monitored by the State Audit Service.

Types of requests 

Once the new Law takes effect, requests through Prozorro Market will effectively split into two types by the estimated value of the procurement item: up to EUR 10,000 (UAH 500,000), and above that amount up to the EU thresholds — that is, up to EUR 140,000 (UAH 7 million) for goods and services, and up to EUR 5.4 million (UAH 274 million) for works. Procurement through the marketplace above these amounts is not allowed.

For requests up to EUR 10,000, little will actually change compared with how requests for suppliers’ proposals work today.

A Prozorro Market request up to EUR 10,000:

• is mandatory for goods worth between EUR 2,000 and EUR 10,000 (approximately UAH 100,000–500,000) if the item is in the marketplace;
• is voluntary for goods up to EUR 2,000 (UAH 100,000) and for services and works up to EUR 10,000 (UAH 500,000);
• allows the request to specify the characteristics of a particular item;
• has a proposal submission period of at least 2 days;
• gives the winner 4 days to upload documents;
• allows the contract to be concluded 5 days after the winner is determined; 
• has no appeals procedure and no monitoring; 
• does not allow a request for clarification or a demand to remedy a violation to be submitted to the contracting authority.

Overall, a procurement of this kind will take at least 8 days. 

Much will change for Prozorro Market procurements above EUR 10,000: it will become possible to request clarification, appeal, and monitor, and the process will take longer. This method will come closer to open tendering.

A request for proposals in Prozorro Market above EUR 10,000:

•  is voluntary for procurements from EUR 10,000 up to the EU thresholds;
• may be used if the goods, service, or works are in the marketplace;
• does not allow specific characteristics to be indicated;
• has a proposal submission period of at least 10 days;
• gives the winner 8 days to upload documents;
• allows the contract to be concluded 10 days after the winner is determined, provided there are no appeals;
• lets potential participants request clarification of the request and demand that a violation be remedied — the contracting authority will have 2 days to respond;
• allows the contracting authority to amend the request not only on its own initiative but also in response to such a submission;
• lets a participant appeal the draft contract, as well as the contracting authority’s decisions, actions, and inaction, to the AMCU;
• may be monitored by the State Audit Service.

Overall, a procurement of this kind will take at least about 22 days, absent any amendments or appeals. For comparison, the minimum duration of open tendering will be around 28 days. 

Note that the split between request types does not fully match the division of procurements into below-threshold and above-threshold under Article 3 — there, the threshold for works is higher than EUR 10,000 (EUR 40,000). So bear in mind that, even though your request for participants’ proposals for works may be below-threshold within the meaning of Article 3 if its estimated value exceeds EUR 10,000 it must be run under the corresponding rules, participants will be able to appeal it, and auditors will be able to monitor it.

Common requirements and options for all requests 

In general, the requirements for a request will not change:

• Such a procurement must be entered into the annual procurement plan.
• The request is announced in line with the technical specification and the other requirements for the procurement item set by the CPO during the qualification selection.
• It may not contain any requirements or documents beyond those provided for in the article on qualification selection. Note that qualification criteria for candidates, grounds for refusal of participation, and the associated lists of documents may not be demanded in the request, since these requirements are set exclusively by the CPO during the qualification selection. 
• Nor may a lower price limit be set for a participant’s proposal.
• The request must include a draft contract whose content may not contradict the electronic fields. 
• The government will be able to approve mandatory contract templates for particular procurement items. In that case, the CPO will post the template in the system and the contracting authority will have to follow it. A CPO may also post contract templates for voluntary use — in which case the contracting authority may either use them or upload its own draft contract. Such contracts are concluded as electronic documents. 
• The request also states the name of the item with its CPV code, the estimated value, the volumes, the timeframe and place of contract performance, and the deadline and language for submitting proposals.  

Unlike today’s requests, future ones are said to allow the item to be divided into lots. Price will remain the sole evaluation criterion. Likewise, the timeframes for reviewing the lowest-priced proposal remain unchanged.

The list of grounds on which the contracting authority must reject proposals within a request for participants’ proposals has, however, been spelled out in somewhat more detail. It will be required to reject a proposal:

• not only if the goods are of Russian origin, but also if the participant itself has ties to the Russian Federation, the Republic of Belarus, or Iran — at present, only the catalogue administrator rejects on the basis of such ties;
• if there are grounds for refusing its participation in the procurement (a criminal record, and so on), or if it does not meet the requirements of the qualification selection conducted by the CPO.

It has also been clarified that a refusal to conclude a contract, on the basis of which the winner is rejected, must be sent as an electronic document.

The contract will have to be concluded no later than 20 days after the winner is determined, with the option to extend this to 30 days. These are longer periods than at present. But, as now, the contracting authority may, if it sees fit, require performance security for the public contract concluded as a result of the request.

The rules set out in the Law will not be exhaustive. Some matters will be governed by secondary legislation. In particular, the Cabinet of Ministers will determine the structure of the electronic marketplace, the procedure for creating and building it, and the fees for using it. 

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.  

Oleh Hladkovskyi: why is the Bohdan trucks case still without a verdict?

In October 2019, Oleh Hladkovskyi tried to fly out of Ukraine, but NABU detectives detained him on the Boryspil highway. The very next day he was served with a notice of suspicion, and in June 2020 the pre-trial investigation was completed. 

The NABU detained Hladkovskyi on the way to Boryspil. Photo by Ukrainska Pravda

According to the investigation, in 2017 Hladkovskyi — then First Deputy Secretary of the NSDC — organized the procurement of Bohdan 6317 military trucks at inflated prices. He was allegedly assisted by former Deputy Defense Minister Ihor Pavlovskyi and former Ministry of Defense department head Andrii Araptanov.

The manufacturer chosen was the Bohdan Motors plant, in which Hladkovskyi himself and his family held stakes. A government resolution required at least 60% Ukrainian localization of production, but the plant actually achieved only about 10%. According to the investigation, under pressure from Hladkovskyi this requirement was lowered to 20%, on the condition that localization within Ukraine gradually reach 30% — and the company secured the government procurement order. The costs of increasing localization were to be borne by the manufacturer itself, but the company, the prosecution alleges, unlawfully shifted them onto the state budget.

The contract had a fixed price, and changing it was expressly prohibited. Despite this, Ministry of Defense officials signed supplementary agreements and approved a price increase. As a result, the state likely overpaid the supplier UAH 17.44 million without justification — as confirmed by the State Audit Service and forensic examinations.

 Oleh Hladkovskyi at the HACC. Photo by RBC-Ukraine

The former official’s conduct throughout the proceedings deserves particular attention. In 2019, the HACC set his preventive measure — detention, with the alternative of UAH 10.6 million in bail. The bail was posted, and in March 2022, after the start of the full-scale invasion, Hladkovskyi asked the court to transfer that money to the needs of the Armed Forces of Ukraine and to replace the bail with a personal recognizance. The court agreed, and soon afterward Hladkovskyi stopped appearing at hearings — it turned out he had left the country. In April 2024 he was put on the wanted list, and in May 2025 news broke of his detention in Spain.

Since August 2022, the HACC has been hearing the case on its merits: witnesses are currently being questioned, and the defendants will be next. The statute of limitations was due to expire in 2027, but because the principal defendant is abroad (likely evading justice), that period is extended. Even so, extradition from Spain may drag on, so there is a risk that the case will never reach a verdict. In May 2025, Hladkovskyi attempted to join a hearing remotely, but the court refused, since the proceedings were being conducted in absentia. Since then, no further public information about his extradition has been available. 

The case against Hladkovskyi Jr.

Oleh Hladkovskyi’s son Ihor received his first notice of suspicion in December 2020. According to the investigation, he influenced the management of the state-owned company Ukrspetsexport to supply parts of dubious origin to Ukroboronprom enterprises through Optymumspetsdetal, and received UAH 950,000 in unlawful benefit for doing so. Since 2021, this case has been before the Solomianskyi District Court of Kyiv.

In October 2023, Hladkovskyi Jr. received a second notice of suspicion: he and former Ukrspetsexport Director Pavlo Bukin are charged with causing nearly UAH 13 million in losses to the state on the procurement of aircraft altimeters. According to the investigation, by using his father’s influence, Hladkovskyi secured Bukin’s appointment to the post and later organized the procurement through controlled companies at inflated prices. Since July 2024, the HACC has been hearing the case on its merits.

An excerpt from Ihor Hladkovskyi's conversation about the altimeters. Screenshot: Nashi Hroshi 

He was first put on the wanted list in 2021, after which he returned to Ukraine. In 2022 he left again, as did Pavlo Bukin. Both join the hearings remotely.

The court denied the prosecutor’s request for in absentia proceedings and chose the ordinary procedure with the defendants taking part via video conference, while nonetheless establishing that they had been hiding from the investigation. The statute of limitations for Hladkovskyi Jr. could have expired in August 2026, but because he is abroad — again, likely evading justice — the general 15-year limitation period may apply. 

The Rohoza and Zhukov case 

In September 2023, the Solomianskyi District Court of Kyiv approved plea agreements with Andrii Rohoza and Vitalii Zhukov. They had built a scheme to supply components for military equipment to Ukroboronprom enterprises. Spare parts of unknown origin were bought for cash off the books and, through the controlled company Optymumspetsdetal, sold to the plants at inflated prices. To legitimize the origin of the goods, they enlisted more than 30 shell companies for sham transactions — and in this way the company evaded UAH 46.4 million in taxes. Funds received from the state enterprises were transferred to the accounts of front companies, converted into cash, and split among the participants in the scheme. 

The court sentenced both to five years’ imprisonment with confiscation of property, but released them from actually serving the sentence, subject to a one-year probationary period.

Zhukov was also accused of attempting to bribe the director of the Izium Instrument-Making Plant, Serhii Filonenko, but the HACC closed that case because the statute of limitations had expired.

Notably, the court initially refused to approve these agreements. In Zhukov’s case, because — as the court stressed — the law prohibits agreements with the organizers of especially grave crimes, and the proposed compensation of only UAH 4 million out of UAH 46 million, combined with a waiver of confiscation of property, was disproportionate to the harm caused. The court described the terms of the agreement as running counter to the interests of society, given the cynicism of embezzlement in the defense sector during wartime. In Rohoza’s case, the court refused the agreement because of a violation of the Criminal Code: the procedure for imposing the sentence had been determined incorrectly, and a suspended sentence had been unlawfully combined with confiscation of property. 

The Filonenko episode: director of the Izium Instrument-Making Plant 

In August 2024, the HACC acquitted the director of the Izium defense plant, Serhii Filonenko, in a case concerning the receipt of more than UAH 2 million in bribes. According to the investigation, between September 2016 and January 2017 he received more than UAH 2.44 million from Optymumspetsdetal LLC in exchange for ensuring payment for goods that were delivered incompletely or with defects concealed behind fictitious invoices.

But the court found Filonenko not guilty because of the absence of direct evidence that a bribe had changed hands (video recordings, marked banknotes, and the like). The prosecution’s principal evidence — WhatsApp correspondence — was ruled inadmissible, since it had been obtained not through investigative actions but from journalists. 

The court emphasized that the materials from journalistic investigations are “advisory” rather than “evidentiary” in nature. Meanwhile, the storage drives containing copies of the defendants’ phones (Seagate and Kingston), created back in 2016–2017 by the Main Military Prosecutor’s Office, showed discrepancies when NABU re-examined them: the data on them turned out to be partly lost and partly bearing signs of having been overwritten by software that did not yet exist when the phones were seized. This gave grounds to speak of possible tampering with the evidence.

The court also cast doubt on the testimony of Zhukov and Rohoza — it could have been driven by their obligation to “incriminate others” in order to fulfill the terms of their agreements. Rohoza’s testimony the court found inadmissible altogether, since he had obtained all of his information from Zhukov. 

One of the judges disagreed with the verdict and set out a dissenting opinion. In her view, the body of evidence did confirm Filonenko’s guilt, and the scheme participants’ correspondence about “500 kg of gray candy” and “14,700 kg of green nuts” was a code for concealing settlements in hryvnias and US dollars — wording atypical of a legitimate business. She identified the key, and entirely lawful, piece of evidence as the flash drive with the journalists’ investigation materials, which they had handed over to the investigation: unlike the compromised MMP drives, it shows no signs of data manipulation.

This verdict is currently under review by the HACC Appeals Chamber.

What about the other defendants?

Most of the less prominent figures agreed to cooperate with the investigation. Former Optymumspetsdetal LLC directors Volodymyr Volokhach and Roman Chuba arranged the legalization of spare parts of unknown origin for the armored plants — through fictitious transactions worth more than UAH 121 million, the company evaded UAH 46.4 million in taxes. The Solomianskyi District Court of Kyiv approved their agreements in exchange for incriminating testimony against the other members of the group, sentencing both to five years’ imprisonment with a one-year probationary period, a three-year ban on holding certain positions, and confiscation of property.

The technical work of legalizing the shadow flows was handled by Artem Boldyriev, Oleksandra Khomych, and, apparently, accountant Olena Ivaniuk. As accomplices in laundering more than UAH 46.4 million, Boldyriev and Khomych entered into agreements — five years each, suspended, without confiscation of property. Ivaniuk, who features in the Rohoza–Zhukov case, still holds the status of defendant, and her proceedings are ongoing at the Solomianskyi District Court of Kyiv. 

A separate episode concerned the Kharkiv Armored Plant: former director Oleksandr Hlushko and chief engineer Ihor Yakymenko were suspected of facilitating the legalization of questionable parts through a fictitious delivery of 12 rangefinders from Optymumspetsdetal. But the SAPO closed the proceedings — the evidence proved insufficient for court, and the means of gathering it anew had already been exhausted.

The Hladkovskyis versus the journalists: the courts have the final word

Beyond the criminal cases, Oleh Hladkovskyi tried to challenge the Bihus.Info investigation through civil proceedings. In August 2020 — already past the limitation period for filing suit — he petitioned the court to declare the information in the report Army. Friends. Cash false and to award him UAH 2 million in moral damages. The case was heard for more than three years: in 2023, the Vinnytsia City Court partly granted Hladkovskyi’s demand for a retraction of the information, but the appellate court overturned that decision. 

The Supreme Court had the final say, dismissing Hladkovskyi Sr.’s cassation appeal on March 14, 2024. The court stressed that, as a Deputy Secretary of the NSDC, Hladkovskyi was a public figure, and the subject of possible embezzlement in the defense sector was a matter of public interest — so the information disseminated by the journalists constituted value judgments and was not subject to retraction. 

Ihor Hladkovskyi filed a similar suit against the journalists — and likewise lost it, both on appeal and in the Supreme Court.

Seven years on: what we know 

Seven years after the Bihus.Info investigation, the situation in the Optymumspetsdetal case remains ambiguous. 

So what larger problems have this case brought to light? 

1. The length of proceedings. Rank-and-file participants in the scheme struck agreements with the investigation and received suspended sentences, while the proceedings against the key figures have dragged on for years.
2. Defendants fleeing. Both Hladkovskyis — father and son — left Ukraine at a critical moment in the proceedings, avoiding participation in the trial. Hladkovskyi Sr. was apprehended only after six years, in Spain, yet his extradition is still in question.
3. The weakness of the evidentiary base. In the Filonenko case, the acquittal rests not so much on a refutation of the facts as on procedural defects in the evidence gathered back in 2016–2017 by the Main Military Prosecutor’s Office.

Taken together, these cases show how difficult it is to investigate and try corruption at the highest level: there is the defendants’ hiding from the court and the investigation, the problems with the admissibility of evidence collected before NABU’s involvement, and the statutes of limitations. As a result, the question of a verdict against the key organizers of the schemes remains open.

Feeding costs the most

The largest spending item was animal food. Over eighteen months, the zoos contracted almost UAH 211 million for meat, fish, vegetables, fruit, hay, grain, browse, and other products.

For predators, they bought beef, horse meat, chicken, fish, shrimp, and other seafood. For herbivores — hay, fresh and dried branches, vegetables, fruit, and specialized feed.

Another roughly UAH 156 million went to electricity, gas, fuel, and other utilities. Almost UAH 85 million was contracted for repairs of enclosures, pavilions, utility buildings, and infrastructure.

Despite the zoos’ different scales, the spending structure is almost the same everywhere. Most of the money goes to animal upkeep, while construction works and grounds development account for a much smaller share. Still, some rather unusual items do appear among the procurements.

Kyiv Zoo

Kyiv Zoo contracted the most money through Prozorro — almost UAH 239 million. Over half of this amount went to utilities and animal food. But its procurements were not limited to daily necessities. 

For getting around the grounds, for example, the zoo purchased three ATTIVA electric vehicles and one NEV L2C.6 electric vehicle for UAH 3.5 million. Another UAH 1.4 million bought a Peugeot e-Partner L2. Separately, the zoo procured an uninterruptible power supply system for UAH 4.4 million, comprising hybrid inverters, storage batteries, battery management equipment, switchboards, and automation. The price also covered installation and commissioning. 

One of the most interesting purchases was a shower-and-laundry module for UAH 3.2 million. It is not, in fact, a facility for animals but a mobile amenity complex for staff. Two converted shipping containers were fitted with showers, bathrooms, washing machines, and dryers. In response to a DOZORRO inquiry, Kyiv Zoo explained that the module was procured for employees forced to work round-the-clock shifts because of Russian aggression. The zoo noted that the war had put on hold a reconstruction project that was to include new staff amenity premises, while the existing trailers and temporary facilities no longer meet sanitary requirements. The module allows employees to shower and wash their clothes after work right on the zoo grounds.

Another UAH 2.5 million went to two mobile living modules. These were also built from shipping containers and equipped with furniture, refrigerators, microwaves, air conditioners, and bathrooms. The modules were procured to replace old trailers used by the grounds cleaning and landscaping staff, giving them a place to change, store personal belongings, have lunch, and take a short rest. 

For general upkeep needs, the zoo also procured ten storage modules worth almost UAH 3 million. As the zoo explained, they will be used to store construction materials, tools, veterinary medicines, chemicals, and feed. The full-scale invasion has increased the need for such premises, as supplies have become less stable while the volume of repair and veterinary work has grown. The new modules replaced old sheds and trailers that were dismantled due to their poor condition. 

The need for infrastructure repairs remains pressing. In early July, Kyiv Zoo was damaged in a Russian attack. The blast wave damaged the primate and bird department buildings, the winter garden dome, the aqua-terrarium, the hay storage facility, and the northern entrance. 

Over UAH 2.5 million more went to the construction of the Owls of Ukraine pavilion. The project involves expanding the space for the birds and setting up new enclosures and dedicated resting areas. This is likely the exhibit of the same name that has already opened. According to Kyiv Zoo, it features five species of Ukrainian owls, including two listed in the Red Data Book of Ukraine. Many of these birds were rescued and found refuge at the zoo. A 180-square-meter enclosure was built for them, recreating their natural habitat with tree hollows, branches, perches, feeding areas, and bathing pools.

Other procurements included four quick-assembly arched camping cabins of 25 square meters each, with insulation, air conditioners, and electric heaters, at a cost of UAH 2.2 million. They were purchased for the staff of the bird house. Kyiv Zoo explained that because the reconstruction is on hold, part of the bird house premises is still occupied by the primate department, while the old temporary sheds have become unusable. The cabins therefore serve as places to change, store personal belongings, rest, and eat. After the war, the zoo plans to use them in other parts of the grounds as the reconstruction resumes.

To install the camping cabins, the zoo separately contracted UAH 2.3 million to prepare the site next to the bird house building: old structures were dismantled, earthworks carried out, and a new foundation laid. Another UAH 1.3 million went to repairing the utility area next to the bird house. 

Beyond infrastructure, the zoo also invested in promotion, contracting over UAH 1.7 million for an advertising campaign in the Kyiv metro. 

Kharkiv Zoo

Despite its proximity to the front line, Kharkiv Zoo kept investing not only in animal upkeep but also in developing its grounds.

It repaired the lynx and wolf enclosures, reconstructed open water features with a water treatment facility and a pedestrian bridge in the South America zone, completed a monkey enclosure, and renovated the petting zoo and wooden structures.

In total, Kharkiv Zoo signed contracts worth more than UAH 81 million over the eighteen months.

And what about the others? 

Other zoos also spent money not only on feed and utilities but on infrastructure development, though on a much more modest scale. 

Among Mykolaiv Zoo’s most unusual procurements was the development of design and cost documentation for a new water well, at UAH 150,000. The well is meant to supply the ponds with process water from underground sources. 

At Odesa Zoo, one of the largest projects was an overhaul of the heating system with the replacement of boiler equipment, worth UAH 4.7 million.

The Roshen Cherkasy City Zoo repaired the roof of one of its enclosures and renovated its warehouse, café, conference hall, kangaroo houses, and tiger enclosure. In total, over UAH 950,000 went to these works.

At Rivne Zoo, the largest construction project was an overhaul of the nutria house and its fencing, at over UAH 1 million. The zoo also repaired walkways, arranged barrier-free access to the exotarium, and procured a mini tractor for maintenance needs.

Lutsk Zoo bought a Renault Master Twin Cab truck for UAH 748,000. It also set up new animal housing: over UAH 124,000 went to a bird enclosure, and another UAH 45,000 to outdoor animal shelters.

 One of the most curious procurements was a pink flamingo for UAH 240,000, purchased by Mena Zoo. This was the only procurement of an animal to expand a zoo’s collection that we found during our analysis. 

What do Ukrainian zoos live on?

For our analysis, we collected the 2025 financial statements of Ukrainian zoos and sent information requests to the institutions to clarify their levels of budget funding, own revenue, and charitable donations. Not all of them replied: some zoos ignored the requests, while others simply suggested consulting the financial statements already published on their official websites. 

The analysis showed that the Ukrainian zoos reviewed cannot sustain themselves on their own. Budget subsidies remain their main source of funding, while revenue from ticket sales, tours, paid services, and other commercial activities plays a supporting role.

Even Kyiv Zoo, which earned the highest own revenue among the institutions analyzed — over UAH 104 million — also drew another UAH 140.5 million from the city budget. This shows that even the country’s largest zoo is not financially self-sufficient.

Rivne and Mykolaiv Zoos also have relatively high own revenue, each earning over UAH 20 million. For Mena Zoo, Odesa Zoo, and a number of other institutions, however, budget funding is the backbone of their operations. Mena Zoo, for instance, earned roughly UAH 2 million of its own revenue while receiving over UAH 12 million from the regional budget.

Charitable donations are another possible source of funds, but their role turned out to be minor. In most cases, donations range from a few hundred thousand hryvnias to roughly one million — several times less than budget funding or commercial revenue.

Overall, the analysis shows that despite their different operating models, Ukrainian zoos remain dependent on budget funding. Even the institutions with the highest own revenue cannot do without support from local budgets, while for others, such support is effectively the basis of their existence.

The analysis of Prozorro procurements also shows that zoos spend most of their money on meeting the animals’ basic daily needs — above all, feed, as well as utilities and routine upkeep. Large-scale repairs or construction are much rarer. Meanwhile, visitors and donors can support these zoos by buying a ticket or contributing to their development. 

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. 

Key takeaways

The Cabinet of Ministers has adopted amendments to the resolution that governs public procurement rules under martial law. Most of the changes will support the gradual transition to the new version of the Law on Public Procurement, which takes effect in spring 2027 — meaning they are needed for European integration. The changes are also expected to have a largely positive effect on the transparency and competitiveness of procurement:

• the return of the mandatory negotiated procedure in place of direct contracts;
• a reduction in the number of exceptions to competitive procedures under martial law, in line with the recommendations of the European Commission and the Accounting Chamber;
• the introduction of a requirement to publish certificates of completed works for construction procurement exceeding UAH 10 million;
• the removal of the mandatory use of Prozorro Market for food procurement;
• the extension of the minimum period for submitting bids in open tendering to 15 days — for works as well as for goods and services;
• a distinction between ordinary contracting authorities and those in special sectors, and the return of the thresholds from the current Law.

Transparency International Ukraine has long advocated for most of these changes.

Recommendation

Balance the approaches to construction procurement in the energy sector. At present, such procurement partly falls simultaneously under both the option to run a negotiated procedure and the option to conclude a direct contract and, importantly, is subject to differing reporting rules and disclosure timelines.

Thresholds and contracting authorities — as in the Law

In the first months after the Specifics took effect, the lowering of thresholds proved a challenge for many contracting authorities in special sectors. Whereas these entities had previously operated under thresholds of UAH 1 million for goods and services and UAH 5 million for works, back in 2022 they were effectively equated with ordinary contracting authorities, and the thresholds for procuring goods and services fell as low as UAH 100,000. 

Now, in 2026, the government is restoring the distinction between ordinary contracting authorities and those in special sectors and is also bringing back the value thresholds set out in the current version of the Law. 

For ordinary contracting authorities: 

• UAH 200,000 — for the procurement of goods and services;
• UAH 1.5 million — for the procurement of works. 

For contracting authorities in special sectors:

• UAH 1 million — for goods and services; 
• UAH 5 million — for works. 

While this change will remove some lower-value procurement from the competitive field, it will at least bring the threshold limits back into line with the Law and should make contracting authorities’ work easier. 

Prozorro Market for food is now optional

From spring 2024 until now, contracting authorities have been required to conduct above-threshold procurement of most food products through the electronic catalogue. At the time, DOZORRO called this move risky — imposing such a no-alternatives obligation on contracting authorities. Practice has shown that the absence of challenges to the AMCU and of State Audit Service monitoring in Prozorro Market procurement is a critical flaw in this mechanism, one that leads to numerous abuses. In particular, a TI Ukraine study found that more than half (55%) of coal procurements made through Prozorro Market contained unlawful requirements to submit additional documents and set extremely short deadlines for their submission — potentially discriminatory conditions. 

Moreover, the mandatory nature of the catalogue artificially narrows the range of lawful conduct available to contracting authorities and creates a restricted market segment — one where access for businesses and their products depends heavily on the actions, decisions, or inaction of the state-appointed administrator, all against a backdrop of insufficiently detailed legal regulation. 

The government is now abolishing the mandatory use of the electronic catalogue for food procurement. The annex listing these products is also being removed from the resolution. So contracting authorities will now be able to choose whichever path they consider more effective: continuing to procure food through the catalogue, or running a tender — including concluding a framework agreement. 

The return of the negotiated procedure: grounds 

One of the most significant changes is the return of the negotiated procedure. TI Ukraine advocated for this step, in particular on the basis of its study of above-threshold direct procurement. That study found that roughly 70% of the value of above-threshold direct contracts consisted of procurement on grounds that had previously required a negotiated procedure. 

Instead of the familiar list of grounds for above-threshold procurement without using the electronic system, clause 13 of the Specifics will now contain a list of grounds for the negotiated procedure. Overall, these are similar to the current list but substantially shortened. The following grounds remain for the negotiated procedure:

1. Cancellation of open tendering after no bids were submitted. 

For this ground, the drafters retained everything developed under the Specifics: unlike the Law, a single cancelled open tender is enough to justify a negotiated procedure. This approach, incidentally, is consistent with Directive 2014/24/EU. In a negotiated procedure following open tendering, the draft contract and the maximum value excluding VAT must remain unchanged. In addition, a new requirement has appeared: the justification for the negotiated procedure must specify the announcement number of the open tender that was cancelled.

2. The provision on works, goods, or services that can be performed, supplied, or provided exclusively by a particular business entity has not undergone any substantive changes compared with the current version of the Specifics and simply becomes a ground for the negotiated procedure. 

3. The conditions for procurement based on urgent need have been revised. First of all, the government clarified what constitutes an urgent need by adding a description of this situation that was absent from the Law: 

“there is an objective, documented need to carry out the procurement, driven by circumstances unforeseeable for the contracting authority and independent of its decisions, actions, or inaction, which make it impossible to observe the deadlines for open tendering or to use the electronic catalogue where goods are being procured.”

As the Specifics currently provide, an urgent need must, in terms of timing, make it impossible to hold open tendering or use the electronic catalogue. In addition, the government clarified that the circumstances of an urgent need must specifically be unforeseeable and independent of the contracting authority’s decisions, actions, or inaction. This is worth bearing in mind when planning procurement. 

The drafters of the resolution also borrowed from the Law a somewhat modified list of cases in which an urgent procurement need may arise. But, unlike the Law, they kept the list non-exhaustive. It will therefore not constrain contracting authorities and will allow a negotiated procedure in all cases where a corresponding urgent need exists. Among these, the resolution expressly provides for the immediate mitigation of the consequences of emergencies or of Russia’s armed aggression against Ukraine, humanitarian aid to other states, termination of a procurement contract through the bidder’s fault, and challenges filed in open tendering. The last of these, admittedly, may to some extent depend on the contracting authority’s own decisions, since it is the challenge to them that gives rise to the need. Nevertheless, this type of urgent-need situation is expressly provided for.

4.Procurement of additional volumes of goods, works, or services from a supplier under an existing contract. These provisions have become grounds for the negotiated procedure almost unchanged; the only important clarification is that the main contract for procuring works or services must have been concluded specifically as a result of open tendering, rather than of procurement in general as is currently the case. It is that contract which must set out the option and the terms for performing the additional works or services. And the 50% ceiling that the value of the additional procurement must not exceed will be calculated excluding VAT.

5. Another ground for the negotiated procedure is borrowed from the Law — the procurement of goods under the procedure for restoring a debtor’s solvency. 

6. The procurement of legal services to settle disputes heard by foreign jurisdictional bodies is set out in the wording taken from the Law and must therefore be based on a decision of the Cabinet of Ministers or the National Security and Defense Council. Procurement related to the contracting authority’s participation in international exhibition events is added here as well.

7. From the Specifics, the list of grounds for the negotiated procedure additionally includes procurement of:

1. goods, works, and services needed to support the construction of military engineering and fortification structures, for the urgent needs of the Armed Forces of Ukraine, other military formations, law enforcement bodies, the State Emergency Service, and higher military educational institutions at their request, with the subsequent transfer of the procurement item onto the requester’s books (formerly subclause 21 of clause 13);
2. items needed for the protection, restoration, reconstruction, maintenance, siting, and construction of destroyed or damaged critical infrastructure facilities (a consolidation of various subclauses of clause 13);
3. procurement in cases where the contracting authority or its separate subdivision is located in an area of active hostilities that have not ceased as of the date the procurement contract is concluded (formerly subclause 2 of clause 13).

In this way, the grounds for the negotiated procedure now take the place of the former exceptions to competitive procedures in clause 13 of the Specifics. This step is likely to be welcomed by the European Commission and, we hope, will be taken into account in the further assessment of Ukraine’s progress in harmonizing its procurement legislation with the European directives.

How the negotiated procedure is changing

Beyond the grounds for it, the Specifics now regulate how the negotiated procedure is conducted, how information about it is published, and the specifics of challenging and reporting on it. 

Importantly for the choice of counterparty, the requirement for a bidder to confirm the absence of grounds for refusing its participation in the negotiated procedure under clause 47 of the Specifics has been extended to all grounds for the procedure — including a negotiated procedure due to a lack of competition and one for additional volumes. Thus, even in such no-alternative negotiated procedures, bidders will be refused participation where grounds for refusal exist. 

The notice of intent to conclude a contract under the negotiated procedure will generally match the rules of the current Law, but with several additions:

1. If the negotiated procedure is conducted because open tendering that received no bids was cancelled, the contracting authority must state in its justification whether the winner of the negotiated procedure meets the qualification criteria set out in the tender documentation for the open tender (if any were specified there). A description of those criteria must also be attached. 
2. By analogy with other procurement, the notice of intent to conclude a contract under the negotiated procedure will state information about the ultimate beneficial owners of the bidder with which the contract is intended to be concluded. This information will be generated automatically by the Prozorro system. Alternatively, where this is not technically possible or where the bidder is a non-resident, the contracting authority will add the information itself. 
3. For negotiated procedures carried out to build fortifications, at the request of military units, or to protect infrastructure, special disclosure rules have been added for the Prozorro system: the contracts and any amendments to them will be published 90 days after martial law ends. 

A negotiated procedure may be challenged within five days (three days for a negotiated procedure based on urgent need and for one used to procure certain energy-sector and utility-sector goods) from the day the complainant learned, or should have learned, of the violation of its rights resulting from the contracting authority’s decision, action, or inaction, but before the day the contract is concluded. Complaints in a negotiated procedure based on urgent need will have a shortened review period — three business days. 

For all complaints, not only those concerning the negotiated procedure, the government clarified that where it is not technically possible to upload information, documents, and materials on the procurement procedure to Prozorro, the parties are to submit them by another accessible means designated by the review body.

If the negotiated procedure is not challenged, then once these five (or three) days have elapsed, the contracting authority is entitled to conclude the contract. This period is half as long as the one provided for in the Law, so it should not significantly delay meeting the contracting authority’s need. 

The Specifics also slightly clarify the cancellation of a negotiated procedure: if a contracting authority cancels it because violations cannot be remedied, it must describe those violations.

Reducing the exceptions to competitive procedures

Among the former grounds for concluding a direct contract that existed in clause 13 of the Specifics, the option to conclude one is retained only until December 31, 2026, and only for the following exceptions:

•  the procurement of goods, works, and services relating to the construction, repair, and other engineering measures to protect critical infrastructure facilities in the fuel and energy sector (formerly subclause 13 of clause 13); 
• experimental procurement to protect the life-support systems of critical infrastructure under Cabinet of Ministers Resolution No. 142 of February 7, 2025 (formerly subclause 13 of clause 13);
• the procurement of a range of types of energy equipment needed to mitigate the consequences of, or to prevent, an emergency, as well as works and services relating to their construction, restoration, reconstruction, siting, and capital repairs at the relevant facilities and to their protection, as part of the measures envisaged by the Comprehensive Resilience Plans for regions and individual cities approved by the decision of the National Security and Defense Council of Ukraine of March 3, 2026, and brought into effect by Presidential Decree No. 239 of March 14, 2026 (formerly subclause 28 of clause 13). 

For such procurement, contracting authorities will publish a report on the procurement contract concluded without using the electronic system, together with the justification of the grounds for such procurement. The requirements to have the justification approved by the head of the contracting authority or a person designated by them, as well as the requirements to publish information about beneficial owners, remain in place. 

 Likewise, a separate set of requirements to report the prices of materials will continue to apply to procurement contracts for current repairs and for new construction, reconstruction, restoration, and capital repair works. Once such contracts are concluded, contracting authorities will have to upload not only the report and the justification but also the contract and its annexes, along with information on the prices of materials in machine-readable format.

For the remaining contracts, the requirement to upload the contract and its annexes will also apply, but the system will make them public 90 days after martial law ends. 

In addition to this wholesale rethink of the approach to direct procurement in clause 13, the government removed a number of exceptions to the requirements to apply procurement procedures or simplified procurement that existed in clause 9 of the Specifics, namely procurement: 

• for measures to search for persons missing under special circumstances and for the repatriation and return of missing persons (military and civilian) carried out by the Ministry for Reintegration and the state-owned enterprises within its remit;
• for unity centers operating under Cabinet of Ministers Resolution No. 841 of July 14, 2025;
• for the servicing of state-owned property of a maritime oil terminal by a business company wholly owned (100% of shares) by another fully state-owned business company — this exception expired in 2025 and was therefore removed as a technical matter;

• of goods, works, and services by defense-industrial complex enterprises to mitigate the consequences of hostilities under martial law, in accordance with Cabinet of Ministers acts on the allocation of funds from the reserve fund of the state budget.

Reviewing and reducing the number of exceptions to competitive procedures is the right step, one that aligns with the European Commission’s recommendations in its EU Enlargement Report on Ukraine, as well as with the recommendations of the Accounting Chamber of Ukraine issued following its analysis of the Ministry of Economy’s annual report.

A separate list of grounds for defense direct procurement

Previously, Resolution No. 1275, which governs defense procurement under martial law, referred — alongside its own grounds for direct contracts — to the grounds set out in clause 13 of the Specifics. That reference has now been removed and, in its place, those grounds relevant to defense procurement have been added directly to Resolution No. 1275. These include:

• cancellation of open tendering due to no bids being submitted;
• the contracting authority or its separate subdivision being located in an area of active hostilities that have not ceased as of the date the state contract is concluded;
• the ability to perform the contract exclusively by a particular business entity owing to a lack of competition for technical reasons or the need to protect intellectual property rights, or the conclusion of a state contract with a supplier of last resort or a universal service provider for the supply of electricity or natural gas;
• urgent need;
• the need to supply an additional volume of goods or to perform additional works or services by the existing performer of the state contract;
• the procurement of attorney (bar) services.

Fifteen days to submit bids across the board

Welcome news for businesses is the extension of the deadlines for submitting bids in open tendering for goods and services: as with the procurement of works, they will now run from 15 days after the announcement is published. 

An improvement for public oversight — publishing completion certificates

A long-awaited step for the civil society organizations that monitor construction procurement is the publication of completion certificates. TI Ukraine’s DOZORRO program has been advocating for this step for several years for high-value procurement of construction works, since it is the certificates that record the actual prices of the materials used. 

The government has added to the Specifics a requirement to publish acceptance certificates for completed construction works and the certificate(s) of the value of completed construction works and costs. The requirement will apply to contracts of UAH 10 million or more including VAT under which current-repair services or works for new construction (including the development of design documentation), reconstruction, restoration, or capital repairs were procured. These documents must be published within five business days of being signed.

Extending and broadening the localization exemptions for energy

For the procurement of a range of types of energy equipment, the government extended the exemption from localization requirements to the end of 2026, clarifying that it applies to procurement not only to mitigate the consequences of, but also to prevent, an emergency in power systems — at both the national and the regional level. 

This concerns the procurement of steam turbines, gas-piston units, cogeneration units, power-generation units, gas generators, gas-turbine units and modular boiler houses, heat pumps, steam boilers, mobile boiler houses, and diesel generators, including the components and parts of such equipment.

This same exemption from localization requirements was extended until March 25, 2028, for procurement under the experimental project for the construction and installation of independent backup power supply systems in apartment buildings in the city of Kyiv (under Cabinet of Ministers Resolution No. 353 of March 20, 2026). 

Overall, both exemptions were expanded to allow the procurement — regardless of the degree of localization — not only of the goods themselves but also of works or services relating to the construction, restoration, reconstruction, siting, or capital repair of the relevant facilities and to their protection, provided that performing such works or providing such services entails the contracting authority acquiring ownership of the relevant listed goods.

Conclusions

To sum up, Resolution No. 957 introduces a number of positive changes to the regulation of procurement that should make it more competitive and transparent. Transparency International Ukraine has long advocated for some of them. Moreover, while the changes were being drafted, the organization provided proposals for technical and legal edits, including to unblock the option of running a negotiated procedure.

We support the return of the negotiated procedure, the longer deadlines for submitting bids in tenders for goods and services, the introduction of requirements to publish certificates of completed works, and the removal of the mandatory use of the electronic catalogue for food procurement. Most of the changes will aid the gradual preparation for the new version of the Law on Public Procurement, which will take effect in spring 2027. Beyond the higher thresholds and longer submission deadlines, contracting authorities will be able to adapt to the return of the negotiated procedure and to choose the optimal method for procuring food.

Reducing the number of exceptions to competitive procedures aligns with the European Commission’s recommendations in its EU Enlargement Report on Ukraine and with the recommendations of the Accounting Chamber of Ukraine and, we hope, will be taken into account in the further assessment of the legislation and the sector as a whole.

Extending and broadening the localization exemptions will likely help contracting authorities cope more easily with the challenges arising from Russia’s strikes on energy facilities. 

Among the resolution’s shortcomings, one can single out a degree of duplication in the approaches to procurement in the energy sector. The ground for the negotiated procedure related to ensuring the protection, restoration, reconstruction, maintenance, siting, and construction of critical infrastructure facilities destroyed or damaged as a result of Russia’s armed aggression partly overlaps with a similar ground for concluding a direct contract. The resolution’s provisions apply different approaches to reporting on works contracts and current-repair contracts in the energy sector concluded directly versus through the negotiated procedure. Thus, where a works contract is concluded directly under clause 9-2 of the Specifics, the contract and its annexes — including the prices of materials — will be made public immediately. By contrast, where a negotiated procedure is carried out under subclauses 8 or 9 of clause 13 of the Specifics, the system will make such information public only after martial law ends. This difference in approach appears unbalanced and will likely require further attention and refinement.

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.

Reconstruction of a kindergarten with a shelter in Kharkiv Region

In April, our experts identified potentially inflated material prices worth UAH 3.6 million in the reconstruction of the Teremok nursery-kindergarten with a shelter in Pisochyn. The local settlement council’s Department of Education, Culture, Youth, and Sports signed the UAH 69 million contract for these works with Zhytlobud-1 Trust PrJSC, the sole bidder in the procurement.

Some materials were included in the cost estimate at prices several times above market. For example, custom-made non-combustible aluminum composite panels were priced at UAH 6,652.24 per m², while their average market price is UAH 1,877.73–1,975.65 per m², depending on the color — over three times lower.

DOZORRO sent the contracting authority its full calculations, asking it to adjust the cost of material resources in the contract. This is easy to do — even in the work completion certificates, since the contract price is adjustable. The contracting authority replied fairly quickly that it had monitored the prices based on open sources and commercial offers, taking into account the Ukraine Facility requirements and the technical specifications of the materials, and disagreed with our calculations. It noted, however, that the final prices would be agreed with the contractor at the settlement stage and could be revised then. 

Meanwhile, at the end of May, the parties signed an additional agreement reducing the contract value by UAH 2.9 million. The prices of the composite panels were never adjusted, though, so we plan to keep monitoring this procurement. The works are scheduled for completion in late 2027.

Overhaul of a sports and fitness complex for the National Guard

Another spring case concerned the UAH 33.8 million overhaul of a sports and fitness complex for the National Guard in Kyiv Region. Following a simplified procurement, the contracting authority — the Central Production and Technological Supply Base of the National Guard of Ukraine — signed a contract with Novator Innovation and Construction Firm LLC, which offered a price UAH 176,000 below the estimated value. The winner had a competitor with a higher bid.

DOZORRO experts identified likely overpayments on certain materials in the cost estimate — in particular, potential price inflation of more than double on basalt wool of various thicknesses and composite facade sheeting. In March, we sent the contracting authority detailed calculations of the likely total overpayment of UAH 2.1 million. 

That same month, the Central Production and Technological Supply Base of the National Guard of Ukraine replied that the price analysis of material resources during the development of the cost estimate section of the design documentation had been carried out not by it but by the Sports Club of the National Guard of Ukraine, which was originally meant to be the contracting authority for these works. At the same time, it said it intended to analyze the material prices itself and adjust the contract price accordingly. 

In June, the Central Production and Technological Supply Base kept its promise and adjusted the contract value through an additional agreement in line with the average material prices in the region — reducing it by almost UAH 2.4 million.

Reconstruction of a sewage collector in Dnipropetrovsk Region

DOZORRO experts helped save money quite quickly on the reconstruction of a sewage collector in Pavlohrad — although, interestingly, in this case the contracting authority never even replied to our appeal.

In May, DOZORRO experts sent the Pavlohradvodokanal municipal enterprise calculations showing a likely overpayment of UAH 8.7 million — almost 17% of the contract value — on the reconstruction of the city’s collector. The price of sand in the cost estimate exceeded the market price more than twofold, and the same was true of crushed stone. Yet the largest potential overpayment concerned the pipes, priced roughly 20% above market. Because the works require a large quantity of these pipes, the potential overpayment on them alone could exceed UAH 4 million. The contract was signed with the sole bidder, BK-Novostroy LLC, which offered a price UAH 137.63 below the estimated value. 

Despite receiving no reply to the appeal itself, in early June the parties agreed to reduce the contract value by UAH 3.2 million through an additional agreement, in part by lowering the price of some of those very pipes. Our experts plan to keep monitoring this procurement, as the works are scheduled to run all the way to August 2028.

June monitoring

In June 2026 itself, DOZORRO experts monitored 92 procurements worth UAH 11.2 billion and found violations in 60 of them:

• in 42 procurements, they identified likely overpayments totaling UAH 208.1 million;
• in 18 procurements, they found other potential violations, including issues with document publication and discriminatory requirements. 

Based on these cases, the experts sent 57 appeals, the results of which we will be able to assess in the coming months.

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.