Limited Progress in Public Procurement: Findings of the New EU Report on Ukraine

The European Commission has published a new enlargement report on Ukraine, assessing the country’s progress in aligning with European rules and standards from September 2024 to August 2025 (inclusive). In the area of public procurement, the Commission recorded limited progress.

“Overall, we expected the report to be more critical, given that Ukraine has not implemented nearly any of last year’s recommendations. At the same time, the European Commission still found some grounds for positive assessment. However, it should be understood that procurement had a minimal effect on the overall evaluation for Cluster 1,” commented Ivan Lakhtionov, Deputy Executive Director of TI Ukraine for Innovative Projects.

Legislation

Public procurement legislation remains partially aligned with EU Directives. Considerable expectations were attached to the adoption of a new framework law — Draft Law No. 11520 — which is still under revision and is not expected to reach the second reading in Parliament before the end of 2025.

In contrast, in summer the Verkhovna Rada adopted a new Law on Public-Private Partnerships (PPP), which also falls within the procurement chapter of the Association Agreement. However, the European Commission notes that the law shows significant divergences from EU standards, particularly as it does not ensure equal access for Ukrainian and European companies to PPP opportunities, and therefore requires amendment. TI Ukraine had earlier pointed to shortcomings in the draft, including insufficient transparency of procedures and excessive discretion of selection commissions.

Alignment of the legal framework on public procurement and public-private partnerships with the EU acquis remains among the key recommendations for the coming year.

Reform strategy

Some progress was noted in implementing the Strategy for Reforming the Public Procurement System for 2024-2026, mainly in professionalization and the further development of the Prozorro system. However, the Commission recommends that the Strategy and its Action Plan should be updated, particularly by better defining the strategic objectives and performance indicators. DOZORRO had similarly highlighted that several indicators currently measure processes rather than outcomes.

The European Commission also recalled that Ukraine still lacks a dedicated anti-corruption strategy for the procurement sector. It is expected that next year public procurement will feature as a separate component of the national Anti-Corruption Strategy, which is currently under development. TI Ukraine is preparing a study on the main corruption risks in procurement to serve as a basis for this section.

Control

The report places significant emphasis on procurement control, both internal and external, assessing it as limited in effectiveness, particularly at the early stages.

Regarding the State Audit Service, the Commission observed that the institution still initiates only a small proportion of its monitoring procedures based on new risk indicators, although the introduction of such indicators and methodologies was acknowledged as a positive step. The report stresses the need to strengthen the role and capacity of procurement monitoring, prioritizing preventive, risk-based audits and ensuring effective follow-up to detected violations — recommendations that had previously been voiced by TI Ukraine as well.

Defense procurement

The European Commission also referred to instances of political interference in the activities of organizations responsible for centralized procurement for the military — the State Rear Operator and the Defense Procurement Agency. This most likely concerns the scandal with leadership change at the Defense Procurement Agency in early 2025, when Arsen Zhumadilov was appointed to replace Maryna Bezrukova as head of the institution.

Overall, defense procurement received slightly greater attention in this year’s report. The Commission noted the introduction of the position of authorized procurement officers within brigades, a long-awaited reform. It also pointed out that legislation still lacks legal clarity related to the distinction between conventional and defense procurement.

Practical implementation

In the practical dimension, the European Commission reported that 68% of the total procurement value were contracted via competitive procedures with an average number of bidders of 1.55. Presumably, there is a typo here, the figure appears to reflect data from 2023, when the average competition level was 1.59 participants per lot, while in 2024 it increased to 1.88. The estimated value share of competitive procurement was also higher.

When assessing these procurement transactions, the Commission noted the overreliance on price as the sole award criterion, indicating a significant imbalance in prioritization of price over quality. This point may be subject to debate, as maximum quality requirements can be embedded in tender conditions even without non-price criteria, and procuring entities may apply such criteria at their discretion — albeit rarely.

Among other recommended steps are the introduction of new procurement tools and e-contracting within the Prozorro system, as well as improving its interoperability with the DREAM platform and other state IT systems.

“If we aim to advance EU integration, it is essential to finalize and adopt the new Law on Public Procurement. At the same time, it must be fully aligned with the EU acquis. This remains the European Commission’s main recommendation for the second consecutive year and a crucial objective under the first negotiation cluster,” summarized Ivan Lakhtionov.

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.