Previous food suppliers for the military filed an appeal against the new procurement for food announced by the State Rear Operator. When they lost the court case, they withdrew their proposals from tenders.
Tender proceedings for food procurements for the Armed Forces of Ukraine in the second quarter of 2024 were unsuccessful twice. During the first attempt, the former suppliers successfully challenged the terms of the tender in court. They also tried to stop the next auction through the court, now challenging the terms of the contract. For instance, participants expressed dissatisfaction with the fines imposed for non-fulfillment of obligations, the specified geography of delivery, and the audit of enterprise capacities. And when the SRO won the case, the companies withdrew their bids from the tenders. As a result, only one participant submitted bids for most procurement lots, and even these individual offers had to be rejected due to issues with their documents.
As noted by the State Rear Operator, the primary issue does not lie in the terms of the contracts, as they were present in previous contracts of the Ministry of Defense. Older suppliers don’t like the fact that the SRO wants to collect and distribute product requests from military units on its own. At present, these applications are submitted directly by units to suppliers, making it nearly impossible to track the actual orders from the approved list of products and assess the quality of goods received by the military. Therefore, there is still a lot of space for manipulating the quality and quantity of products delivered.
Given that the second quarter of the year is less than a month away, at least some of the contracts will still have to be concluded with older suppliers. Nevertheless, there are a few options: extending existing contracts or entering new direct contracts without conducting tenders. The best option is to sign new contracts, and this should be done by the State Rear Operator. Then they will be able to control the applications from military units. To do this, the SRO has already developed the necessary IT system.
Changing the approach and gathering information about the actual orders placed by military units represent the initial step in the reform of food procurement for the military, a process that is of critical importance for us to undertake.
“The crucial point we all need to understand now is that the initial unsuccessful attempt to reform food procurement does not imply that the SRO is ineffective or requires different leadership. And I suspect that we will soon see many similar statements. This setback signifies, above all, that qualitative changes necessitate more time and ongoing support for the agency in their attempt to unravel this knot,” states Ivan Lakhtionov, Deputy Executive Director of TI Ukraine for Innovative Projects.
