Transparency International Ukraine calls on the Cabinet of Ministers to return mandatory competitive procurement for procuring entities who have the opportunity to conduct them during the war as soon as possible.

The relevant Resolution has already been developed by the Ministry of Economy. It proposes to oblige procuring entities to purchase either through Prozorro Market or through simplified procurement in Prozorro, if the expected price of the procurement transaction is equal to or exceeds UAH 50,000. There is no limit on the maximum cost. The draft Resolution also provides for some exceptions.

Procuring entities conducting defense procurement will still be able to purchase directly, as well as those defined by Article 3, part 9 of the Law of Ukraine “On Public Procurement”: the Ministry of Internal Affairs, the Ministry of Defense, the National Police, the State Border Guard Service, and others. An exception will also cover procurement to ensure the urgent needs of the state in martial law, in accordance with the appropriate Resolution. These include the procurement of Ukrzaliznytsia, and some procurement of regional military administrations and central authorities: food, medicines, priority emergency repair work, etc.

Simplified procurement or catalogs will not be mandatory:

  • for procuring entities in the zone of active hostilities;
  • for those, who have no technical possibility to use Prozorro and can confirm it with documents;
  • when there is an urgent need;
  • for procurement transactions, the announcement of which will contain restricted information;
  • after a simplified procurement transaction that was cancelled due to insufficient number of participants.

These rules will not apply to the exceptions defined by the Law “On Public Procurement.” For example, it will still be possible to conclude contracts with suppliers of the last hope or agreements under the results of art competitions directly.

For procurement through Prozorro Market for more than UAH 200,000, the Resolution provides for the application of the request for prices of proposals if there is more than one proposal in the catalog. The Ministry of Economy also proposes to increase the time limits for reporting on contracts concluded directly to 70 days from the date of termination of martial law. According to the current version of the Resolution, procuring entities will have 20 days to do so.

The State Audit Service also supports the return to competitive bidding. And the experience of Ukrposhta’s procurement during the war confirms that simplified procurement is not only possible, but also allows for significant savings in budget funds, which are now scarce.

“Now more than ever, it is important to spend budget funds efficiently. In the conditions where most money goes to war needs, we need to look for the most profitable offers to meet civilian needs. Simplified procurement and catalogs are the optimal solution to return competition and not overburden procuring entities,” explains Ivan Lakhtionov, Deputy Executive Director of TI Ukraine for Innovative Projects.

Transparency International Ukraine supports the initiative of the Ministry of Economy, and calls on the Cabinet of Ministers to adopt the relevant Resolution as soon as possible.

Simplified procurement and catalogs are the optimal solution to return competition and not overburden procuring entities.

Ivan Lakhtionov