Billions of hryvnias are spent from the national and local budgets each year through public procurement. These funds are used to procure equipment for hospitals, food for kindergartens, ammunition for the military, repair roads, and build shelters.
One of the key advantages of the Prozorro electronic system is that anyone can monitor procurement transactions. All stages and documents for each tender are available online.
If you want to start monitoring public procurement, we’ve prepared a brief guide on the most common violations on Prozorro and where to report them.
Common violations in procurement and how to spot them
You don’t need to be a procurement expert to spot a potential violation. However, you do need a basic understanding of public procurement. Once you understand the differences between procurement methods, who the procuring entity is, what the CPV code means, and how the estimated value compares to the contract amount — why not start analyzing your first tender?
The most common violations on Prozorro and where to find them
– Inflated prices. The cost of goods, services, or works can be found in an already signed contract, particularly in its appendices (specifications or estimates). To assess whether the price is reasonable, it’s best to compare it with several sources: market prices online, similar procurements on Prozorro, and commercial offers. Also, check whether the price includes delivery, installation, or other additional services — these can significantly affect the total cost. Another useful tip: review the specifications of the product or building materials in works procurement. Sometimes, general names are used, while in reality, a much cheaper item is being supplied.
– Discriminatory requirements. Sometimes, whether intentionally or not, procuring entities may include requirements in the tender conditions that only one or a few participants can meet. These may include overly specific and often unnecessary certificates. To spot this type of violation, review the tender documentation carefully. We also recommend paying attention to the questions and clarifications section — this is where potential participants often raise concerns about excessive or unfair requirements.
– Narrowing the technical specification. Sometimes the terms of reference are written in a way that only a specific product or manufacturer fits the criteria. For example, the documentation might name a particular brand or model without allowing for equivalent alternatives, or list characteristics so narrowly that other options are effectively excluded. To spot such violations, carefully review the tender documentation, especially the description of procurement items. According to the law, the technical specification must comply with the non-discrimination principle. If there are any restrictions, they must be properly justified in the tender documentation. A clear example of narrowing the specification is a requirement like: a laptop with a 3.1 GHz processor and 12 GB of RAM, without any acceptable tolerance range or the option to offer an equivalent.
- A winner who doesn’t meet the requirements. Sometimes a procuring entity selects a company as the winner even though it does not meet the tender conditions. For example, the company may have an expired license, lack the required equipment, or fail to provide necessary documents. To identify such violations, review the winning bidder’s tender proposal files and compare them with the requirements outlined in the tender documentation.
- Bypassing the procedure. Some procuring entities attempt to bypass open bidding by signing a direct contract. While this is allowed in exceptional cases clearly defined by law (urgent needs or specific types of procurement) it is sometimes misused. To check whether a direct contract is legal, pay attention to several key factors. First, review the stated basis and justification — they must be clearly specified on Prozorro. Next, check the date the contract was signed; in some cases, an “emergency” situation is indicated retroactively, which may signal a violation. It’s also worth looking at whether similar procurement transactions have been made previously — if the procuring entity repeatedly uses direct contracts for the same goods or services, this may suggest a pattern of systematically avoiding open bidding. Finally, be alert to contract amounts that fall just a few hryvnias below the threshold for mandatory open bidding — this could be a sign of deliberate circumvention of procurement procedures.
- Divided procurement item. Another common scheme is artificially dividing a procurement into several smaller transactions to avoid going through a competitive procedure. For example, instead of one procurement worth UAH 270,000, a procuring entity may conduct three separate tenders of UAH 90,000 each, with nearly identical items but listed under different CPV codes. To detect this, search the system for multiple procurement transactions of the same type from the same procuring entity, with similar items and close dates.
- Collusion between participants. Sometimes participants in a procurement collude with each other. For example, they may submit bids from the same IP address, one company may rent office space or equipment from another, or their documents may contain identical or very similar errors. Such signs can be identified by analyzing the tender documents of all participants and reviewing open data about the companies (for instance, using services like YouControl or Opendatabot). If you find that the participants are connected, it may indicate possible collusion.
What to do if you detect a violation.
If you notice a possible violation, the first step is to collect evidence:
– Make screenshots of messages, decision minutes, and technical requirements; save the necessary documents (for example, contracts and amendments to them); and copy relevant links.
– Be sure (!) to record the procurement ID (a unique number that allows you to find all information on Prozorro).
– Write down everything that raises doubts and leads you to believe something is wrong with the procurement — the more details and specifics you provide, the more effective your report will be.
Next, contact the procuring entity — that is, the government body, municipal institution, or state-owned enterprise conducting the procurement. First, the violation may have been unintentional, and the procuring entity might correct it after receiving your inquiry. Second, they may provide additional information and explain why there is, in fact, no violation.
Send an official inquiry requesting clarification of the situation. Clearly outline the issue, provide justification, and be sure to include the procurement ID. In many cases, procuring entities respond constructively to such emails, which allows the issue to be resolved without involving regulatory authorities. However, if the procuring entity does not respond or provides only a formal reply, it’s time to take further action.
Where to submit an official complaint?
The State Audit Service of Ukraine (the State Audit Service)
In the field of public procurement, the State Audit Service is the main oversight body. This is the authority you should contact if you notice a violation of procurement legislation.
For example, if a procuring entity bypassed the procedure and made a direct procurement without legal grounds, if a participant’s bid was rejected without explanation or in violation of the law, or if the procurement contract was not published, it’s worth reporting these issues to the auditors. Important: Issues such as overpricing, collusion between participants, or discriminatory requirements do not fall under the responsibility of the State Audit Service. Also note that the Service does not review tenders where the contract has already been completed or terminated.
According to the law, state authorities, MPs, local self-government bodies, mass media, and public organizations can report possible violations.
However, individual citizens can also notify auditors by using the “report a violation” button on the procurement page on Prozorro. In general, the State Audit Service is not required to respond to every inquiry. However, if you clearly describe the nature of the violation and it falls within their area of responsibility, they may take action. As a result, they can initiate monitoring on their own and, if a violation is confirmed, require it to be corrected, or even hold those responsible accountable.
Law enforcement agencies
If, during procurement analysis, there is a suspicion of a criminal offense, such as fictitious procurement, document forgery, potential overpayment, or the unlawful receipt of benefits, this goes beyond administrative oversight. In such cases, you should contact the National Police, the Prosecutor’s Office, or the National Anti-Corruption Bureau of Ukraine. By the way, overpricing also falls within the authority of law enforcement agencies.
A report to law enforcement agencies should be thoroughly prepared: clearly state the facts, provide supporting evidence, and explain step by step why a violation is likely in the procurement. In more complex cases, it’s advisable to involve legal advisers or lawyers to help properly draft the report, gather the necessary evidence, and provide further support throughout the process.
The Anti-Monopoly Committee of Ukraine (AMCU)
If you notice suspicious activity — for example, several companies submitting formal bids in the same procurement just to create the appearance of competition when the outcome is already predetermined, this may be a sign of collusion. Collusion between procurement participants is a serious violation, where companies do not compete fairly but instead agree in advance on who will win the tender.
The Anti-Monopoly Committee of Ukraine is authorized to detect and penalize collusion. This state body is responsible for combating unfair competition and has the power to officially investigate and establish the fact of collusion. Anyone can submit a complaint to the AMCU — a rejected participant, a public organization, a journalist, an ordinary citizen, or a state body. The AMCU can also initiate a case on its own if there are facts or reasonable suspicions of collusion. It is advisable to include facts, documents, screenshots, and analysis in your report — anything that can help support and confirm the suspicions.
The AMCU will conduct an investigation, and if collusion is confirmed, the companies may be fined and banned from participating in public procurement for a certain period.
Non-governmental organizations
If you’re not yet confident in preparing your own reports to auditors or law enforcement agencies, you can reach out to specialized non-governmental organizations (NGOs) for support. They can provide media support, legal advice, or submit a request on behalf of the organization.
For example, you can contact us — the DOZORRO project by TI Ukraine. Since 2016, we’ve been helping to identify procurement violations and respond to them through legal means. If you come across something suspicious, feel free to email us at [email protected] or reach out via our social media channels (facebook, instagram).
Our experts will review the procurement, and if they also confirm violations, they will prepare an inquiry with the appropriate state authority. We often support these inquiries through public communication, highlighting violations in the media and on social networks. Media pressure frequently leads to quicker responses from procuring entities. Please note that we previously offered the option to submit procurement reviews directly on the DOZORRO website. While the Prozorro platform still displays related buttons on each procurement page, this functionality is currently not working.
What results can be expected?
A single inquiry can make a real difference. However, the response depends on how well the inquiry is substantiated, the level of public pressure, and the degree of support it receives.
The results may vary:
- A procuring entity may take your concerns into account and either amend the tender documentation or cancel the procurement altogether.
- The winner may be reconsidered if inconsistencies are confirmed.
- The contract amount may be adjusted — for example, reduced to reflect the actual market value.
- Auditors may initiate monitoring, confirm the violation, and require the procuring entity to address it.
- Those responsible may be held liable — administratively or even criminally.
For example, following our recent request, the cost of a contract for completing a rehabilitation center in the Lviv region was reduced by UAH 26 million. DOZORRO experts identified inflated prices for construction materials in the cost estimate and submitted an inquiry to both the procuring entity and the governing body, the Ministry of Social Policy. As a result, the procuring entity reviewed the contractor’s estimate and reduced the contract amount. In Kryvyi Rih, our inquiry led to the opening of criminal proceedings. In a procurement for the construction of a shelter at a lyceum, DOZORRO experts identified inflated rebar prices totaling UAH 5 million. The tender documentation also included discriminatory requirements (the obligation to provide a site visit report). When the procuring entity failed to respond to DOZORRO’s inquiry, we submitted a report to the prosecutor’s office regarding a potential criminal offense related to overpricing certain material items. As a result, a pre-trial investigation was initiated.
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.
Source: rubryka.com
