The full-scale war could not but affect public procurement — and the DOZORRO Transparency International Ukraine team investigated what changes took place in this area during the first 6 months of the invasion.
Currently, Prozorro does not have full information about martial law procurement. Therefore, in order to assess the loss of openness, the data for March-August 2022 were compared with the indicators of the same period in 2021. The total number of lots in the study period fell by 2.6 times compared to 2021, and the number of competitive lots fell by more than 4 times.
As expected, the number of lots fell the most in March, with a further decline lasting another two months. However, in general, many procuring entities published at least minimal information in Prozorro throughout the study period, even despite the government’s permission at the time not to do so. Presumably, this was also due to a lack of trust in the government resolution, which has a lower legal force than the procurement legislation.
The number of tenders in Prozorro — both competitive and in general — began to grow from June, when procuring entities were obliged to conduct simplified procurement or request tender bids without an upper limit of value. Before that, they had the right to sign any contracts directly.
Only 42.5% of the competitive lots announced in the first 6 months of the full-scale invasion ended with the signing of the contract. In 95% of cases, the unsuccessful nature of procurement is due to an insufficient number of participants.
Almost 30% of the contracts completed during the full-scale war were terminated, which is four times more than in 2021. The main reasons for the termination were a decrease in funding, a change in the cost of procurement, and the inability to fulfill obligations. The largest percentage of terminated contracts, more than 90%, is in contracts related to services in the field of health care and social assistance.
The Law of Ukraine “On Public Procurement” needs to enshrine mechanisms that will allow for fast, open, and competitive procedures in extreme conditions, such as war, pandemic, or natural disaster. Then there will be no need to urgently adopt regulations and numerous amendments to them to regulate the situation, and the risk of legal conflicts will be reduced. Moreover, in this case, all participants of the process will be able to prepare for extreme conditions in advance. To prescribe mechanisms for such situations, Ukraine can use the experience of procurement during the pandemic and active hostilities.
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