We’ll Pay You in a Year: Abnormally Long Payment Terms on Prozorro Procurement

Unrealistic payment terms in some Prozorro procurement transactions can discourage companies from taking part. Not every business can afford to wait for payment for half a year, a year, or even until the end of the war.

At the same time, such terms can sometimes be a red flag indicating potential corruption. Procurement by Energoatom involved in the so-called “shlagbaum (barrier)” scheme, which we learned about from the “Mindich tapes,” was exactly characterized by long payment terms in contracts. This allowed the criminal organization to delay works and payments in order to demand kickbacks from contractors. 

The DOZORRO TI Ukraine project decided to analyze how often Prozorro features procurements with payment terms of 90 days or more, what the level of competition in such tenders is, and when payments under such contracts are actually made. To this end, we analyzed data on all competitive tenders announced from 2023 through October 2025.

Summary

Excessively long payment terms are generally not a very widespread practice on Prozorro. Payment terms longer than one month are used in about 15% of goods and services procurement, and only in works procurement does their share reach 31%.

Quick post-payment reduces financial risks for suppliers and makes participation in procurement more attractive. Conversely, excessively long post-payment periods may put off part of the business community. The data confirmed this: as payment terms increase, competition decreases. At the same time, abnormally long terms of more than one year that we identified are often linked to technical errors in filling in electronic fields on Prozorro, whereas the actual terms in the contracts themselves are significantly shorter.

As for the actual speed of payment in procurements with contractual payment terms of over three months, in those cases where it can be checked, approximately 91% of lots are paid earlier than the agreed deadline — on average 57% faster. However, these data cannot be treated as a representative sample for the system as a whole, since within the scope of this study we managed to obtain payment information for only 27.5% of all such transactions. The reason is that more than three quarters of such procurements fall on those financed from the income from commercial activities of municipal and state-owned enterprises. Data on these payments is not public.

Complaints about payment terms remain isolated, and the AMCU has so far not upheld them. 

What can be done to reduce the share of procurement transactions with long payment terms

• First of all, find out why the AMCU does not uphold complaints about long payment terms.
• Introducing e-contracting with automatic verification of payment terms in contracts would help prevent situations where long payment periods arise due to technical errors rather than reflecting the actual conditions.
• It is worth considering mandatory reporting on contract performance events within defined time limits — this would make both payment monitoring and contract implementation more effective and transparent.
• Consider making information on payments by municipal and state-owned enterprises public. At present, there is no information at all on how they make payments, even though these contracting authorities also operate public funds. 
• A more radical option could be considered — prohibiting excessively long payment terms in public procurement at the legislative level. However, this is a rather risky step that requires much deeper prior analysis and consultations. In some cases, longer terms may have objective reasons.

How contracting authorities specify payment terms when announcing a procurement

Payment terms under a contract (the procedure for settlements) are a key factor of a procurement’s attractiveness for businesses. 

On authorized Prozorro platforms, when creating a procurement, a contracting authority must select the following in the electronic fields:

• the event upon which payment under the contract will be made;
• the type of payment: advance or post-payment;
• the period (in days) within which payment will be made;
• the type of days: working, calendar, or banking;
• the payment amount — in such a way that the total amount across different types of payment equals 100%, which makes it possible to provide for combined payment formats.

Before the electronic fields on payment terms on Prozorro became mandatory, contracting authorities did not always enter the relevant information, so such tenders are marked as “Not specified.” At the same time, payment terms in any case had to be indicated in the draft contract uploaded with the notice and had to correspond to the parameters selected in the electronic fields, where applicable.

How often contracting authorities set unrealistic payment terms

Overall, from January 2023 through October 2025, contracting authorities successfully conducted 975,000 competitive procurement transactions on Prozorro with an estimated value of UAH 2 trillion. 

Of these, post-payment accounted for 82.9% of lots by number. At the same time, when looking at the distribution by contract value, post-payment accounted for 78.9% of the total amount, almost 3.3% for advance payments, and 15.6% for a combination of advance and post-payment.

Another 14.3% by number and 2.2% by value are lots where the form of settlement is not specified. These are predominantly requests for quotations on Prozorro Market.

Post-payment is the most common form of settlement regardless of the type of procurement item. However, while in goods and services advances and their combination with post-payment account for only a few percent of lots, in works their share is higher — 8.6% for the combined type of payment and another 0.2% for pure advance payment.

Thus, across all breakdowns, post-payment is the most widespread settlement form in contracts concluded as a result of procurements on Prozorro. Going forward, we focus specifically on this form. It should be recalled that, in the context of these data, we are talking about the settlement terms that contracting authorities manually entered into the system when announcing procurements.

Which type of days for payment terms is most often used by contracting authorities 

Contracting authorities use different approaches, but most often they choose calendar days — this option is specified in 45.4% of lots. Other types are used in roughly equal proportions: 28.7% banking days and 25.9% working days. At the same time, the difference between these types can be substantial, since the same number will correspond to different actual periods. For example, 10 working days do not equal 10 calendar days, but 14. That is 40% more. Therefore, to ensure data accuracy in this study, we recalculated payment terms expressed in banking and working days into calendar days. We also took into account the fact that, at the legislative level, from April 1, 2023, a banking day was effectively equated to a calendar day.

Which payment terms are most often set in contracts 

After downloading the data from Prozorro, we grouped payment terms into the following ranges: up to 1 month, 1–2 months, 2–3 months, 3–6 months, and over 6 months.

The analysis showed that the vast majority of procurements — almost 85% by number and 78% by contract value — have payment terms of up to 1 month.

We also examined whether there are differences between the procurement of goods, services, and works. In the first two categories, the main share falls on procurement transactions with post-payment of up to 2 months — these periods cover more than 92% of all contracts.

In the category of works, a different trend is observed: the second most common option is post-payment in the range from 3 to 6 months. It accounts for almost 12% of the total number.

It is also worth noting that in the procurement of goods and services, payment terms increase in parallel with the growth of the average contract value, which may be a logical consequence of larger supply volumes or more complex performance conditions.

By contrast, no such correlation is observed for works. 

Thus, in general, the vast majority of procurement of goods provides for swift payment, which should promote competition — suppliers face lower financial risks. Longer payment terms (over two months) are not typical for such transactions. The same trend applies to service procurement: contracting authorities are generally ready for prompt post-payment, and longer payment periods are used only in isolated cases.

For works, longer payment terms are more typical, which may be linked to technological construction cycles and staged financing. At the same time, this creates risks for contractors, especially small businesses, due to the need for working capital.

Therefore, it can be concluded that excessively long payment terms are generally not a widespread practice on Prozorro. Payment terms longer than one month are used in about 15% of goods and services procurement, and only in works procurement does their share reach 31%.

Correlation between payment terms and competition 

The highest average level of competition is observed in the procurement of goods — 2.31 bidders per lot. For services, this figure stands at 1.52, and for works — at 1.35. 

At the same time, data on the average number of bidders in procurement correlate with payment terms. Although we cannot assess the strength of this factor’s impact as the level of competition depends on more than just payment conditions, faster post-payment is more attractive for businesses. In particular, quicker payment reduces financial risks for suppliers, whereas long post-payment periods may limit access for some of them due to the need for working capital.

In goods procurement, competition decreases steadily: from 2.41 bidders per lots with payment within one month, to 2.1 for a two-month term, and 1.92 for three months. Beyond that, this indicator remains at approximately 1.71. 

For services, the dynamics are similar — competition also declines gradually, though less sharply, as payment terms increase. Overall, it falls from 1.54 bidders per lot to 1.35. Only in transactions with payment terms exceeding six months does it suddenly rise to 1.49. Given the small number of such procurements, this average value is more likely driven by anomalous outliers rather than reflecting a general trend. A similar pattern is observed in works procurement: a gradual decrease from 1.42 to 1.13, followed by an increase to 1.22 in procurements with payment terms of over six months.

Thus, it can be stated that as payment terms exceed one month, competition gradually declines. At the same time, for post-payment exceeding three months, this decline slows down significantly. With this in mind, for the purposes of further analysis, we treat procurement transactions with post-payment of three months or more as having abnormally long post-payment periods and examine them in greater detail.

Analysis of procurement transactions with post-payment and payment terms exceeding 90 days

Distribution of payment terms

Most contracts fall within the ranges of 180–365 days (17.4 thousand lots) and 90–180 days (11.6 thousand lots). Together, these account for more than 96% of all cases, with a total contract value of UAH 2.1 billion. Lots with payment terms exceeding 365 days are relatively rare — only 1,137 lots (3.8%) — but they account for a rather large total contract value of UAH 1.5 billion.

Sectoral distribution

Long payment terms are most often applied in the construction sector. The largest shares of such contracts fall under the following CPV codes:

• 45450000-6 Final construction works — more than 10% of all lots;
• 45260000-7 Roofing and specialized works — 3.7%;
• 45230000-8 Construction of roads and utilities — 3.2%;
• 45310000-3 Electrical installation works — 2.3%;
• 44110000-4 Construction materials — 2.1%;
• 44160000-9 Mains, pipelines, pipes, casing pipes, tubing, and related products — 2.36%.

Beyond construction, the segment of petroleum product supplies (CPV 09130000-9) is also notable, accounting for more than 1.8% of procurements with long payment terms.

Procurement methods

The vast majority of procedures are special open bidding procedures (90%). Other methods are used far less frequently:

• Request for price quotations — 6.4%;
• Simplified procurement procedure — 3.7%;
• Standard open bidding — only 2 cases, which are likely due to errors in filling in the electronic fields.

Financing and actual payment terms

We also sought to analyze when contracting authorities actually make payments — that is, whether it indeed takes as long as originally provided for. However, it proved impossible to conduct a comprehensive analysis of such data.

The reason is that the overwhelming majority of lots with post-payment terms exceeding three months — namely, 57.2% of such procurements — are financed from the proceeds of commercial activities of municipal and state-owned enterprises. In value terms, this share is even higher — 68.6% of all funds fall within this category. These enterprises pay under contracts from their own bank accounts rather than via the State Treasury Service, and therefore information on the actual payment dates is not publicly available.

By contrast, procurement transactions financed exclusively from the state or local budgets account for approximately one third (33.9%) by number of lots and only one quarter (25.1%) by value. It is precisely for these procurements that real payments can be traced through the Treasury system, but they do not provide a full picture of the entire market.

In addition, payment reports on the Spending portal do not always indicate the identifier of the procurement to which a particular payment relates. The Fiscal Policy Research Center supported our analysis by extracting data on the date of the first payment for each procurement wherever possible. Ultimately, such data were obtained for only 27.5% of all transactions with long payment terms.

It should also be taken into account that, under Article 253(1) of the Civil Code of Ukraine, the calculation of a term begins on the day following the relevant calendar date or event specified by the contracting authority as the trigger for the start of the term. However, since information on such trigger dates is not publicly available, as contracting authorities are not required to report them, for the purposes of analyzing procurements with long post-payment terms we treat the contract publication date as the starting point.

The largest number of procurement transactions with payment terms exceeding 90 days were announced by Energoatom JSC and its 11 separate divisions. Together, they account for more than 20% of the total number of such procurements, with a total contract value of nearly UAH 20 billion. 

At the same time, a total of 18 regional electricity distribution companies of Ukraine also constitute a significant share of procurements — both by number of lots (8.58%) and by total value (UAH 36 billion). However, their presence in the market structure is fundamentally different from that of Energoatom. Some of these companies have common or cross-shareholding beneficiaries, their procurements are not concentrated in a single entity, and are instead distributed across various legal entities.

There are also contracting authorities from other sectors that frequently resort to setting long payment terms exceeding 90 days:

• Department of Humanitarian Policy of the Dnipro City Council — 4.4% of all lots, worth UAH 1.66 billion;
• Education Department of the Darnytskyi District State Administration of Kyiv — 2.2% of all lots, worth UAH 3.12 billion;
• Kharkiv Heating Networks Municipal Enterprise — 2.2% of all lots, worth UAH 3.1 billion.

The largest number of procurement transactions with payment terms exceeding 365 days, specifically, 62% — were announced by four contracting authorities, with a total value exceeding UAH 2 billion: 

• Vinnytsia City Council Municipal Enterprise “Vinnytsiamiskteploenerho” — 18.3% of lots;
• Municipal Enterprise “Management Company for Housing Maintenance of the Sviatoshynskyi District of Kyiv” — 17.6% of lots;
• Department of Infrastructure and Landscaping of the Chernivtsi City Council — 14.9% of lots;
• Chernivtsiteplokomunenerho Municipal Enterprise — 11.2% of lots.

The analysis shows that more than 91% of lots are paid faster than provided by the contract, even if the payment period is calculated from the date of contract publication — on average, by 57%. If, instead of the contract publication date, the countdown starts from the performance event, the actual payment period is even shorter. This points to a clear pattern: the payment terms published on Prozorro do not always reflect real financial practices. 

We interviewed several contracting authorities that set long payment terms to understand why they do so. Some explained that the reason lies in the funding cycle. For example, in district heating enterprises, expenses and revenues depend on seasonality — higher revenues in winter and increased maintenance costs in summer. As one such contracting authority told us, they fear penalties for late payment and therefore secure themselves by setting longer payment terms. In some cases, the decision to establish long terms is made not by the authorized procurement officer, but by the internal customer responsible for preparing the technical specifications. And sometimes long payment terms have simply become a routine practice that no one questions anymore.

Appeals to the AMCU

Since long payment terms may deter bidders from participating in procurement, we also analyzed AMCU practice to assess whether such terms are appealed — and if so, how successful such appeals are.

Procurements with long payment terms were challenged by bidders in only 2.7% of cases, which is the system-wide average among competitive tenders. However, not all such complaints concerned payment terms specifically, some related, for example, to lack of transparency or bias in determining the winner. At the same time, tenders conducted through the request for price quotations procedure are currently not subject to appeal at all. 

Procurements with complaints specifically about payment terms are difficult to identify, but of those we were able to find, the complaints were dismissed. For example, in two ongoing road repair service tenders in Mukachevo (UA-2025-03-10-008291-a and UA-2025-03-10-008888-a), the AMCU Commission rejected the complaints (decisions No. 6419 and No. 6430 of April 22, 2025, respectively), stating that the complainant failed to provide sufficient documentary evidence substantiating the need to amend the documentation, and that there was no proof that the established payment terms violated the bidder’s rights or legitimate interests. Similar refusals were found in at least 97 other AMCU decisions during 2024–2025. 

The very fact that such a large number of complaints are dismissed may discourage bidders from filing appeals, particularly when they encounter excessively long payment terms. They may decide that challenging such conditions is not worth the time, even when the contract terms appear unfair.

Anomalous cases and incorrect data

Some procurements feature extremely long payment terms — more than one year, sometimes even up to 1,000 days. The total contract value of such procurements during 2023–2025 reaches UAH 5 billion, accounting for 3.8% of all transactions. From the procurement announcement alone, it appears that suppliers would have to wait almost indefinitely for payment. Seeing such conditions, suppliers think twice before deciding whether to participate. However, once it comes to contract signing, the situation often changes: the actual payment terms specified in the contract itself frequently turn out to be much shorter.

In some cases, the reason lies not in an intention to delay payments, but in errors made when filling in electronic fields in the Prozorro system. 

For example, the Kyiv City Clinical Endocrinology Center (a municipal non-profit enterprise) procured 1,500 packs of paper towels for UAH 74,700. The electronic form specified post-payment within 1,000 days, although both the draft contract and the signed contract with the winner clearly stipulated 30 banking days from the date of delivery.

Another example concerns the procurement of lighting fixtures for Volynoblenergo PJSC worth UAH 717,000. The contracting authority entered a post-payment term of 888 days in the electronic field but did not specify any payment terms in the draft contract. After the contract was signed, it became clear that the actual term was 120 days, and the payment deferral had been included as a non-price evaluation criterion with options of 60, 90, and 120 days, meaning the exact term depended on the selected bid. In any case, entering 888 days in the electronic field was unjustified, even though formally the requirement of the Law (Article 37(1)(37)) to specify “payment terms” was met — payment was to be made after delivery of the goods. 

These examples show that extremely long payment terms sometimes do not reflect real practice and are merely the result of errors made by contracting authorities in Prozorro.

Although average competition in procurements with long payment terms is not always high, there are certain segments that remain fairly competitive, including cases where the number of bidders reaches 10–16 per lot. For example, in the procurement of medical supplies under CPV 33140000-3, some tenders achieved competition of more than 10 bidders with an average payment term of four months. Likewise, in electricity procurement under CPV 09310000-5, the average competition for the contracting authority Ukrprodcontract reaches 10 bidders with similar contract payment terms. Meanwhile, the state enterprise “Creative, Production and Research Center for the Development of Contemporary Art,” under the same CPV code, achieved competition among 16 bidders with a payment term of just over three months. 

Anomalous cases and incorrect data

Some procurements feature extremely long payment terms — more than one year, sometimes even up to 1,000 days. The total contract value of such procurements during 2023–2025 reaches UAH 5 billion, accounting for 3.8% of all transactions. From the procurement announcement alone, it appears that suppliers would have to wait almost indefinitely for payment. Seeing such conditions, suppliers think twice before deciding whether to participate. However, once it comes to contract signing, the situation often changes: the actual payment terms specified in the contract itself frequently turn out to be much shorter.

In some cases, the reason lies not in an intention to delay payments, but in errors made when filling in electronic fields in the Prozorro system. 

For example, the Kyiv City Clinical Endocrinology Center (a municipal non-profit enterprise) procured 1,500 packs of paper towels for UAH 74,700. The electronic form specified post-payment within 1,000 days, although both the draft contract and the signed contract with the winner clearly stipulated 30 banking days from the date of delivery.

Another example concerns the procurement of lighting fixtures for Volynoblenergo PJSC worth UAH 717,000. The contracting authority entered a post-payment term of 888 days in the electronic field but did not specify any payment terms in the draft contract. After the contract was signed, it became clear that the actual term was 120 days, and the payment deferral had been included as a non-price evaluation criterion with options of 60, 90, and 120 days, meaning the exact term depended on the selected bid. In any case, entering 888 days in the electronic field was unjustified, even though formally the requirement of the Law (Article 37(1)(37)) to specify “payment terms” was met — payment was to be made after delivery of the goods. 

These examples show that extremely long payment terms sometimes do not reflect real practice and are merely the result of errors made by contracting authorities in Prozorro.

Although average competition in procurements with long payment terms is not always high, there are certain segments that remain fairly competitive, including cases where the number of bidders reaches 10–16 per lot. For example, in the procurement of medical supplies under CPV 33140000-3, some tenders achieved competition of more than 10 bidders with an average payment term of four months. Likewise, in electricity procurement under CPV 09310000-5, the average competition for the contracting authority Ukrprodcontract reaches 10 bidders with similar contract payment terms. Meanwhile, the state enterprise “Creative, Production and Research Center for the Development of Contemporary Art,” under the same CPV code, achieved competition among 16 bidders with a payment term of just over three months.