Summary

Over 14 months, contracting authorities concluded 257,000 above-threshold direct award contracts totaling UAH 401.7 billion. This represents approximately 6% of the total number of contracts in the system and nearly 28% of their aggregate value. While the number of such procurements is relatively modest, their financial scale is significant.

At the same time, almost half of the total value (43.3%) of above-threshold direct contracts relates to the procurement of natural gas by a contracting authority on which the government has imposed public service obligations. These are reports on the sale of gas within the Naftogaz group, which became mandatory in 2023. Such procurements may distort the statistics and overstate the problem of direct non-competitive awards in Prozorro, including in the eyes of international partners. 

Overall, the situation regarding non-competitive above-threshold procurement would be improved by reinstating the negotiated procedure. Excluding natural gas procurement within the Naftogaz group, approximately 70% of contract value currently consists of procurement conducted on grounds for which the negotiated procedure was previously required. The negotiated procedure provides for consultations with several suppliers where possible, and for a review mechanism, both of which reduce the risk of infringements and inefficient decisions.

Direct awards can be retained as exceptions for circumstances arising specifically from martial law — for example, where a contracting authority is located in an area of active hostilities. At the same time, a number of grounds should be reconsidered altogether — whether they are in fact necessary.

Volumes and dynamics of procurement

From July 30, 2024, to September 30, 2025, contracting authorities concluded 257,000 above-threshold direct award contracts. Their value at the time of the study stood at UAH 401.7 billion — nearly 28% of the aggregate current value of contracts concluded during that period. While their value share is significant, the number of such procurements is moderate, at 5.87% of the total.

Contracting authority activity is largely governed by the budgetary and planning cycle. A gradual increase in the number of lots and total contract value is observed through to January 2025, followed by a steady decline through March. This pattern mirrors the general trend across all procurement methods and may be explained by a combination of seasonal factors, the desire to use up budget appropriations before the year-end, and procurements for the new year. In the seasonality analysis, we excluded reports on natural gas procurement within the Naftogaz group, as they significantly distorted the statistics.

This means that the planning and management of budgetary resources in the direct award segment of procurement require heightened attention during the peak season, in order to prevent inefficient use of funds and potential procurement risks.

Grounds applied by contracting authorities

Over the 14 months under review, 84.4% of the value of above-threshold direct awards fell within the five most common grounds out of nearly three dozen. These were: 

1. Procurement of natural gas by an entity subject to public service obligations — 43.3%. In four such procurements totaling UAH 82.8 billion, the contracting authority indicated an incorrect ground in the electronic field; these were added manually on the basis of the justification document.
2. Absence of competition on technical grounds — 19.1%.
3. Protection of critical infrastructure and energy facilities — 8.1%.
4. Procurement on grounds of urgent need — 7.6%.
5. Open tendering canceled due to absence of tenders — 6.4%.

By number of lots, four grounds account for 78.1% of procurements:

1. Absence of competition on technical grounds — 29.9%.
2. Open tendering canceled due to the absence of tenders — 18.3%.
3. Procurement on grounds of urgent need — 15.7%.
4. Legal services — 14.2%.

Each of these grounds has its own application characteristics and associated risks.

On the ground of absence of competition on technical grounds, contracting authorities may conduct procurement from natural monopolies (where the absence of competition has been formally recognized by the Antimonopoly Committee) or in other circumstances. To roughly estimate the share of procurements conducted specifically from natural monopolies, we used the AMCU’s consolidated register of natural monopolies as of October 31, 2025. They account for 56.1% of procurements on the ground of absence of competition on technical grounds by number of lots, and 51.8% by value.

In other cases, the absence of competition may arise from vendor lock-in, where changing a contractor is disadvantageous or altogether impossible. In IT service procurement, for example, such dependency may arise from the architecture of the IT product, the absence of comprehensive technical documentation, or the use of niche programming languages. The effective monopolization by developers of the right to further develop solutions they have created can lead to rising service costs and reduced motivation for the contractor to innovate or improve quality in the absence of competition. This issue is examined in greater detail in the study on IT procurement in Prozorro. That said, not every restriction of competition is unambiguously negative or the result of bad faith on the part of the contracting authority or supplier. In a number of situations — in particular those relating to national security, defense capability, or the protection of critical infrastructure — the use of proprietary technical solutions, closed architectures, or a limited pool of contractors may be objectively justified and aimed at minimizing risks to the state. The same applies to other procurement subjects.

In direct contracts on grounds of urgent need, there is a risk that the need is not in fact genuinely urgent — or that it became urgent as a result of the contracting authority’s own actions in failing to procure earlier. The number of procurements on this ground increases toward the end of the budgetary year — between September and December, that number rises by approximately 50%. It is therefore most likely that contracting authorities also invoke this ground simply when they need to use up appropriations within the budgetary year. 

When a contracting authority concludes a direct contract because no one submitted a tender, the terms of that direct award must be identical to those of the original tender. However, whether contracting authorities comply with this in practice — for example, whether they require counterparties to provide all the certificates they requested from bidders in the failed competition — is difficult to verify, since only the contract itself is published in the system. There are instances where contracting authorities conclude several contracts instead of one. 

Among direct contracts for legal services, high-volume procurement of small amounts is combined with a number of large strategic contracts. 65% of total procurement value is concentrated among five contracting authorities: Ukrnafta JSC, National Joint Stock Company Naftogaz of Ukraine, Dnipro Metropolitan Municipal Enterprise, and the Eastern and South-Eastern Interregional Centers for the Provision of Free Legal Aid. By number of lots, however, nearly 97% belong to the last two legal aid centers, which systematically procure legal representation services for the provision of secondary free legal aid. We also investigated how other such inter-regional centers procure legal services. It emerged that they too conclude numerous small direct contracts en masse, but do not indicate the ground in the electronic field. In total, the number of such lots from legal aid centers over the period under review was nearly 73,000, totaling UAH 646 million. 

In the case of legal services, the question arises as to whether direct contracts should in fact be permitted at all for such services. Legal advisory and legal representation services, for example, are procured competitively. Similarly, competitive procedures are used to procure a range of other high-expertise services — such as consulting or audit.

What is being procured

Contracting authorities most frequently used above-threshold non-competitive procurement for the purchase of services. Services account for 57.47% of all such procurements — over 147,000 of the 257,000 lots. In monetary terms, however, services represent only 19.7% of the aggregate contract value. This indicates that the majority of service procurements are small in value but large in volume. 

The situation with goods is quite different. Although fewer in number than services — 40.15% of the total, or over 103,000 lots — goods account for nearly two-thirds of the total value of direct contracts, approximately UAH 255 billion.

Works have the smallest share — only 2.38% by number, or approximately 6,000 lots. In value terms, however, they account for 16.88% of all above-threshold non-competitive procurements (nearly UAH 68 billion). 

If one drills down into CPV codes, the value of direct awards is heavily concentrated in three categories, which together account for over 69% of total contract value. Certain categories generate a substantial share of contract value despite a relatively low number of lots.

Gaseous fuels (09120000-6) is the key category by financial volume. Despite its modest share of the total number of lots, gas accounts for the largest share of contract value. One reason is the obligation on Naftogaz Trading LLC, a gas supply company, to report on its procurement of natural gas from its own parent company and other entities within the group. This subsidiary of NAC Naftogaz of Ukraine conducts wholesale sales of natural gas to industrial consumers, budget institutions, and suppliers.

It is also worth noting that nearly 8,700 gas supply contracts were concluded via direct award following unsuccessful competitive tendering. During the period under review, only 8.3% of competitive procurements of this commodity were successfully completed.

Ukraine has committed to ensuring a free market for electricity and gaseous fuels. At the same time, the government has imposed public service obligations on Naftogaz Trading LLC — the company is required to supply natural gas to budget institutions at a preferential tariff. No separate rules have been established for this situation, so contracting authorities are required to launch open tendering, which no one participates in due to the low estimated value, and then conclude a direct contract with the Naftogaz company at a low price. Occasionally — in summer, for example, when the price of the commodity is lower — competitive tendering does succeed. Overall, however, considerable resources are expended on formal procedures.

Construction works (CPV 45000000-7): For the analysis of this sector, we consolidated all procurements by the second digit of the CPV code, since the procurement item here is defined by reference to the object rather than the classifier. Three grounds account for 75.7% of the total value of above-threshold direct awards in this sector, while together representing only 51.3% of the number of lots. These are: protection of critical infrastructure and energy facilities, urgent need, and the procurement of additional works under the main contract (up to 50%). The need to procure additional works indicates potential issues with the quality of project design and the accuracy of cost estimates at the planning stage, including owing to the complexity of such projects. 

Direct contracts on grounds of absence of any tender submission are high in number but account for a relatively small share of value. Insufficient competition in this sector may point to potential barriers to participation — for example, excessive requirements in tender documentation — or to a limited pool of contractors. 

Steam, hot water, and associated products (09320000-8) are characterized by a high share of procedures conducted on the ground of absence of competition on technical grounds. This is consistent with the nature of the market, where supply is often provided by local monopolies and the possibility of choosing an alternative supplier is limited.

Although the categories Electrical energy (09310000-5) and Distribution of electrical energy (65310000-9) belong to the same sector, they exhibit a different structure of grounds for above-threshold direct awards. In electricity procurement as a commodity, one ground dominates by a wide margin (approximately 70%), both by value and by number of procedures — namely the conclusion of a contract with a supplier of last resort or a universal service provider. A significant share (21%) also relates to absence of competition on technical grounds and cancellation of tendering due to absence of tenders. This structure indicates that in this category the use of direct contracts is substantially dependent on the quality of procurement planning and the level of market activity among suppliers.

By contrast, electrical energy distribution services within a given territory are provided by a single distribution system operator, and tariffs are set by the state regulator. In these circumstances, the predominance of the ground “absence of competition on technical grounds” — 95.5% by number and 97.6% by value of contracts — is objective in nature and results from the natural monopoly position of the relevant operators. 

Thus, despite their sectoral proximity, these two categories exhibit different models of non-competitive procurement and require different approaches to risk assessment.

Since some of the grounds for above-threshold non-competitive procurement are tied to the subject matter of the procurement, the presence of certain categories at the top was expected — for example, natural gas or legal services. Overall, the bulk of above-threshold direct contracts relates to the procurement of various energy carriers. 

In each category, a few principal grounds for direct contracts predominate. The choice of which to invoke may, however, be influenced by a variety of circumstances: technical constraints, absence of competitors, or urgent needs.

Contracting authorities do sometimes indicate incorrect grounds. For example, gaseous fuel was purchased under the ground for the procurement of hematopoietic stem cells. At the same time, among contracts for natural gas with suppliers subject to public service obligations, contracts for the supply of gas to schools do appear. However, such instances were not sufficiently widespread to have a material effect on overall statistics by value.

Helicopters, airplanes, spacecraft, and other motor-powered aircraft (34710000-7): Procurements in this category are primarily directed at meeting the urgent needs of the Armed Forces of Ukraine or are accounted for by contracting authorities located in areas of active hostilities.

Since some of the grounds for above-threshold non-competitive procurement are tied to the subject matter of the procurement, the presence of certain categories at the top was expected — for example, natural gas or legal services. Overall, the bulk of above-threshold direct contracts relates to the procurement of various energy carriers. 

In each category, a few principal grounds for direct contracts predominate. The choice of which to invoke may, however, be influenced by a variety of circumstances: technical constraints, absence of competitors, or urgent needs.

Contracting authorities do sometimes indicate incorrect grounds. For example, gaseous fuel was purchased under the ground for the procurement of hematopoietic stem cells. At the same time, among contracts for natural gas with suppliers subject to public service obligations, contracts for the supply of gas to schools do appear. However, such instances were not sufficiently widespread to have a material effect on overall statistics by value.

Monitoring of direct contracts

The State Audit Service covered 1,062 lots — 0.41% of above-threshold direct awards conducted during the period under review — through monitoring. In competitive procurement, monitoring coverage is nearly seven times higher, at 2.73% of the total number of procurements eligible for monitoring. The same trend is observed in value terms: monitoring covers only 2.3% of the aggregate value of above-threshold direct award contracts, compared with 20.9% in the competitive segment. Even excluding the value of natural gas procurement within the Naftogaz group, as well as procurements from natural monopolies, suppliers of last resort, and universal service providers, coverage reaches only 5% of the value of direct contracts. This gap relative to competitive procurement indicates that direct awards remain largely outside the monitoring focus. Yet they too require oversight, since they do not provide for competition or safeguards such as review before the AMCU. 

The largest monitoring volumes relate to the construction sector (CPV 45) and the energy sector (CPV 09), where contract values run into the billions of hryvnias. Overall, monitoring activity is concentrated in sectors with high financial exposure and an elevated risk of inefficient use of funds. Significant attention is also devoted to industrial machinery (CPV 42) and repair and maintenance services (CPV 50).

At the same time, the top three sectors by number of monitoring instances include accommodation, catering, and retail trade services (CPV 55), with a combined value of over UAH 90 million. In 98% of cases, these involve catering services for educational establishments. Such procurements were monitored primarily by the directorates of the Western Office of the State Audit Service, in particular in Khmelnytskyi and Ternopil regions, where they were examined three times more frequently than construction procurements. Violations found under this CPV related predominantly to the failure to publish, or untimely publication of, the justification for the procurement ground. Accordingly, most monitoring instances resulted in auditors requiring explanatory work and training of authorized persons to be carried out.

Overall, violations in above-threshold direct awards were identified by auditors during monitoring in 67.8% of cases. This figure is slightly higher than in competitive procurement, where it stands at 61.3%. While a gap of 6 percentage points is not critically large, it may indicate that direct non-competitive procurement carries elevated risks of non-compliance with legislation. It is important, however, to understand what types of violations auditors are actually identifying. Doing so comprehensively is difficult, since in the electronic field on Prozorro, the State Audit Service almost invariably classifies the type of violation as “Other violations of procurement legislation,” and details must be sought manually in the text of the audit finding. It would therefore be worthwhile to update the violation categories in the system and apply them consistently, so as to enable analysis of the problems arising in direct procurement.

In summary, above-threshold direct awards warrant greater monitoring coverage. The State Audit Service generally selects sectors for monitoring well — concentrating on construction, energy, and related sectors, where procurement volumes are largest and corruption risks are highest. The Western Office’s excessive focus on catering service procurements for educational establishments is questionable. Such procurements are not particularly widespread, are comparatively small in value, and the violations associated with them largely concern failure to publish or untimely publication of information. The Office would therefore benefit from refining its methodology for selecting above-threshold direct awards for monitoring.

Contract modifications

Modifications were made to contracts in 36,700 lots, representing over 14% of the total number of above-threshold direct award procurements. The aggregate value of modified contracts reached UAH 140 billion, or nearly 35% of the total value of all contracts in this segment. By comparison, in competitive procurement, modifications occurred more frequently: they affected 21.8% of lots and 44.7% of the total value of contracts over the corresponding period. The data indicate that while contract modifications in above-threshold direct awards are recorded less frequently than in competitive procurement, their financial scale remains significant. The majority of modified contracts relate to cases where the ground for using direct awards was absence of competition on technical grounds (41.81% of all modified contracts) or absence of tenders in open tendering (32.53% of all modified contracts). Their shares are high because these are overall the most common grounds for above-threshold direct awards. If one looks at what share of contracts were modified within each direct award ground, the leaders are as follows:

• Procurement of natural gas by an entity subject to public service obligations — modifications in 38.34% of contracts (41.2% for Naftogaz group procurements specifically)
• Procurement of additional works or services from the same economic operator, up to 50% of the price of the previous/existing contract — 28.11% of contracts
• No tender submitted — 25.38%.

In order to assess the justification for these modifications and the potential risk of abuse, it is necessary to conduct further in-depth analysis of their substance.

Comparison with the negotiated procedure 

The negotiated procedure was abandoned in the first year of the full-scale invasion in favor of an even more flexible mechanism. Under Resolution No. 1178, the grounds for the negotiated procedure became the grounds for direct awards. In the early period, such changes may have been justified to meet the needs of contracting authorities, in particular for defense, energy, and critical infrastructure. However, this expansion of contracting authority discretion creates risks of manipulation and circumvention of competitive procedures, whereby a portion of procurements are concluded as direct contracts without adequate scrutiny of the grounds invoked.

Over the comparable period from July 30, 2020, to September 30, 2021 — the years immediately preceding the full-scale invasion — contracting authorities conducted 100,600 negotiated procedures, under which contracts totaling UAH 101.7 billion were concluded. This amounts to an average of 7,200 contracts per month valued at UAH 7.3 billion. This is considerably lower than the current figure — during the period under review, an average of 18,400 above-threshold direct award contracts per month were concluded, valued at UAH 28.7 billion. In other words, the number of such lots has more than doubled overall, and the contract volume has increased nearly fourfold. Two factors should of course be taken into account:

• High inflation over recent years, and
• The increase in the number of grounds for above-threshold direct awards.

In both the negotiated procedure and the direct awards conducted under the wartime special rules, absence of competition on technical grounds remains the leading ground by number and by value of expenditure. Under the negotiated procedure, this ground accounts for nearly 52% of lots and over 50% of contract value. The same ground also ranks first in direct awards under the special rules — nearly 30% of contracts and 19% of total contract value. The list of the most common grounds under the negotiated procedure, which together account for 95.7% of contract value, is as follows: 

1. Absence of competition on technical grounds — UAH 51.8 billion (50.9%) by contract value and 52% by number of lots.
2. No tender submitted — UAH 21.4 billion (21%) and 30% of lots.
3. Need to carry out additional construction works — UAH 15.6 billion (15.3%) and 2.5% of lots.
4. Urgent need (across all sub-paragraphs of this ground in the Law) — UAH 6 billion (5.9%) and 3.9% of lots. 
5. Need to protect intellectual property rights — UAH 2.6 billion (2.6%) and 2.2% of lots.

By type of procurement subject, the distribution in negotiated procedures is similar to that in direct contracts. The only material difference was in the value of goods and services. Previously they accounted for 37% and 48% of contract value respectively, whereas now goods take a larger share — 63% versus 20%. 

The largest expenditure under the negotiated procedure was also concentrated in energy resources and construction. At that time, however, natural gas did not dominate contract values to nearly the same extent. Reporting on natural gas procurement within the Naftogaz group did not yet exist, and procurements from the supplier of last resort were also significantly smaller in volume.

Excluding gas procurement within the Naftogaz group, grounds on which contracting authorities previously conducted the negotiated procedure currently account for 70.2% of the value of above-threshold direct awards. This means that a substantial share of the direct procurement market could potentially have been channeled through a more controlled procedure that ensures transparency and competitiveness.

The application of the negotiated procedure offers significant institutional advantages: it allows for consultations with several potential suppliers prior to contract conclusion and provides a mechanism for the review of decisions. Even where review is rare — occurring in fewer than 1% of cases — the very existence of this instrument has a deterrent effect and reduces the risk of non-competitive procurement, including procurement justified by an alleged absence of competition.

Reinstating the negotiated procedure can thus serve as an effective mechanism for enhancing transparency and minimizing risks in the direct award segment, where oversight and competition are currently limited.

Conclusions

From July 30, 2024 to September 30, 2025, contracting authorities concluded 257,000 above-threshold direct award contracts totaling UAH 401.7 billion. This represents approximately 6% of the total number of contracts in the system and nearly 28% of their aggregate value. While the number of such procurements is relatively modest, their financial scale is significant.

Nearly half of the total value (43.3%) of above-threshold direct awards relates to natural gas procurement by a contracting authority on which the government has imposed public service obligations — that is, to reports on the sale of this commodity within the Naftogaz group. This raises the question of whether such reports on Prozorro are necessary at all: prior to 2023, they were not published.

A large volume of gas procurement — 8,700 contracts — is also concluded as direct awards following unsuccessful tendering. Contracting authorities succeeded in completing only 8.3% of such competitive procurements. A solution must be developed with the involvement of both the Ministry of Economy and the Ministry of Energy, since a quasi-free gas market has now taken shape in public procurement: contracting authorities nominally have the option of purchasing from any supplier, but are in practice compelled to conduct fruitless tendering.

Overall, the situation regarding non-competitive above-threshold procurement would be improved by reinstating the negotiated procedure. Excluding natural gas procurement within the Naftogaz group, approximately 70% of contract value currently consists of procurement conducted on grounds for which the negotiated procedure was previously required. The negotiated procedure provides for consultations with several suppliers where possible, and for a review mechanism, both of which reduce the risk of infringements and inefficient decisions.

Particular attention should also be paid to procurement on grounds of urgent need — the use of this ground increases by approximately 50% toward the end of the budgetary year. It is therefore likely that a portion of such procurements are conducted not so much because of genuinely urgent circumstances as because of budgetary management challenges. This, however, requires further investigation.

In addition, it would be advisable to technically link, within Prozorro, unsuccessful open tendering to the subsequent non-competitive procurement conducted as a result of its cancellation. This would enhance the transparency of such procurement and improve oversight of contracting authorities’ compliance with the terms of the original tender in the context of direct awards.

Direct awards can be retained as exceptions for circumstances arising specifically from martial law — for example, where a contracting authority is located in an area of active hostilities. At the same time, a number of grounds should be reconsidered altogether — whether they are in fact necessary. Some grounds have been indicated in the system in only a handful or a few dozen procurements. It would also be appropriate to explore alternative procurement methods for the purchase of free legal aid services — for example, framework agreements. 

For both the negotiated procedure and direct contracts to function effectively, it is important to train contracting authorities — in particular on how best to determine the value of such contracts and select a supplier.

Finally, above-threshold direct awards are currently subject to monitoring at a rate seven times lower than competitive procurement — only 2.26% of value compared with 20.9%. They require greater oversight, with a focus on higher-value procurements and material violations. 

This research was prepared within the framework of the “Digitalization for Growth, Integrity, and Transparency” (UK DIGIT) project, implemented by the Eurasia Foundation and funded by UK Dev.

The research was produced with the financial support of the UK Government’s International Development Assistance Programme. The contents of this material are the sole responsibility of Transparency International Ukraine; the views expressed do not necessarily reflect the official policy of the Government of the United Kingdom.

This research was developed by

Team lead: 

Ivan Lakhtionov, Deputy Executive Director of TI Ukraine for Innovative Projects

Authors of the research:

Pavlo Dehtiariov, researcher of DOZORRO TI Ukraine project

Kateryna Rusina, Project Manager at DOZORRO

SUMMARY

More than half (55%) of the hard coal procurements checked contained unlawful requirements to provide additional documents and set extremely short deadlines for their submission — conditions that are potentially discriminatory. 

Draft contracts frequently also included provisions under which failure to submit documents within the short deadline was automatically treated as a written refusal to conclude a contract, resulting in the rejection of the tender and disqualification of the participant.

In the representative sample, winning tenders in procurements with unlawful requirements and disqualifications were on average nearly 40% more expensive than the lowest-priced tenders that contracting authorities had rejected.

This practice demonstrates that the simplified RFP procedure sometimes fails to function as intended and partially undermines the logic of the electronic catalog as a fast and accessible procurement tool. To enhance transparency in Prozorro Market procurement, the DOZORRO TI Ukraine project recommends the following:

1. Closing the hard coal category in Prozorro Market.
2. Introducing a mechanism for challenging procurement requirements, which would give businesses a means of protecting their interests and could significantly reduce the risk of abuse. 
3. Enabling monitoring of RFPs by the State Audit Service, to bring this procurement under oversight.
4. Granting the Ministry of Economy the authority to approve standard contracts for specific commodity categories, thereby simplifying their preparation and ensuring legislative compliance, and converting them into electronic contracts.
5. As electronic contracting develops, introducing automated pre-screening of draft contracts in the electronic catalog that, upon detecting potentially unlawful language, would generate alerts for supervisory authorities.
6. Developing guidance notes for authorized persons at contracting authorities, with recommendations on preparing and conducting procurement through the e-catalog.

Together, these measures can make Prozorro Market procurement more transparent, predictable, and user-friendly for both contracting authorities and market participants.

What makes Prozorro Market procurement distinctive

The specifics of procurement through the e-catalog (Prozorro Market) are governed by a separate Procedure for the Formation and Use of the Electronic Catalog (the Procedure), approved by Cabinet of Ministers Resolution No. 822 of September 14, 2020. The core idea behind this method is to simplify and expedite procurement. Qualification — that is, the verification of supplier documents — is handled by the catalog administrator. RFPs are not subject to auditor monitoring, and participants have no right to challenge either the terms or the decisions of contracting authorities. 

An RFP is generated by completing electronic forms in which the contracting authority specifies a limited set of details: the name of the procurement item, estimated value, quantity, delivery period and location, payment terms, and the deadline for submitting price proposals. 

When publishing an RFP, a contracting authority may only specify information on the specifications of the goods and their permissible values within the item specification set by the catalog administrator. The government recently amended the Procedure (Cabinet of Ministers Resolution No. 33 of 14 January 2026), further specifying the list of details that may be indicated. It was clarified that, in addition to the information already mentioned, a contracting authority may specify the delivery terms, the amount, type, period, and conditions for providing and returning contract performance security (where it requires such security to be provided), as well as a requirement that the country of origin may not be the Russian Federation, the Republic of Belarus, or the Islamic Republic of Iran.

The draft contract, which forms part of the RFP, must not conflict with the information the contracting authority has entered in the electronic fields, and may contain other conditions that are provided for by law in respect of such a contract and that the contracting authority considers necessary for the performance of the contract during its term. It is prohibited to include in an RFP requirements directed at the procurement participant or the selected winner, or to demand any additional documents not provided for by the Procedure. This is a prerequisite for the transparency of such procurement and allows potential suppliers to properly assess its terms and make an informed decision on whether to participate.

Hard coal procurement through RFPs

This study focuses on CPV class “Solid fuels” (code 09110000-3), with an additional targeted sample specifically of hard coal procurements conducted through RFPs on Prozorro Market. For the analysis, we selected procurements announced between September 1, 2024, and September 30, 2025. 

The total number of lots included in the analysis is 858.

For coal procurement, contracting authorities opt for the RFP method twice as often as for open tendering — Prozorro Market accounts for about 64% of such lots. The estimated value of RFP-based procurements is also twice as high, representing 62% of the value of competitive coal orders. Significantly more participants come forward for Prozorro Market procurements — an average of 6.58, compared with 2.04 in open tendering. However, the number of disqualifications is also much higher. 

Where contracting authorities reject 16.5% of tenders in open tendering, the corresponding figure in RFPs is approximately 55%. It is important to note in this context that in open tendering, approximately 22% of lots are accompanied by complaints, which underscores the significance of the review mechanism as an instrument for overseeing the transparency and openness of procurement.

All profiles in the coal category on Prozorro Market now require goods to comply with the DSTU 7146:2010 standard (the Standard). Under the Standard: 

• When concluding a coal supply contract for household needs, a certificate of genetic, technological, and quality characteristics must be presented (clause 7.10). In practice, however, the application of this provision of the Standard creates a conflict in law enforcement, since the Procedure expressly prohibits the demand for any additional documents under the RFP. 
• A coal consignment is considered accepted for dispatch once a composite commercial sample has been taken from it in accordance with DSTU 4096 and a quality certificate has been issued (clause 7.3). Accordingly, this certificate may be requested at the time of delivery.

The requirement to provide these additional documents occasionally appears in lot notes — in 6% of procurements. These are optional fields in which contracting authorities may include supplementary information about the procurement — for example, drawing potential suppliers’ attention to terms of particular importance to them. However, in addition to established documents, contracting authorities in 1.4% of lots also required additional documents not covered by the Standard. Notes carry no legal force, but this already reveals at this stage that some contracting authorities conducting coal procurement tend to impose excessive requirements on potential bidders that are not provided for by law.

Additional requirements in draft contracts 

For the detailed analysis, we randomly selected 270 lots from the full dataset of 858. The sample was calculated using a 95% confidence interval and a 5% margin of error. The sample is therefore representative and reflects the overall picture of coal procurement through Prozorro Market.

Under the legislation in force at the time of the procurements under review, an RFP must not contain requirements directed at the supplier or any documents not provided for by the Procedure. In the draft contract, as elsewhere, a contracting authority may specify only information on the characteristics of the goods and their permissible values within the item specification set by the administrator.

The Standard does not require any documents to be provided in respect of coal other than the certificate of genetic, technological, and quality characteristics at contract signing, and the quality certificate for the coal consignment at delivery. Accordingly, only the certificate of genetic, technological, and quality characteristics and contract performance security in the form of a bank guarantee may lawfully be required at the contract conclusion stage (Article 27(1) of the Law on Public Procurement). The right to require a bank guarantee is now also expressly provided for in the amended Procedure — the contracting authority may specify in the draft contract the amount, type, period, and conditions for providing and returning such security. Any other documents demanded from participants or the selected winner that are not provided for by law are unlawful.

The findings, however, point to systematic non-compliance with these requirements. The documents most frequently demanded by contracting authorities in draft coal supply contracts were as follows.

Overall, 55% of draft contracts (148) in the sample contained requirements to provide additional documents not provided for by either the Procedure or the Standard. In isolated cases, these were manifestly excessive and included documents with no functional connection to the subject matter of the procurement — for example, a certificate of proficiency in the state language, copies of the coal producer’s financial statements for prior years, or an expert market assessment. In the majority of procurements, however, the violations consisted in requirements to provide documents that formally relate to the supplier’s operations but do not affect the physical or quality characteristics of the goods and are not provided for by law, in particular, quality management system certificates, proof of experience in performing similar contracts, or extraction permits. This points to a systemic and uncontrolled expansion of supplier requirements. A full list of documents whose provision was recorded in the study is available via the table at the link.

In practice, contracting authorities are using the draft contract as a tool for introducing additional barriers to participation — contrary to the simplified nature of the RFP procedure and creating disproportionate and discriminatory conditions for suppliers. This eliminates competition, impedes access for bona fide participants, and undermines the logic of the e-catalog as a fast and transparent procurement tool.

When additional documents must be submitted

The review of draft contract terms also revealed that in 52% (141) of procurements, contracting authorities set extremely short deadlines — between 1 and 48 hours — for submitting an additional, sometimes excessive, list of documents required for contract conclusion.

Such tight timeframes place suppliers on an unequal footing, functioning as a barrier and a covert mechanism for selecting a predetermined winner while screening out those objectively unable to meet the requirements in time.

In this context, it is important to determine from what moment the clock actually starts running. The analysis shows that contracting authorities use one of two reference points: 

• the opening of proposals, which virtually coincides with the submission deadline;
• the determination of the selected winner (receipt of an automated system notification).

When publishing an RFP, a contracting authority may set the proposal submission deadline at its own discretion, subject to the minimum requirements of clause 57 of the Procedure — the deadline may not be less than two working days from the date of publication. Formally, this requirement may be satisfied even where the deadline falls on late evening, midnight, or a weekend. 

Particular concern is raised by the combination of nighttime proposal openings and extremely short deadlines. In 25% of lots with short deadlines, suppliers are given between 1 and 4 hours to provide additional documents after the opening of proposals or the determination of the winner. In half of those cases, the proposal submission deadline and automatic opening fall between 11:00 p.m. and 01:00 a.m. compelling suppliers to submit documents during nighttime hours when most responsible personnel are unavailable. 

As regards the moment of determining the selected winner, under clauses 61–62 of the Procedure the winner is determined automatically upon expiry of the submission deadline and evaluation by the electronic system. In practice, however, this long remained in a gray area, with two competing interpretations: immediately upon opening of proposals, or upon the contracting authority’s confirmation. This has now been resolved. Under the amended clause 62, the contracting authority determines the winner and records its intention to conclude a contract in a protocol that is automatically generated and published in the system. Notification of intent is sent automatically within one day of publication. The start of the compliance period is therefore now more transparent and clear to all suppliers.

Even so, where contracting authorities indicated that the winner would be determined “upon receipt of a system notification,” the combination of short deadlines and uncertainty about when that notification would arrive created additional pressure. Winners were compelled to await confirmation without being able to predict the precise start of the compliance period, making timely preparation of documents more difficult. In any case, requirements to provide excessive or unlawfully demanded documents remained unlawful regardless of how that moment was defined. 

Imposing additional requirements through the draft contract not only constitutes a procedural violation but also contradicts the fundamental principles of contract law and public procurement. Contract terms apply only to the parties that have actually concluded the contract. 

Equally legally incorrect is the widespread practice of including provisions such as: “In the event that the Contracting Authority is not provided with such documents (as defined in the draft contract), the Contracting Authority shall treat this as a written refusal by the participant to sign the contract, and shall accordingly reject such participant’s proposal pursuant to subclause 2 of clause 64 of Cabinet of Ministers Resolution No. 822 of September 14, 2020.”

Subclause 3 of clause 64 of the Procedure provides as a ground for rejection only the selected winner’s written refusal to sign the contract. Under Article 207 of the Civil Code, a legal transaction is considered to have been effected in writing if its content is recorded in document(s) exchanged by the parties, including through information and communication systems. A refusal to conclude a contract has legal force only if made in writing by a person with authority to sign it — the selected winner, not merely a procurement participant — and communicated to the other party. The failure of a participant or winner to take certain actions or submit documents, even if such actions are provided for in the draft contract, cannot therefore be treated as a written refusal to sign.

Such conditions create fertile ground for abuse. Formal procedural compliance combined with additional barriers at the contract conclusion stage creates the appearance of competitive tendering while in practice restricting participation to a narrow pool of suppliers who, in certain cases, may be connected, resulting in procurement at inflated prices and inefficient use of public funds.

For example, in February 2025, a gymnasium in Kirovohrad Region procured three types of coal. The draft contract required participants to submit over a dozen documents — including an underground mining permit and financial statements — within 24 hours of the opening of proposals. The contracting authority rejected 8 out of 9 proposals and concluded a contract at the highest price of UAH 299,700, while the lowest offer was UAH 182,000. In another case, the Vanchykivtsi Village Council’s coal procurement required a set of documents within 24 hours of the winner being determined. According to suppliers, proposals were rejected even where the documents were submitted. The contracting authority rejected 8 out of 9 proposals and concluded a contract for nearly UAH 2.6 million, against a lowest tender of UAH 1.5 million. 

Overall, in the analyzed sample, the gap between the lowest and winning tenders in procurements with unlawful requirements or short deadlines amounted to UAH 28.5 million — contracts ended up costing nearly 40% more than they could have.

Such violations have already drawn the attention of law enforcement and courts. A number of criminal proceedings have been opened for misappropriation of public funds in RFP procedures (case numbers 42024222140000071, 12025082210000241, 12025160000000217). A court judgment has also been handed down (No. 573/1300/25) finding that the contracting authority’s actions — in particular, setting a 1-hour deadline for an excessive list of documents — resulted in the rejection of the majority of economically advantageous proposals, contract conclusion at an inflated price, and inefficient use of public funds.

As part of the study, we spoke with suppliers about their direct experience practice of applying additional requirements and barriers at different stages of procurement. Some noted that in most procurements with additional requirements, contracting authorities either tailor conditions to a specific supplier or mechanically copy draft contracts from other RFPs. They also noted that contracting authorities sometimes justify excessive requirements by the desire to minimize their own risk in connection with potential post-delivery inspections. One supplier reported instances of pressure from competitors filing complaints with law enforcement, after which contracting authorities are required to justify the price-to-quality ratio of the coal delivered. 

We also approached individual contracting authorities for their perspective. Most said the primary purpose of such measures is to “play it safe” against the risk of receiving low-quality coal mid-heating-season or dealing with unreliable suppliers or fraudsters. They noted that even where contractual penalties exist, they often lack the resources for lengthy court proceedings. Regrettably, some contracting authorities, when their attention was drawn to potential violations, responded dismissively or claimed not to recall the details. It is also worth noting that some contracting authorities interpret certain legislative provisions at their own discretion — for example, taking the view that requiring documents and contract signature within 24 hours does not conflict with the statutory five-calendar-day deadline for concluding a contract.

Conclusions

55% of RFPs for coal procurement contain requirements to provide documents not provided for by law, and 52% set short submission deadlines.In the representative sample, winning tenders in procurements with unlawful requirements and disqualifications were on average nearly 40% more expensive than the rejected lowest-priced tenders.

These statistics relate exclusively to coal category procurements, not to all RFPs on Prozorro Market. The situation may vary by commodity, and there may be categories where this problem is not systemic. The study does, however, identify specific vulnerabilities in the RFP process and illustrates the potential scale of problems in certain categories.

• The most effective remedy would be a review mechanism in Prozorro Market, currently being developed under the draft new Law on Public Procurement. However, that process is lengthy and the new mechanism will not cover all RFP-based procurements. 
• The situation of unlawful rejections on grounds of alleged refusal to sign would improve with e-contracting, which is also yet to come. But these need not be the only solutions. 

It is therefore worth introducing a range of additional instruments to reduce abuse risks, enhance legal certainty, and strengthen contracting authority capacity.

• Enable monitoring of RFPs by the State Audit Service.

The State Audit Service does not currently monitor RFPs. Whether it has the legal authority to do so is disputed due to ambiguous wording in the procurement rules. It would therefore be advisable either to confirm formally that monitoring is permitted or to amend the legislation accordingly. Even selective monitoring and sanctioning of individual violators can deter future violations.

• Develop and introduce standard contracts.

The e-catalog currently has no mandatory contract templates for commodity categories, and the Ministry of Economy lacks the authority to approve them. The Ministry should be granted that authority and standard contracts approved that set out the permissible terms for coal procurement, leaving contracting authorities to fill in only the key parameters — delivery and payment terms and quantity. This would unify procurement terms, ensure legislative compliance, and simplify preparation without restricting contracting authorities from reflecting their specific needs. These should subsequently be introduced as e-contracts.

• Close the hard coal category in Prozorro Market.

Given that over 50% of procurements in this category contained unlawful requirements, coal procurement through RFPs should be restricted. Procurement would then take place through a method under which businesses may challenge discriminatory requirements and auditors may carry out monitoring. 

• Develop and introduce universal guidance notes for procurement through the electronic catalog.

Such notes will help authorized persons conduct RFPs correctly, apply legislative provisions accurately, and avoid excessive or discriminatory conditions — contributing to more transparent, predictable, and high-quality catalog procurement.

• As electronic contracting develops, introduce automated pre-screening of draft contracts in the e-catalog as a risk indicator for supervisory authorities.
  The algorithm could detect keywords and language conflicting with legislation and the Procedure — such as “certificate,” “declaration,” “permit,” “within X hours of the opening of tenders.” Where such indicators are found, the system could generate risk signals or reports for supervisory authorities. This will become technically feasible only once electronic contracting is in place, as the system currently cannot automatically read and analyze file contents.

These recommendations will help eliminate one method of circumventing the rules in coal procurement and more broadly improve the efficiency and transparency of RFP-based procurement. Efforts must also continue to find approaches that allow contracting authorities to minimize the risk of receiving substandard goods, while protecting bona fide participants from artificially created obstacles and bad-faith practices.

This research was made possible with the support of the MATRA program of the Embassy of the Kingdom of the Netherlands in Ukraine. Responsibility for the content lies with the author and does not necessarily reflect the official position of the Embassy.

This research was developed by

Team lead: 

Ivan Lakhtionov, Deputy Executive Director of TI Ukraine for Innovative Projects

Authors of the research:

Viktoriia Hermasheva, Projects Assistant, TI Ukraine

Kateryna Rusina, Project Manager at DOZORRO

Summary

Accurately estimating the economic impact of these changes is virtually impossible at this stage. We are unlikely to see the real picture until at least the end of 2026, once the new rules have been in force for six months.

Presumably, the changes will further increase the share of procurements won by VAT-paying participants, who already account for wins in 68.16% of competitive lots by number and 92.14% by value. Cooperation conditions for small businesses are likely to worsen.

The largest impact will be on competitive procurements where VAT-paying participants compete directly with non-VAT-paying participants, approximately 21% of lots by number and less than 10% by value.

However, it is very difficult to forecast whether contracting authorities will actually pay more. The change in evaluation methodology alone is likely to have a limited economic effect. If VAT-exclusive bid evaluation had already been in place during the analyzed period (one year and five months), and participant strategies had remained unchanged, contracting authorities would have paid an additional UAH 250 million, which is less than 0.1% of total contract value.

By contrast, changes in expenditure planning and in setting estimated procurement value may have a more serious effect. Under a worst-case scenario—if all non-VAT-paying contracting authorities add 20% to estimated value as a safeguard—budget pressure could increase to more than UAH 60 billion. Even in that scenario, however, competition could still push actual spending downward. 

On top of this, we must account for likely changes in bidder behavior, which are even harder to predict.

Evaluating bids without VAT may also increase price transparency.

In practice, the most difficult adjustment, especially at the beginning, will be for contracting authorities, which will need to adapt mid-budget year. We expect the Ministry of Economy to issue clear guidance with practical instructions on how to calculate estimated value, launch procurement procedures, and conclude contracts under the new rules. 

That said, the most significant impact on the sector will likely come not from procurement-rule changes, but from tax reform—specifically, the draft law abolishing the separate upper VAT-liability threshold for individual entrepreneurs under the simplified taxation system. The current threshold is over UAH 9.3 million and may be reduced to UAH 1–4 million, in line with the rules applied to other entrepreneurs. 

How the new approach to setting estimated value will work

For now, the contracting authority determines how to announce a procurement—whether the estimated value is stated inclusive of VAT or exclusive of VAT. Bids are evaluated based on their total final price, which includes 20% VAT (or another applicable rate) if the bidder is a VAT payer.

If the changes take effect, the contracting authority will indicate the value inclusive of VAT in the procurement plan, but exclusive of VAT in the procurement notice itself. Bids will also be reviewed exclusive of VAT. If a VAT payer wins, the VAT amount will be added to the bid price at the contract-signing stage. In this way, the final contract value will increase, but it will not exceed the procurement value stated in the plan. 

Why exclude only VAT, given that it is not the only tax that differs across businesses? Most likely because VAT is an indirect tax—effectively paid (financed) by the buyer, while the business only administers and remits it to the budget. By contrast, most other taxes—including the single tax for individual entrepreneurs and corporate income tax—are direct taxes borne by the business itself.  

Do the proposals align with EU rules?

In the explanatory note to the draft government resolution, the government stated that the changes are consistent with the European approach to estimated-value setting and bid evaluation.

This claim cannot be fully endorsed. Directive 2014/24/EU, which regulates public procurement in the EU, states that contracting authorities must calculate estimated procurement value exclusive of VAT. At the same time, the directive does not regulate VAT treatment at the bid-evaluation stage. 

VAT payers among contracting authorities and participants

According to BI Prozorro and the YouControl analytical system, non-VAT payers predominate among contracting authorities, accounting for 78.47%. This is expected, since most of them are budget-funded institutions. The remaining 21.53% of contracting authorities are VAT payers—for example, state-owned enterprises. 

If we look at all market participants (in both direct and competitive procurement), the overall status split is similar:

• non-VAT payers — 74.76%
• VAT payers — 25.24%

Note: In further calculations, we excluded CPV 3300 Medical equipment, pharmaceuticals, and personal care products, because some medicines and medical devices are taxed at a 7% rate. Procurements in preferential categories were not excluded from calculations, since separating them requires manual processing.

In competitive procurement, 88.03% of procedures were announced inclusive of VAT. These procedures accounted for 79.56% of the total value.

In competitive lots, the share of VAT-paying participants rises to 50.56%. This can be explained by the fact that competitive procurements are higher in value, while companies and individual entrepreneurs become VAT payers once they reach a certain annual income threshold. VAT payers also win more often. Over the nearly one-and-a-half-year period we analyzed, they won 68.16% of competitive lots. By value, they accounted for 92.14% of contracts.

How competition may change

In previous years, VAT payers argued that they were at a disadvantage compared with non-VAT payers because they had to add VAT to their bid price. However, as noted above, in competitive procurement they already receive roughly two-thirds of contracts by number and 92% by value. Once the changes take effect, VAT payers will likely win more often, but a substantial increase in their contract share is unlikely. Much will also depend on their interest in smaller lots. 

The shift to VAT-exclusive bid evaluation will primarily affect tenders where non-VAT participants compete directly against VAT payers. During the study period, the distribution was as follows:

• • only non-VAT participants — 21.66%
  •  only VAT-paying participants — 57.01%
  • both participant types — 21.1%

It is also important to note that, when bids are evaluated exclusive of VAT, the balance may tilt in the opposite direction, with VAT payers gaining the advantage—because they may claim input VAT recovery on procurements they previously made with VAT included. As a result, even where the nominal price of goods is the same, VAT payers’ effective costs may be lower.  Under such conditions, there is a risk of small businesses being crowded out of public procurement.

Will non-VAT contracting authorities have to pay more?

This is a difficult question to answer. On the one hand, it is possible to estimate, at least approximately, the economic effect of harmonizing bid-evaluation methodology itself. On the other hand, potential changes in how contracting authorities plan expenditures and set estimated procurement value also need to be considered. Of course, bidder behavior will matter as well, and that behavior may also change. However, in the case of bidders, probable scenarios are significantly harder to forecast.

1. Contracting authorities evaluate bids exclusive of VAT: economic effect

Perhaps the main concern procurement practitioners raise about evaluating all bids exclusive of VAT is that, in the end, contracting authorities may overpay. 

Example. A contracting authority allocates UAH 120,000 in its annual plan for a procurement and announces the procedure exclusive of VAT—i.e., with an estimated value of UAH 100,000. Two bidders participate: a VAT payer with a bid of UAH 95,000 and a non-VAT payer with a bid of UAH 97,000. Under VAT-exclusive evaluation, the VAT payer wins. At the contract stage, 20% VAT is then added. As a result, the final contract value is UAH 114,000—which is UAH 17,000 more than it would have been if the authority had signed with the non-VAT payer.

For VAT-paying contracting authorities, this rule change is unlikely to have a material effect. It is already more advantageous for them to announce procurements exclusive of VAT, and they can do so under current rules. If a VAT payer wins, the additional VAT amount included in the contract can later be recovered through input tax credit. By contrast, the changes will affect non-VAT-paying contracting authorities (about four-fifths of all authorities): they cannot recover paid VAT, and the bid that appeared cheapest exclusive of VAT may become more expensive than others once 20% VAT is added.

We analyzed whether winner selection in past procurements would have changed if bids had been evaluated exclusive of VAT, and by how much contract totals would have increased. 

For procurements where VAT payers and non-VAT payers competed against each other, we converted bids to net amounts (exclusive of VAT), identified winners based on those net amounts, and added 20% tax if the winner was a VAT payer. We then calculated differences between the final bids of the simulated winners and the actual winners.

If, during the study period, non-VAT-paying contracting authorities had evaluated all bids exclusive of VAT, total contract value would have been UAH 250 million higher than it actually was.

At the national level, over nearly one and a half years, this is a relatively small amount—0.06% of the total value of contracts awarded by non-VAT-paying contracting authorities. This is because these two bidder types meet in tenders infrequently, in only about one-fifth of cases, and differences between their bids were usually minimal, sometimes even less than one hryvnia. Potentially, this gap in final bid value could widen if the new rules are introduced, because non-VAT participants would need to cut prices more aggressively to win tenders. 

2. To hedge risk, contracting authorities may plan estimated value and expenditures 20% higher

Because contracting authorities are concerned that they may have to pay more after the reform, they may plan for higher expected expenditures. Some may simply budget amounts 20% higher than before to remain on the safe side and ensure they can procure the required quantity.

The worst-case scenario is that all non-VAT-paying contracting authorities do this in all cases. In that event, demand for local and state budget expenditures could increase by UAH 61.78 billion per year. In practice, the scale will likely be smaller, and this pressure may be one-off: after the first year of VAT-exclusive bid evaluation, there will be actual data showing what costs what in Prozorro and how the reform has functioned. Even so, this underscores the need to support contracting authorities in setting estimated value—and not only to account for VAT correctly.

We will see higher-quality price statistics on Prozorro

Now, if a contracting authority announces a procurement inclusive of VAT, a non-VAT payer may submit a bid within the full estimated value. As a result, that bidder may receive funds that were originally set aside in case VAT had to be paid.

Example. A contracting authority announces a procurement with an estimated value of UAH 120,000 inclusive of VAT. Accordingly, UAH 20,000 of that estimated value is VAT, which would need to be included in the contract and paid if a VAT payer wins. Two bids are submitted: a VAT payer at UAH 119,000 and a non-VAT payer at UAH 118,000. The authority signs a contract without VAT at UAH 118,000. That is already UAH 18,000 higher than the estimated value of the procurement item exclusive of VAT.

In practice, because non-VAT-paying contracting authorities are generally indifferent as to which status of supplier they contract with, they usually have no reason to analyze item value exclusive of VAT. Their priority is to obtain the most economically advantageous bid. Therefore, they may mark the estimated value as “inclusive of VAT” simply to preserve the option of contracting with a VAT payer later.

We examined competitive VAT-inclusive procurements in which contracts were awarded to non-VAT payers. Specifically, we calculated estimated value exclusive of VAT and the gap between that figure and the signed contract amount.

In 70.75% of cases (93,500 lots out of 132,100), the contract value with a non-VAT payer exceeded estimated value exclusive of VAT. The total excess amounted to UAH 3.98 billion, or 7.95% of the initial total value of those agreements. 

Two interpretations are possible:

• either prices are higher than they could be, because non-VAT payers can submit bids up to the full estimated value in procurements where VAT is included;
• or estimated procurement value is understated, and the additional 20% set aside for VAT effectively brings it closer to market level.

We also identified a number of State Audit Service monitoring findings in which violations were recorded when a winning non-VAT bid exceeded the estimated procurement value net of VAT. For example, this occurred in a overhaul procurement for Kyiv City Clinical Hospital No. 1, where the contract was signed without VAT at UAH 59.1 million against an estimated value of UAH 61.1 million inclusive of VAT, and in a procurement for green-space maintenance in Vynohradiv, where the contract was UAH 1.67 million without VAT against an estimated value of UAH 1.69 million inclusive of VAT.

This practice is not widespread, and there are also monitoring cases in which auditors did not identify violations in similar circumstances.

In this context, VAT-exclusive bid evaluation may be beneficial: at a minimum, it can improve how market value is reflected in procurement pricing. At the same time, there is a possibility that the changes will also incentivize non-VAT participants to reduce prices.

Will these changes increase tax revenues?

A significant fiscal effect from procurement-rule changes alone should not be expected. Public procurement participants account for only 1.6% of all active business entities. Of course, part of the overall business-entity count consists of individual entrepreneurs who in practice operate under employment-like arrangements. But even if we compare procurement participants only with legal entities, their share is still below 5%. In addition, VAT payers already win 68% of contracts in competitive lots, which account for 92% of the total contract value in competitive procurement. 

In some cases, communities will indirectly finance the state budget, except where VAT is recoverable. This refers to situations in which a VAT payer’s final winning bid (after VAT is added) exceeds a non-VAT payer’s bid. As the calculations above show, however, these amounts are small.

What will change for VAT-paying contracting authorities?

For these organizers, it is more advantageous to announce procurement exclusive of VAT, because even if a VAT payer wins and VAT must be included in the contract value, the tax can later be recovered through input tax credit. In general, they can already announce procurement this way—but the data show this is done in only 13.38% of cases.

In 2024 and the first five months of 2025, VAT-paying contracting authorities signed UAH 25.7 billion in agreements with non-VAT participants. If they had evaluated bids exclusive of VAT, non-VAT participants would have won less often, and the total value of winning bids would have been UAH 600 million lower (accounting for input tax credit). Why this occurs requires additional research.

Contracting authorities can already announce procurement exclusive of VAT, but State Audit Service monitoring conclusions sometimes treat it as a violation when the final contract amount inclusive of VAT exceeds the estimated value stated exclusive of VAT.

For example, in January 2023, state enterprise Dobropilliavuhillia-Vydobutok ran a procurement for pipes. In the procurement plan, it stated an estimated value inclusive of VAT at UAH 7.8 million, but announced the tender itself exclusive of VAT at UAH 6.5 million. A VAT payer won with a bid of UAH 6.48 million exclusive of VAT; VAT was then added in the contract, bringing the final amount to UAH 7.78 million. Therefore, the contracting authority followed the steps the government now proposes to make mandatory. Nevertheless, the Chernivtsi Regional Office of the Western Office of the State Audit Service identified this as a violation, stating that the authority “did not reject the bidder’s tender proposal as one whose price exceeds the estimated procurement value determined by the contracting authority in the open-tender notice.” 

However, this is not a consistent agency practice, and opposite decisions also exist. For example, the Odesa branch of Ukrainian Sea Ports Authority, in its annual plan for territory-maintenance procurement, set the estimated value at UAH 7.8 million inclusive of VAT, while announcing the tender exclusive of VAT at UAH 6.5 million. A VAT payer won, and the contract value inclusive of VAT was UAH 6.54 million. During monitoring, the Eastern Office of the State Audit Service asked about the estimated-value overrun, but after the contracting authority’s explanations, found no violation on this point.

Conclusions

In summary, accurately estimating the economic impact of these changes is practically impossible at this point. We are unlikely to see the real picture until at least the end of 2026, once the new rules have been in force for six months.

What can be stated clearly is that the reform is unlikely to produce a major fiscal effect—it affects a very small share of businesses at the national level.

Presumably, the changes will further increase the share of procurements won by VAT-paying participants, who already account for wins in 68.16% of competitive lots by number and 92.14% by value. Cooperation conditions for small businesses are likely to worsen.

The largest impact will be on competitive procurements where VAT-paying participants compete directly with non-VAT-paying participants, approximately 21% of lots by number and less than 10% by value.

However, it is very difficult to forecast whether contracting authorities will actually pay more. The change in evaluation methodology alone is likely to have a limited economic effect. If VAT-exclusive bid evaluation had already been in place during the analyzed period (one year and five months), and participant strategies had remained unchanged, contracting authorities would have paid an additional UAH 250 million, which is less than 0.1% of total contract value.

By contrast, changes in expenditure planning and in setting estimated procurement value may have a more serious effect. Under a worst-case scenario—if all non-VAT-paying contracting authorities add 20% to estimated value as a safeguard—budget pressure could increase to more than UAH 60 billion. Even in that scenario, however, competition could still push actual spending downward. 

On top of this, we must account for likely changes in bidder behavior, which are even harder to predict.

Evaluating bids exclusive of VAT may also improve price transparency, because it allows comparison of the net cost of goods and services without the indirect-tax component. It may also help reduce prices offered by non-VAT participants.

In practice, the most difficult adjustment, especially at the beginning, will be for contracting authorities, which will need to adapt mid-budget year. We expect the Ministry of Economy to issue clear guidance with practical instructions on how to calculate estimated value, launch procurement procedures, and conclude contracts under the new rules. 

Ultimately, however, there is another major variable: the draft law abolishing the separate upper VAT-liability threshold for individual entrepreneurs under the simplified taxation system. The current threshold is over UAH 9.3 million and may be reduced to UAH 1–4 million, in line with the rules applied to other entrepreneurs. Tax changes may affect the sector more strongly than procurement-rule changes themselves. The number of non-VAT participants would naturally decline, as they would have to register as VAT payers. And VAT administration is fairly burdensome for entrepreneurs; unless it is simplified, this may affect both the number of businesses and the prices of their goods and services.

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. 

Research team

Project Lead:
Ivan Lakhtionov, Deputy Executive Director of Transparency International Ukraine for Innovative Projects

Author:
Kateryna Rusina, Senior Project Manager at Transparency International Ukraine

Co-authors:
Ivan Lakhtionov, Olha Nos, Liliia Lakhtionova, Anna Yuldashova

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 two third 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 BI 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. 

The work of the Transparency International Ukraine team, in partnership with the government, businesses, and civil society, has produced the following results over past nine years:

• More than 30,000 buyers, suppliers, and other users each year analyze Ukraine’s public procurement market daily, with a total volume of UAH 917 billion (~USD 24 billion) in 2023.
• More than 16,000 buyers and suppliers have been trained to use the BI Prozorro module to improve the efficiency of their routine procurement tasks.
• Over 80 studies analyzing public procurement issues have been prepared, contributing to the improvement of regulations and informing policymaking at various levels. For instance, one study by the Kyiv School of Economics on the 24-hour correction period for tender proposals led to regulatory changes that have saved the state more than UAH 11 billion (>USD 30 million) since 2021.
• Through regular feedback and participation in coordination meetings with SoE Prozorro and procurement platforms, improvements have been made in data collection, publication, and the overall public procurement process within the Prozorro system.

Structured interviews with stakeholders reveal that the public BI Prozorro analytics module expands market opportunities for businesses; encourages better internal compliance and integrity among buyers; promotes efficient resource use in public procurement; and helps improve the quality of goods, works, and services provided through public procurement in Ukraine. The impact of the analytics module on the procurement ecosystem can be indirectly assessed by examining BI use cases documented by different stakeholders and the achievements they contributed to:

• Policymakers: The Ministry of Economy of Ukraine and the SoE Prozorro use BI Prozorro and ProBI modules for policy development, analysis, reporting, and informing stakeholders about procurement reforms.
• Buyers: Use BI Prozorro to analyze the market, prepare for procurement transactions, develop procurement Key Performance Indicators (KPIs), and assess their own performance.
• Internal Oversight Bodies and Centralized Procurement Organizations: Use BI Prozorro for real-time monitoring of potential deviations in the procurement processes, risk identification, and internal control over their network of subsidiary organizations.
• Suppliers: Use BI Prozorro to find new business opportunities, analyze buyers, monitor competitors, and increase business profitability.

Think tanks and NGOs: Use BI Prozorro to identify issues in the procurement sector, conduct civic monitoring, and prepare research papers.

 

This research is made possible by the generous support of the American people through the United States Agency for International Development (USAID). The contents are the responsibility of Open Contracting Partnership and Transparency International Ukraine and do not necessarily reflect the views of USAID or the United States Government.

This research has been funded by UK International Development from the UK government; however, the views expressed do not necessarily reflect the UK government’s official policies.

This research was conducted with funding from the National Endowment for Democracy. Views expressed in this publication do not necessarily represent the views of the National Endowment for Democracy.