Legislative changes: will public procurement become more transparent and efficient


Аleksеy Kot 

Miy biznes

In September last year, the Verkhovna Rada adopted a number of amendments to the Law of Ukraine “On Public Procurement”. On April 19, 2020, they entered into force. Managing partner of the law firm “Antika”, Ph.D. Oleksiy Kot analyzed the changes and innovations that await participants and customers of procurement procedures.

In the new version of the Law, government officials have provided a number of innovations that will significantly affect the procedures familiar to all participants in public procurement. Consider the key ones.

Sub-threshold purchases were reduced from UAH 200,000 to UAH 50,000.

Another innovation is that from now on the customer must publish information about the concluded contracts on the ProZorro website, regardless of their amount. Previously, if the amount of the transaction was less than UAH 50,000, such a report was not required.

The procedure for procurement worth from UAH 50,000 to UAH 200,000 has been simplified.

A key feature of the procedure is the reduced purchase period: the announcement is published 6 working days before the date of submission of proposals. And for purchases less than UAH 50,000, an electronic catalog system is created – the actual price offers of companies for various goods that the customer can use when purchasing.

Bidding with a limited number of participants.

This is a new procurement procedure. In fact, it duplicates the two-stage procedure well known from international donor procurement procedures. At the first stage, qualification selection of procurement participants is carried out. It should be noted that for the procedure to take place, at least four participants must submit their proposals. At least three participants who have qualified in the first stage must be admitted to the second stage. And only after that the actual procurement can be carried out by the open bidding procedure.

Important innovations also apply to the open bidding procedure itself. From now on, customers can use a new additional criterion – the financial capacity of participants. In this case, the minimum size can not be greater than the expected cost of the purchase.

Ability to eliminate minor shortcomings in the tender offer of the winner of the procurement.

This is an extremely important innovation. Because now the winner has 24 hours from the date of the announcement of the results to correct minor deficiencies. This means that now the customer will no longer be able to reject participants on formal grounds, such as the absence of separate pages of documents or the presence of errors in the submitted proposal.

A new term was introduced – “abnormally low purchase price”.

If the price of the most economically advantageous bid based on the auction results is lower by 40% and higher than the arithmetic mean value of the bid prices of other bidders at the initial stage of the auction, and / or is lower by 30% and higher than the next price / reduced bid price according to the results of the electronic auction, the system automatically marks the bidder’s price as abnormally low. In this case, the bidder must provide a justification for its price, and the customer must reject the winner’s bid if such justification can not confirm the reality of the price offer.

Additional conditions have been introduced for rejecting the bidder’s proposal.

Reasons for rejecting the bidder’s offer may be the presence of arrears of taxes and fees, as well as negative experience with him during the last three years.

Analyzing the amendments to the Law of Ukraine “On Public Procurement”, it should be noted that they are generally positive, as they aim to increase the level of control and transparency of the procurement procedure and eliminate a number of existing critical issues that were widely used for abuse. Nevertheless, in order to speak with confidence about the expediency and effectiveness of new procedures, some time must pass, which will make it possible to test their effectiveness in practice.