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COUNTRY RESULTS
Ukraine 86.2%
Select Year
2016
2016
Country facts
Population - 42 539 010
Area - 603,500 km2
GDP - 87 bln $ (nominal)
GDP (per capita) - 2,052 $ (nominal)
State Budget Revenues - 38 bln $
State Budget Expenditures - 40 bln $
Economic Growth - 2.2%

Public procurement regulation in Ukraine has evolved from 1993 (1993 - first Governmental regulation, 2000 – first Public Procurement Law) to the most recent amendments incorporated in the new the Law of Ukraine “On Public Procurement” (the “New Public Procurement Law” – New PPL). From May 2016 Ukraine is country member of General Procurement Agreement of WTO (World Trade Organisation).

The New PPL introduced important novelties into the procurement system:

  • Completely electronic procurement procedures/operations, ensuring free public access to practically all procurement information.
  • A new (valid from 2014) definition of the procuring entities, which is similar to the relevant definition of the contracting entities (specifically in the concept of the bodies governed by public law) in the EU Directive 24/2014.
  • A drastic decrease in the number of exceptions from the scope of the public procurement rules – decrease from 43 to 18 exemptions (with 2 temporary), most of which are compatible with the EU requirements.
  • Only 3 procurement procedures – open tender, competitive dialogue and negotiated procedure.
  • E-auction (based on price only or multi-criteria) is sole evaluation method for tender procedures.
  • Simplification of participation in tender through “self-declaration approach” (only winner provides documents confirming qualification compliance to requirements).

One of the main novelties was that an open source e-tendering system Prozorro was created. The system was designed at the initiative of civil society organisations and financed by several private IT firms. The system ownership has been transferred to Transparency International Ukraine and later by the end of 2015 – to Ministry of Economic Development and Trade. The e-system integrates useful analytical and monitoring tools - the BI module http://bi.prozorro.org/  and new monitoring forum for issues/disputes DoZorro http://dozorro.org/.

The TPPR assessment of the PPL allows to conclude that it is quite progressive and well compliant with best international standards (GPA, UNCITRAL, EU). Ukraine scored best among the target countries of the TPPR assessment and showed that the legislation promotes very high level of transparency and is user-friendly.

On the other hand, domination of lowest price and simplified approach to verification of bidders compliance with tender requirements may have serious risks on economic efficiency of procurements (contract discipline, achieving best value for money and good quality-price balance) which is the reason why Ukraine scored relatively low in terms of efficiency of the PPL - 70% of the points related to efficiency of the system.

In the wider context of assessment on applying the public procurement rules in Ukraine, the most acute problem relates to inconsistent and constantly changing legislation, which does not allow public authorities and market operators to accumulate much needed expertise.

 

The Public Procurement Reform Strategy and Action Plan (Road-Map) was approved by Resolution No. 175 of the Cabinet of Ministers of Ukraine on 24 February 2016 addresses the development of the public procurement system in the period 2016 to 2022. The Strategy refers to the need to implement EU rules and standards as set by EU-Ukraine Association Agreement, to increase competition in public procurement and the necessity for professionalization and well-structured permanent training activities.

Among ongoing developments, online public procurement trainings can be pointed out as a positive development. The first online training sessions in public procurement (“Training for ALL”) was in 2015-2016 to address a chronic need to ensure that up to 100,000 officials dealing with public procurement in Ukraine annually received some professional training. The course started in May 2016 (updated in January 2017) and is being delivered via the on-line education platform “PROMETHEUS” (www.prometheus.org.ua ). In light of the success of this initiative, the present online training programme now includes business community and will include interested civil society activists and organisations.

Assessment of the Legislation:
 
Public Procurement Legislative Base: