Public procurements in Ukraine

On 1 April 2016, the Law on Public Procurement ("The Law") came into force. The Law was intended to increase the level of transparency and openness of public procurements, optimisation of procurement procedures and the level of competition in the field of public procurements, reduction of corruption through the introduction of electronic procurement system and electronic appeal system. The Law introduced some important changes on which we will focus in more details in this article.
 
Thresholds of public procurements
 
The Law increased the minimum purchase price for a mandatory public procurement. For general customers the value of the purchase subject of good (goods) shall be equal to or exceed 200,000 UAH, and service (services) - 1.5 million UAH.
 
For customers who carry out activities in certain spheres of economic activity, provided that the value of the purchase subject of the good (goods) shall be equal to or exceeds 1 million UAH, and service (services) - 5 million UAH.
 
Procurement may be carried out by applying one of the following procedures:
a) public auction;
b) competitive dialogue;
c) negotiation procurement procedure.
 
Public auctionis the main procurement procedure which shall be carried out with the obligatory auction on the lowest price and non-price criteria basis. During the public auction all interested parties shall have the right to submit the tender offer and at least two proposals must be submitted for sufficiency of the procurement procedure.
 
Competitive dialoguecan be applied by the customer under the following conditions:
 

• In case if the customer may not determine the suitable technical, qualitative characteristics (specifications) of the services or determine the type of services, and in order to come to optimal decision it is necessary to negotiate with the participants;

• In case if the subject of procurement are consulting services, legal services, development of information systems, software products, research, experimentation or development, execution of research and development, construction work, and definition of secularities requires negotiation.

 
Competitive dialogue is conducted in two stages. At the first stage, all participants are invited to submit its tender offer, which provides information on compliance of the participant with the qualification criteria and requirements specified by the customer in the tender documentation, and a description of the procurement decision without specifying the price. At the second stage, participants have to submit final tender offer with price indication.
 
Negotiation procurementprocedure shall be used by the customer as an exception and according to which the customer concludes a procurement contract with the participant after negotiating with one or more participants.

Electronic procurement system ProZorro
 
The keystone of the new Law was the transition of public procurements to an innovative system of authorised electronic platforms. An authorised electronic platform is information and telecommunication system authorised by the Authorised Agency, which is a part of the electronic procurement system and provides for the registration of the parties, the automatic placement of the procurement, receipt and transmission of information and documents during the procurement procedures, the use of services with automatic information exchange. The access to the authorised electronic platforms is carried out via the internet. The procedure for authorising electronic platforms is determined by the Cabinet of Ministers of Ukraine. At the moment there are more than 10 popular electronic platforms in Ukraine (ProZorro, Zakupki.prom.ua, E-tender,etc.).
 
Timescales of actions in public procurement
 
The customer independently and free of charge publishes through authorised electronic platforms on the website of the Authorised Body full information onprocurement.
 

Action in tender	Terms
The announcement regarding procurement procedure and tender documentation	Not later than 15 days prior to the day of disclosure of tender offers
Changes to the tender documentation and clarifications	within one day from the date of the decision on introduction or clarification.
Announcement with information on conclusion of framework agreement (in the case of procurement under framework agreements)	not later than seven days from the date of conclusion of the framework agreement
The protocol of consideration of tender offers	within one day from the day of its approval
Notice of intention to conclude a procurement agreement	within one day from the date of the decision to determine the winner of the procurement procedure
Publishing of procurement contract	within two days from the day of its conclusion.
Notification of amendments to the contract	within three days from the date of the change
Report on conclusion of an agreement contracts	within one day from the day of conclusion of the contract.

 
The responsibility for the completeness and security of the information, which is made public on the web portal of the Authorised Body, is borne by the chairman and secretary of the tender committee of the customer or an authorised person.
 
Appeal procedure
 
The appeal procedure is regulated by Article 18 of the Law. The complaint shall be submitted in the form of an electronic document through the electronic procurement system. The complaint shall contain the information regarding date and time of filing, unique number of the public procurement, name of the customer, information regarding decision, action or inaction, grounds for a complaint, references to violation of the procurement procedure, actions or omissions of the customer and factual circumstances which can be confirmed. 
 
The complaint shall contain documents which affirm the violation of the procurement procedure and the document confirming the payment to the appeal body for consideration of the complaint.

Antimonopoly Committee of Ukraine is an appeal body for public procurement. The permanent administrative board under Antimonopoly Committee of Ukraine has been created for dealing with the complaints on violations of legislation in the field of public procurement.
 
Terms of appeal
 
The consideration of the complaint in the Antimonopoly Committee takes 15 working days and automatically suspends the procurement procedure.
 
The law specifies clear deadlines for filing complaints and the subject of appeal depending on the stage of the procurement procedure.
 
On initial stage of appeal of tender documentation, decisions or inactivity of the customer, the complaints may be submitted from the moment of publication of the announcement of tender, but not later than four days before the date fixed for the submission of tenders.
 
The complaints concerning decisions, actions or inactivity of the customer that occurred after the evaluation of the proposals of the participants shall be submitted within 10 days from the date of publication of the notice of intention to conclude the agreement, but before the date of the conclusion of the procurement agreement.
 
Complaints on decisions, actions or inactivity of the customer which took place after consideration of tender offers for compliance with the technical requirements specified in the tender documentation and determination of conformity of participants with the qualification criteria shall be submitted within five days from the day of publication of the tender review protocol.
 
Since the functioningofProZorrosystemthe participants of tenders submitted there have been 389,300 complaints and demands. 27.9% of complaints have been satisfied; 2.7% of all public procurements were appealed.
 
 
 
office 93
5/24 Irynynska Street
Kiev 01001
Ukraine
Tel: +380 44 590 4828
Fax: +380 44 590 4830
www.kievbarrister.com
 
 
AUTHOR & CONTACT INFORMATION
AUTHOR(S): Nataliia Isakhanova, Ivan Podpalov
 
AUTHOR EMAIL(S): n.isakhanova@kievbarrister.com  i.podpalov@kievbarrister.com
FIRM NAME: Sergii Koziakov & PartnersLaw Firm
FIRM ADDRESS: office 93, 5/24 Irynynska Street, Kyiv 01001, Ukraine
TELEPHONE NUMBER: +380 44 590 4828
FAX NUMBER: +380 44 590 4830
 
FIRM EMAIL: office@kievbarrister.com
 
WEBSITE ADDRESS: www.kievbarrister.com
 
Nataliia Isakhanova
 
Nataliia Isakhanova is a Partner of Sergii Koziakov & Partners specialising in International Antitrust & Competition Law, Mergers and Acquisitions, Trade Law, Corporate Law, Foreign Investments.
 
Nataliia has extensive experience representing the interests of foreign investors in major investments projects in manufacturing, oil-and-gas industry, commercial, agricultural and telecommunication sectors in Ukraine and abroad. Nataliia Isakhanova defended the interests of foreign investors as to their compliance with Ukrainian Competition Law in the Antimonopoly Committee of Ukraine (AMC) in the process of legal supporting investments project and business activity of companies with foreign investments in Ukraine.
 
Nataliiahas extensive experience in representing and advisingGeneral Motors Company, Opel Southeast Europe LLC, Chevrolet Central and Eastern Europe LLC,DELPHI France SAS, TP-LINK Technologies Co. Ltd, Bunge, Lenovo Group, HyundaiCorporation, Samsung Electronics Co., Ltd, ECO Eastern Europe Real Estate AG, Mohamed Abdulmohsin Al Kharafi & Sons General Trading, General Contracting & Industrial Structures Co W. L. L., AE Nibulon Ltd (the largest Ukrainian agricultural exporter of grain), Scanroc (the largest Ukrainian producer of an energy-saving system for building’s thermal protection), Ukreximbank and many others.
 
Nataliia Isakhanova was an Adviser on Foreign Investments of the Government of the Autonomous Republic of Adjara (Georgia) from January 2009 to October, 2012.
 
Nataliia was repeatedly invited as an independent expert. Nataliia Isakhanova developed the Concept of the Ukrainian Center for Foreign Investment Promotion and gave recommendations regarding Legislative Acts on establishment and activity of the Ukrainian for Foreign Investment Promotion as part of the grant of the Government of the Netherlands. Upon the World Bank request, Nataliia Isakhanova participated in the working group composed of leading EU lawyers on preparation of the reports on conformity of Ukrainian legislation with the WTO standards and agreements under the WTO framework and developed recommendations on harmonisation of Ukrainian legislation with the WTO standards and requirements. Nataliia Isakhanova participated in the working group on preparation ofthe National Export Strategy and Action Plan for Ukraine for the period of 2016-2020. These documentshave been prepared with financial support from Western NIS Enterprise Fund on the request of the Ministry of Economic Development and Trade of Ukraine.
 
Nataliia Isakhanova is recognised as a National expert in the sphere of Trade & Customs and in the sphere of Competition Law (Cartel Regulation) by Getting The Deal Through.
 
Nataliia Isakhanova is recommended as an exclusive expert in the sphere of Trade & Customs in Ukraine by the Global Law Experts (GLE).
 
Nataliia Isakhanova authored numerous articles and publications on Competition Law, International Trade Law and Corporate Law.
 
Nataliia Isakhanova holds Master`s Degree in International Law from Kyiv National Taras Shevchenko University, Institute of International Relations.
 
Nataliia holds Ph.D. in International Law from Kyiv National Taras Shevchenko University, Institute of International Relations.
 
Nataliia is fluent in English, Russian and Ukrainian and admitted to the Ukrainian Association of Lawyers and Ukrainian National Bar Association.
 
Ivan Podpalov
 
Ivan Podpalov is a Counsellor of Sergii Koziakov& Partners specialising inCompetition Law, Corporate Law, Merger and Acquisition, Corporate LawandImmigration Law.
 
Ivan Podpalov has experience in representing the interests of foreign investorsin major projects in heavy industry, energy, commercial and agricultural sectors in Ukraine.  Ivan Podpalov defended the interests of foreign investors as totheir compliance with Ukrainian Competition Law in the Antimonopoly Committee of Ukraine (AMCU) in the process of legal supporting project and business activity of companies with foreign investments in Ukraine.   
 
Ivan Podpalov is recognised as a National expert in the sphere of Competition Law (Cartel Regulation) by Getting The Deal Through.
 
Ivan Podpalov authored numerous articles and publications on Competition Law and Corporate Law.
 
Ivan Podpalov is admitted to the Ukrainian National Bar Association.
 
Education:  Kyiv National Taras Shevchenko University, Institute of International Relations, The International Law Department (Master of International Law), the Hague Academy of International Law, the Hague, the Netherlands (2009), International Fulbright Program “ADR Process: Skills Development and Implementation” Kyiv, Ukraine (2009).
 
Languages: Ukrainian, Russian, English. 
 
Sergii Koziakov & Partners
 
Founded in 1994, Sergii Koziakov & Partners is one of the leading law firms in Ukraine. Sergii Koziakov & Partners have earned a solid reputation for providing of excellent legal services and its lawyers have repeatedly been among the leaders of various national and international rankings.
 
The team of professional lawyers advises on a wide range of issues with core practice being Corporate Law, Mergers and Acquisitions, Competition Law, International Trade Law, Real Estate, Tax, Banking Law and Insurance Law, Arbitration and Litigation. We deliver high quality client-tailored support for the exclusive benefit of every client.
 
Sergii Koziakov & Partners represented interests regarding and advised on: Antimonopoly investigations of a violation of legislation on protection of economic competition on different national markets; Safeguard and Anti-Dumping Investigations on imports to Ukraine of different products; M&A transactions including representation of interests in obtaining of approvals required for closing of the transactions in the Antimonopoly Committee; restructuring of the assets of the largest Ukrainian agricultural producers; acquisition of land plots and buildings for construction of largest network of food supermarket in Ukraine.
 
Through its expertise, knowledge of industries and legal experience Sergii Koziakov & Partners offers every client the best practical decisions and progressive academic legal expertise in a competitive environment.
 
Sergii Koziakov and Partners has a long-established practice of offering highly professional advice to transnationalcorporationsofGlobal500represented by Fortune Magazine such asGeneral Motors, Samsung Electronics, SamsungElectronicsUkraine Company, Bunge, Lenovo Group, LafargeHuawei Technologiesand their subsidiariesNissanMotorUkraine, McDonald`sUkraine, and others. Sergii Koziakov and Partners  hasalso been working withAdam Opel AG, Chevrolet Central and Eastern Europe LLC,DELPHIFranceSAS, TP-LINKTechnologiesCo. Ltd, HyundaiCorporation, EuroglasPolskaSp. z.o.o., ECOEasternEuropeRealEstateAG, KoreaElectrоnicsAssоciation, KoreanTextileAssociation, OJSCFarmak, thelargestUkrainianpharmaceuticalproducer;AENibulonLtd, thelargestUkrainianagriculturalexporterofgrain; the Ministry of Defense of Ukraine, Ministry of Justice of Ukraine, Foreign Embassies; UkrEximbank and many others.