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Print REFORM OF STATE PROCUREMENT

The state purchases goods, works and services to meet social needs. Annually the volume of public procurement in Ukraine amounts to about 13% of GDP. The Ministry of Economic Development and Trade of Ukraine has the Department for State Procurement Regulation, which defines legal policy in this field and coordinates the work of the public procurement system.

The aim of the Department for State Procurement Regulation is to develop a system, which will satisfy public and state needs at the best price. In the updated system the business will willingly participate in public procurement and a naturally occurring competition will destroy the corruption. Experienced procurers will understand the market and will be able to effectively provide their companies with high-quality goods, services and works.

In order to obtain a comfortable modern public procurement system that everyone wants to use because of its  trustability, the following measures should be assumed:
•    simplification of tendering procedure and making it transparent and fair;
•    bringing real business to participation in public procurement and creation of a natural competition in this area;
•    allowing full access to the public to all the purchases carried out for analysis and control;
•    harmonization of Ukrainian legislation with European best practices.

Reform of state procurement started last year with the Law of Ukraine “On Public Procurement” (Verkhovna Rada Journal (VVR), 2014, No. 24, p. 883). The purpose of the updated Law, in particular, is to create a competitive environment in the sphere of state procurement, to prevent corruption in this sphere and to develop fair competition.

Key innovations – the updated Law has reduced the list of reasons for application of non-competitive procedures; has adapted procurement procedures with one participant to practice of using such a procedure in European countries; has reduced the list of cases (from 44 to 10) that are not covered by the Law. The latter was introduced with the purpose of prevention of uncontrolled use of public funds, transparency and openness of state procurement etc.

Procurement platform ProZorro developed together with business, public activists, international experts, non-governmental organizations combating corruption and other active participants of the process was opened in a pilot mode in February 2015. For the first time ever this system allowed suppliers to submit their bids electronically and therefore attract large groups of existing suppliers to state tenders. Now the system is working only with small procurements that are not covered by the Law – the so-called “sub-threshold purchases”. But even such tenders have already been announced in the amount of nearly half a billion hryvnias, and the platform is being used by key government bodies – the Ministry of Economic Development and Trade, the Ministry of Finance of Ukraine, the Ministry of Defense of Ukraine, the Ministry of Infrastructure of Ukraine, the State Management of Affairs, the Ministry of Justice of Ukraine, the National Bank of Ukraine, the National Nuclear Energy Generating Company of Ukraine, Kyiv City State Administration, the State Financial Inspection of Ukraine, the Ministry of Healthcare of Ukraine, Lviv City Council and others.

The next phase of reforms:
In 2015:
•    To make additional amendments to the Law “On Public Procurement” based on business practices for the last year. Key points:
•    to simplify the procedure of filing documents presented by the participant (documents to be filed only by the  winner);
•    to get closer to EU standards and GPA;
•    to increase the state procurement thresholds according to the level of inflation;
•    to launch electronic procedures for some procurement groups by means of building of modern infrastructure based on current public web-portal and developments of community and business, to build a convenient knowledge database on procurement.

In 2016:
•    to spread electronic procurement over all procurements;
•    to ensure convenient public access to information on public procurement;
•    to improve professional development of the governmental customers.

In 2015 – 2022 :
•    to implement into Ukrainian legislation provisions of the Directive 2014/24/EC and the Directive 89/665/EEC, as amended by the Directive 2007/66/EC, defined in Annexes XXI-B, XXI-C to the Agreement.


Public officers with significant length of service and people having successful experience in real business today have joined together their efforts at the Department for State Procurement Regulation in order to achieve these goals in the shortest time. Updated Public Procurement Department is actively working on the reform and engages non-governmental organizations in cooperation and monitoring.


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