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The Verkhovna Rada has improved the Prozorro public procurement mechanism, which will save up to UAH 9 bln annually
19.09.2019 | 15:50 | Directorate for relations with state bodies and public

On September 19, the Verkhovna Rada approved at its second reading and as a whole a draft law No. 1076, which is intended to improve the Prozorro public procurement mechanism.

The adopted draft law, in particular, introduces personal liability for violation of the procurement law and improves the appeal mechanism, as well as harmonizes the public procurement standards with international standards.

In addition, the adopted draft law lowers the threshold for mandatory procurement through Prozorro from 200 down to 50 thousand hryvnias. This means that more than 250,000 procedures a year will now occur in the system and have an auction stage.

“This Draft law will help to increase control over how the state spends the taxpayers’ money, as well as significantly increases liability for abuse and embezzlement. Due to this solution, we also simplify control over irresponsible suppliers, which in turn will increase the effectiveness of Prozorro public procurements, reduce risks and ensure fairness for all participants”, said Minister of Economic Development, Trade and Agriculture Timofii Mylovanov.

Improving the appeal mechanism will give businesses greater opportunities to assert their rights. The changes include repayment of a fee in case of satisfaction of the supplier’s complaint, payment of the complaint through the system, anti-trolling mechanisms. Therefore, to counteract trolling and tender blocking, only paid complaints will be accepted and it will not be possible to withdraw them. The businesses will also be able to appeal the cancellation of the procedure and the rejection of all proposals. It is forbidden to cancel the procedure during the appeal. For failure to comply with the decision of the AMCU, the head of the customer shall pay fine in the amount of UAH 85 thousand.

The adopted draft law strengthens the liability for breach of the law for unfair customers. For example, if the customer improperly applied the negotiation procedure, unreasonably rejected the tender proposal, violated the tender proposal publication terms, he shall pay a fine in the amount from UAH 25.5 thousand to UAH 51 thousand. For failure to comply with the decision of the body of appeal, the head shall bear liability and pay fine in the amount of UAH 85 thousand.

“By making this decision, we bring out of the shadow more than a quarter of million procurements. They will now take place in Prozorro. Additional savings from this could amount to more than UAH 9 bln annually. The law also mandates the use of Prozorro Market electronic directories that allow you to sell and buy small batches of goods as easily as you would through an online store. The mechanisms to combat trolling are also envisaged, the appeal procedure is being improved, the professionalization of procurements is emphasized”, commented First Deputy Minister of Economic Development, Trade and Agriculture Pavlo Kukhta.

It should be noted that the draft law also addresses the issue of international drug purchases. Certain medicines will continue to be procured through international organizations over the next two years upon approval of the list of such medicines and the procedure for their procurement through the Cabinet of Ministers.

Other innovations of the adopted draft law include expanding the list of competitive procedures and assigning the customers’ right to conduct pre-tender communications with businesses. A new anti-dumping tool is also introduced – the system will highlight an abnormally low price. The supplier will have to justify it to sign contract with the customer.

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