Bird & Bird's Warsaw office supports public procurement in Ukraine - a hybrid training event was held on September 15

Despite the ongoing war with Russia, Ukraine’s process of reconstruction has already begun. The total loss to Ukraine's economy stands at about $600 billion and continues to soar. The good news, though, is that Ukraine has one of the most modern electronic procurement systems in Europe. This increases the chances of a large number of competitive bids in public tenders.

What is the law in Ukraine?

The principal Ukrainian law governing public procurement is the Law of Ukraine "On Public Procurement”. It foresees open tender, open tender in English (European), competitive dialogue and negotiation procedures. The European procedure means that, by signing the Association Agreement, Ukraine has also committed to aligning its public procurement laws with EU Directives and EU procurement rules, including non-discrimination based on the bidder’s status and nationality, and the competitiveness of procurement based on transparency at every stage. 

The European procedure consists of a prequalification phase followed by an e-auction composed of three rounds, where in the final stage contractors have to submit all formal documents regarding the absence of grounds for exclusion and their fulfilment of the conditions of participation. The submission deadlines are tight, so it is a good idea to prepare such documents in advance. The system automatically generates the result of the procedure.

Contractors can appeal all actions and decisions of the contracting authority to the Antimonopoly Committee of Ukraine (AMCU). The deadlines for submitting appeals are, for example, 5 days from the publication of prequalification results, and 10 days from the disclosure of a violation. The AMCU has 10 business days to consider a complaint; the fee for a complaint at the tender proposal submission stage is 0,3% of the expected cost of the tender (but not less than USD 55 and not more than USD 2,400), and at the prequalification or later stages - 0,6% (minimum USD 85 and maximum USD 4,800).

Are proceedings conducted in English?

In a European tender, only the most important information is translated into English, such as the announcement. The rest of the documents need to be translated, but today's online document translation tools are good enough to produce suitable English versions. Correspondence regarding supplementary documents or clarifications must be in Ukrainian. 

Where can I find information on procurement in Ukraine?

Ukraine introduced procurement reform in 2016, and runs electronic procurement through the https://prozorro.gov.ua/en  platform. 

Prozorro is a hybrid electronic system based on an open-source model. It allows collaboration and data transfer between a central database and an infinite number of commercial marketplaces/platforms. Alexandra Misiats, who conducted the training, uses the commercial platform https://zakupki.prom.ua/en, but in fact there are many recommended accredited commercial platforms, such as https://smarttender.biz/en/, https://e-tender.ua/en, https://playtender.com.ua/, https://zakupki.com.ua/, and https://izi.trade/.  Most of them have an English interface.  Marketplaces compete with each other, which motivates them to provide the best service to attract both contracting entities and suppliers.

What makes Ukraine’s procurement system unique?

The official motto of Prozorro is "Everyone can see everything." After a tender procedure is complete, absolutely all data is disclosed, including the list of all participants, their bids, the decisions of the tender committee, all qualification documents, and so on. All this information is publicly accessible through Prozorro's online analytics module.

Prozorro also gives users free access to a wide range of economic information on competitors - from their participation in tenders to data on sanctions imposed on them to information on their financial situation or any pending lawsuits. By comparison, in Poland it is not possible to obtain so much information free of charge.

Prozorro’s e-procurement and e-auction systems have greatly sped up proceedings; they now average two months. Contracting authorities also only have 20 business days to formally verify documents after bids are submitted, a deadline most of them meet.

How can I get started?

All you have to do is create an account on one of the commercial platforms connected to the Prozorro system and search for procurement notices of interest. The system can send you notifications when announcements appear.

In some proceedings where a license is required (the production of medicines, wholesale and retail trade in medicines, etc.), you have to register a company in Ukraine. In practice, it takes about 3 days to establish a limited liability company and 3 weeks to establish a representative office.

A practical solution is to appoint a representative who is a Ukrainian citizen, can obtain a Ukrainian e-signature, and can handle communication with the contracting authority or assess the grounds for appeal.

What do foreign companies face?

Documents must be signed with a Ukrainian e-signature, which can be obtained only by Ukrainian citizens, and from July 2022 also by Polish citizens. Other foreign companies are unlikely to obtain one, which is why Ukraine's procurement system exempts them in many cases. 

The contracting authority cannot require non-residents to produce documents that are not provided by law in their country, and their bids cannot be rejected for this reason. In this situation, the contractor must provide an explanation to that effect, which is sufficient in most cases. In contrast, in Poland the level of formality in this regard is very high, with companies often excluded for this reason. 

The Ukrainian procurement system is very accessible and transparent. The whole procedure is electronic, runs smoothly, and foreign entities can benefit as non-residents from special features of the Euro procedure.

More information on the Ukrainian public procurement system, questions raised during the training session, and the entire presentation are available here.