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Procurement in a new way: 10 novelties of the Law of Ukraine "On Public Procurement"

On April 19, amendments to the Law of Ukraine "On Public Procurement" (hereinafter - the Law), adopted in September last year, came into force. The law once again improves the procedures for conducting public tenders and again forces both customers and participants to adapt to the next changes.

Therefore, in this article we will talk about the main innovations of the Law and try to understand exactly how to work with them.

  1. Simplified purchase is applied at purchase for the sum of 50 thousand UAH or more, but less than the limit established for the concrete customer. This procedure is in fact an improved pre-threshold procurement. However, now all simplified purchases must be made through an electronic system. In addition, such procurement consists of separate stages and is carried out using an electronic auction. !!! Although there are exceptions. Purchase of goods, services, works is allowed without the use of a simplified procedure in the range from 50 thousand UAH and up to the threshold in the same cases that were previously provided for the negotiation procedure with certain features:
  • an urgent need for such a purchase may arise appealing decisions the customer after evaluating the bids of the participants, as well as termination of the contract through the fault of the participant. In this case, procurement outside the simplified procedure in this case is allowed in the amount of not more than 20 % of the tender value / contract amount;
  • now you can buy all the services of a lawyer;
  • if the purchase of goods is carried out using an electronic catalog;
  • if the purchase of goods and services is carried out from the enterprises of public organizations of persons with disabilities.

If there is one of these grounds, the Customer is only obliged to publish a report on the procurement contract.

If you need advice on the new rules of public procurement, contact us for help

2. Electronic catalog - a kind of alternative to simplified procurement. Although simplified procurement is faster than above-threshold, it will still take time. Instead, the new law proposes to make sub-threshold purchases also through an electronic catalog. In this case, the purchase is made almost as in an online store. The customer enters the electronic catalog, selects the product category, then selects from the proposed suppliers and places an order. After receiving the supplier's answer, the system independently generates a report on the contract, the customer only needs to enter the details of the contract.

! The structure, procedure for the formation and use of electronic catalogs are determined by the Cabinet of Ministers of Ukraine. At present, such an order is still in place not accepted. Therefore, details about the work of e-catalogs will be known later.

3. Bug fixes. This possibility appeared only with regard to confirming information compliance of the participant with the qualification criteria or signature rights tender offer and / or procurement contract and provided that such deficiencies are identified by the customer. In this case, the participant is given 24 hours to correct errors from the moment the customer publishes a request to eliminate errors. As before, errors identified by the bidder must be corrected by the deadline for submission of bids.

!!! An interesting situation is when the customer did not find an error and did not inform the participant, and later rejected such an offer. How to act? The law does not regulate such situations. We will wait for the position of the AMCU.

4. Goodbye, tender committee! Do not rush to rejoice or panic. The law establishes a transitional period. In particular, the formation of a tender committee is still allowed until January 1, 2022. In the future, all purchases must be made by an authorized person. It should be noted that the authorized person may carry out its activities only on the basis of an employment contract or an order of the customer (if such a person is already an employee of the customer).

5. Bidding with limited participation - a new competitive procedure. It is held in the case when the qualification of participants must be carried out in advance of the auction. Such a procedure can be carried out only if the purchase price exceeds the amount equivalent to 133 thousand euros - for goods and services and 5 150 thousand euros - for works.

!!! This procedure can be used only from 19.10.2020.


6. Abnormally low price - one of the new concepts of the Law. It can be defined in two cases:

  • if the price is less than 40 % or more than the arithmetic mean price of the bids of other bidders at the initial stage of the auction.
  • if the price is less than 30 % or more than the next price of the tender offer according to the results of the electronic auction.

In this case, if the bidder justifies such a price within one working day from the date of the auction, the customer may accept such an offer. Such justification is provided in any form.

7. The cost of the life cycle - a new criterion for evaluating tender proposals. It is the sum of the value of the subject of purchase and the costs during its use. This criterion can be used where the customer may incur additional costs. Such costs may be related to: the use of the subject of procurement, in particular the consumption of energy and other resources; maintenance; collection and disposal of goods (goods); impact on the environment.

8. Financial capacity among the list of qualification criteria. This criterion is not new, it was present in the law "On Public Procurement". The essence of this criterion is to ensure the customer's confidence in the profitability of the participant and the ability to cover the costs associated with the performance of the contract. Currently, the law explicitly states that financial capacity is mandatory must be confirmed by financial statements, ie the participant must provide a balance sheet, statement of financial performance, statement of cash flows, statement of equity (for companies that conduct simplified accounting - only the balance sheet and statement of financial performance). It should be noted that individual entrepreneurs do not submit financial statements and therefore will not be able to participate in the bidding if such a criterion is established. At the same time, it is the customer who decides whether to set this criterion or not. The exception is limited bidding. In this case, all four criteria provided by law are applied.

9. New tariffs when appealing the purchase. Now the price of the complaint is affected not only by the subject of procurement (goods, services or works), but also by the stage at which the appeal takes place.

If the bidder appeals the terms of the tender documentation, qualification criteria or any decisions of the customer taken before the deadline for submission of bids, the cost of such a complaint is 0.3 % of the value of the procurement, but not less than 2 thousand UAH and not more than 85 thousand UAH. When appealing against decisions made after the opening of tender proposals, a fee of 0.6 % is charged from the value of the subject of procurement, but not less than UAH 3,000 and not more than UAH 170,000.

You can read more about the calculation of the cost of the complaint, the procedure for its payment and return to the complainant at Resolution of the Cabinet of Ministers of Ukraine dated 22.04.2020 № 292.

10. Responsibility of the head of the customer. If before Art. 16414 КУпАП established responsibility for such infringements as: carrying out purchase without application of the procedures defined by the legislation; evaluation of proposals not according to the evaluation criteria and methods; concluding a contract with the winner of the tender at prices and volumes that do not meet the requirements of the documentation, etc., now Art. 16414 КУпАП is considerably supplemented. There is a responsibility for the purchase of goods, works and services before / without simplified procurement, non-rejection of tender proposals, which were subject to rejection or rejection on grounds not provided by law, etc.

In addition, the responsibility of the head of the customer appeared: for non-compliance with the decision of the AMCU and the conclusion of contracts before / without conducting procurement procedures / simplified procurement.

It should be noted that the amount of fines has changed significantly. If earlier fines for members of the tender committee were set in the range from UAH 11,900 to UAH 25,500, now the minimum fine is UAH 1,700 and the maximum is UAH 85,000. As for the liability of the head of the customer, the fine varies from 34,000 to 170,000 UAH. 

!!! Important information for those who started the purchase before the implementation of the above changes or have a valid contract:

Implementation procurement, started before 19.04.2020, as well as the implementation and amendment of agreements concluded before that date, is carried out in accordance with the procedure in force before the entry into force of the new Law.

Conclusions: In this article, we have mentioned only the main changes made by law № 114-IX. It should be noted that the Law also changed the previously established deadlines. For example, the deadline for publishing contract information has been increased to 3 business days compared to 1 business day as before. The customer is also given the opportunity to increase the term for concluding the contract to 60 days. In addition, the procedure for appealing against procurement and certain features of concluding and amending contracts have changed.

Undoubtedly, it will take time to master all these changes. Therefore, if you already have questions or need help, we will be happy to tell you about the nuances of procurement "in a new way".

If you need advice on the new rules of public procurement, contact us for help

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