Public Procurement: 2020 amendments

On 19 April 2020 entered into force restated Law of Ukraine “On Public Procurement” providing for qualification threshold decreased to UAH50 thousand, updated contesting procedure, new electronic instruments, and new procurement procedure.

1. The threshold for mandatory application of ProZorro system decreased from UAH200 thousand to UAH50 thousand

The new law decreased threshold for mandatory application of ProZorro system and introduced simplified procedure which shall apply to procurements which value shall be equal or exceeding UAH50 thousand and shall not exceed the values specified in items 1, 2 clause 1 article 3 of the Law of Ukraine “On Public Procurement”. Preliminary such an amendment boosts a market for UAH27-32 billion annually.

Before 19 April 2020 public customers were entitled to engage contractors for subthreshold values passing through the procurement procedures.

2. From tender committees to authorized persons

After 01 January 2022, all public procurements shall be managed by the authorized persons acting on the basis of labor agreements (contracts) or resolutions of public customers and respective regulations. Qualification of the authorized persons shall be confirmed through passing the appropriate test.

During the interim period by the end of 2021 public procurements may be managed by tender committees or authorized persons.

3. Restricted access procurement – a new tender procedure

Existing public procurement procedures – open procedure (bidding), negotiation procedure, competitive dialogue, framework contract procedure – were supplemented by restricted access procurement. Under the new procedure, anyone may ask to participate in a restricted procedure, but only those who are pre-selected may submit tenders. The new procedure shall be effective from 01.10.2020.

4. Dumping protection

The new law defines “abnormally low price” which shall be determined by the electronic system provided the price of the bid shall be lower:

• by at least 40% from average prices of the bids of other participants at the beginning level; and / or
• by at least 30% of the following price of the bid by the results of the electronic auction.

A public customer may require justification of such price and if the participant fails to provide the feedback – decline the bid.

5. Alternative qualification criteria

Currently, the public customers are entitled to apply alternative, i.e. non-price, qualification criteria in the tender documentation.

6. Rectifying immaterial mistakes in the tender documentation

One of the novelties of the restated law is the obligation of the public customer to require through the e-system from the participant to eliminate immaterial inconsistencies in the tender documentation. The participant shall rectify the reveled inconsistencies and upload updated or new documents to the e-system.

7. AMC contesting procedure: updates

In accordance with the amendments, the fee for handling the complaint shall be returned provided the complaint is upheld by the Antimonopoly Committee of Ukraine. In the meantime, in the interests of the public customer, the following shall prevent from “contesting trolling”: complaints shall be processed provided the participant paid up the fee, and complaints cannot be withdrawn by the participant. In addition, the fee for handling the complaint shall be changed from the fixed amount to amount linked to the price of the tender as shall be determined in accordance with the resolution of the Cabinet of Ministers of Ukraine.

8. The accomplishment of the public procurement procedures launched before entering into force the restated law

Under the law, public procurements launched before the restated law entered into force shall be accomplished in accordance with the law effective before the restated law was enacted.