The general goal of the legislative amendments is to bring the public procurement procedure as close as possible to EU legislation and increase the level of accountability and transparency of the local self-government when procuring services and works for current and capital repairs. The updates are designed to reduce the number of exceptions to procurement legislation under martial law.
The main changes introduced in accordance with the Law of Ukraine No. 3988-ІХ dated 19 September 2024 “On Amending the Law of Ukraine ‘On Public Procurement’” concern services and works procurement contracts for current repairs, new construction, reconstruction, restoration, capital repair of facilities under construction.
From now on, as was noted by Yuliia Polishchuk, Adviser on Decentralisation and Local Self-Government of the Regional Office of U-LEAD with Europe in the Cherkasy Oblast, documentary evidence of the prices of material resources should be attached as integral appendices to the service procurement contracts for current repairs, new construction, reconstruction, restoration, capital repair of facilities under construction. The same applies to construction works that include the development of design documentation. Certain amendments to the law regulate the extent and format of making this information public.
Types of procurement, which are subject to the updated requirements:
- Current repair services.
- New construction, reconstruction, restoration, capital repair of facilities under construction.
- Current repair services that include the development of design documentation.
- Works on facilities under construction that include the development of design documentation.
- Amendments to the procurement contract in case of changes in prices for material resources.
Serhii Terelia, Adviser on Municipal Management and Recovery at the Regional Office of U-LEAD in the Zakarpattia Oblast, stated:
“The updated legal requirements cover all areas related to construction works, including current repairs of state-owned and municipal property, current repairs of highways, construction, repair and restoration of facilities under construction, as well as ensuring the construction of military engineering facilities and fortifications. These requirements apply to all procuring entities related to construction works.”
Publication deadlines: 3 and 10 banking days
Among the updates to the law are clear deadlines for the publication of this information, which vary for different types of contracts. From now on, any procurement under martial law worth at least UAH 50,000 requires the publication of the report on the contract and all its appendices (including information on the prices of material resources) within three banking days from the contract date.
“The publication period of 10 days for the report on the contract was previously required for procurements worth over UAH 50,000 but up to UAH 1,500,000. Now, in most cases, the law provides for a deadline of three banking days, but with a different starting point,” said Serhii Terelia.
When entering into a service procurement contract for services for current repairs or construction works, the procurement contract as well as any annexes thereto (including information on the prices of material resources) must be made public within three banking days from the contract date. However, under martial law, the procuring entity has the option not to disclose its location or the location of its contractor. If the contract has been amended, a notice of amendment and/or updated prices for material resources must be released within three banking days from the date of amendment (the notice must include all changes to the material terms and conditions of the contract). In the case of formalising a contractual price adjusted as per the approved design documentation (for procurement of services for ongoing repairs that include the development of design documentation or works on facilities under construction that include the development of design documentation), a notice of amendment must be released within three banking days from the date of formalising the adjusted contract price. The adjusted contract price (including documents containing information on the prices of material resources) in a machine-readable format must be attached to the notice.
The law also prescribes the deadline for releasing information on procurements for the construction of military engineering facilities and fortifications within 10 banking days. However, these changes will come into effect on 22 December 2024.
The report on the contract must be made public, including the name of the procuring entity, the designation of the procurement item, the price specified in the procurement contract and information on the prices of material resources.
What exactly needs to be made public and in what format?
Experts also focused on certain aspects of information that must be made public. The concept of information about prices for materials and equipment is not new for the vast majority of procuring entities and contractors. According to the legislative updates, it includes the designation of the material resource (with characteristics), a unit of measurement, quantity, selling price, transportation, procurement and storage costs and country of origin. This information is contained in the final bill of resources or the bill of resources under the local estimate, which are regulated by the Guidelines on Calculating the Construction Value under the Cost Estimate Regulations.
The country of origin is determined in accordance with Article 41 of the Customs Code of Ukraine and the Rules for Determining the Country of Origin of Goods to the Agreement on Establishment of Free Trade Area between the GUAM Participating States, which was ratified by Ukraine on 23 February 2024 and entered into force for Ukraine on 28 March 2024.
“According to the Rules, the country of origin of the goods is considered to be the country where the goods were produced or subjected to sufficient processing. A country of prepacking, packaging or splitting into parts will not be considered a country of origin. The documents confirming the country of origin of the goods are the Certificate of Origin of the goods or the Certified Declaration of the Origin of the goods, or the Declaration of Origin of the goods, or the Certificate of the Regional Name of the goods,” said Serhii Terelia.
Keep in mind the method of making information about the prices of material resources public. The procuring entity must submit it in a machine-readable format. However, as noted by Serhii Terelia, this very wording — “machine-readable format” — is currently not provided for and not determined by any other law or regulation. It is similar in content to the wording “machine-readable form” contained in the Regulations on Data Sets to be Released as Open Data.
According to this Regulation, a machine-readable format is a data format structured in such a way that enables identifying, transforming and retrieving specific data, including individual facts and their internal structure, without human intervention. These are text data in RTF and DOC(X) formats, structured data in XLS(X) format, graphic data in JPG (JPEG) format and data archives in ZIP and 7z formats.
However, the Regulation on Data Sets does not provide for the PDF format, which is used by 90% of procuring entities, according to Clause 15 of the Procedure for Releasing Information on Public Procurement approved by Order of the Ministry of Economy No. 1082 dated 11 June 2020. It states that the procuring entity must publish the procurement contract and any annexes and amendments thereto in the electronic procurement system in PDF format. According to the explanation on the Prozorro Infobox, the machine-readable format also includes PDF files converted from Word files.
So, while waiting for additional regulations and clarifications, we should follow the provisions set out in the Regulations on Data Sets to be Released as Open Data.
