Procurements under the new rules


04 march 2020

The new public procurement rules will come into force on April 19, 2020. The changes will affect all customers and participants of tenders.

“Innovations will concern four blocks: increasing the efficiency of procurement; introduction of responsibility for violation of procurement law; improvement of the appeal mechanism; harmonization with international standards,” said Elena Dmitrenko, procurement monitoring expert of Budget Advocacy School.

Let’s consider 7 major innovations:

Anti-dumping tool. In competitive bidding, the system will determine an abnormally low bid price each time separately. The organization comes to bidding at a price 40% lower than the price of competitors or reduces its price during the auction by 30% or more – the system reports about it. If you do not confirm the ability to provide quality services at such a low price, the Customer will reject the offer.

The right to make a mistake. Participants will have 24 hours to correct errors in documents confirming qualifications or signature rights. The customer generates a list of inaccuracies when considering the proposal. One participant can correct list errors only once.

Deviation due to poor work. The customer may reject the organization for three years if in the past it was necessary to terminate the contract with this organization and impose a fine.

Subcontractor capacities. Participants who engage subcontractors to provide services may use their employees’ experience and property during qualification. If you need to confirm the availability of a car that you do not have, but your subcontractors have, a sublease is no longer needed.

Financial ability. The fourth qualification criterion that the customer can use to select suppliers. To confirm compliance with the criterion, it is necessary to provide the customer with financial statements.

Complaints. If the participant submits a complaint and the Antimonopoly Committee of Ukraine satisfies it or the Customer eliminates the violations, the appeal fee is returned to the participant’s account. If your rights are violated and the Antimonopoly Committee of Ukraine will confirm this, the complaint for you may be free.

Detailing of framework agreements. The updated law contains broad explanations regarding the requirements for a procurement announcement under a framework agreement and an announcement with information about the agreement concluded. As before, the peculiarities of such purchases are determined by the authorized body (Ministry for Development of Economy, Trade and Agriculture of Ukraine).

We reviewed 7 major changes but there are much more of them. If you conduct procurements or take part in, we advise you to read the Law in full. In most aspects changes are necessary because this is the only way to resolve systemic misunderstandings between customers and participants. Work under the new rules should eliminate unfair competition, speed up competitive procedures, facilitate participation in procurements and protect customers from dishonest suppliers.

The article was prepared in the framework of the project with the financial support of the  International Renaissance Foundation

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