Prozorro 2.0

On April 19, 2020, numerous changes to the public procurement system, informally referred to as Prozorro 2.0, will begin to take effect - the new version of the Law of Ukraine “On Public Procurement” will enter into force. We offer, together with Dmitry Bayev, SmartTender.biz legal adviser, to consider some important aspects of this reform, taking into account the latest clarifications from lawmakers.

Appeal Dates and Mechanisms

Terms of appeal: what has changed and how it will affect the protection of the interests of the supplier by contacting the AMCU.

According to the new version of the Law, bidders will not need to draw up a separate invoice for payment for filing a complaint and certify it at the bank. According to the new rules, payment will be made directly through the official electronic trading platforms of Prozorro (through a separate field in the complaint window).

The fees for filing a complaint will also change. They will be finally determined in the new Decree of the CMU, which at the moment everyone expects. In this case, if the complaint is satisfied or if the customer eliminates the comments about which the complainant writes, the money for filing will be returned to the participant. The exact refund mechanism will also be provided for by regulation.

Also, the complaint can no longer be withdrawn. Now it’s possible to do this, which is why the expression “tender trolling” even appeared - when a complaint is filed, they put pressure on competitors or customers, and then withdraw.

In Prozorro 2.0, it will be possible to appeal against tenders where all participants are disqualified or the purchase is canceled (the link to the fact that there should be a protocol of intentions was removed from the text). Now, as soon as the participant is rejected, he can already write to the Antimonopoly Committee of Ukraine (AMCU), without waiting for the completion of bidding.

In the new edition, at the level of the Law, the right of the complainant is fixed to compensate for his losses in court. The updated period for consideration of a complaint by the Antimonopoly Committee of Ukraine is 10 working days from the date of commencement of consideration. This period may be reasonably extended up to 20 business days.

Under the new rules, the customer will be prohibited from taking any actions and making any decisions regarding the procurement procedure (on canceling the tender or declaring it invalid, canceling the negotiation procedure, concluding a procurement contract), except for actions aimed at eliminating the violations indicated in the complaint.

The customer must comply with the decision of the Antimonopoly Committee of Ukraine within 30 calendar days from the date of its adoption if he has not challenged it in court. Otherwise - administrative responsibility for the head of the state-owned enterprise-customer (a fine for 34 000 to 85 000 UAH).

Qualification Criteria

What will change in the qualification criteria and how it will affect the chances of the procurement participant.

The new version of the Law adds a new qualification criterion: financial solvency. At the same time, the customer does not have the right to require confirmation of the amount of annual income in the amount greater than the expected value of the procurement item (in proportion to the expected value of the part of the procurement item (lot) in case of separation of the procurement object into parts).

To confirm its compliance with such a criterion as the availability of material and technical base or the availability of workers, a participant can attract the capacities of subcontractors and co-contractors.

A fundamentally new opportunity also appears: participation in tenders by an association of participants (a concern, holding, corporation, consortium). Moreover, confirmation of compliance with qualification criteria is carried out taking into account the combined indicators of each member of such an association.

On the one hand, the qualifications of participants are becoming more complicated, and on the other, the legislator has provided an opportunity to bid for associations of participants and involve co-contractors to meet qualification criteria.

Abnormally Low Price

How the bid rejection mechanism will work due to an abnormally low price.

In Prozorro 2.0, a participant whose offer is abnormally low must, within one business day (from the day the most cost-effective tender proposal has been determined), provide an arbitrary justification for the price or value of the relevant goods, work or services.

At the same time, the customer may reject the tender offer with an abnormally low price if the bidder has not provided due justification within one business day from the moment of determining the most economically advantageous tender offer.

Thus, if a participant does not timely reason his proposal with an abnormally low price, the customer will be required to disqualify his proposal. At the same time, if he provides an argument, his fate will still be decided by the customer.

Sub-threshold Procurement

How pre-threshold purchases will work and how to take them into account in the annual plan.

Modern pre-threshold purchases will become “simplified" and now all purchases from 50,000 hryvnias need to be done through an electronic procurement system. Moreover, the law has an exhaustive list of cases in which it is allowed not to procurement, simply directly signing the contract and publishing a report about it.

An example is the use of the Prozorro Market e-catalog as an alternative to simplified purchasing. In all other respects, simplified purchases will be similar to sub-threshold ones, and they can be appealed only by contacting the customer or the authority exercising control over the customer, as well as through a court. Simplified procurement, along with the usual procedures, should also be indicated in the annual plan.

Tender Committees and Authorized Persons

How exactly do purchases under the control of tender committees differ from the practice of using authorized persons?

The key difference between the activities of authorized persons and the work of tender committees is responsibility. The authorized person independently signs the protocols and other documents related to public procurement, while the tender committee acts based on the principle of collegiality. This is opposed to the personal responsibility of the authorized person. In the tender committee, those who have made an unlawful decision are liable.

In the new version of the Law, the customer has the right to appoint several authorized persons, provided that each of them is only responsible for organizing and conducting specific procedures (procurement or simplified procurement). When determining several authorized persons, the delimitation of their powers and duties is determined by the decision of the customer.

The authorized person conducts its activities based on a labor agreement (contract) concluded with the customer or an administrative decision of the customer. At the same time, before January 1, 2022, customers can still use tender committees, and already starting from the indicated date they will be obliged to fully switch to the practice of appointing specifically authorized persons. At the same time, you can use authorized persons now.

It is still difficult to predict all the effects that April will bring us. But one thing is obvious: only someone who is fully acquainted with the key changes in the work of the Prozorro system can expect on success.