SmartTender

Martial law continues in Ukraine for the fifth month. Many public procurements announced before 24.02.2022 were not completed for various reasons. Most of them did not take place due to the fact that the procurement became impossible as a result of force majeure.

Current Situation with Purchases Announced Before 24.02.2022 and Canceled due to Force Majeure

Currently, in practice, customers most often confirm the existence of force majeure circumstances (meaning the military aggression of the Russian Federation against Ukraine), referring to the Decree of the President of Ukraine dated February 24, 2022 No. 63/2022 “On the introduction of a state of emergency in certain regions of Ukraine”, of Ukraine No. 64/2022 dated February 24, 2022 “On the imposition of martial law in Ukraine”, according to which martial law was introduced in Ukraine on February 24, 2022, as well as to the letter of the Ukrainian Chamber of Commerce and Industry dated February 28, 2022 No. 2024/02.0-7.1, certifying the fact of force majeure circumstances (circumstances of insuperable force).

In addition, according to the letter of the Ministry of Economy of Ukraine dated 04.03.2022 No. 3304-04_9225-06 “On procurement during martial law”, procurement and simplified procurement procedures that began before the introduction of the legal regime of martial law in Ukraine are completed in the manner determined by the Law of Ukraine "On Public Procurement" (hereinafter - the Law). If the contracting authorities, who started procurement procedures before the introduction of the legal regime of martial law in Ukraine, are unable to complete such procurement procedures due to circumstances beyond their control, they may declare the tender invalid in accordance with paragraph five of Article 32 of the Law, if the procurement has become impossible in the result of an unstoppable force.

Thus, customers who announced tenders before 24.02.2022 and were not able to complete the purchases have every right to recognize the announced tenders as failed, referring to the above circumstances and legal grounds. For example, the customer used this right in the procurement procedure UA-2022-01-21-003854-c, announced on January 21, 2022. The customer of the purchase referred to the legislative grounds for declaring the tender invalid, and the complainant failed to prove the opposite, having received a refusal to satisfy the complaint.

Is It possible to Cancel the Purchases Announced After 24.02.2022, with Reference to Force Majeure Circumstances?

Many experts are interested in the question: do the customers have the right to cancel the tenders announced after February 24, 2022, referring to force majeure circumstances that arose by the time the tender was announced?

Dmytro Baiov, head of the legal department at SmartTender, investigated this issue by analyzing the relevant decision of the AMCU board.

Decision No. 4911-р/пк-пз dated 06/21/2022

Procurement procedure UA-2022-05-17-001759-a

The customer announced open tenders on May 17, 2022. On 03.06.2022, after the end of the auction, the customer declared the tender invalid in accordance with paragraph five of Article 32 of the Law, namely if the procurement became impossible due to force majeure. The customer, in their justification, referred to the Decrees of the President of Ukraine, the Letter of the Chamber of Commerce and Industry of Ukraine (described in the previous paragraph of the article), and also noted that these circumstances make it impossible to comply with the provisions of the Law, in addition, errors were found in the tender documentation itself.

The complainant noted that the decision to declare the tender invalid with reference to Part 5 of Art. 32 of the Law (if the procurement has become impossible due to force majeure) is groundless, since the educational institutions of the customer are located in the Vinnitsa region, in which there are no hostilities. And in general, martial law in Ukraine was introduced on February 24, 2022, and the procurement procedure was announced on May 17, 2022, that is, after the introduction of martial law in Ukraine. Accordingly, knowing about the existence of martial law in Ukraine, but at the same time needing to provide educational institutions with electrical energy, the customer announced an open tender. Moreover, the introduction of martial law in Ukraine does not cancel the customer's need for the purchase of goods (DK 021:2015:09310000-5 - Electricity), does not interfere with the consideration of the complainant's proposal in compliance with all procurement principles in accordance with Art. 5 of the Law.

Indeed, the AMCU board in its decision, with reference to the letter of the Ministry of Economy of Ukraine dated 04.03.2022 No. 3304-04_9225-06 “On procurement during martial law”, noted that by Decree of the President of Ukraine dated 24.02.2022 No. 24/2 On the introduction of military situation in Ukraine”, martial law was introduced in Ukraine on February 24, 2022. At the same time, in accordance with the information published on the web portal of the Authorized Body, the announcement of the procurement procedure was published on May 17, 2022.

That is, the decision of the customer to declare the tender void on the basis of force majeure is not lawful due to the fact that such tenders were announced after the onset of force majeure circumstances and during their action. The customer knew and understood that martial law was introduced at the time of the announcement of the auction, but this did not prevent them from starting and continuing the purchase. Therefore, canceling purchases due to existing force majeure circumstances, despite the fact that such a purchase was announced at the time of such circumstances, is at least illogical.

Thus, we advise customers to take into account the decision of the AMCU board analyzed above and be sure to establish whether your auction was actually published before 24.02.2022, and therefore there are appropriate grounds for making a decision to declare the tender void as a result of force majeure.

How to order a consultation with SmartTender lawyers?

If you have questions about the legal side of participation in the procurement, please contact SmartTender lawyers on this page.

You can also always contact our support service at 0 800 75 10 10.