On June 24, 2022, the Cabinet of Ministers of Ukraine adopted amendments to the Decree of the Cabinet of Ministers of Ukraine No. 169 dated February 28, 2022 “Some issues of defense and public procurement of goods, works and services under martial law” (hereinafter referred to as the Decree).

Yesterday, 06/27/2022, the Resolution of the Cabinet of Ministers dated 06/24/2022 No. 723 "On Amendments to the Resolutions of the Cabinet of Ministers dated 14.09.2020 No. 822 and dated 28.02.2022 No. 169" was published on the Government Portal. Please note that the changes will come into force after their official publication in the "Government Courier" and/or in the "Official Gazette of Ukraine".

In the meantime, the changes are subject to official publication and come into force, we propose to briefly analyze what exactly has changed in the Resolution, highlighting 5 key changes.

Two Conditional Categories of Customers

The first and most global change in the Resolution is that now not all customers can carry out a public procurement of goods, works, and services without the use of procurement procedures and simplified procurement.

So, according to the above changes, the legislator divides customers into two conditional categories: customers who can make purchases without using the electronic procurement system (hereinafter – EPS) and simplified purchases, and customers who must carry out public purchases using the Prozorro Market electronic catalog and/or the procedure for conducting simplified procurement when applying the Decree.

“Exception customers” who can continue to procure without the use of EPS and simplified procurement include:

- customers defined by the ninth part of Article 3 of the Law of Ukraine "On Public Procurement" (hereinafter referred to as the Law);
- government customers in the field of defense by the Law of Ukraine "On Defense Procurement";
- customers carrying out a public procurement of goods, works, and services to meet the urgent needs of the functioning of the state under martial law by the Resolution of the Cabinet of Ministers of Ukraine dated March 2, 2022 No. 185 "Some issues of public procurement of goods, works and services to meet urgent needs functioning of the state under martial law”.

All other customers, not related to the above exceptions, now carry out public procurement, the cost of which is or exceeds 50 thousand hryvnias, using the electronic catalog and/or the simplified procurement procedure established by the Law of Ukraine “On Public Procurement”.

Please note that purchases using the procedure for conducting simplified purchases and/or the Prozorro Market electronic catalog, the value of which is equal to or exceeds UAH 50,000, are made without limiting restrictions on the expected value of the subject of the purchase.

Cases Where Simplified Procurement/Electronic Catalog Can Be Used

The second important change to the Resolution is the list of exceptions for which it is not necessary to make a procurement by applying the procedure of simplified procurement and/or electronic catalog.

Even though customers who are not included in the list of "exempt customers" must now make public purchases using the electronic catalog Prozorro Market and/or the procedure for simplified procurement in the case of application of the Regulation, the legislator provided that the purchase of goods, works, and services, can be carried out without the above methods, in particular, but not exclusively, if:

- the customer is in the area of military (combat) operations at the time of the decision to purchase or implement it;
- there is no technical possibility to use the ESS, which must be documented by the customer;
- there is an urgent need to purchase due to the occurrence of objective circumstances that make it impossible for the customer to meet the deadlines for a simplified purchase or use of the electronic catalog Prozorro Market;
- works, goods, or services may be performed, supplied, or provided exclusively by a particular entity in the presence of one of these cases, including the conclusion of a procurement contract with a supplier of last resort or with a universal service provider for the supply of electricity or natural gas ;
- goods, works, and services are procured to ensure the functioning of critical infrastructure facilities.

Thus, in case of circumstances that do not allow customers to make purchases using the electronic catalog Prozorro Market and/or the procedure of simplified procurement, customers can take advantage of the above exceptions and still enter into a procurement contract concluded without the use of EPS.

The full list of such exceptions can be found in the full text of the amendments to the Resolution.

Principles That Customers Should Be Guided by When Concluding Direct Contracts

Another change that should be mentioned is the clarification of the principles provided for in the first part of subparagraph 1 of this paragraph. Before the changes, paragraph 2 of subparagraph 3 of paragraph 1 of the Resolution looked like this: "customers must comply with the principles of public procurement, by the Law of Ukraine "On Public Procurement".

In the new version of the Decree, the legislator clarified by replacing the mentioned paragraph 2 that customers must comply with the following principles of public procurement, by the Law of Ukraine “On Public Procurement”:

- maximum savings, efficiency;
- prevention of corruption and abuse.

Please note that the changes specified that part 1 of subparagraph 3 of paragraph 1 of the Decree applies exclusively to purchases carried out without the use of EPS.

Therefore, when concluding a direct contract using the Decree, it is necessary to distribute budgetary funds efficiently and economically, avoiding corruption risks and abuses.

Deadlines for Publication of the Report on the Concluded Contract Without the Use of the EPS and the List of Documents for Publication

It should be noted that changes were also made in the terms of publication of the report on the concluded contract without the use of the EPS and the list of documents that are published together with such a report. According to the published changes, the deadline for publishing the report on the concluded agreement without the use of the EPS was extended from 20 to 70 days from the date of termination or abolition of martial law in Ukraine or some of its localities.

Before the new version of the Resolution, the debatable issue was whether it was possible to publish a report on the concluded agreement without the use of the EPS until the cessation or abolition of martial law in Ukraine or some of its localities. It can now be stated that the norm was supplemented by the phrase "after the conclusion of the contract", which directly allows the customer to publish the report and these documents or after the conclusion of such a contract or after the termination of martial law.

Please note that the changes have changed the list of what must be published together with the report on the contract. That is, now customers need to upload in the EPS not only the contract and all its annexes, but also changes to such a contract that previously did not need to be done.

In conclusion, when concluding a procurement contract, do not forget after its conclusion, but not later than 70 days from the date of termination or abolition of martial law in Ukraine or in certain localities to publish a report on the contract, the contract itself, all annexes and changes.

It should also be borne in mind that this rule applies to those purchases that were made after the amendments to the Resolution. For purchases made earlier, there are 20 days left from the date of termination or abolition of martial law.

The Person Responsible for the Procurement Is Specified

Equally important in the new changes is the clarification of the legislator regarding the person responsible for the procurement.

Thus, the Decree is supplemented by subparagraph 41, according to which an authorized person or another person specified by the customer may be responsible for organizing and conducting procurements, specified in subparagraph 1 of this paragraph.

Thus, in contrast to the Law, according to which simplified procurement can be carried out exclusively by an authorized person if the procedure for conducting simplified procurement is applied by the Decree, not only an authorized person but also any other person may be responsible for such a procurement, which is determined by the customer.

We would like to inform you that SmartTender lawyers will hold a webinar next Friday, and during it, they will tell in detail and analyze all the key changes that each participant in the procurement process needs to know about.

Stay tuned for the announcement of the webinar! Take care of yourself!