Changes to Resolution No. 1178

On February 17, the Cabinet of Ministers of Ukraine made changes to Resolution No. 1178 of October 12, 2022 (hereinafter referred to as the Resolution), which regulates procedures for state tenders during martial law. Let’s look at what exactly has changed and how it will affect the work of customers and suppliers of Prozorro procurement.

What Are the Main Changes Made to the Regulation?

The main things to pay attention to in the new text of the Resolution are as follows:

1. The reasons for which a supplier may be denied participation in procurement have been updated.
2. Updated the grounds for rejecting a supplier's offer.
3. Added detailed information on the cases in which the customer must publish the contract, performance report, etc. in the electronic system. The condition is described when a report on transactions worth up to UAH 50,000 does not need to be published.
4. Some of the grounds for announcing direct procurement instead of competitive procurement have been removed.
5. The wording of some grounds for announcing direct procurement instead of competitive procurement has been changed. Added requirements for justification and its publication in the electronic system during direct procurement on certain grounds.

Under What Conditions the Supplier May Not Be Allowed to Participate in Public Procurement?

Previously, the Resolution referred to Art. 17 of the Law "On Public Procurement" to describe the grounds for a refusal to participate in the tender – the customer had to use all of them, except tax debt.

Currently, such grounds have appeared in paragraph 44 of the Resolution itself, but with some changes. First of all, it is for the head of the supplier company that certificates regarding the absence of:

- corruption offenses;
- criminal records;
- offenses related to any form of human trafficking or the use of child labor.

Before making edits, such certificates had to be issued to an official (official) person authorized to represent the interests of the procurement participant during the tender. It could be the director or another person to whom the power of attorney was issued.

How Have the Grounds for the Rejection of Tender Proposals by the Customer Been Updated?

The main changes you should pay attention to are:

1. The reason, according to which the customer could reject the offer of the participant if it was not presented in the language specified in the tender documentation, was removed.
2. The reason for tender security was shortened and now has the following form: "did not provide security for the tender offer, if such security was required by the customer."
3. The description of persons associated with the Russian Federation or the Republic of Belarus, whose offers can be rejected, has been expanded.

The rest of the grounds were changed insignificantly.

Regarding the Absence of a Requirement to Publish a Report on the Contract for Purchases for Amounts Up to UAH 50,000

In paragraph 2 point 11 of the Resolution was added a text that answers customers' questions about the need to publish contracts worth up to UAH 50,000: if the purchase of goods, services, or works was carried out outside the electronic system and had a value of less than UAH 50,000, the customer does not publish a report on contract on such purchase.

However, the requirement to publish the annual plan for tenders from UAH 0.01 remains unchanged (according to Clause 14 of the Resolution).

What Grounds for Direct Procurement Have Been Removed?

Paragraph 9 of point 2 of the Resolution was removed, which allowed customers in the described cases to conduct direct procurement instead of competitive procurement for the purchase of works and services related to the elimination of the consequences of military aggression and the restoration of the infrastructure of the affected settlements by the orders of the Cabinet of Ministers.

The text in paragraph 9 was also added regarding direct purchases by enterprises of the defense-industrial complex, determined by the relevant orders of the Cabinet of Ministers. Such procurement takes place only in case of impossibility of compliance by the customer with the terms stipulated by the rules of competitive procurement or the use of the Prozorro Market catalog.

What Grounds for Conducting Direct Purchases for Amounts Over UAH 50,000 Have Been Changed?

Clause 13 of the Resolution contains the conditions under which the customer can make direct purchases for amounts from and over UAH 100,000 (for goods and services), from and over UAH 200,000 (for current repair services), and from and over UAH 1.5 million (for works). The following changes took place in it:

1. In subpoint 1 added a list of infrastructure objects and a condition regarding the existence of justification for why information about the procurement may pose a threat to such objects.
2. In subpoint 2 added that the basis for reporting is the presence in the zone of active hostilities, even of a separate unit of the customer company that makes the purchase. The ground is possible only if hostilities continued as of the date of conclusion of the purchase agreement.
3. Subpoint 3 was supplemented with the requirement of substantiation that the customer is unable to meet the deadlines for competitive procurement or procurement through the Prozorro Market catalog.
4. In subpoint 6 added an opportunity for the customer to enter into a procurement contract with a value higher than the expected cost of the canceled competitive procurement, by the accepted percentage of the excess price of the participant's tender offer, which was specified in the tender documentation.
5. In subpoint 12 categories of infrastructure objects were added.

A new point was also added for reporting on procurements carried out for the implementation of measures aimed at ensuring the security of some critical infrastructure facilities.

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