Prozorro

On April 12, the Cabinet of Ministers of Ukraine adopted Resolution No. 437, which amended subparagraphs 1 and 3 of paragraph 1 of the Resolution of the Cabinet of Ministers of Ukraine No. 169 dated February 28, 2022 (hereinafter referred to as the Resolution). The text submitted in the document is aimed at regulating issues that are relevant for customers when conducting purchases during martial law, in particular for purchases, the cost of which does not exceed 50 thousand hryvnias. SmartTender lawyers analyzed what will change in the procurement activities of customers after these changes came into force on April 14, 2022.

Changes in subparagraph 1 of paragraph 1 of the Resolution: two options for procurement

Subparagraph 1 of paragraph 1 of the Decree was supplemented with the following paragraph: “The customer can conduct public procurement, the cost of which does not exceed UAH 50,000, using the electronic procurement system, including using electronic catalogs. In the case of procurement, the value of which does not exceed UAH 50,000, without using the electronic procurement system, the customer must comply with the principles of public procurement, does not enter information on such procurement into the annual plan, and does not publish it in the electronic procurement system a report on the procurement contract concluded without using the electronic procurement system.”

Therefore, according to the changes made, the customer is allowed to choose how to make purchases up to UAH 50,000:

using the electronic procurement system, including using electronic catalogs;

without using the electronic procurement system.

If the customer conducts wartime purchases up to UAH 50,000 without an electronic procurement system, he must take into account the following requirements:

- the customer is obliged to comply with the principles of public procurement;
- the customer does not enter information on such purchases into the annual plan and does not publish in the electronic procurement system a report on the procurement contract concluded without using the electronic procurement system.

That is, when carrying out public procurement, the cost of which does not exceed UAH 50,000, without using an electronic system, including without using electronic catalogs, the customer does not publish a report on such procurement. This is also evidenced by one of the changes in subparagraph 3 of paragraph 1 of the Resolution.

Changes to the procedure for publishing procurement reports, the value of which does not exceed UAH 50,000

In the first paragraph, the words "procurements provided for by this resolution" were replaced by the text "purchases provided for in the first paragraph of subparagraph 1 of this paragraph".

In this wording of this paragraph, public procurement, the value of which does not exceed UAH 50,000 and which will be carried out without an electronic procurement system, does not apply the provision that, based on the results of the implementation in the electronic procurement system, the customer publishes a report on the procurement contract concluded without the use of the electronic procurement system, the procurement contract and all annexes to it no later than 20 days from the date of termination or cancellation of martial law in Ukraine or its areas.

Therefore, according to the amendments made to the Decree dated April 12, 2022, in the case of procurement, the cost of which does not exceed UAH 50,000, without using the electronic system, such procurement is not included in the annual plan and they are not published in the report on the procurement contract concluded without the use of the electronic procurement system.

Taking into account the changes made by officials, we recommend that customers who plan to purchase goods/services/works for not more than UAH 50,000 according to the rules of the Decree do the following: do not forget to add such purchases to the list and volumes of purchases of goods, works and services determined by the decisions of customers making such purchases.

Changes in subparagraph 3 of paragraph 1 of the Decree: conclusion of contracts for procurement carried out before the entry into force of the Decree

Also, in the new version of the Decree, subparagraph 3 of paragraph 1 was supplemented with a new paragraph as follows: “The procurement agreement is concluded by the norms of the Civil and Commercial Codes of Ukraine. The parties to the procurement contract concluded by paragraph one, subparagraph 1 of paragraph 1 of this resolution may establish that the terms of such an agreement apply to relations that arose between the parties before the entry into force of this resolution, only if at the time of entry into force of this decision from the customer for the purchase of the subject of procurement provided for in the procurement contract, there were conditions for the application of the negotiation procurement procedure, defined in paragraphs 2, 4, 5 of the second part of Article 40 of the Law of Ukraine "On Public Procurement" (hereinafter referred to as the Law), or there are conditions for not applying the procedure for conducting simplified procurement, determined by paragraphs 2, 4, 5 of the seventh part of Article 3 of the Law.

Thanks to these changes, customers have a legal opportunity to legally consolidate the relationship for the purchase of goods, works, or services that took place in the period before the entry into force of Decree No. 169, that is, until 02/28/2022. However, it should be emphasized that this can not be done for all relationships.

To use this paragraph of the Decree, the customer must have the following grounds (depending on the cost of goods/works/services consumed before the Decree came into force):

- the grounds for applying the negotiation procurement procedure, defined in paragraphs 2, 4, 5 of the second part of Article 40 of the Law;
- the grounds for non-application of the procedure for conducting simplified procurement, defined in paragraphs 2, 4, and 5 of the seventh part of Article 3 of the Law.

In other words, it will be possible to use this paragraph of the Decree under the following conditions:

1. If works, goods, or services can be performed, supplied, or provided exclusively by a certain business entity in the presence of one of the following cases:

- - the object of the procurement is the creation or acquisition of a work of art or artistic performance;
  - conclusion of a procurement contract with the winner of an architectural or artistic competition;
  - lack of competition for technical reasons, which must be documented by the customer;
  - the need to protect intellectual property rights;
  - conclusion of an agreement with the supplier of "last resort" for the supply of electricity or natural gas.

2. OR if, after the conclusion of the purchase agreement, the customer needs to supply an additional volume of goods from the same supplier, if, in the event of a change in supplier, the customer would be forced to purchase goods with different technical characteristics, which would lead to incompatibility related to the operation and maintenance. The purchase of an additional volume of goods from the same supplier is carried out within three years after the conclusion of the purchase contract if the total cost of such a supply does not exceed 50% of the price of the purchase contract.

3. OR if, after the conclusion of the purchase agreement, the customer needs to purchase additional similar works or services from the same participant. The possibility and conditions of such additional works or services may be provided for in the main procurement contract concluded as a result of the tender. Procurement of additional similar works or services from the same participant is carried out within three years after the conclusion of the procurement contract if the total cost of such works or services does not exceed 50% of the price of the main procurement contract concluded as a result of the tender.

A vivid example of the application of the last paragraph of subparagraph 3 of paragraph 1 of the Resolution is the case of a contract between a customer and a supplier for gas and/or electricity received from suppliers of last resort in January-February of the current year without a written purchase contract. Thus, customers will be able to pay for already delivered/provided/completed goods/services/works during January-February, having the appropriate legal basis.

With this change, in exceptional cases, customers were allowed to use the provision of Part 3 of Article 631 of the Civil Code of Ukraine, according to which the parties can establish that the terms of the contract apply to relations between them that arose before its conclusion, namely, about procurement contracts.

Summarizing the changes made to the Decree, it can be argued that they are aimed at resolving issues that were ignored by officials in the previous edition. A procurement mechanism was determined, the cost of which does not exceed UAH 50,000, and the possibility of legal registration of the purchase of goods, works, or services consumed before the entry into force of Decree No. 169, that is, until February 28, 2022, was legalized.