Ukraine`s public procurement market presents significant opportunities for international businesses, especially in light of the country`s current need for recovery and its integration with the European Union. The procurement system is designated to ensure transparency, competition and equal access for both domestic and foreign bidders.

Public tenders in Ukraine can be broadly divided into 2 categories:

  1. Those financed by state and municipal budgets, which are regulated by national legislation and conducted through the electronic procurement system ProZorro, and
  2. Those financed by international financial institutions (IFIs), such as the European Investment Bank, IBRD, EBRD, which are governed by the procurement rules of these institutions.

This article provides an overview of the legal framework and practical aspects of both procurement regimes in Ukraine, addressing state-powered tenders and those governed by IFI rules.

State-financed public procurements

State-financed procurement in Ukraine is regulated by the Law of Ukraine «On Public Procurement», which governs the acquisition of goods, works, and services funded from state and local budgets, as well as by the state-owned enterprises. This law, harmonized with EU public procurement standards under the EU – Ukraine Association Agreement, enshrines the principles of fair competition, transparency, non-discrimination, and the efficient use of public resources.

ProZorro electronic procurement system

As defined by the law, all state-financed procurements are carried out through the electronic procurement system ProZorro, which operates on the principle «so that everyone sees everything» and guarantees open access to all tender-related information at every stage of the process. The system is built around a central state-owned database, ProZorro, which collects and publishes all procurement data. Access to this database for the bidders is provided exclusively through 12 accredited electronic marketplaces, where bidders can register, search for tenders, submit proposals, and communicate with contracting authorities in a fully transparent and competitive environment.

Types of procurement procedures

The law provides for several procurement procedures, applied depending on the value of the contract, complexity and specific circumstances. One can distinguish the following types:

  1. Open tender: the primary and most competitive procedure provide by the law. It requires public announcement through the ProZorro system and unrestricted participation of all interested bidders, with proposals evaluated against predefined criteria.
  2. Restricted tendering: the two-stage procedure, applied when a prior qualification of bidders is necessary. At the first stage, the contracting authority conducts a qualification selection to identify candidates meeting predefined criteria, and only those shortlisted are invited to submit full tenders at the second stage.
  3. Simplified procedure: is a streamlined procedure, applied to purchases below the statutory threshold.
  4. Competitive dialogue: another two-stage procurement procedure used when the contracting authority cannot clearly define the technical specifications or the nature of the required services and has to consult potential suppliers to develop optimal solution. At the first stage, participants submit proposals without price, enabling structured negotiations with the authority, after which all qualified bidders are invited to submit final priced offers at the second stage.
  5. Negotiated procedure: the exceptional procedure, applied specifically in strictly defined cases, such as urgent needs, protection of intellectual property rights, defending rights and interests of the state etc. Under this procedure, the contracting authority conducts direct negotiations on price and contract terms with one or several suppliers.

Note: during the period of martial law, the scope of situations in which the negotiated procedure may be applied has been significantly expanded under the Special rules for public procurement during wartime.

All this procurement procedures are fully accessible to foreign businesses, allowing them to compete on equal terms with local companies in Ukraine`s public procurement market.

Typical requirements for participation

Ukrainian legislation defines that foreign businesses can fully participate in Ukrainian public procurement; however, they must meet qualification and compliance requirements, which may differ depending on the contracting authority and the specific tender. Typical requirements include:

  • Proof of eligibility: absence of sanctions, bankruptcy, criminal convictions or affiliated relations with other bidders or the contracting authority officials.
  • Bid security in the form of a bank guarantee.

In addition to these typical requirements, contracting authorities may set specific qualification criteria (one or few). They may include the need to prove:

  • Technical capacity: availability of equipment, material and technical base, and technologies.
  • Availability of qualified personnel: staff with appropriate expertise and existence.
  • Relevant experience: documented performance of similar contracts.
  • Financial capacity: confirmed by financial statements.

Also, Ukrainian public procurement law allows for the involvement of subcontractors (also referred to as co-executors), but only where the subject of the contract is the procurement of works or services, not goods. If a bidder plans to engage one or more subcontractors whose share of work equals or exceeds 20% of the contract value, the tender proposal must indicate their full name and location.

Note: In case a bidder believes that the tender discrimination contains discriminatory requirements, it may file a complaint with the Antimonopoly Committee of Ukraine, which acts as the designated appeal body in public procurement and has the authority to order the contracting authority to amend the documentation.

Internationally financed public procurements

Procurements financed by international financial institutions (IFIs), such as the International Bank for Reconstruction and Development (IBRD), the European Bank for Reconstruction and Development (EBRD), the European Investment Bank (EIB), and others are carried out in accordance with the procurement rules of the respective institution, while also taking into account the principles of public procurement set forth in the Law of Ukraine «On public procurements».

The information about IFI-funded procurement opportunities is publicly available on the procurement portals of the respective institutions, such as the EBRD`s Client e-Procurement Portal (ECEPP) at https://ecepp.ebrd.com/. Contract terms are usually based on internationally accepted standards (e.g., FIDIC for construction projects), and disputes are resolved under international mechanisms.

Types of procurement procedures

International financial institutions apply procurement procedures that are harmonized with international standards and tailored to the specific needs of the financed project. While terminology may vary across institutions, the following types are commonly used:

  • Open competitive bidding: is the primary method, allowing all eligible bidders to participate under equal conditions.
  • Competitive selection procedure: is applied in cases, where selection is based not only on price but also on the quality of the proposed approach, methodology and team expertise.
  • Direct contracting: is used only in exceptional cases – such as when only one supplier is capable of delivering the goods and services, or in cases of unforeseeable events or circumstances.

The choice of procedure is determined by the project`s complexity, financing terms, and procurement strategy approved by the IFI.

Typical requirements for participation

The qualification requirements for bidders in IFI procurements are often more rigorous and internationally aligned. Common criteria include:

  • Proven experience in similar projects.
  • Financial and technical capacity.
  • Compliance with environmental, social, health, and safety (ESHS) requirements.
  • Absence of restrictive measures or sanctions, as well as of unfair competitive advantage or conflicts of interest.

IFI procurements also permit the participation of joint ventures or consortium. These partnerships allow multiple companies to combine technical expertise, financial capacity, and knowledge to successfully perform under complex contracts.

How to participate in public procurement in Ukraine?

As was mentioned before, participation in Ukrainian public procurements is open to both domestic and foreign businesses, provided they follow the procedural steps set out by the relevant regulations. The process varies slightly depending on whether the procurement is state-financed or funded by international financial institutions, but the core requirements remain similar.

State-financed procurements

Announcements for all state-financed tenders are published on the Prozorro system. In order to participate, a bidder has to:

  1. Choose one of the 12 accredited marketplaces connected to Prozorro (depending on your personal preferences of the platform`s interface and terms of use) and register an account.
  2. Prepare and submit all the required documents in accordance with the tender specifications, including qualification documents and a bid security (if required).
  3. Pay a participation fee, the amount of which varies depending on the tender value (for tenders with a budget exceeding UAH 4 million, the fee is approximately EUR 85).
  4. Submit the bid electronically within the set deadline and monitor communications through the platform.

Internationally financed public procurements

For procurements financed by IFIs, announcements are published on the official procurement portals of the respective institutions. Participation generally involves:

  1. Creating an account on the respective IFI portal.
  2. Submitting expressions of interest or full proposals depending on each specific procedure.
  3. Providing all supporting documentation, which shows the compliance with the qualification criteria set by the institution.
  4. Following the institution`s specific instructions regarding bid submission, evaluation, and contract award.

By following these steps, foreign companies can successfully access and compete in both ProZorro-based and IFI-funded procurement markets in Ukraine.

At Koziakov & Partners, we have extensive experience guiding international businesses through procurement processes in Ukraine. Our team provides full support at every stage – from assessing tender opportunities and preparing compliant bids to representing clients before contracting authorities and ensuring smooth implementation of awarded contracts. With our extensive expertise, foreign companies can confidently navigate the procurement landscape and maximize their chances of success in Ukraine.

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