Ukrainian Parliament passes public procurement law required under World Bank, EU tool

The Verkhovna Rada has approved in the second reading and as a whole draft law No. 11520 on public procurement, which is a requirement under the World Bank’s Development Policy Operations (DPO) instrument and will help unlock $3.4 billion.

As an Interfax-Ukraine correspondent reported, during the parliamentary session on Wednesday, May 27, the bill in its second reading was supported by 245 MPs, with no votes against.

The law harmonizes the public procurement system with EU directives and introduces new instruments such as innovation partnerships and dynamic systems.

The document simplifies the attraction of international investment and will support domestic enterprises, including those established by war veterans.

Adoption of the law is a requirement of the European Union and the World Bank within the framework of adapting Ukrainian legislation to the EU acquis communautaire. The new version is intended to replace the current law and introduce more transparent and competitive tender procedures. As noted by the Ministry of Economy, the law is aimed at implementing Directive 2014/24/EU, while public procurement forms part of the first, fundamental cluster of negotiations on Ukraine’s accession to the EU.

The ministry added that successful progress on such reforms opens access to financing under the World Bank’s Development Policy Operation (DPO) for jobs and private sector growth in the amount of $3.4 billion. The funds received are directed straight to the general state budget fund to cover priority social and humanitarian expenditures.

According to the explanatory note, the bill proposes a number of innovations aimed at increasing procurement efficiency, including broad use of electronic tools and minimizing opportunities for abuse through exceptions to general procedures and participant proposals of their own solutions. It also provides for regulation of the mechanism for dividing large procurements into lots, which will prevent major players from taking all contracts and create opportunities for small regional companies to participate in large-scale tenders.

Among the key provisions proposed by the government is mandatory use of electronic catalogs for procurement of goods within a certain price range (from UAH 50,000 to UAH 400,000), while for works valued at up to UAH 1.5 million, use of the electronic system remains optional.

As reported, the Verkhovna Rada approved bill No. 11520 in the first reading as a basis on September 17, 2024. However, on April 29, during voting, parliament sent the bill back for a repeat second reading.