**GOVERNMENTPROCUREMENT REGULATIONS IN UKRAINE.**

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2 fEBRUARY 2000

SOURCE:US COMMERCIAL SERVICE, KYIV

 

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INTERNATIONALCOPYRIGHT, U.S. & FOREIGN COMMERCIAL SERVICE AND U.S. DEPARTMENT OF STATE,2000. ALL RIGHTS RESERVED OUTSIDE OF THE UNITED STATES

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1. SUMMARY: THISREPORT PROVIDES INFORMATION ON GOU PROCUREMENT REGULATIONS AND PRACTICES.  IT IS SUBMITTED TO ASSIST U.S.COMPANIES IN SELLING TO THE UKRAINIAN GOVERNMENT.  END SUMMARY.

 

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OVERVIEW OF GOUPROCUREMENT

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2. GOVERNMENTPROCUREMENT IN UKRAINE IS DIVIDED INTO TWO MAIN TYPES:

 

TYPE A: GOVERNMENTPURCHASING.

TYPE B: GOVERNMENTORDERING.

 

3. THE GOALS OF TYPEA PROCUREMENT (GOVERNMENT PURCHASING) ARE:

 

- FILLING THE GENERAL NEEDS OF THE GOVERNMENT ANDPUBLIC AGENCIES FOR GOODS AND SERVICES;

- PROVIDING AN INCENTIVE FOR DOMESTIC COMPANIES ANDCREATING ADDITIONAL JOBS; AND

- ADJUSTING MARKETSTRUCTURE.

 

4. TYPE B PROCUREMENT(GOVERNMENT ORDERING) IS AIMED AT OBTAINING SPECIAL PRODUCTS FOR:

 

- NATIONAL SECURITYAND DEFENSE; and

- THE DEVELOPMENT OF SCIENCE, TECHNOLOGY,EDUCATION, AND CULTURE.

 

5. THE PARLIAMENT ANDTHE CABINET OF MINISTERS REGULATE GOVERNMENT PROCUREMENT IN UKRAINE.  GOVERNMENT PROCUREMENT IS DIRECTED ANDMONITORED BY THE MINISTRY OF ECONOMY AND MANAGED BY CORRESPONDING GOVERNMENTORGANIZATIONS.

 

6. RELIABLESTATISTICS ON GOVERNMENT PURCHASING MADE BY THE GOVERNMENT IN UKRAINE WERE NOT AVAILABLE.  HOWEVER, THE MINISTRY OF ECONOMYESTIMATED THE VALUE OF GOVERNMENT ORDERING IN 1998 AT USD 700 MILLION.

 

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TYPE A PROCUREMENT:GOVERNMENT PURCHASING

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7. THE CABINET OFMINISTERS' RESOLUTION ON "ORGANIZATION AND CONDUCTING OF GOVERNMENTPROCUREMENT TENDERS" WAS TARGETED AT INCREASING THE EFFICIENCY OFPURCHASES AT THE EXPENSE OF THE STATE BUDGET, OBTAINING QUALITY GOODS ANDSERVICES, AND ELIMINATING  CORRUPTPRACTICES IN GOVERNMENT PROCUREMENT. THE RESOLUTION STATED THAT THE PURCHASE OF GOODS AND SERVICES WORTH MORETHAN USD 10,000 WITH GOVERNMENT FUNDS WERE SUBJECT TO PROCUREMENT REGULATIONS.  FOR TENDERS FOR PURCHASES OVER USD100,000, IT IS COMPULSORY TO PUBLISH INFORMATION ON THE REQUIREMENTS IN THEUKRAINIAN OFFICIAL PRESS AND INTERNATIONAL SPECIALIZED PUBLICATIONS. 

 

8. CURRENTLY, VISNYKDERZHAVNYKH ZAKUPIVEL (GOVERNMENT PROCUREMENT BULLETIN) IS THE OFFICIALPUBLICATION OF THE MINISTRY OF ECONOMY OF UKRAINE, WHICH PROVIDES INFORMATIONON GOVERNMENT TENDERS.  THE CONTACTINFORMATION AND WEB-SITE ADDRESS IS AVAILABLE BELOW.

 

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DESCRIPTION OFGOVERNMENT PURCHASING TENDER PROCEDURES 

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9. ACCORDING TOCURRENT REGULATIONS, GOVERNMENT TENDERS ARE TO BE NON-DISCRIMINATORY AGAINSTFOREIGN BIDDERS, WITH SOME EXCEPTIONS grantedon a tender-by-tender basis. THESE EXCEPTIONS GIVE PRIORITY TO DOMESTIC SUPPLIERS.  WHEN APPLIED, THE PREFERENTIALEXCEPTION ADDS 15 PERCENT TO THE VALUE OF A FOREIGN INVESTOR’S BID.  GOVERNMENTAL AGENCIES CAN ALSO APPLYADDITIONAL CRITERIA TO FAVOR DOMESTIC SUPPLIERS. 

 

10. A CONTRACTINGORGANIZATION CAN USE ONE OF THE FOLLOWING TENDER PROCEDURES:

 

- OPEN TENDER;

- OPEN TENDER WITH APRELIMINARY QUALIFICATION;

- COMPETITIVENEGOTIATIONS; OR

- REQUESTS FORQUOTES.

 

11. "OPEN TENDERWITH A PRELIMINARY QUALIFICATION" IS DIVIDED IN TWO STAGES.  FOR THE FIRST STAGE, A CONTRACTINGORGANIZATION SOLICITS BIDS, QUALIFIES, AND INVITES QUALIFIED BIDDERS TOPARTICIPATE IN THE SECOND STAGE. ONLY PROPOSALS FROM INVITED BIDDERS WOULD BE CONSIDERED IN THE SECONDSTAGE OF THIS PROCEDURE.

 

12. IN"COMPETITIVE NEGOTIATIONS," THE CONTRACTING ORGANIZATION CONTACTS ATLEAST THREE POTENTIAL SUPPLIERS FOR FURTHER NEGOTIATIONS REGARDING THESPECIFICATIONS OF THE ORDER.

 

13. BY MAKING "AREQUEST FOR QUOTES~~REQUESTS~~," THE CONTRACTINGORGANIZATION SOLICITS ONLY PRICE QUOTES FROM POTENTIAL SUPPLIERS OF REQUESTEDPRODUCTS.

 

14. IF THE VALUE OFTHE CONTRACT EXCEEDS USD 100,000, THE CONTRACTING ORGANIZATION MAY ONLY USE ONEOF THE FOLLOWING PROCEDURES:

 

- OPEN TENDER;

- OPEN TENDER WITH APRELIMINARY QUALIFICATION; OR

- COMPETITIVENEGOTIATIONS.

 

15. IF THE VALUE OFTHE CONTRACT IS BETWEEN USD 70,000 AND USD 100,000, THE FOLLOWING PROCEDURESMUST BE USED:

 

- COMPETITIVENEGOTIATIONS, or~~AND~~

- REQUEST FOR QUOTES.

 

16. CONTRACTS FOR USD10,000 TO USD 70,000 MAY USE A QUOTING PROCEDURE.  HOWEVER, WHEN FEASIBLE, A CONTRACTING ORGANIZATIONREQUESTING GOODS OR SERVICES OF BETWEEN USD 10,000 AND USD 70,000 MAY USEEITHER AN OPEN TENDER OR AN OPEN TENDER WITH A PRELIMINARY QUALIFICATION.

 

17. THE INFORMATIONABOUT GOVERNMENT TENDERS PROVIDED BY GOU WILL TYPICALLY INCLUDE THE:

 

-       NAME AND ADDRESSOF THE CONTRACTING ORGANIZATION;

-       TYPE OF TENDERPROCEDURE TO BE USED, QUANTITY AND PLACE OF DELIVERY OF GOODS OR SERVICESREQUESTED;

-       DELIVERY TERMS;

-       PROCEDURE ANDDEADLINE FOR OBTAINING TENDER  APPLICATION FORMS;

-       VALUE OF THETENDER DOCUMENT PROCESSING FEE;

-       PAYMENT TERMS;

-       LANGUAGE OFBIDS;

-       PLACE ANDDEADLINE FOR SUBMISSION OF TENDER BIDS; AND

-       SOURCE OFFINANCING FOR A PURCHASE.

 

18. THE DEADLINE FORSUBMISSION OF BIDS MUST BE AT LEAST 45 DAYS AFTER THE DATE INDICATED IN THETENDER ANNOUNCEMENT. 

 

19. BIDDERS MAYREQUEST TENDER DOCUMENTS FROM THE CONTRACTING ORGANIZATION.  TENDER DOCUMENTS ARE DETAILEDDESCRIPTIONS OF PROCEDURES AND CONDITIONS IN EFFECT TO A PARTICULAR TENDER ANDARE NECESSARY FOR PREPARING A BID.

 

20. BIDDERS MAY BEREQUIRED TO DEPOSIT TENDER COLLATERAL, WHICH SHOULD NOT EXCEED FIVE PERCENT OFTHE VALUE OF THE CONTRACT.

 

21. BIDS SHOULD BEFILED IN THE LANGUAGE OF THE TENDER DOCUMENTS OR THE LANGUAGE INDICATED IN THETENDER DOCUMENTS.

 

22. THERE ARE TWOSETS OF CRITERIA FOR SELECTING BEST BIDS THAT THE CONTRACTING ORGANIZATION MAYUSE:

 

A)       BEST PRICE. THE CONTRACTING ORGANIZATION MAYUSE A 15 PERCENT PREFERENTIAL AMENDMENT FOR DOMESTIC BIDDERS.

 

B)       OTHER CRITERIA:

-       DELIVERY TERMS;

-       DELIVERY COST;

-       QUALITY;

-       FUNCTIONALCHARACTERISTICS;

-       ENVIRONMENTALFRIENDLINESS;

-       WARRANTIES ANDAFTER-SALE SERVICES;

-       PAYMENT TERMS;

-       TECHNOLOGYTRANSFER; AND

-       USER TRAINING.

 

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TYPE B PROCUREMENT:GOVERNMENT ORDERING

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23. GOVERNMENTORDERING IS REGULATED BY THE LAW ON "SUPPLY OF GOODS FOR GOVERNMENTNEEDS" AND THE RESOLUTION OF THE CABINET OF MINISTERS NO. 266 OF FEBRUARY29, 1996 "ON RULES FOR PREPARATION, PLACEMENT, AND CONTROL OF GOVERNMENTORDERS FOR THE SUPPLY OF GOODS FOR THE GOVERNMENT."

 

24. SUPPLIERS OFGOVERNMENT ORDERS ARE MAINLY GOVERNMENT AGENCIES AND A LIMITED SET OFPRE-QUALIFIED DOMESTIC ORGANIZATIONS. SUCH PROCUREMENT IS NOT OPEN TO INTERNATIONAL COMPETITIVE BIDDING.

 

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LAWS AND REGULATIONS ONGOU PROCUREMENT

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25. THE CABINET OFMINISTERS' RESOLUTION NO. 694 OF JUNE 29, 1997, "ON THE ORGANIZATION ANDOPERATION OF GOVERNMENT PROCUREMENT TENDERS," WITH CORRESPONDINGAMENDMENTS, CURRENTLY REGULATES GOVERNMENT PURCHASES IN UKRAINE.  DRAFT LEGISLATION ON PROCUREMENT OFGOODS, WORKS, AND SERVICES FOR GOVERNMENT NEEDS IS CURRENTLY BEING CONSIDEREDBY THE PARLIAMENT, AND WHEN ENACTED INTO LAW WILL REPLACE THE CABMIN RESOLUTION.

 

26. OTHER REGULATIONSON GOVERNMENT PROCUREMENT IN UKRAINE INCLUDE:

 

-       THE RESOLUTIONOF THE CABINET OF MINISTERS NO. 1369 OF SEPTEMBER 1, 1998 "FORORGANIZATION AND CONDUCTING OF GOVERNMENT PROCUREMENT TENDERS INCONSTRUCTION;"

-       THE DECREE OFTHE PRESIDENT ON "THE RULES OF PROCUREMENT OF PHARMACEUTICAL PRODUCTS ATTHE EXPENSE OF THE STATE BUDGET;" AND

-       THE DECREE OFTHE PRESIDENT ON "THE RULES OF PROCUREMENT OF MEDICAL EQUIPMENT AT EXPENSEOF THE STATE BUDGET."

 

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ADDITIONALINFORMATION

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27. DETAILEDINFORMATION ABOUT GOVERNMENT PURCHASING MAY BE OBTAINED FROM THE GOUPROCUREMENT BULLETIN (SEE CONTACT INFORMATION BELOW).  TENDER ANNOUNCEMENTS ARE ALSO ACCESSIBLE ON THE WEB-SITE: WWW.VDZ.UKRNET.NET. ADDITIONALLY,LEGISLATION ON GOVERNMENT PROCUREMENT IN THE UKRAINIAN LANGUAGE CAN BE FOUND ONWWW.RADA.KIEV.UA; WWW.CMU.GOV.UA; AND WWW.LIGA.KIEV.UA.

 

28. KEY CONTACTS:

 

MINISTRY OF ECONOMICS

DEPARTMENT OFGOVERNMENT PROCUREMENT

VOLODYMYR TRETIAK,HEAD OF DEPARTMENT

NADIA OBUSHKO, DEPUTYHEAD OF DEPARTMENT

12/2, HRUSHEVSKOHOVUL. KIEV 252008, UKRAINE

TEL: (380-44)293-9394, 226-2315

FAX: (380-44)226-3181

URL: WWW.ME.GOV.UA

 

STATE PROPERTY FUNDOF UKRAINE

OLEKSANDR BONDAR,CHAIRMAN

18/9 KUTUZOVA VUL.KIEV 252133, UKRAINE

TEL: (380-44)295-1274, 296-6401

FAX: (380-44)295-1274

URL: WWW.SPFU.KIEV.UA; www.spfukraine.com

 

VISNYK DERZHAVNYKHZAKUPIVEL (GOVERNMENT PROCUREMENT BULLETIN)

12/2, HRUSHEVSKOHOVUL.

KIEV 01008, UKRAINE

TEL: +380 (44)293-9415

FAX: +380 (44)293-4445

E-MAIL: [email protected]

URL: WWW.VDZ.UKRNET.NET

 

JULIANA KINAL,INTERNATIONAL TRADE SPECIALIST

BUSINESS INFORMATIONSERVICE FOR THE NEWLY INDEPENDENT STATES (BISNIS)

U.S. DEPARTMENT OFCOMMERCE

USA TRADE CENTER 

STOP R-BISNIS

1401 CONSTITUTIONALAVE., NW

WASHINGTON, DC 20230

TEL: (202) 482-4655 

FAX: (202) 482-2293 

1-800/USA-TRADE

E-MAIL: [email protected]

HTTP://WWW.BISNIS.DOC.GOV

 

29.               HOWEVER,U.S. SUPPLIERS ARE URGED TO EXERCISE CAUTION BEFORE CONCLUDING CONTRACTS INUKRAINE.  POST SUGGESTS CONSULTINGTHE COUNTRY COMMERCIAL GUIDE FOR UKRAINE AVAILABLE AT HTTP://WWW.STAT-USA.GOVAND DISCUSSING PROSPECTIVE CONTRACTS WITH EMBASSY STAFF, AMCHAM, ACCOUNTINGFIRMS, LEGAL COUNSEL AND OTHER SOURCES.