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The conference “Legal Aspects of Public Procurement,” organized by the publishing house “Yuridichna Praktika” in collaboration with the Association of Ukrainian Corporate Counsel, continues in Kyiv. The event’s program continued with the third session, dedicated to risks and compliance in the field of public procurement.
During the session, experts focused on the practical aspects of identifying and proving anti-competitive concerted actions by bidders, the current practice of the Antimonopoly Committee of Ukraine in disputes between contracting authorities and bidders, as well as the scope of application of direct contracts and negotiated procedures during martial law. Special attention was given to the results of the launch of Donor Procurement in the “Prozorro” system, criminal and reputational risks for procurement parties, as well as tools for assessing and minimizing corruption risks.
The session was moderated by Oleksiy Shevchuk, a partner and speaker at Barristers Law Firm. He structured the panel as a dynamic discussion focused on practical dialogue rather than formal presentations. Oleksiy Shevchuk emphasized the importance of lively interaction between the speakers and the audience.
The session’s first speaker—Maksym Sandyga, Deputy Chairman of the Committee and State Commissioner of the Antimonopoly Committee of Ukraine—dedicated his presentation to the topic of identifying and proving anti-competitive concerted actions by bidders in the field of public procurement. The speaker identified this category of violations as one of the key areas in the AMCU’s practice, one that directly affects the level of competition and the efficient use of public funds.
In his speech, he explained that this primarily refers to bid-rigging, where participants in procurement procedures coordinate their actions to achieve a predetermined outcome and eliminate genuine competition. According to him, such practices can take various forms—ranging from coordinating price proposals to synchronized behavior during auctions.
Maksym Sandyga paid particular attention to the evolution of approaches to proving collusion in such cases. He noted that traditional indicators of violations, such as shared IP addresses or overlapping staff between companies, are gradually losing their decisive role. Instead, the Committee is increasingly focusing on analyzing the economic behavior of bidders, recurring patterns in their actions, and algorithms for participating in procurement procedures.
The speaker also discussed in detail the sanctions resulting from a finding of anti-competitive concerted practices. These include fines of up to 10% of a business entity’s annual revenue and inclusion in the register of violators, which effectively means a ban on participating in public procurement for three years. He emphasized that liability applies regardless of whether the participant won the tender—the mere fact of participating in collusive behavior is sufficient.
A separate section of the presentation was devoted to statistics on the AMCU’s activities and investigation priorities. Maksym Sandyga noted the significant number of fines imposed and entities held accountable, emphasizing that the Commission’s focus is primarily on defense procurement, the reconstruction sector, construction, and medical procurement.
Yevhen Kostenko, Deputy Director of the Department for Appeals of Decisions in the Field of Public Procurement — Head of the First Complaints Review Division of the Antimonopoly Committee of Ukraine — spoke on the AMCU’s practices in disputes between contracting authorities and participants in public procurement, as well as key trends in this area.
The speaker first outlined the specific nature of the appeals body, emphasizing that within the public procurement system, the Antimonopoly Committee performs a quasi-judicial function during the pre-litigation stage of dispute resolution. According to him, the key objective of this procedure is to ensure the most expeditious protection of the rights of participants and contracting authorities, as complaints are reviewed within a short timeframe—approximately seven business days.
Separately, Yevhen Kostenko presented general statistics on the appeals body’s activities, noting that over 9,000 complaints were received last year, and the violations identified in procurement procedures involved amounts exceeding 55 billion hryvnias. He emphasized that the appeal mechanism is most effective precisely at the stage prior to contract signing, when violations can still be rectified without subsequent complex legal proceedings.
The speaker also focused on key categories of violations in public procurement. Among the most common, he cited the drafting of tender documentation “tailored to a single manufacturer,” which effectively restricts competition. In this context, he recalled the so-called “two-manufacturer rule,” according to which the contracting authority must demonstrate the existence of at least two potential manufacturers of the relevant goods; otherwise, the requirements must be adjusted.
Yevhen Kostenko paid particular attention to qualification requirements, especially in areas of licensed activities, such as security services or fire alarm systems. He emphasized that in cases where the state has already established licensing conditions for market access, contracting authorities should not further complicate participation with excessive requirements that lack objective justification.
The speaker also cited examples of excessive requirements in procurement practice, specifically situations where contracting authorities demanded confirmation that security guards’ employment records were kept directly at their posts—conditions he described as illogical and disproportionate. Separately, he mentioned restrictions on standardized goods during the period when special provisions are in effect, during which contracting authorities also cannot deviate from the prescribed standards.
Mykhailo Mokhnya, Deputy Director of the Public Procurement Department and Head of the Public Procurement Division at the Ministry of Economy of Ukraine, focused his presentation on direct contracts and negotiated procedures during martial law and the limits of their permissible application.
The speaker immediately noted that the term “direct contract” is not actually used in legislation. Instead, the term refers to a report on a procurement contract concluded without using the electronic procurement system, which is applied within the scope of the relevant provisions on “special circumstances.” At the same time, a key point of the presentation was that even in the absence of a competitive procedure, the contracting authority is not exempt from the obligation to adhere to the basic principles of public procurement, first and foremost—the principle of competition.
Separately, Mykhailo Mokhnya highlighted a common mistake made by contracting authorities, who perceive such exceptions as an opportunity to enter into contracts with any contractor without proper justification. According to him, in the event of an audit, the contracting authority must be prepared to explain both the selection of the supplier and the determination of the estimated cost, even if the procurement was conducted outside the electronic system.
A significant portion of the presentation was devoted to the context of the European integration process. The Ministry of Economy, according to the speaker, is in constant communication with the European Commission, which consistently emphasizes the need to reduce the number of exceptions in the procurement sector, as each one objectively reduces the level of competition and transparency.
At the same time, the speaker noted that similar exemption mechanisms exist in European law as well, particularly in the context of states’ security interests. The difference lies in the approaches to their application and scope, which are also subject to ongoing review in Ukrainian legislation.
It was specifically emphasized that every exception in the field of public procurement undergoes interagency review with the involvement of relevant authorities. At the same time, among the most common problems are insufficient justification of “urgency” and the excessive use of exceptions as a tool to avoid potential challenges.
Maksym Shchurov, Product Manager at the State Enterprise “Prozorro,” dedicated his presentation to the results of the launch of Donor Procurement and the rationale behind the design of the donor module within the public procurement system. The speaker noted that the donor module was created in response to a situation where significant amounts of international funding began flowing into Ukraine, and procurements using these funds often took place outside the usual electronic system—in some cases even in paper format. In such cases, the contracting authority would essentially just publish a notice, and bids were submitted in the “old-style” manner, which created risks of a lack of transparency. According to him, this was precisely the starting point for creating a separate tool within “Prozorro.”
The key idea behind the module is to combine the infrastructure and principles of “Prozorro” with the rules of international financial institutions. This refers to the ability to conduct procurements in accordance with the regulations of organizations such as the World Bank or the EBRD, while fully maintaining transparency, open data, and competitive practices. According to Maksym Shchurov, this allows for tracking the entire procurement cycle while ensuring clarity for the market.
He also highlighted the implementation phases: Following confirmation of compliance by the World Bank in 2023 and approval of the transition of projects to the system in 2024, the donor module was officially launched for full-scale operation in 2025. Today, it already integrates the national procurement infrastructure with the procedures of international donors, forming a unified digital framework for reconstruction projects.
According to data provided by the speaker, more than 20 international aid programs are already operating within the system, over 2,600 procurements have been conducted, and dozens of contracting authorities are connected to the module. The total value of the contracts runs into the billions of hryvnias, although an exact estimate is complicated by the reporting practices of donors, who do not always publish complete data in the system.
Special attention was given to the involvement of non-residents: according to Mr. Shchurov, the system is already showing active participation by foreign companies in procurements, which is an important signal for international partners and the reconstruction market. At the same time, he acknowledged that in a number of cases, Ukrainian suppliers remain more competitive in terms of price.
Among the key advantages of the donor module, he cited the flexibility to tailor procedures to the requirements of specific donors, the streamlining of work for contracting authorities operating within a single system, and the ability to quickly adapt procurement rules to various international standards. He also emphasized the ability to make prompt changes at the request of development partners—from proposal submission deadlines to evaluation criteria.
Igor Parfilo, an advisor at ADVANQ, focused his presentation on criminal risks for contracting authorities and bidders. At the outset, the speaker provided a general overview and statistical analysis of this category of criminal offenses. He identified two main groups: the procurement of goods, works, and services at inflated prices (Articles 191, 364, and 367 of the Criminal Code of Ukraine) and the procurement of goods, works, and services of substandard quality (Articles 190 and 425 of the Criminal Code of Ukraine).
A separate sample was provided based on statistics from the High Anti-Corruption Court regarding Article 191 for the period 2019–2025. According to the speaker, approximately 28% of all convictions in this category pertain specifically to procurement at inflated prices. At the same time, 60% of the convictions in this category are handed down on the basis of plea agreements, and among the convictions handed down without such agreements, 33% are acquittals. The speaker attributed this to the complexity of public procurement procedures and the difficulty of proving damages in such criminal proceedings.
Mr. Parfilo categorized criminal risks in the procurement sector into four key categories: compliance with procurement procedures, communication between contracting authorities and bidders, the cost of goods/works/services, and their quality.
Within the first category—compliance with procedures—the standard elements of a contracting authority’s responsibilities were outlined: identifying needs, determining the expected cost, preparing tender documentation, defining the technical and quality specifications of the procurement item, evaluating tender proposals, and selecting the winning bidder.
Separately, the speaker emphasized the importance of compliance procedures as a key element in protecting the contracting authority. According to him, a properly documented procedure, a complete set of documents, and audit results have long been viewed as factors that significantly reduce the risk of claims from law enforcement agencies. In this context, he cited the example of a complex approval system among large government contracting authorities, specifically a case involving more than 40 signatures in the procurement approval process at JSC “Ukrzaliznytsia.” At the same time, the speaker noted that law enforcement agencies have shifted their focus from formal procedures to individuals who actually influence decision-making, even without formal authority.
Special attention was given to the risks associated with communication between contracting authorities and bidders. Among the classic indicators of potential collusion, he cited assistance in determining the expected cost, bidders’ involvement in preparing tender documentation, the disclosure of insider information, and violations of document-handling procedures.
The speaker also addressed the practice of the Supreme Court. He noted that since 2022, there had been varying approaches regarding the significance of communication in establishing a conspiracy; but in 2025, the Joint Chamber of the Supreme Court established a position according to which the presence or absence of direct communication is not decisive for criminal classification. In this context, he also mentioned the development of an approach regarding “conclusive actions” as possible evidence of intent.
A separate section of the presentation was devoted to the issue of damages. The speaker noted that damages are typically determined in two ways: as the difference between the actual cost and the market price (based on an expert assessment), or as the difference between the purchase price and the manufacturer’s cost when intermediaries are excluded. He emphasized that even the lowest bid in a tender does not guarantee that it will be recognized as the market price in criminal proceedings, since the average market price, determined using the comparative method, often serves as a benchmark.
Risks related to the quality of goods were also discussed. The speaker emphasized that responsibility for quality under the contract lies with the customer, not the manufacturer, and that reliance on the manufacturer’s declarations does not exempt the customer from the obligation to verify compliance with the requirements of the tender documentation and regulatory acts. As an example, he cited criminal proceedings regarding the supply of first-aid kits to the National Guard of Ukraine in 2022, where the non-compliance of the kits’ contents with regulatory requirements led to a finding that the goods were unsuitable and to the determination of their full value as damages.
Artem Gichko, Executive Director of ELOT LLC, focused his presentation on reputational risks in public procurement and the significance of so-called “blacklists” as both formal and informal tools for influencing market participants. He emphasized that a supplier’s business reputation in the procurement sector is often just as important as price or technical compliance, as it is precisely this reputation that builds trust between businesses and government customers.
The speaker paid particular attention to the specifics of the legal environment for public procurement, which is characterized by a high level of transparency and, at the same time, increased accountability for participants. According to him, martial law has only intensified oversight by the state, law enforcement agencies, and the AMCU, and any violations—or even suspicions of misconduct—can quickly attract public attention and result in significant reputational damage.
A significant portion of the report was devoted to the AMCU’s “blacklist” as a formal mechanism of influence. He noted that inclusion in the register of anti-competitive concerted actions results from the establishment of a conspiracy among bidders and entails serious legal restrictions, including a ban on participating in public procurement for a specified period, fines, and the mandatory consideration of this status by contracting authorities when rejecting bids. At the same time, he emphasized that the official registry is only part of the problem.
Separately, Artem Gichko drew attention to informal reputational mechanisms that develop within the professional community through practice, communication, and high-profile cases. Even after formal restrictions have ended, companies may still face mistrust from contracting authorities. As a practical conclusion, he emphasized the need to implement anti-corruption compliance programs, proper legal support, and internal discipline as key tools for minimizing reputational risks in the field of public procurement.
Andriy Mikheev, Head of Compliance at GTS Operator of Ukraine LLC, focused his presentation on a systematic approach to assessing and minimizing corruption risks in public procurement, emphasizing the role of the compliance function as a key risk management tool. He noted that the company is one of the largest contracting entities in the “Prozorro” system, which necessitates heightened attention to internal control procedures and risk management.
The speaker outlined a basic model for compliance reviews of procurements, which consists of two levels: formal and analytical. The formal level involves verifying the existence of grounds for disqualifying participants or refusing to enter into a contract in accordance with legislation and regulatory requirements. The second level involves identifying a broader range of risks—corruption, reputational, and financial—and making management decisions regarding further actions in the procurement process.
He paid particular attention to the stage of needs assessment and procurement planning, which he described as the most risky in terms of corruption-related abuses. Among the key risks, he highlighted affiliations between bidders and the contracting authority’s officials, the artificial creation of procurement needs, manipulation of the annual procurement plan, and potential restrictions on competition due to specific or excessively narrow technical requirements. Risks associated with determining the expected cost and collecting commercial proposals were also noted.
A separate section of the presentation addressed regulatory and compliance requirements, specifically the existence of anti-corruption programs among participants and the proper preparation of documents, as well as problematic aspects of verifying data in state registries. In addition, the speaker drew attention to risks associated with sanctions restrictions and indirect ties to sanctioned individuals. In conclusion, he emphasized that effective risk management is possible only through a comprehensive approach that combines legal, organizational, and compliance tools, along with continuous improvement of the regulatory framework.
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