How to sell to Ukraine's Government

MINISTRY OF ECONOMIC DEVELOPMENT AND TRADE OF UKRAINE

HOW TO SELL TO UKRAINE’S GOVERNMENT?

Мaxim Nefyodov

Natalia Mykolska

First Deputy to the Minister of Economic Development and Trade of Ukraine

Deputy to the Minister of Economic Development and Trade of Ukraine Trade Representative

"Public procurement reform in Ukraine is an exemplary case of shifting from corrupt procurement system to a transparent electronic procedure. Today public procurement via ProZorro opens new opportunities for business from Ukraine and abroad"

“We are building new, open and mutually beneficial relationships with our trading partners abroad. Ukraine today is a promising and reliable partner, especially in the public procurement area”

CONTENT

0.

Introduction: Public Procurement Reform in Ukraine & New Opportunities

3

1.

Which public Authorities purchase Goods & Services?

4

2.

What Goods and Services are in Demand?

5

3.

Ukrainian Procurement Market in Numbers

6

4.

Foreign Companies have already won Ukrainian government Tenders

8

5.

Market Research using Business Intelligence Module

12

6.

What are the GPA Benefits and Restrictions?

13

7.

How the Government procures?

14

8.

Which Procurement is most commonly used?

18

9.

Which Resources and Documents can be needed to compete for governmental Tenders?

20

10.

Need help? Contact GPAinUA Office

22

11.

Useful Links & Resources

23

3

INTRODUCTION: PUBLIC PROCUREMENT REFORM IN UKRAINE & NEW OPPORTUNITIES Following the 2014 Revolution of Dignity a new team of activists and business minded professionals came into Ukrainian public sector. They initiated much needed economic reforms, achieving remarkable results in defence, police, energy independence, deregulation, improving business climate and transparent public procurement.

Public Procurement Reform is a big success of a team that includes activists, business professionals, civil society and government. With the modern e-procurement system ProZorro at its core, public procurement reform has shown how transparency and how modern technology can ensure transparency and transform even the most corrupt areas.

Public companies and government bodies spend over UAH 300 bln every year (approx. USD 10 bln). It used to be the most corrupt area where all proposals were hidden in paper envelops, negotiations were conducted behind closed doors and honest business had no chance to win fairly. Starting August 1, 2016, public e-procurement has become mandatory for all procuring entities.

So what has changed? Public procurement procedures are now conducted online. Anyone, a journalist, or monitoring agency representative, can be virtually present during the procurement procedure. Therefore any attempt to conduct a corrupted tender will become known the public. All documents uploaded to the system remain in the database forever. History of changes in tender documentation is available to anyone.

KEY ADVANTAGES TRANSPARENT SELECTION OF WINNER After the auction concludes, all participant’s, offers are visible to other participants and the public, as well as protocols of disqualification, if there were any. Participants can make an online appeal regarding the customer’s decision. The system keeps history of all changes and allows to view previous versions and deleted documents.

NEW MARKET The state procures all categories of goods, services and works amounting at UAH 300 bln. annually (approx. USD 10 bln). Any business can find a distribution channel - the probability of winning large tenders is very high.

PAYMENT CONTROL ONLINE ProZorro also provides an ability to check contract payments. The Payment Control module was developed by the project «Е-Data and 007» and allows to track online payments made through the State Treasury. Data on payment contracts, as the rest of the tender documentation can be found on any of the tenders.

PUBLIC MONITORING Every citizen of Ukraine can monitor how the government is spending his taxes. Analysis module – a tool that society can use to control the public procurement system and influence its improvement. The Analysis Module shows data about all tenders that are conducted in ProZorro. NGO representatives, big public procurers and controlling authorities can obtain access rights to an extended version of the Analytical Module. Access can be granted by Transparency International Ukraine.

4

1WHICH PUBLIC AUTHORITIES PURCHASE GOODS & SERVICES? Starting from 2016 according to the new law use of e-procurement system ProZorro has become mandatory for all government entities under the new law «On public procurement». This includes the central government (ministries, national agencies, etc.), as well as state-owned companies (eg, Ukrainian Railway and Ukrainian Post, Naftogaz (national oil and gas company), Energoatom (national nuclear energy generating company)), local government authorities (regional administrations, districts, towns and villages), utilities providers, etc. In addition under the new law, ProZorro is also used by companies, regardless of ownership, if they have a special (monopolistic) position on the market, for example, companies that supply electricity, water and heat to citizens. Some companies with a state share which are not legally obliged to hold tenders through Prozorro are nevertheless actively using the system, because it significantly improve the efficiency of procurement.

One such example is the company Ukrgazvydobuvannya (company that is engaged in gas exploration, transportation, processing and retail). In total, the company conducted over 1,000 purchases inside the ProZorro trading system with a planned budget of UAH 26 billion (approx. USD 1 bln). Among the main products UGV regularly procures are buys Ukrgazvydobuvannya - building materials, industrial machinery, chemical products, electrical equipment, computer hardware, etc.

The top buyers by number of tenders include: Kyiv City State Administration, the Ministry of Infrastructure, Dnipro Regional Administration, Ministry of Economic Development and Trade of Ukraine, Ministry of Education and Science and the Ministry of Finance. At the same time, the top by volume of tenders include, among others, the The State Agency of Automobile Roads of Ukraine (Ukravtodor), Ministry of Internal Affairs and the State Public Savings Bank of Ukraine.

Top Buyers by the Number of GPA Contracts (2015 - July 2016): PJSC Ukrainian Railway

104

SE «United Mining and Chemical Company»

88

SE «Eastern Mining and Processing Complex»

63

MC «Kyivpastrans» (transport utility company)

52

Ministry of Health of Ukraine

51

Ministry of Defense of Ukraine

42

PJSC Sumykhimprom (power and chemical association)

41

Kyiv City State Administration, Department of Health

41

SE «NNEGC «Energoatom» (nuclear energy generating company)

40

NJSC «UkrAgroLeasing» (agriculture equipment leasing company)

33

All major state-owned companies, such as Ukrainian Post openly publish their procurement plans for the year ahead, allowing suppliers to plan participation in major auctions.

5

2WHAT GOODS AND SERVICES ARE IN DEMAND? Today, the state of Ukraine purchases all kinds of goods and services. It is the largest buyer in the country with the hundreds different types of goods and services purchased annually. The selection is wide - from food, clothing and furniture, to large industrial machinery, engineering and construction works.

Goods, services and works that are procured through the Prozorro system are classified according to the system of Common Procurement Vocabulary (CPV) codes. This greatly simplifies the search for tenders. For example, a provider of medical supplies can select a group code 33000000 or in more detail, the code 33600000-6 for Pharmaceutical products or 33600000-7 code for personal hygiene. You can create search profiles and subscribe to certain codes and be notified when the relevant applications directly to your email.

You can identify your CPV codes here: https://goo.gl/wQ5ZOz

Top Selling Goods and Services by value and by number (November 2016): Top Selling CPV's

Expected Value, bln. USD

Oil, Eelectricity

44,7

Construction works

40,0

Services related to the oil and gas industry

18,6

Transport equipment

11,9

Structures and construction materials

7,4

Food, beverages, tobacco

7,2

Transport services; travel agency services

6,9

Industrial machinery

5,7

Electrical machinery, Lighting equipment

5,2

Medical equipments, pharmaceuticals

4,4

Repair and maintenance

3,3

Office and computer equipment

2,6

Chemicals

2,5

Mining and construction equipment

2,3

Laboratory, optical and precision equipment

2,1

Clothing, footwear, bags and accessories

2,1

Furniture

2,0

Architectural, construction, engineering and inspection services

1,5

Waste services

1,4

Mining products, base metals

1,2

6

3UKRAINIAN PROCUREMENT MARKET IN NUMBERS Today, about 4000 tenders are carried out daily using the electronic public procurement system. Since its launch as a pilot project, and then during entry into force of the law on the mandatory use of the Prozorro, almost more than 800 thousand procedures have been held in the system:

Total value of these procedures has almost reached UAH 400 bln. (approx. USD 15 bln) 20 thousand government customers made acquisitions Average number of participants per bid equals 2.45 suppliers

If we focus only on large, above-threshold GPA tenders, which are of primary interest to foreign suppliers, the number of such completed tenders exceed 1,5 thousand, with their total value exceeding UAH 48 billion (approx. USD 2 bln). It is moreover noting, that the number of above-threshold tenders is growing rapidly each day: from about 14 tenders in April 2016 to nearly 400 tenders in November 2016 (almost 30 times growth).

Statistical data indicates presence of seasonality - procurement peaks occur in the spring and at the end of the calendar year.

The major share of above-threshold tenders (62%) are open auction procedures with descending prices (reverse auction). Over 4,600 of these above-threshold tenders are also published in English, amounting to nearly UAH 200 billion (approx. USD 7 bln) (as at March 2017) in value.

The maximum number of announced tenders reaches over 1000 daily. Top 10 items of above threshold tenders include: oil products, transport, construction materials, electrical and medical equipment, repair and maintenance services, etc.

Increasing competition - is one of the main objectives of public procurement reform in Ukraine. Currently, the average number of participants per tender equals to 2.45, which according to the Ministry of Economic Development and Trade of Ukraine estimates, translates to around 40% success rate to new suppliers.

In the tenders that are open to foreign suppliers, the average number of participants in the auction is 2.83. Therefore most of the tenders attract only two suppliers. This is a very small level of competition that offers great opportunities for newcomers.

7

Distribution of the number of participants in tenders above threshold in 2016 Tender’s number by number of bidders 800 695

600

No. of Tenders

351

228 400

117

200 71 38 19

13

8

3

4

1

1

1

1

10

11

12

13

15

16

25

0 2

3

4

5

6

7

8

9

Number of bidders

New transparent rules of the game, a simple and user-friendly system are attracting large foreign companies to public procurement in Ukraine.

8

4FOREIGN COMPANIES HAVE ALREADY WON UKRAINIAN GOVERNMENT TENDERS Case study 1 THE ITALIAN EQUIPMENT FOR ENERGOATOM Purchase of units for pump action Energoatom - a vivid example of how ProZorro system works. This equipment was crucial for an investment project, which could not start for several years. But new rules in public procurement finally allowed to move the project off the ground.

The State Enterprise Energoatom procured sophisticated technical equipment. Therefore, pre-qualification with technical expertise was used for purchases (so-called euro procedure).

Before making an application for the purchase, the company had consulted with three suppliers. This allowed for a realistic budget allocation, which passed the state expert valuation and non-discriminatory tender documentation rules.

Offers from the participants were collected, pre-qualification procedures conducted in accordance with the requirements, and then held a reduction price. Two companies - manufacturer from Italy and Ukrainian representing a manufacturer from China, were competing in price. The winner was the Italian manufacturer, which offered the best price.

For more information about the purchase: https://goo.gl/acppsR

CASE SUMMARY Customer: State Enterprise Energoatom Subject of procurement: pump aggregates (Piston pump assemblies for SS SU NPP) Winner: Company ™.P. S.P.A. - TERMOMECCANICA POMPE (Italy) The target price: UAH 327 mln.

The final price: UAH 175 mln.

The type of procedure: pre-technical skills (euro procedure) Number of participants: 2

Мaxim Nefyodov First Deputy to the Minister of Economic Development and Trade of Ukraine

«This purchase demonstrates the essence of changes in the public procurement system. ProZorro can be used not only for price competition. But also for much more complex procedures that require high expertise. In addition, the purchase proves that foreign companies can participate in tenders on a par with local companies and win by offering better value for money and price»

9

4FOREIGN COMPANIES HAVE ALREADY WON UKRAINIAN GOVERNMENT TENDERS Case study 2 TECHNOLOGICAL EQUIPMENT FOR ENERGOATOM State Enterprise «Energoatom» was able to attract two Ukrainian and three foreign suppliers to bid on their purchase of equipment (spare parts for electric motors and generators). Although, some participated in the bidding through its representative office in Ukraine, the tender was won by a Polish company, which had applied directly.

Energoatom announced an open tender for the purchase of spare parts for their main equipment via ProZorro in October 2016. Five companies submitted bids, including three foreign.

During the auction on November 7, four participants actively traded. The winner was a Polish company DIMIDA SPÓŁKA Z OGRANICZONĄ ODPOWIEDZIALNOŚCIĄ. It is noteworthy, that the difference between the winner and second best offer was only 1000 UAH, indicating that the real competition is in the auction.

The contract with the supplier was concluded in early December.

For more information about the purchase, please follow the link: https://goo.gl/uXSR6F

CASE SUMMARY Customer: State Enterprise Energoatom Subject of procurement: Parts for electric motors and generators Winner: DIMIDA SPÓŁKA Z OGRANICZONĄ ODPOWIEDZIALNOŚCIĄ (Poland) Target price: UAH 3.7 mln.

Final price: UAH 1.1 mln.

Type of procedure: open auction Number of participants: 5

Мaxim Nefyodov First Deputy to the Minister of Economic Development and Trade of Ukraine

«This purchase demonstrates the essence of changes in the public procurement system. ProZorro can be used not only for reduction. But also for much more complex procedures that require high expertise. In addition, the purchase proves that foreign companies can participate in tenders on a par with local companies and win by offering better quality and price»

10

4FOREIGN COMPANIES HAVE ALREADY WON UKRAINIAN GOVERNMENT TENDERS Case study 3 CHEMICALS FOR EASTERN MINING State owned enterprise «Eastern Ore Dressing Complex» managed to attract a foreign supplier for its purchase of specialized chemicals. This resulted in 10% savings for the company.

Eastern Ore Dressing Complex announced a tender to purchase 3,8 tons of hafnium dioxide in August. This lot was of interest to two companies: «Torgservice» (Ukraine) and Buss & Buss Spezialmetalle GmbH (Germany). Both suppliers took part in reduction, resulting in a huge discount of UAH 1 mln (over 10% less than the target price).

The auction was held in the first decade of October. The agreement with the winner – German company Buss & Buss Spezialmetalle GmbH – was signed in November 2016.

For more information about this purchase: https://goo.gl/u1Sd6G

CASE SUMMARY Customer: State Enterprise «Eastern Ore Dressing Complex» Subject of procurement: hafnium dioxide Winner: Buss & Buss Spezialmetalle GmbH (Germany) The target price: UAH 9 mln.

The final price: UAH 8 mln.

The type of procedure: reduction Number of participants: 2

Мaxim Nefyodov First Deputy to the Minister of Economic Development and Trade of Ukraine

«In Ukraine, we have several huge stated owned companies, and their tenders form a great share of public procurement volume. Whether it is specific equipment, services or chemicals, these purchases are usually announced every year. It’s a great opportunity for foreign suppliers»

11

4FOREIGN COMPANIES HAVE ALREADY WON UKRAINIAN GOVERNMENT TENDERS Case study 4 PROVISION FOR THE MINISTRY OF DEFENSE Company METRO Cash & Carry Ukraine won the tender from the Ministry of Defense of Ukraine using the electronic public procurement system ProZorro. Capital years, METRO did not even consider taking part in public procurement. They started venturing in this direction following the promotion of public procurement by the ProZorro team.

In January, Ministry of Defense announced two tenders for food products purchase (for the military unit A2238 in Odesa and Lviv Hetman Petro Sahaidachnyi National Army Academy). The subject of the purchases were sets of food products and prepared meals (food packages for military unit personnel and military educational institutions).

The starting price of the auctions amounted to UAH 3.24 mln (for Odessa) and 11,7 mln (for Lviv). The competition was very intense: first auction attracted 5 suppliers, the second one – 8. As a result, Ministry of Defense made saved of 31% and 27% respectively.

For more information about these purchases: https://goo.gl/A3LPhx https://goo.gl/uCkfck

CASE SUMMARY Customer: Ministry of Defense Subject of procurement: Provision for military units and military educational institutions (Odessa/Lviv) Winner: METRO Cash & Carry Ukraine The target price: UAH 3,2/11,7 mln.

The final price: UAH 2,2/8,5 mln.

The type of procedure: open auction Number of participants: 5/8

Мaxim Nefyodov First Deputy to the Minister of Economic Development and Trade of Ukraine

«State is a very interesting customer for all types of suppliers. ProZorro provides excellent opportunities for fair competition.

Foreign companies can count on equal and transparent rules. And the successful showcase of METRO Cash & Carry Ukraine – is a clear confirmation for that»

12

5MARKET RESEARCH USING BUSINESS INTELLIGENCE MODULE All procurement data is reflected in a flexible and convenient Business Intelligence Module (BI Module) http://bi.prozorro.org , which is an analogue to what is used by the New York Stock Exchange. The BI module, which is also available in English, displays the general statistical data (number of tenders, suppliers, customers, the planned values and volumes). In addition, it allows for custom data filtering by geography, certain groups of goods and services, the number of participants in the auction, etc.

All this creates a unique marketing and research tool for suppliers. One can easily find out what products are purchased and who purchases them in Ukraine, what is the level of competition in these auctions, how often they are carried out, as well as a detailed study of each individual tender.

Business Analitycs Module BI.ProZorro.org:

All data for each of the tenders is open to all on the official website https://prozorro.gov.ua/: tender information, list of bidders, questions and answers to the customer, information about the auction and the offered prices, information about the winner, and so on.You can examine the text of the contract signed with the winner and even check the payment information if they are held by the State Treasury of Ukraine.

13

6WHAT ARE THE GPA BENEFITS AND RESTRICTIONS? In May 2016 Ukraine became a member of the World Trade Organization’s Government Procurement Agreement (WTO GPA).

Accession to the GPA mutually opens public procurement markets between its 47 parties, including the US, EU-28, Canada and Japan among others.

Under the GPA terms, Ukraine guarantees national treatment and non-discrimination for the suppliers of parties to the GPA with respect to procurement of covered goods, services and construction services as set out in its schedules. You can find list of authorized public authorities, goods and services at the e-GPA Portal https://e-gpa.wto.org/en/Agreement/Latest

Under the GPA, Ukraine opens government tenders valued at or above the following thresholds:

Ordinary buyers

Monopolist Buyers

from UAH 200 thsd (UAH 1,5 mln for construction) to EUR 133 thsd (EUR 5,2 mln for construction)

from UAH 1 mln (UAH 5 mln for construction) to EUR 133 thsd (EUR 5,2 mln for construction)

from EUR 133 thsd (EUR 5,2 mln for construction)

Procurement Procedure

Open Auction

Open Auction with Publication in English

According to the agreement, all tenders meeting GPA requirements of must be translated into English. In addition, you can set up e-mail notifications for your selected products and serach requirments (e.g.filter on the basis of «Above threshold» needs to be checked to receive notifications for above-threshold tenders).

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7HOW THE GOVERNMENT PROCURES? Basic concept and principles Prozorro (ukr. Прозоро - openly, directly, transparently) - a systemic tender process reform of electronic public and state procurements in Ukraine.

THE PHILOSOPHY OF PROZORRO RESTS UPON THREE MAIN COMPONENTS: 1.

Modern hybrid electronic system built in line with open source principles. As opposed to mono- and multi-platforms, under hybrid model concept the central state module cooperates with commercial platforms so all the information available in the central database is transmitted through the platforms that are responsible for client attraction and service. De jure, the system development was carried out by the famous Transparency International NGO. The system’s code is absolutely open, and can be freely downloaded and used.

Public Procurement in Ukraine: Hybrid Electronic System

Central Database Provides data storage, security & statistics

Commercial market places Ensures competitiveness, high quality client services & support

Procuring unity

Supplier

2.

“Everyone sees everything” – the program’s official slogan. Once the tender procedure is completed, the information regarding the submitted offers of all participants, decisions made by the bid committee, all the qualification documents etc can be viewed in the e-system.This information is available via a convenient analytics module for a broad audience.

3.

Golden triangle of partnership – a unique union of business, government and civil society aimed at promoting changes which allows to maintain a high level of trust between the main stakeholders during the reform.

15

HOW IT WORKS:

1.

State customer places online notification for call for tenders with the subject of procurement, its requirements and approximate budget

2.

Seller finds interesting notifications or receives alerts via e-mail or mobile phone if he is signed up for the nesletter

3.

The Seller through his personal account on one of accredited marketplaces submits his online proposal for auction

4.

After all initial offers are received, the system anonymously discloses prices of each supplier and each can interactively reduce its first proposal (reverse auction)

5.

After the auction ends, the system discloses all information about the participants

6.

Additional documented is requested from the supplier offering the lowest price to confirm that the product or service quality is as declared and meets the criteria demanded by the customer

7.

If the participant qualifies, he is declared as a winner. The contract is published and the procurement receives a completed status.

8.

If the purchasing party wishes to challenge the acts or tender procedure, they can file a request or complaint online

16

Public Procurement in Ukraine: How it Works

1

2

Сustomer 1.1 posts announcement on a marketplace; it is automatically added to database

Marketplace A

Suppliers

1.2 announcement becomes available on every marketplace

Marketplace B

Marketplace C

2.1 register on any of marketplaces and send proposals; proposals are added to database and kept closed

Marketplace D

Subject of procurement, target price (e. g. «White copy paper, A4, 80gsm, 500,000 sheets, UAH 70,000»)

CENTRAL DATABASE

Marketplace E

3

Online trading 3.1 all the proposals are sent online 3.2 Suppliers could reduce price in 3 steps 3.3 After the auction system opens up the proposals and suppliers 3.4 Customer Buyer checks the documentation and selects a winner beginning with the best price

All information submitted into one marketplace enters the central database, which the state controls. This information is made available immediately to all marketplaces connected to the system. Thus, access to information is the same to all participants in the system without exception. The only exception is the name of the participants and the details of their proposals prior to the auction. This is a necessary measure to ensure the objectivity of the bidding. After the tender ends, the names of suppliers and their offers become public.

Search for tenders through the search box, similar to the Google search box. You can set a separate word as a parameter, a phrase (eg, «surgical equipment» or «truck») or set a specific parameter, such as the registration period, the status of the application, CPV code and so on. For more fine-tuning, you can use multiple parameters and filters.

Issuing results are linked to tender pages. These pages are generated automatically as soon as the customer places the tender, and their address (link) remains unchanged, regardless of whether a tender has been completed or canceled.

Furthermore, all documents from application registration, are also attached to this particular page of the tender, and remain there forever. If the original documents are changed initial versions are also available for download and viewing. Thus, at any given point in time, the tender page reflects all the information that has been uploaded/downloaded as part of the application at the time of the page view. This allows you to maintain complete transparency and publicity of tenders and creates unique opportunities for market research.

To get started with ProZorro, you should register in the system through one or more marketplaces. A full list of marketplaces can be found here: https://prozorro.gov.ua/en/pochaty-robotu-postachalnyku/

17

KEY STEPS: HOW TO START WORKING WITH THE SYSTEM FOR FOREIGN SUPPLIERS: STEP №1 Choose one of the marketplaces to register in e-procurement platform ProZorro

STEP №2 Select procurement item and customize your subscription

STEP №3 Submit your proposal online

STEP №4 Participate in auction

STEP №5 Give the best price and win!

Most of the tenders are held in public auction procedures with price reduction (reverse auction). The auction has three stages.

After the opening of bids, which were hidden before the start of the auction, suppliers could reduce their price in three steps.

Participants remain anonymous.

5 STEPS TO WIN THE AUCTION Make sure that you entered the auction page as a participant, and not as an observer. Your competitors will be indicated as “Participant 1”, “Participant 2” and so on, while your line will be marked with a “You”. If you do not see yourself among the participants, please contact support immediately Check the starting time of the auction. Make sure that you have stable Internet access for the duration of the auction.

Each auction lasts from thirty minutes to an hour You can reduce your price in three rounds during the auction. The Participant who gave the proposal with the lowest price in previous round will do the last did at next round. During the proposal receiving time try to give the proposal with lower price instead of the target one given by the Procurer. The auction winner is the participant who offered the lowest price on the third stage of auction Note when it is your turn. When your turn starts, you will be able to enter your proposed price at the bottom of the screen. You will have two minutes to do so. Please make sure you get a message that states “Your proposal has been received” If your competitor gives an unrealistically low price, don’t panic and certainly don’t leave the auction. Upon review, the buyer may reject the competitor’s proposal for not meeting his demands. In that case, the buyer will move onto the next best offer. After the auction concludes, return to the e-platform to see the proposals of all your competitors

18

8WHICH PROCUREMENT IS MOST COMMONLY USED? TYPES OF ABOVE THRESHOLD TENDERS Open procedure – is the main procurement procedure. Open procedure is conducted through ProZorro, any company that operates under the law, and who responded to the announcement of the tender may participate Euro procedure with the publication in English has additional pre-qualification stage The competitive dialogue is characterized in that before the auction buyer provides a prior consultation with the suppliers regarding the details of the procurement subject Negotiated procedure (euro) – is an exceptional procedure used by procurers. Procure awards a contract after negotiating with one or several suppliers

The main feature of so-called euro procedure with the publication in English is the period of pre-qualification (as opposed to public bidding, which is carried out, using post-qualifying).

19

Open “Ukrainian” Procedure Tender Announcement/ Start receiving Propositions

1

Finish receiving Propositions

2

Sending proposition

Auction Expectation

Auction

3

Naming the Winner

Qualification

4

Сontract Fulfillment

Signing up the Contract

5

Euro Procedure

Tender Announcement/ Start receiving Finish receiving Propositions Propositions

1

Sending proposition (price, technical and qualification

2

Determine auction participants according to technical and qualification requirements

Pre-qualification

3

Auction Expectation

Auction

4

Naming the Winner

Qualification

5

Сontract Fulfillment

Signing up the Contract

6

parts)

The competitive dialogue is characterized in that before the auction buyer provides a prior consultation with the suppliers regarding the details of the procurement subject. For example, when you want to build a building, the project can be very different. And it is necessary to determine the detailed, but non-discriminatory conditions for such tender. Then a tender is held as a standard three step reduction auction.

The negotiation procedure is used when the only option to purchase is to purchase from a single supplier. It is used for example to purchase components for equipment of a certain brand, or extreme cases when there is no time to conduct a full procedure (force majeure). In this case, the state allows the entity to negotiate and then purchase from a single supplier, without an auction. All the details of such purchases and its justification also remain in the public domain.

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9WHICH RESOURCES AND DOCUMENTS CAN BE NEEDED TO COMPETE FOR GOVERNMENTAL TENDERS? The new Ukrainian system of public procurement is modern and user-friendly for suppliers, including foreign ones. It allows you to quickly find interesting tenders and submit applications electronically, as well as to participate in the bidding remotely with just an internet connection. In addition, fulfilling the requirements of the GPA Ukrainian customers must translate into English the application for the purchases which are subject to the agreement into English.

To improve the quality of procurement in the public procurement system in Ukraine, a bank guarantee instrument is provided.

The bank guarantee is an additional protection against unscrupulous providers: in the case of violation of the rules of procurement, the customer can collect the bank guarantee from the offender.

The list of international banks that have representative offices in Ukraine and are ready to provide appropriate guarantees to foreign suppliers, can be provided by the GPAinUA office.

Each supplier who submits an application for tender participation, is also required to make a payment for participation, regardless of the results of the auction. This fee is charged for each individual auction and non-refundable. The participation fee is used to support the work of the electronic system and does not exceed the standard banking commission.

To this date, the prices for participation in the auction range from UAH 17 to UAH 1,700 (from USD 0.5 to USD 65), depending on the planned purchase amount. Payment is made in local currency at the exchange rate of the National Bank of Ukraine, by bank transfer.

AT THE SAME TIME, TO PARTICIPATE IN A TENDER IN UKRAINE, THE SUPPLIER MAY REQUIRE ADDITIONAL RESOURCES: You may wish to have an interpreter to translate the documentation - tender terms from Ukrainian and your application documents to Ukrainian. Some documents (eg, certificates and statements), need to be prepared in advance so that in case of victory you can provide them in the required time.

You may have someone who will lead the marketing analysis and clarify who is buying your products and services in Ukraine, which tenders are held and how often, what is in their competition, what are the usual delivery conditions, etc.

You may also need a separate person who will follow the procedures of the tender and prepares your application prior to the auction. He must have the authority to make the decision to reduce the price.

In case of victory, you will need to urgently send required documentation and then sign the contract. It may be necessary to delegate your representative to Ukraine (for example, a law firm), or use a digital signature. You will also need to be ready to send your employee on a business trip to Ukraine for signing the contract.

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STANDARD PACKAGE OF DOCUMENTS FOR SIGNING THE CONTRACT INCLUDES: Company registration data Financial information (official records) Licenses and permits Additional documents confirming your satisfaction of tender requirements

We recommend you to prepare this documents in paper form (legally certified) before the start of the auction. It is also important to have translations of these documents endorsed by Ukrainian legal entity. GPAinUA can provide you with the necessary contacts that you require.

In the case of overseas delivery, the logistics chain is of great importance. Therefore, it is important to calculate in advance the time and cost of delivery of goods and services to Ukraine. You can carry out the corresponding preparatory work independently or with the help of consultants which can help to prepare the paperwork and financial matters.

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10NEED HELP? CONTACT GPAinUA OFFICE GPAinUA OFFICE: READY TO HELP YOU TO START SELLING TO THE UKRAINIAN GOVERNMENT The Ministry of Economic Development and Trade in cooperation with partners, established a pilot project office GPAinUA. The Aim of the GPAinUA project – is to ensure the participation of first foreign companies in Ukraine’s public procurement tenders by providing assistance in organizational and informational issues

OUR SUPPORT Provide comprehensive information: procurement manuals, statistics, regulations Assistance in selection of potential public procurement tenders Support from central government agencies Support of project participants at every stage of tender process: from tender selection to deal closure

YOUR COMPETITORS ARE ALREADY EARNING MONEY, JOIN THE PROZORRO PLATFORM! www.prozorro.gov.ua/en/pochaty-robotu-postachalnyku

CONTACT US: Alexei Mikhailitchenko GPAinUA Project Manager Adviser to the Minister of Economic Development and Trade of Ukraine

Tel.: +38 (044) 596-67-22, +38 (067) 513 46 56 Mail: mikhailitchenko@me.gov.ua Facebook: https://www.facebook.com/pg/gpainua Web: http://GPUinUA.org

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11USEFUL LINKS & RESOURCES GPAinUA Office Support Center

SOE «Prozorro» Contact Center

Facebook: https://www.facebook.com/pg/gpainua

22, Bulvarno-Kudryavskaya str., Kyiv, 01601

Tel.: +38 (067) 828-20-34

Facebook: https://www.facebook.com/prozorro

Mail: gpainua@gmail.com

Tel.: +38 (044) 281-42-87, +38 (044) 233-63-07

Web: http://gpainua.org/

Web: https://prozorro.gov.ua/en

Join: http://goo.gl/forms/y0nVORfgu8

Mail: feedback@prozorro.gov.ua

Law firms, working with documentation for participation in public procurement

Consulting companies that help with the design of supply and logistics

Force and Right Legal Group

Strategic LLC.

18-A, Velyka Zhytomyrska St., 2nd Floor,

4-V Verhniy Val St. Office 221-222 (2-nd Fl),

01001 Kyiv, Ukraine

Kyiv, Ukraine 04071

Facebook: https://www.facebook.com/forceandright/

Facebook: https://www.facebook.com/Strategic.International

Tel.: +38 (044) 490-34-26, +39 (044) 490-34-27

Tel.: +38 (044) 221-50-33

Web: http://forceandright.com/

Web: http://strategic-ua.com/en/

Mail: secretar@forceandright.com

Mail: info@strategic-ua.com

EUCON

Commercial Law Development Program

33 Tarasa Shevchenko blvd, office 12,

U.S. Department of Commerce,

Kyiv, 01032, Ukraine

Office of the General Counsel, Mail Stop 5875

Facebook: https://www.facebook.com/eucon.ua

1401 Constitution Avenue, NW, Washington, DC 20230

Tel.: +38 (044) 238-09-44, +38 (044) 238-04-13

Tel.: +1 202 482-2400

Web: http://eucon.ua/en/

Web: http://www.cldp.doc.gov/

Mail: office@eucon.ua

Legitimate Cause Karla Marksa, avenue, build 101, 1 floor, Dnipropetrovsk, Ukraine Facebook: https://www.facebook.com/lfpravoedelo/ Tel.: + 38 (067) 234-33-00 Web: http://pravoedelo.com.ua/en Mail: info@pravoedelo.com.ua