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Army procurements in one day at unlimited prices: Parliamentary Committee will consider President’s draft law

On Wednesday, December 6, the Parliamentary Committee on Economic Policy, headed by Andriy Ivanchuk, will consider the draft law No. 9460, which was initiated by the President. It suggests to grant the right to conduct procurement for defense purposes during the state of martial law in one day with the unlimited possibility to change the price after the deal is concluded. The Anti-Corruption Committee of the Verkhovna Rada has already recognized this draft law corrupt.

The Committee hearing will start on February 6 at 15:30 at the address  11 Velyka Zhytomyrska street, room 304.

The draft law No. 9460, submitted by the President of Ukraine to the Parliament, suggests amending the Article 35 of the Law of Ukraine “On Public Procurement”. It is aimed at ensuring that during the state of martial law the defense procurements could be conducted upon the negotiation procedure (without tenders) over one day.

The draft law entails a number of threats. Over a month of martial law, introduced even in one region only, it would be possible to purchase for the whole country allegedly for defense purposes the fuel upon the so-called Trade Commodity scheme or backpacks upon Avakov’s scheme.

The biggest risk is that it suggests to allow customers to change essential terms of the contract regarding procurement after it is signed, including increasing the amount of the contract.

For example, the contract was concluded for the amount of one million UAH. Then, with the additional agreements the contract amount could increase up to a few million. Moreover, there are no restrictions on increasing the volume of procurement and the amount of the contract.

We should note that such schemes have already become the case for the NABU investigation. This is about embezzlement of almost 150 million UAH during the procurement of fuel by the Ministry of Defense from the Trade Commodity company for needs of the army. According to investigation, additional agreements were concluded by the Ministry. According to them, the price of fuel was unreasonably increased in average by 16% from the initial price.

The draft law also suggests to reduce the time limit for the appeal of decisions up to one working day from the day the notice on intention to conclude the procurement contract was announced. According to lawyers of the Anti-Corruption Action Center, such terms make it impossible to appeal in general.

Moreover, there is the threat of misusing the law and holding the negotiation procedure during the state of martial law for procurements that are not relevant to defense requirements.

For example, the Ministry of Interior has bought backpacks of poor quality using the negotiations procedure allegedly for defense purposes. The state losses, according to investigation, were equal to 14 million UAH.

The President introduced the draft law No. 9460 “On the Peculiaritiy of the Public Procurement Procedure During the Legal Regime of the State of Martial Law” on January 3. However, the special law that allows to conduct urgent procurements for the army is already in force. This is the Law of Ukraine “On the Peculiarities of the Procurement of Goods, Works and Services for Guaranteed Defense Requirements”.