The Verkhovna Rada, Ukraine’s parliament, has passed bill No. 2398-d on defense procurement in the second reading and as a whole. The draft law was backed by 276 MPs with at least 226 votes required.
The bill defines the general legal framework for planning and forming the volumes and specifics of procurement of goods, works and services for defense purposes to meet the needs of the sector, as well as other goods, works and services to ensure the needs of defense and the implementation of state and democratic (civil) control in this area. The document also provides for the harmonization of Ukraine’s defense procurement legislation with the provisions of Directive 2009/81/EU in line with the Association Agreement between Ukraine and the European Union, the European Atomic Energy Community (Euratom) and their member states. In particular, the bill provides for the approval of standard government contracts, clear definition of the powers of the Defense Ministry and the Economy Ministry in terms of planning and implementation of procurement, introduction of the criterion “life cycle of weapons, military and special equipment”, the explanatory note to the draft law said.
The document also stipulates gradual transition to the following activities: endorsing quality by state agencies on the basis of approaches used in the relevant NATO standards; enabling government customers to procure goods, works and services for defense purposes under transparent and competitive procedures, as well as purchasing imported goods; handling procurements within a three-year planning system. In addition, it is envisaged that the state customer will establish additional criteria of selection to ensure the security of information with limited access (ensuring the safety of secret and confidential information) and security of supplies (the reliable execution of the contract on time).
The document also guarantees support for the national defense industry both in the public and private sectors. It also provides for safeguards to protect the interests of performers in procurement procedures, including by introducing a settlement price of goods, works and services for defense purposes from a single contractor. Among other things, this refers to providing foreign suppliers with access to defense goods procurement procedures, subject to the provision of advantages to manufacturers localized in Ukraine’s customs territory, as well as those who provide more favorable conditions for the maintenance, service and repair of delivered products. This also refers to creating conditions for national manufacturers to directly participate in projects for the supply of goods, works and services for defense purposes for the needs of NATO member countries, and prohibiting government customers from reducing the level of profitability at their own discretion. This is also about the automation and digitalization of information about the defense market by creating an electronic register of relevant suppliers. (UNIAN/Business World Magazine)
