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LAW OF UKRAINE

of December 25, 2015 No. 922-VIII

About public purchases

(as amended on 19-09-2019)

This Law determines legal and economic basis of implementation of purchases of goods, works and services for ensuring needs of the state, territorial communities and the integrated territorial communities.

The purpose of this Law is ensuring effective and transparent implementation of purchases, creations of competitive environment in the sphere of public purchases, prevention of manifestations of corruption in this sphere, development of fair competition.

This Law also aims to adapt the legislation of Ukraine of acquis of the European Union in pursuance of the Agreement on association between Ukraine, on the one hand, and the European Union, European Atomic Energy Community and their state members, on the other hand.

Section I General provisions

Article 1. Determinations of the main terms

1. In this Law the below-stated terms are used in such value:

1) the authorized electronic platform - the information and telecommunication system authorized by Authorized body which has complex system of information security with the confirmed compliance according to the Law of Ukraine "About information security in information and telecommunication systems" is part of electronic purchasing system and online service which provides registration of persons, automatic placement, obtaining and information transfer and documents when carrying out purchases, using of services with automatic exchange of information, access to which is provided by means of the Internet;

2) automatic indicators of risks - criteria with the parameters set in advance which use gives the chance automatically to perform the choice of procedures of the purchases containing signs of violations of the law in the sphere of public purchases;

3) abnormally low price of the tender offer (further - abnormally low price) - the price / the adjusted price of the most economic offer on results of auction which is smaller for 40 or more percent from arithmetic-mean value of the price / the adjusted price of tender offers of other participants at the initial stage of auction and/or is 30 or more percent less from the following price / the adjusted price of the tender offer by results of the held electronic auction. Abnormally low price is determined by electronic purchasing system automatically on condition of availability at least two participants who submitted the tender offers in subject of purchase or its part (lot);

4) life cycle cost - set of cost of subject of purchase or its part (lot) and other expenses which will be incurred by the customer in usage time, servicing and the termination of use of subject of purchase. The life cycle cost is calculated according to the technique established in the tender documentation;

5) the web portal of Authorized body concerning purchases (further - the web portal of Authorized body) - the information and telecommunication system which has complex system of information security with the confirmed compliance according to the Law of Ukraine "About information security in information and telecommunication systems" which part the module of electronic auction and the database are and is part of electronic purchasing system. The web portal of Authorized body is online service which provides creation, storage, promulgation of all information on purchases, running an electronic auction, automatic exchange of information and documents and use of services with automatic exchange of information, access to which is provided by means of the Internet. Ensuring functioning of the web portal of Authorized body is performed, including, due to provision to the authorized electronic platforms of paid access to it;

6) the purchase agreement - the economic agreement which is signed between the customer and the participant on the results of the procedure of purchase / the simplified purchase and provides paid rendering services, performance of works or purchase of goods;

7) electronic purchasing system - information and telecommunication system which has complex system of information security with the confirmed compliance according to the Law of Ukraine "About information security in information and telecommunication systems", providing carrying out purchases, creation, placement, the notification, exchange of information and documents in electronic form which part are the web portal of Authorized body, authorized electronic platforms between which automatic exchange of information and documents is provided;

8) the electronic catalog - the systematized base of urgent offers which is created and followed by the centralized purchasing organization in electronic purchasing system and is used by the customer for the purpose of the choice of the supplier of goods (goods), which cost (which) it is less than the cost of the part one of article 3 of this Law established in Items 1 and 2;

9) ensuring agreement performance about purchase - provision of ensuring obligation fulfillment by the participant before the customer according to the purchase agreement;

10) providing tender pro-line item / offer - provision of ensuring obligation fulfillment by the participant before the customer, arisen in connection with submission of the tender offer / offer, in the form of such providing as guarantee;

11) customers are the subjects determined according to article 2 of this Law, conducting procurements of goods, works and services according to this Law;

12) information resource of Authorized body - the website which filling performs Authorized body on which free consultations of advisory nature concerning public purchases, access to which is provided by means of the Internet, are provided;

13) competitive procurement procedure (further - the tender) - implementation of competitive selection of participants of procedure for procurement of open tenderings, the biddings with limited participation and competitive dialogue;

14) monitoring of procurement procedure - the analysis of observance by the customer of the legislation in the sphere of public purchases during procurement procedure, the conclusion of the purchase agreement and during its action for the purpose of prevention of violations of the law in the sphere of public purchases;

15) the most economic tender offer / offer - the tender offer / offer recognized as the best by results of assessment of tender offers / offers according to article 29 of this Law;

16) the announcement of holding competitive procedures of purchases - the announcement of carrying out open tenderings, the announcement of tendering with limited participation and the announcement of carrying out competitive dialogue;

17) body of appeal - Antimonopoly Committee of Ukraine;

18) the winner of procurement procedure - the participant whose tender offer answers all criteria and conditions which are determined in the tender documentation, and acknowledged by the most economic and to which the customer reported about intention to sign the purchase agreement, or the participant to whom the customer reported about intention to sign the purchase agreement by results of application of negotiation procurement procedure;

19) the winner of the simplified purchase - the participant whose proposal answers all conditions which are determined in the announcement of carrying out the simplified purchase, to requirements to subject of purchase and acknowledged by the most economic and to which the customer reported about intention to sign the purchase agreement;

20) the connected person - person who for the purposes of this Law answers any of the following signs:

the legal entity who exercises control over the participant of procurement procedure or is controlled by the participant of procurement procedure, or is under general control with the participant of procurement procedure;

the physical person or members of his family exercising control over the participant of procurement procedure;

office (official) face of the participant of procurement procedure, authorized to perform on behalf of the participant of procurement procedure the legal acts directed to establishment, change or the termination of the civil relations and also members of the family of such office (official) person;

physical person - the authorized person of the customer, the head of the customer and/or members of their families which exercise control over participants of procurement procedure or authorized to perform the legal acts directed to establishment, change or the termination of the civil relations on behalf of the participant of procurement procedure.

Control is understood as possibility of implementation of decisive influence on economic activity of the participant of procurement procedure. Such influence can directly be performed or through other physical persons or legal entity, in particular, by realization of right of possession or use of all their assets or their considerable share, the right of the solving influence on forming of structure or results of vote, and also opportunity to determine conditions of economic activity, to give mandatory instructions or to perform functions of governing body of the participant of the procurement procedure, or ownership of shares (share, the block of shares) constituting at least 25 percent of the authorized capital of the participant of procurement procedure.

For physical person the total amount of ownership of shares in the authorized capital of the participant of procurement procedure is determined depending on amount of corporate laws which in total belong to such physical person, members of his family and legal entities who are controlled by such physical person or members of his family.

For the purposes of this Law spouses, children, parents, brothers and sisters, grandfathers, grandmothers, grandsons, adoptive parents adopted and also other persons on condition of their permanent residence together with the connected person and maintaining reckon with it general economy as family members;

21) services - any subject of purchase, in addition to goods and works, including transport services, development of technologies, scientific research, research or developmental developments, medical and consumer services, employment (lease), and also financial and consulting services, running repair;

22) purchase subject - goods, works or services which are bought by the customer within the single procurement procedure or within carrying out the simplified purchase, concerning which participants are allowed to submit tender offers / offers or offers at negotiations (in case of application of negotiation procurement procedure). The subject of purchase is determined by the customer according to the procedure, established by Authorized body, using the Single purchasing dictionary approved in the procedure established by the legislation;

23) adjusted price - the price specified by the participant in the tender offer / offers and calculated by mathematical formula taking into account indicators of other evaluation criteria determined by the customer in tender documentation / announcement on carrying out the simplified purchase;

24) the proposal of the participant of the simplified purchase (further - the offer) - the proposal concerning subject of purchase or its part (lot) which the participant submits to the customer according to the announcement of carrying out the simplified purchase and requirements to purchase subject;

25) public purchase (further - purchase) - acquisition by the customer of goods, works and services according to the procedure, established by this Law;

26) the framework agreement - the bargain which is concluded by one or several customers (including the centralized purchasing organization) according to the procedure, established by this Law, with several participants of procurement procedure for the purpose of determination of the main conditions of purchase of separate goods and services for the conclusion of the corresponding purchase agreements during effective period of the framework agreement;

27) works - development of the project documentation on construction objects, the scientific project documentation on restoration of monuments of architecture and town planning, construction new, expansion, reconstruction, capital repairs and restoration of the existing objects and constructions of production and non-productive appointment, work on regulation in construction, exploration works, technical retrofitting of operating plants and services accompanying works, including geodetic works, drilling, seismic researches, aero - both satellite photographing and other services which join in the estimated cost of works if the cost of such services does not exceed the cost of works;

28) the simplified purchase - acquisition by the customer of goods, works and services which cost is equal or exceeds 50 thousand hryvnias and the cost established in Items 1 and 2 of part one of article 3 of this Law is smaller, than;

29) effective period of the tender offer - the term established by the customer in the tender documentation after which termination the tender offer is considered invalid and deviates;

30) the subject of appeal in body of appeal (further - the subject of appeal) - the physical person or legal entity which addressed to body of appeal for the purpose of protection of the rights and the interests protected by the law concerning the decision, actions or the divergences of the customer contradicting the legislation in the sphere of public purchases and as a result of which the right or legitimate interests of such person is violated;

31) the tender documentation - documentation under the terms of carrying out the tender which is developed and affirms the customer will be promulgated for open entry in electronic purchasing system;

32) the tender offer - the offer concerning subject of purchase or its part (lot) which the participant of procurement procedure gives to the customer according to requirements of the tender documentation;

33) the technical specification to purchase subject - the set of the specifications determining characteristics of goods (goods), service (services) or necessary for performance of works by construction object established by the customer which can include impact indicators on the environment and climate, features of designing (including about suitability for persons physically challenged), compliance, productivities, resursoeffektivnost, safety, procedures of quality assurance, the requirement about product name under which it is on sale, terminology, symbols, technique of testing and testing, the requirement to packaging, marking and labeling of the instruction for users, engineering procedures and production technologies at any stages of lifecycle of works, goods or service;

34) goods - products, objects of any kind and appointment, including raw materials, products, the equipment, technologies, objects in strong, liquid and gaseous state, and also the services connected with delivery of such goods if the cost of such services does not exceed the cost of goods;

35) the authorized person (persons) - office (official) or other person who is the worker of the customer and is determined responsible for the organization and holding procedures of purchase / the simplified purchases according to this Law based on own administrative decision of the customer or the employment contract (contract);

36) Authorized body - the central executive body which provides forming and realizes state policy in the sphere of public purchases;

37) the participant of the procedure of purchase / the simplified purchase (further - the participant) - physical person, physical person entrepreneur or the legal entity - the resident or the nonresident, including consolidation of participants, submitted the tender offer / offer or taken part in negotiations in case of application of negotiation procurement procedure.

For the purposes of this Law treat consolidation of participants:

the separate legal entity created by consolidation of legal entities - residents;

the separate legal entity created by consolidation of legal entities (residents and nonresidents);

associations of legal entities - nonresidents with creation or without creation of the separate legal entity;

38) the centralized purchasing organizations - legal entities of the state-owned or municipal property who are determined by the Cabinet of Ministers of Ukraine Council of Ministers of the Autonomous Republic of Crimea, local government bodies as customers who organize and hold tenders and purchases according to the framework agreements for the benefit of customers according to this Law;

39) part of subject of purchase (lot) - the part of goods, works or services determined by the customer on which within the single procedure of purchase / the simplified purchase participants are allowed to submit tender offers / offers or offers at negotiations in case of application of negotiation procurement procedure.

Article 2. Customers

1. Treat the customers conducting procurement according to this Law:

1) public authorities (body legislative, bodies of executive, judicial authority), and law enforcement agencies of the state, authorities of the Autonomous Republic of Crimea, local government bodies, associations of territorial communities;

2) the Pension fund of Ukraine, trust insurance funds on insurance in connection with temporary disability, from labor accidents and occupational diseases, medical insurance and insurance on unemployment case (further - bodies of social insurance);

3) legal entities, being the companies, organizations, the organizations (except those which are determined in Items 1 and 2 of this part) and their associations which provide needs of the state or territorial community if such activities are not performed on industrial or commercial basis in the presence of one of the following signs:

the legal entity is manager, the receiver of budgetary funds;

public authorities or local government bodies or other customers own by a majority vote in the supreme body of management of the legal entity;

in the authorized capital of the legal entity the state or municipal share fraction (share, shares) exceeds 50 percent;

4) legal entities and/or subjects of managing who perform activities in one or several certain spheres of managing determined by part two of this Article, and answering at least to one of the following signs:

public authorities, authorities of the Autonomous Republic of Crimea, local government bodies or other customers possess share in the authorized capital of the legal entity and/or the subject of managing in the amount of more than 50 percent or such bodies or other customers own by a majority vote in the supreme body of the legal entity and/or subject of managing or the right to appoint more than a half of structure of executive body or the supervisory board of the legal entity and/or the subject of managing;

availability of special or exclusive rights - the rights granted within powers by public authority or local government body based on any regulatory legal act and/or the act of individual action which limit implementation of activities in the spheres determined by this Law, one or several persons that significantly influences capability of other persons to perform activities in the specified spheres. Are not considered special or exclusive the rights granted by results of tenders (tenders, procedures of purchases), information about which carrying out together with selection criteria made a reservation and available previously in public access, the possibility of participation in such tenders (tenders, procedures of purchases) was not limited and if provision of such rights was performed on the basis of objective criteria.

2. For the purposes of item 4 of part one of this Article activities in certain spheres of managing - activities which are performed in one or several of the following spheres:

1) ensuring transportation, distribution, storage (downloading, selection) and supply of natural gas for benefit of the third parties (customers), natural gas productions and provision of services of the LNG installation;

2) ensuring production, transportation and delivery of heat energy to consumers;

3) ensuring production, transfer, distribution, purchase and sale, delivery of electrical energy to consumers, dispatching management and ensuring leave of electrical energy in/from system of transfer/distribution and ensuring functioning of the market of electrical energy "for the days ahead" and the intra daily market of electrical energy and the balancing market of electrical energy and the organization of purchase and sale of electrical energy in these markets;

4) ensuring production, transportation and supply of drinking water, ensuring functioning of centralized water disposal;

5) holding irrigating, drying or drying and moistening meliorative actions if the amount of water which will be used for supply of drinking water makes more than 20 percent of total amount of water which is provided by irrigating or drying systems;

6) provision of services on use of infrastructure of rail transport public, ensuring functioning of urban electric transportation, including the subway, and operation of its objects for provision of services for transportation, and also provision of services on transportation of passengers by buses within the cities, with observance of the conditions determined by relevant organs of the executive authority and local government bodies on the routes determined by them;

7) provision of services of bus stations, ports, airports, services in aeronautical servicing of flights of aircrafts;

8) rendering services of mail service;

9) development of oil and gas deposits, coalfields and other types of solid fuel, oil extraction, coal and other types of solid fuel.

3. For the purposes of item 4 of part one of this Article in certain spheres of managing do not treat activities:

1) production and delivery of heat energy and gas in network public if such production is consequence of other productive activity of the customer, except the activities performed in the spheres determined in this Item, at the same time delivery of heat energy is performed only for the purpose of economical operation of production capacities of the customer, and the income from these activities does not exceed 20 percent of the annual average income for the previous three years, including profit for the current year;

2) production, transfer and delivery of electrical energy to networks public if such production, transfer and delivery are necessary for consumption by the customer for implementation of other productive activity, except the activities performed in the spheres determined in this Item, and the scope of supply of electrical energy the customer in network public depends on the level of its own consumption provided that own consumption is at least 70 percent of the total amount of the electrical energy made by the customer calculated by annual average indicators of production for the previous three years including indicators for the current year;

3) production, transportation and supply of drinking water to networks public if such production, transportation and delivery are necessary for consumption by the customer for implementation of other productive activity, except the activities performed in the spheres determined in this Item, and the scope of supply of drinking water the customer for general use depends on the level of its own consumption provided that own consumption is at least 70 percent of the total amount of the drinking water made by the customer calculated by annual average indicators of production for the previous three years including indicators for the current year.

4. The categories of customers used in this Law:

1) the public authorities and local government bodies specified in Item of 1 part one of this Article;

2) the bodies of social insurance specified in Item 2 parts one of this Article;

3) the companies, organizations, the organizations specified in Item 3 parts one of this Article;

4) legal entities and/or subjects of managing who perform activities in certain spheres of managing, the parts one of this Article specified in item 4.

Article 3. Scope of the Law

1. This Law is applied:

1) to the customers determined by Items 1 - 3 parts one of article 2 of this Law provided that the cost of subject of purchase of goods (goods), service (services) is equal or exceed 200 thousand hryvnias, and works - 1, 5 million hryvnias;

2) to the customers determined by item 4 of part one of article 2 of this Law provided that the cost of subject of purchase of goods (goods), service (services) is equal or is exceeded by 1 million hryvnias, and works - 5 million hryvnias;

3) to the customers determined by part one of article 2 of this Law who conduct the simplified procurements according to this Law and/or sign contracts without use of electronic purchasing system according to part two of this Article.

2. Customers conduct the simplified procurements by use of electronic purchasing system according to the procedure, provided by this Law.

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