Procurement Risk:
High
Score:
41/100
Government Policy
Q57
63/100
Does the country have legislation covering defence and security procurement with clauses specific to corruption risks, and are any items exempt from these laws?
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This indicator is not assigned a score in the GDI. Generally, Ukraine has a broad legal framework on public procurement. It consists of: 1.…
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Legislation on open procurement (conducted according to the Law On Public Procurement) refers to corruption as one of the potential challenges and states that…
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Though there are cases of corruption in defence procurement [1, 2], there is no evidence that defence procurement generally violates legislation on defence procurement…
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Q58
75/100
Is the defence procurement cycle process, from assessment of needs, through contract implementation and sign-off, all the way to asset disposal, disclosed to the public?
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There are two types of military procurement: centralized (carried out by the MoD) and decentralized (carried out by military units, universities, etc.) [1]. If…
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Assessment of needs, the process of awarding contracts and contract implementation for classified procurements are classified phases. Moreover, classified plans are not published, though…
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In practice, the defence procurement cycle has few shortcomings. For example, procedures of the State Defence Order envisage the following steps: AFU Services send…
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Q59
42/100
Are defence procurement oversight mechanisms in place and are these oversight mechanisms active and transparent?
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Internal oversight of procurement is conducted by the Internal Audit Department, an internal unit auditing the financial and material resources of the MoD and…
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With 64 bn. UAH in the MoD budget for 2017 [1], the MoD Internal Audit Department managed to audit 81 bn. UAH worth of…
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Ukrainian legislation does not stipulate that audit reports are to be published. However, the Internal Audit Department provides non-redacted audit reports at MPs’ request…
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Ukraine started implementing mid-term budget planning, and the Ministry of Finance declared it was going to introduce corresponding changes to the Law of Ukraine…
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There is a three-year procurement plan [2] for classified military procurement but MoD does not publish any information on procurement plans for classified goods…
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Classified military purchases are not published in any form, although public officials can provide general information on classified purchases [1], and the MoD White…
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Data on classified procurements is not publicly available and thus not released in an accessible format. Non-classified procurements (including those of the MoD) are…
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Capability Gap and Requirements Definition
Q62
63/100
What procedures and standards are companies required to have – such as compliance programmes and business conduct programmes – in order to be able to bid for work for the Ministry of Defence or armed forces?
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Classified Procurement: No provisions detail how the government discriminates suppliers based on their integrity during the selection process. Business entities can become State Defence…
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Classified procurement: No provisions state that the government can discriminate among suppliers based on their integrity [1, 2]. Information on the particular business entity…
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Q63
58/100
Are procurement requirements derived from a national defence and security strategy, and are procurement decisions well-audited? Are defence purchases based on clearly identified and quantified requirements?
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Classified procurement. Planning of State Defence Order is an integral part of the development planning of the military organization of the state, carried out…
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The Internal Audit Department and Department of Military Policy, Strategic Planning and International Cooperation are entitled to conduct scrutiny to confirm that procurement is…
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The Ministry of Defence and the AFU base their major purchases on clearly identified requirements – State Defence Orders mostly for classified items and…
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Tender Solicitation, Assessment and Contract Award
Q64
38/100
Is defence procurement generally conducted as open competition or is there a significant element of single-sourcing (that is, without competition)?
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With the MoD’s budget of 59.42 bn. UAH in 2016 [1], MoD public procurements (uniform, medical supply, food etc.) equalled 10.15 bn. UAH and…
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Classified procurement: Justification of classified procurements is based on state policies and requirements of the General Staff of the AFU [1]. After an annual…
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Q65
56/100
Are tender boards subject to regulations and codes of conduct and are their decisions subject to independent audit to ensure due process and fairness?
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Classified procurement: Procurement of goods and services which constitute state secrets are conducted without open competition, there is no tendering procedure for that [16].…
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Technical specifications for goods and services are developed by different units depending on the particular good or service and signed by the Minister following…
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Tender board regulations [1], as well as their composition [2], are transparent. The Code of Conduct is publicly available [3].
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There is no evidence of external verification for particular tender specifications, although the MoD developed several technical specifications in cooperation with volunteers and private…
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Q66
44/100
Does the country have legislation in place to discourage and punish collusion between bidders for defence and security contracts?
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Article 164-14 of the Code on Administrative Offences covers the responsibilities of public officials in the field of public procurement [1]. There is no…
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Article 164-14 of the Code on Administrative Offences provides sanctions for infringement of legislation on procurement with administrative fines of 17000-25500 UAH (607-911 USD)…
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There is evidence that the Antimonopoly Committee investigates cases of bidders collusion in defence [1, 2, 3] and imposes fines [2]. The head of…
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It’s not been possible to find any evidence about obligatory specialized training for representatives of the MoD procurement department in order to punish collusion…
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Contract Delivery and In-Service Support
Q67
69/100
Are there mechanisms and procedures that ensure that contractors meet their obligations on reporting and delivery?
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According to the Law, the MoD controls the quality of military goods produced by enterprises for the Armed Forces of Ukraine and exports, as…
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Classified procurement: Contracts are not available since the corresponding goods and services constitute state secrets [1]. Non-classified procurement: All contracts for non-classified procurement are…
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There is a procedure for officials to control contract completion [1, 2] which stipulates that special commissions should draft corresponding reports. To carry out…
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There is evidence that the MOD makes efforts to react appropriately to the cases of goods delivered being of inferior quality [1, 2, 3].…
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Q68
58/100
Are there mechanisms in place to allow companies to complain about perceived malpractice in procurement, and are companies protected from discrimination when they use these mechanisms?
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Classified procurement: The legislation does not provide any specific mechanisms for companies to complain about perceived malpractice [1, 2]. There are two clauses (Para…
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Classified procurement: Companies can resolve disputes in court [1, 2]; however, according to the Unified State Register for Court Decisions, a large number of…
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The level of trust in the Ukrainian judiciary is extremely low, with only 0.5% of citizens being fully sure in the courts’ credibility, and…
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Classified procurement: There is no clear legislation or implementing guidelines empowering procurement officials to exclude companies and senior company officials where there is a…
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There is no strong evidence in particular cases; however, in general, investigation and prosecution systems are exposed to undue influence. Corruption cases (including those…
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The e-procurement system Prozzoro offers information that the MoD did not discriminate among suppliers (in regards to MoD public procurement) based on their integrity…
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Offset Contracts
Q70
25/100
When negotiating offset contracts, does the government specifically address corruption risk by imposing anti-corruption due diligence on contractors and third parties?
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Offset contracts are regulated by the same Law which regulates procurement of classified defence goods and services [1]. This means that goods and services…
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Ukrainian legislation on offset contracts does not stipulate that offset contracts are to be published [1, 2]. The legislation also does not outline any…
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There is an offset commission set up under the Ministry of Economic Development and Trade of Ukraine as a permanent advisory body to coordinate…
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Following the start of Russian aggression [1, 2] in Ukraine, the VRU amended the Law On State Defence Order [3] in 2015, making the…
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Following the start of Russian aggression [1, 2] in Ukraine, the VRU amended the Law On State Defence Order [3] in 2015, making the…
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Agents / Brokers
Q73
0/100
How strongly does the government control the company’s use of agents and intermediaries in the procurement cycle?
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Classified procurement: Ukrainian legislation on State Defence Order [1, 2] does not include any ban or restriction on the use of intermediaries. Moreover, there…
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Given that there are no restrictions on the use of agents and intermediaries, this indicator is scored Not Applicable. Non-classified procurement: Ukrainian legislation on…
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Financing Package
Q74
0/100
Are the principal aspects of the financing package surrounding major arms deals, (such as payment timelines, interest rates, commercial loans or export credit agreements) made publicly available prior to the signing of contracts?
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The financing package surrounding arms deals (including major arms deals) is not publicly available, although the State Service for Export Control of Ukraine publishes…
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Seller Influence
Q75
NS/100
How common is it for defence acquisition decisions to be based on political influence by selling nations?
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This indicator is not assigned a score in the GDI. There is not strong evidence of political influence of seller nations on Ukraine. Moreover,…
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This indicator is not assigned a score in the GDI. Justification for the procurement of armaments is based on state policies and requirements of…
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This indicator is not assigned a score in the GDI. There is evidence that major arms procurements in Ukraine are strongly influenced by politicians…
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