Over the past year, the procurement system of the Agency for Restoration has undergone significant changes. All of them are aimed at improving the procurement process through better supplier selection, minimizing procurement-related risks, increasing transparency and promoting cost savings.
1. The Agency for Restoration recently introduced a procurement risk management system. How does it work and why is it especially important now?
In Ukraine, similar approaches have already been used in operational activities by large state-owned companies. At the same time, our Risk Management, Monitoring, and Evaluation System for Public Procurement is an additional tool aimed at improving the quality of the procurement process within the Agency for Restoration ecosystem.
Within the Agency for Restoration’s risk management system, all procurements conducted by our contracting authorities — regional recovery services — are automatically analyzed based on a set of risk indicators. Currently, there are 37 such indicators. They enable automatic analysis of each recovery service’s procurements, identification of potential risks, and focus on procedures that require additional review. In other words, it is an internal monitoring tool that helps detect procurement risks in a timely manner and respond to them at early stages.
The electronic procurement system transparently implements automatic risk indicators aimed at identifying procurements that show signs of violations of public procurement legislation for further monitoring by the State Audit Service of Ukraine. In contrast, the Agency for Restoration’s risk management system is specifically designed to prevent potential legal violations and to identify factors during procurement procedures that affect their efficiency. This is particularly important today, as procurements carried out by recovery services, amounting to tens of billions of hryvnias, are under close scrutiny from oversight bodies, the public, the media and international partners.
2. The transparency dashboard for the construction of protective structures is a new practice. How are contractors and society responding to the open publication of material prices?
The transparency dashboard is a tool that displays information on the procurement of price-forming material resources by the general contractor (which account for approximately over 80% of the total cost of all materials in the consolidated construction estimate), carried out under construction contracts. The data is updated weekly: contractors provide information to contracting authorities, who then submit it to the Agency for further publication. Anyone interested can check which materials were purchased and at what price. The main goal is to eliminate concerns about possible price inflation and ensure maximum transparency and openness.
In addition to publishing all cost estimates, as required by law, we also publish the actual prices of material resources on a weekly basis for each service.
The overall response has been positive. Businesses understand the importance of these projects, particularly in the field of protecting energy infrastructure, and often cooperate by offering materials at prices below market levels. This allows the state to save funds and implement more projects within the same budget. Some contracting authorities, represented by regional military administrations, have also expressed interest in adopting the idea of publishing material prices.
For society, this is also an important signal of openness: access to cost estimates and material prices allows not only oversight bodies but also the public to conduct independent monitoring.
Currently, as noted in the Ukrainska Pravda column “Rebuilding the Energy Sector Without Transparency Means Rebuilding Corruption,” only the Agency for Restoration and Ukrenergo voluntarily publish cost estimates for the construction of protective structures for energy infrastructure facilities. Based solely on these two contractors, civil society is able to track whether the declared costs correspond to market rates.
3. What are the results of the procurement activities of the Agency and the Services for Restoration in 2025? What are the actual savings and how has competition changed?
In 2025, the Services for Restoration announced a total of 3,712 procurements with an overall expected value of more than UAH 73 billion. Of these, 682 were conducted through open tender procedures with a total expected value of UAH 56 billion. Based on the results of these open tenders, total savings amounted to UAH 2.8 billion (7.35%). The average savings rate in open tenders was 11.06%.
The average number of participants in open tenders was 1.94. For comparison, the average across Ukraine in 2025 was 1.9 participants (across all contracting authorities in the electronic procurement system).
This indicates the stable functioning of the procurement system and a sufficient level of competition.
Savings are achieved not only through lower price bids during auctions, but also through systemic changes: standardization of approaches to tender documentation, methodological recommendations for contracting authorities, and improved preparation of procedures.
Importantly, centralization helps improve the quality of procurement and reduces the risks of errors or manipulation.
The Agency for Restoration also places significant emphasis on strengthening the institutional capacity of the Services. For example, as part of cooperation with EU4Reconstruction (a joint initiative of the European Union and Denmark, Germany, France and Lithuania), regular practical training workshops are held on public procurement and cost estimation. The main goal is to discuss practical skills and procurement outcomes, as well as the practices of the Appeals Body (AMCU) and decisions of the State Audit Service.
4. What typical manipulation attempts in procurement can be identified thanks to the new system?
Most of the remarks concern tender documentation requirements that may appear to restrict competition. These include requirements for similar experience, financial statements, material and technical capacity, or certificates that only a limited number of companies can provide. Sometimes the requirements for bidders are described in excessive detail or are disproportionate to the subject of procurement or the technical specifications. Such issues often become the subject of appeals to the Antimonopoly Committee of Ukraine, the designated appeals body.
A persistent challenge for all construction contracting authorities in Ukraine is pricing. The lack of standardized, objective datasets on average prices for construction materials creates room for varying interpretations and places significant responsibility on contracting authorities. Currently, the obligation to monitor prices largely rests on the contracting authorities themselves, and without clear benchmarks, it is difficult to determine whether a price is justified. There is a need for a clear market reference point, which would make it much easier to assess deviations and respond more quickly to potential risks.
At present, the Ministry for Development is working on creating a database of prices for construction products, which is currently in the testing phase. There are high expectations for its successful implementation and use in the construction sector. The process of forming prices for construction materials should be automated and not depend on either the contracting authority or the contractor.
It is worth recalling that the situation used to be quite challenging: profit margins in cost estimates often ranged between 0–1%, which did not actually cover real business costs. As a result, this led to distortions — in particular, underreporting of official wages and attempts to compensate through other components, such as materials. This is why the issue of resource pricing frequently attracted the attention of oversight bodies and investigations.
Under such conditions, it was difficult for businesses to operate, especially given the risks of wartime.
Following the adoption of the relevant decision by the Cabinet of Ministers (Resolution No. 1512 of November 19, 2025, on transparent pricing), the state has, for the first time, introduced more realistic approaches to cost formation — particularly regarding expenses, profit, and the level of estimated wages in the construction sector.
This helps make the system more balanced: on the one hand, it minimizes the scope for manipulation, and on the other, it creates conditions in which it is economically viable for businesses to operate.
5. Can the Agency’s model of transparent procurement become a standard for the entire public sector of Ukraine?
The Agency’s model already demonstrates effective approaches to transparency — in particular, the open publication of cost estimates and prices, as well as systematic procurement analysis.
However, it is still too early to speak about it becoming a full-fledged standard for the entire country. Procurement is a complex system where it is necessary to constantly balance openness and efficiency.
A key area for further development should be not only the formal implementation of tools, but also ensuring maximum accessibility of information: open data, user-friendly formats, and the absence of “closed” or unreadable documents.
Another important factor is the professionalization of procurement — training specialists who are capable of conducting complex procedures efficiently under tight deadlines.
To handle such a volume of procurements and funding, highly qualified personnel are essential. An important role is played by procurement professionals in the regions, who effectively ensure the implementation of a large number of procedures for critically important facilities.
At the same time, a significant share of these procurements takes place under very tight timelines, which further increases the workload on specialists. Therefore, it is worth highlighting the work of authorized personnel within the services, who operate under these conditions and ensure the continuity of processes.
It is precisely the combination of transparency, professionalism, and systematic control that can form the basis for scaling this model across the entire public sector.