The Verkhovna Rada has introduced a mechanism of reserved contracts in public procurement: what will change?

A new tool in the field of public procurement will appear in Ukraine – reserved contracts. The relevant changes are provided for by the Law of Ukraine No. 11520, which the Verkhovna Rada adopted in order to combine public procurement with social policy objectives and support for the employment of people who have difficulties accessing the labor market.

The new mechanism will allow using public procurement not only as a tool for effective spending of budget funds, but also as a means of social integration, primarily of people with disabilities and other vulnerable categories of the population.

What are reserved contracts

Reserved contracts are a special type of public procurement, in which only enterprises that meet certain social criteria will be able to participate.

This approach has been used in the countries of the European Union for a long time. Its main goal is to create additional employment opportunities for people who, due to health or other circumstances, face difficulties in finding a job.

In fact, the state will use the public procurement system as one of the mechanisms for implementing social policy.

The law defines only general rules

Despite the adoption of the law, the full launch of the new mechanism is still ahead.

The document establishes only the basic principles of the functioning of reserved contracts, while the procedure for their practical application should be determined by separate regulatory legal acts.

It is expected that the Cabinet of Ministers of Ukraine will prepare a separate draft law or the necessary by-laws that will regulate:

criteria for participation of enterprises in reserved procurements;

the procedure for confirming compliance with the established requirements;

the procedure for conducting such procurements;

mechanisms of state control.

It is these documents that will determine how the new model will work in practice.

What risks do experts see

Along with positive expectations, experts draw attention to the need to create effective safeguards against possible abuses.

Among the main risks are:

formal employment of persons with disabilities only to fulfill quota requirements and obtain the right to participate in reserved procurements;
the use of so-called “nominal” employees, which can recreate the practice of fictitious employment, known as “employment book rental” schemes;
situations when the winner of the procurement only formally meets social criteria, and the actual implementation of the contract is carried out by another business entity, which nullifies the very idea of ​​social support;
possible distortion of competition and inefficient use of budget funds in the absence of proper control.

According to experts, it is an effective verification and monitoring mechanism that will become a key condition for the successful functioning of the new model.

A new model of public procurement

It is expected that after its full launch, the reserved contracts mechanism will allow Ukraine to bring the public procurement system closer to European standards.

Its implementation should not only ensure competition and efficient use of budget funds, but also create additional opportunities for the professional and social integration of people who need state support.

At the same time, the success of this reform will largely depend on how transparent the rules for its implementation will be and how effectively the state will be able to prevent possible abuses.