Date of publication: 1 July 2026
Anastasiia Leontieva, Lawyer
Oleksandr Fefelov, Partner, Head of Antitrust & Competition Practice
Source: Yurydychna Gazeta
On 27 May 2026, the Verkhovna Rada of Ukraine adopted the Law of Ukraine “On Public Procurement” No. 4888-IX (hereinafter – the Law). Upon its entry into force, Law No. 922-VIII of 25 December 2015, which has regulated the public procurement sector over recent years, will stand repealed.
The currently effective Law on Public Procurement was enacted back in 2015 as one of the core components for fulfilling Ukraine’s obligations under the Association Agreement with the European Union. At the same time, subsequent regulatory development occurred primarily through numerous ad hoc targeted amendments, which addressed specific practical issues but fell short of ensuring full approximation of the Ukrainian public procurement system with the requirements of Directives 2014/24/EU and 2014/25/EU.
As a result, the legislation retained a number of substantial differences from the European model, while certain instruments and procedures provided for by EU law were never implemented at all. Work on Draft Law No. 11520 commenced in 2024 with the aim of directly establishing a new regulatory framework for public procurement that would simultaneously meet European integration requirements and the needs of Ukraine’s large-scale post-war reconstruction.
Why the Reform Is Happening Now: The Financial Aspect
Chapter IV of the Association Agreement between Ukraine and the EU, ratified by the Law of Ukraine of 16 September 2014, contains obligations for the gradual approximation of procurement legislation with EU law. Ukraine’s acquisition of EU candidate country status in 2022 significantly elevated the importance of obligations regarding the adaptation of procurement legislation to Union law. Public procurement has become one of the areas assessed within the EU membership negotiation process, and the effectiveness of the reform is considered an indicator of overall European integration progress.
Regulation (EU) 2024/792 on the Ukraine Facility directly links the disbursement of tranches to the implementation of structural reforms, the list of which includes bringing procurement legislation into compliance with Directives 2014/24/EU and 2014/25/EU. Full alignment of the public procurement sector with the requirements of EU law must be completed by the third quarter of 2027. The adoption of Law No. 4888-IX becomes significant as one of the key milestones in implementing Ukraine’s relevant European integration commitments. Concurrently, it will also fulfill one of the World Bank’s requirements under the Development Policy Operations (DPO) instrument, which unlocks access to financing exceeding 3.4 billion USD earmarked directly for the state budget.
New Public Procurement Mechanisms for Business
Among the principal changes introduced by the Law, particular emphasis should be placed on the introduction of mechanisms characteristic of the modern European public procurement model. While the previous regulation predominantly focused on conducting competitive procedures, the new approach substantially expands the toolkit available to contracting authorities and offers more flexible options for organizing procurement.
- Innovation Partnership (Art. 31 of Directive 2014/24/EU). Unlike traditional procurement, where the contracting authority selects a ready-made product or service, an innovation partnership allows it to fund the development of the required solution initially and, upon successful completion of the development phase, purchase the resulting outcomes without conducting a new procurement procedure. For post-war reconstruction projects, this will unlock the opportunity to engage companies offering new technological solutions in construction, energy, digitalization, medicine, or security.
- Dynamic Purchasing Systems (Arts. 34-35 of Directive 2014/24/EU). Whereas under a standard tender procedure, an applicant must submit a bid within a set deadline after which new participants can no longer join, a dynamic purchasing system allows suppliers to join throughout its entire period of operation, provided they meet the qualification criteria. Once such a system is established, the contracting authority conducts separate selections among its participants for specific procurements of standardized goods and services. This approach reduces administrative costs and allows competition to be maintained on a continuous basis, particularly in markets with a large number of suppliers of off-the-shelf goods.
- Joint and Aggregated Procurement. These allow several contracting authorities to conduct a single procedure to satisfy a shared need, whereas aggregated procurement involves the centralized purchase of goods or services through a central purchasing body on behalf of several contracting authorities. Both mechanisms aim to consolidate demand and secure more favorable commercial terms driven by larger procurement volumes.
- Mixed Subject Matter of Procurement, which may combine goods, works, and services within a single contract, provided that such a combination objectively stems from the needs of the contracting authority. Regulating the mixed subject matter of procurement aligns with European practice for defining the scope of procurement, which accounts for the economic substance and functional integrity of the project.
- Stricter Regulation of Dividing Procurement into Lots. A lot represents a distinct part of the subject matter of procurement, for which participants can submit bids independently of other parts of the procurement. For example, the purchase of equipment for a hospital can be divided into separate lots by equipment type, and a construction project – by specific types of work. In contrast to the previous approach, the new Law requires contracting authorities to justify any decision not to divide a large procurement into lots. This model reflects the rationale of Art. 46 of Directive 2014/24/EU and is intended to ensure wider access for small and medium-sized enterprises (SMEs) to public contracts. Indeed, an enterprise that may not have the capacity to perform an entire large contract is often fully capable of competing successfully for a specific part of it.
- Reserving Contracts for Veteran-Owned Businesses and Persons with Disabilities has received full legislative consolidation as a distinct procurement policy tool, corresponding to the approach provided for by Art. 20 of Directive 2014/24/EU.
Digitalization and Streamlining of Procurement Procedures
A significant portion of the changes concerns the development of electronic procurement tools and the further improvement of the Prozorro system to reduce the instances of rejecting bids on formal grounds and to facilitate a more effective use of appeal mechanisms.
Law provides for:
- further development of electronic procurement tools, specifically through the introduction of electronic contracts and the enhancement of the legal framework for electronic catalogs;
- an improved mechanism for remedying non-compliances in tenders within 24 hours;
- an expanded scope of information and documents that can be corrected by the participant;
- the option to conduct an electronic auction even with a single participant, reflecting the practical experience of the procurement system operating under martial law.
Thresholds in EUR: Inflation Protection
Value thresholds are now pegged to the Euro rather than the Ukrainian Hryvnia. This decision is driven both by the requirements of Directive 2014/24/EU and by objective inflationary risks that make fixed UAH thresholds volatile and necessitate constant revision. The peg to the Euro makes the regulation clear both for the domestic market and in a cross-border context, which is fundamental for foreign procurement participants.
What This Means for International Business and Investors
For foreign investors, institutional investors (World Bank, IMF, EBRD, EIB), and international companies, the greatest practical significance lies in the increased predictability of the regulatory environment. Predictable procurement procedures constitute a vital element of risk assessment when making decisions regarding project financing in Ukraine and serve as one of the key indicators of good governance and efficient use of funds.
- Harmonization with Directive 2014/24/EU – foreign companies that already have experience participating in tenders across EU Member States will find themselves in a familiar legal environment. Selection procedures, qualification criteria, grounds for exclusion, and appeal processes are converging with the standards well known to foreign companies looking at Ukraine as a post-war recovery market.
- Statutory Regulation of Subcontracting Relationships. The implementation of large-scale infrastructure projects, especially in the reconstruction sector, typically involves a significant number of subcontractors and specialized executors. Having clear rules regarding the participation of such entities in the performance of public contracts increases legal predictability and simplifies project structuring involving international partners. Additionally, the Law allows participants to submit alternative technical solutions in cases specified in the tender documentation, bringing procurement procedures closer to the approaches traditionally utilized in major investment and infrastructure projects.
For certain international support programs, notably the World Bank’s DPO mechanism, reforming procurement legislation stands as an explicit conditionality for funding.
In this context, the practical implementation of Law No. 4888-IX will directly influence both Ukraine’s access to international financing and the level of confidence foreign businesses have in the Ukrainian market.
Implementation of the Public Procurement Reform and Its Significance for Business
Further approximation to European Union standards will be largely determined by the substance of secondary legislation, the consistency of law enforcement practice, and the efficiency of executing the enacted legislative changes.
The passage of Law No. 4888-IX is merely the initial phase. Over the next 9 months, the Cabinet of Ministers and the Ministry of Economy must develop approximately 40 secondary regulations detailing the mechanisms for innovation partnerships and dynamic systems.
Until 31 December 2032, defense procurement of civilian goods will be conducted subject to local content requirements as a transitional measure, which will require a separate analysis regarding its compatibility with Ukraine’s WTO obligations and future full participation in the EU internal market.
