On Friday, April 9, 2021, the Cabinet of Ministers of Ukraine published the amendments to its Decree № 298 dated March 17, 2011, which were introduced on March 24, 2021. We explain in more details why these changes are important to consider within the procurement procedures.
The Decree №298 has already been amended twice in 2020 with regards to the procurement. Each time new editions became a stumbling block in the procurement process.
- The changes were made for the first time on June 12, 2020 and provided that the State Enterprise "Medical Procurement of Ukraine" should agree on technical, quality and other characteristics of items to be procured, as well as on draft agreements, with the Ministry of Health of Ukraine. Moreover, in a manner that was not regulated properly. At that time we made a statement that this decision was illegal and would delay the launch of the procurement of medicines for patients.
- The Decree was changed for the second time on October 26, 2020. It was then determined that medical and technical requirements for goods and services that are the subject of procurement are approved by the order of the Ministry of Healthcare. Moreover, it was envisaged to approve a separate Interaction Procedure between the Ministry of Health as the main administrator of budget funds and the SE "MPU" as the recipient of budget funds. Such a procedure was never approved by the Ministry of Health, despite the fact that its draft version was prepared and sent to the Ministry of Health for consideration.
None of the mentioned options proved to be a successful management decision.
Amendments to the Decree №298 as of June 12, 2020 created significant delays in announcing of the procedures. The approval of the terms of reference by the Ministry lasted from two weeks to months. This led to the late announcement of procedures and, as a result, some procedures were not completed by the end of the budget year 2020.
The counterproductive impact of the amendments to the Decree, made on October 26, 2020, are becoming more and more noticeable now. The lack of terms of reference, which must be approved by the Ministry of Health, does not allow us to start procedures in the areas for which we already received key documents - the enumeration of the positions that should be procured, the passport of the budget program, the quantity of goods to be purchased. These are such areas as multiple sclerosis, tuberculosis, ART, cerebral palsy, orphan metabolic diseases, etc.
In is obvious that preparation of the medical and technical requirements for the goods that should be procured is problematic for the Ministry of Health. Indeed, we are talking about 600 positions in 19 areas. Unfortunately, the Ministry of Health seeks to assume powers that it is unable to fulfill.
MPU is ready to start procedures. We analyzed the market and identified categorical strategies for each of the 19 areas, we conducted market consultations with potential participants of the procedures and arranged an annual forum for more than 200 suppliers, we provided comments on approved nomenclature items to the Ministry of Healthcare, we adjusted our tender documentation and updated draft contracts.
The latest amendments to the Decree №298, introduces on March 24, 2021, mostly return us to the wording of the amendments made on June 12, 2020. From now on, the SE "MPU" should send the ToRs prepared by us for approval by the Ministry of Healthcare.
Returning to the old version does not solve the problem. The decision still:
- Contradicts Part 4 of Art. 7 of the Law of Ukraine "On Public Procurement". This article clearly regulates the list of authorized bodies that have the right to exercise control in the field of public procurement. These are the Accounting Chamber, the Antimonopoly Committee of Ukraine, and the State Audit Office of Ukraine, the central executive body that implements the state financial control. The Cabinet of Ministers of Ukraine endows the Ministry of Health with unusual and illegal functions, which, as practice has shown, it is unable to execute effectively.
- Determines the deadline for approval of documents of the Ministry of Health of Ukraine within 5 days from the date of approval of the ToR by groups of experts, which operate under the Ministry of Health. However, it does not determine the actual timeframe within which the decisions will be made by groups of experts. There is the risk that the approval documents may last for weeks or months, which will have a critical impact on the procedures.
- The requirement to approve ToRs provides the Ministry of Health with manual leverage over procurement and contains a corruption factor.
- Due to the lack of political will to normalize the processes by approving the Interaction Procedure between the Ministry of Health and the SE "MPU", the Ministry simply excluded this norm from the Decree wording.
We are ensured that such ineffective decision affect the procedures and might cause the delays in procurement. 98% of the ToRs that we sent for approval in 2020 were returned without any additional comments. There are no substantiated grounds for applying this practice further on.
At the same time, it should be noted that delaying procurement due to the need for the Ministry of Health to approve technical tasks is still less harmful solution than blocking procurement due to the lack of approval of these documents by the Ministry of Health. As soon as the updated resolution comes into force, we will send the ToRs according to the procurement nomenclature for consideration and approval by the Ministry of Health.