Procedures for Price Analysis in Construction to Be Simplified
The Ministry of Restoration, Infrastructure and Transport discussed the implementation of the Construction Product Price Database, the formation of average prices, and the next steps needed to increase transparency in construction funded by public money. The focus of the meeting was the evaluation of the proposed changes with representatives of the anti-corruption community to maintain a balance of control over the use of public funds.
“The pricing reform in construction is fundamental for the entire reconstruction system. Our task is to find a balance between maximum transparency in the use of public funds and the rapid implementation of projects that are critically important for the country today. The reform should not create additional barriers but rather provide customers with clear digital tools for price analysis, protect them from subjective claims by regulatory authorities, and guarantee businesses transparent and fair operating rules,” emphasized Natalia Kozlovska, Deputy Minister of Restoration, Infrastructure and Transport of Ukraine.
A separate topic of the meeting was the solutions developed by the Ministry together with the State Audit Service based on a series of consultations with regional military administrations, local self-government bodies, the Association of Ukrainian Cities, the Association of United Territorial Communities, and the expert community.
Based on the received proposals, a draft amendment to Cabinet of Ministers Resolution No. 1512 has been developed and already sent for approval to central executive authorities, associations, and regional administrations.
The proposed changes aim to make price analysis procedures more practical and reduce the administrative burden on customers.
In particular, it is proposed to set a threshold of UAH 1.5 million, above which price analysis will be carried out according to the procedure defined by Resolution No. 1512. For objects of lesser value, customers will independently determine the price analysis procedure by internal documents, which will help avoid unnecessary bureaucracy for schools, hospitals, and other social sector facilities.
It is also planned to significantly simplify report preparation through a differentiated approach to analyzing budget items depending on their impact on the total construction cost.
Thus, price-forming materials (60% of the cost) will be checked by the full procedure, for less costly resources (35% of the cost) a simplified analysis is provided, and for low-value materials, the requirements for confirming information sources will be minimized. According to expert estimates, this will reduce the time for report preparation by up to 80%.
A separate block of changes concerns regulating interaction with suppliers. It is proposed to set a maximum response time to price inquiries of five working days. If no response is received, the fact of sending the inquiry will be recorded in the Unified State Electronic System of Public Procurement (UDESSP) and considered sufficient confirmation of the absence of competitive offers. In addition, official manufacturer price lists and data from the UDESSP Price Database are proposed to be equated to commercial offers.
The draft amendments also clearly delineate the responsibilities of participants in the process. The accuracy of information about the supplier’s status, for example, an official distributor, will be the responsibility of the person submitting the price proposal, while customers and estimators will not be responsible for verifying this information and will not be required to request additional supporting documents.
For manufacturers of construction products, it is proposed to establish that the placement of prices in the UDESSP Price Database is purely indicative and does not create obligations to supply or sell products at the published prices. Free data entry into the system via API is also provided, which should encourage more active filling of the Price Database.
Moreover, the changes propose clearly defining the functions of the customer and contractor at different stages of project implementation, as well as providing transitional provisions that will prevent the stoppage of already started construction projects or the need to repeat expertise solely due to the introduction of new requirements for electronic reports. This will allow ongoing projects to continue without delays while gradually implementing new pricing mechanisms.
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