Road Repair and Maintenance Bids to Be Aligned with EU Standards: How Road Contractors Will Be Selected
20 June 06:53
The Ministry of Economy, Environment, and Agriculture of Ukraine is improving its approaches to the procurement of services for the operational maintenance of state and local roads, according to "Komersant Ukrainian"
The updated guidelines are intended to ensure a balance between open competition, the quality of work performed, and the efficient use of budget funds.
The Ministry of Economy emphasizes that qualification requirements for tender participants must correspond to the subject of the procurement, be proportionate to its complexity, and not be used to artificially restrict competition.
Why the Decision to Change the Approach to Road Procurement
The latest changes to the guidelines were prepared following consultations with representatives of contracting authorities, road construction companies, industry associations, and other market participants.
Two key needs were taken into account when developing the new approaches:
- ensuring continuous and high-quality road maintenance;
- creating a level playing field for business participation in procurement.
The Ministry aims to avoid situations where excessive or overly formal requirements, without sufficient justification, prevent potentially capable companies from participating in tenders.
At the same time, contracting authorities must be able to verify the actual experience, technical capabilities, and financial capacity of prospective contractors.
What services are covered by the recommendations
This concerns the procurement of services for the operational maintenance of public roads of national and local significance.
Such work may include:
- winter road maintenance;
- cleaning the roadway;
- repair of emergency potholes;
- road shoulder maintenance;
- repair and replacement of road signs;
- painting road markings;
- maintenance of drainage systems;
- ensuring traffic safety;
- emergency repairs following damage.
The condition of the road infrastructure, the safety of drivers and passengers, and—during wartime—the functioning of critical logistics all depend on the quality of these services.
How participants’ experience will be verified
The Ministry of Economy supports an approach whereby qualification criteria must confirm a participant’s actual ability to fulfill the future contract.
At the same time, the requirements should not artificially limit the number of potential participants.
When determining the criteria, contracting authorities are advised to consider:
- the complexity of the procurement;
- the contract value;
- the duration of performance;
- the scope of work;
- potential risks;
- the specific characteristics of a particular road or region.
Requirements for prior experience must be directly related to the subject matter of the procurement and commensurate with its scope.
Are only fully completed contracts required?
European legislation does not require a bidder to demonstrate its experience exclusively through fully completed contracts.
According to EU Directive 2014/24/EU, technical and professional capacity may be demonstrated by a list of works performed over the past five years or services provided over the past three years.
Documents or certificates confirming proper performance must also be provided.
The Ministry of Economy emphasizes that European rules do not establish a single mandatory percentage of contract completion for all procurements.
The principles of proportionality, reasonableness, and non-discrimination remain paramount.
What Approach Does the World Bank Use?
The World Bank’s standard tender documentation for the procurement of works provides for the possibility of taking into account contracts under which at least 80% of the work has been completed.
This approach allows for the evaluation of a company’s practical experience, even if the contract has not yet been formally closed in full.
According to the Ministry of Economy, this practice helps expand competition and allow participants with sufficient relevant experience—who may not have previously met overly strict formal requirements—to participate in tenders.
How Financial Capacity Will Be Assessed
European and international practice does not provide for a single universal indicator of financial capacity for all procurements.
The level of requirements should be determined by the contracting authority depending on:
- the value of the procurement;
- the contract term;
- the complexity of the work;
- the need to engage equipment and personnel;
- financial and technical risks.
The Ministry cautions against introducing a single, rigid standard that would apply uniformly to all tenders regardless of their scale.
Such an approach could unreasonably restrict competition or, conversely, fail to ensure adequate vetting of the contractor.
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The methodological recommendations are not mandatory
The Ministry of Economy specifically emphasized that the methodological recommendations do not establish mandatory requirements for contracting authorities.
It is the procuring entity that determines:
- the list of qualification criteria;
- the documents required to verify experience;
- requirements for material and technical resources;
- the level of financial capacity;
- the structure of the tender documentation.
All decisions must comply with public procurement legislation and take into account the specific characteristics of the procurement in question.
Thus, the recommendations serve as a guideline rather than a strict, mandatory set of instructions.
Statement by the Federation of Employers of Ukraine
The Federation of Employers of Ukraine supported the update to approaches for procuring road maintenance services.
The Federation believes that, in the past, the lowest price—often achieved through dumping—could be the deciding factor in certain tenders.
This created the risk that companies without sufficient equipment, experience, personnel, or financial capacity would win the contracts.
The consequences could include:
- substandard road maintenance;
- termination or suspension of contracts;
- additional budget expenditures;
- the need for emergency repairs;
- problems with critical logistics.
The Federation expects that the updated recommendations will help assess participants’ capabilities more objectively and reduce the risks of unfair competition.
What Will Change for Procuring Entities
Clients will receive more guidance for preparing well-founded tender documentation.
In particular, they will be able to:
- structure lots more flexibly;
- define criteria in accordance with the scale of the procurement;
- take into account contracts that have been substantially fulfilled;
- assess a bidder’s actual financial capacity;
- avoid unreasonable discriminatory requirements.
At the same time, responsibility for the final terms of the tender and the selection of criteria remains with the specific contracting authority.
What Will Change for Road Construction Companies
For market participants, the updated approaches may mean broader opportunities to participate in tenders.
Companies with relevant experience but that have not yet completed certain long-term contracts will potentially be able to demonstrate their capabilities based on the volume of work they have already performed.
At the same time, participants will continue to be required to provide proof of:
- technical capabilities;
- availability of the necessary equipment;
- professional staff;
- experience in performing similar work;
- financial stability.
Therefore, the goal of these changes is not to simplify the requirements at any cost, but to establish more proportionate and objective criteria.
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