Cabinet of Ministers of Ukraine.
Resolution No. 266 of February 26, 1996, Kyiv

On Procedures for the Formulation and Placing
 of State Orders for the Supply of Production for State Purposes
 and Review of their Implementation 

In accordance with the Law of Ukraine "On the Supply of Production
for State Needs," the Cabinet of Ministers of Ukraine resolves:
1. Approve the Procedures for the Formulation and Placing of State
Orders for the Supply of Production for State Purposes and Review
of their Implementation" (in addendum).

2. Assign the functions of formulating government orders and
coordinating the activities of state customers of placing state
orders to the Ministry of the Economy.

3. Establish that the suppliers for state orders which are of
strategic importance, connected with supporting national defense
and security, if necessary, may receive the right to realize
quotas, which are obligatory, in order for the enterprises and
organizations, who are Ukrainian suppliers of certain types of
materials and sub-products, to sell to them in the volumes and
according to the list approved by the Cabinet of Ministers of
Ukraine.

4. The Ministry of Statistics together with Ministry of the
Economy, by April 1, 1996, according to the established procedure,
shall develop and implement a system of statistical reporting on
the fulfillment of state contracts.

5. From 1997, the Ministry of Finance shall put the financing of
state procurement in a separate category of the State Budget of
Ukraine.

6. The Government of the Autonomous Republic of Crimea, the oblast
authorities, and Kyiv and Sevastopol city administrations shall
approve the Procedures for the Formulation and Placing of State
Orders for the Supply of Production for State Purposes and Review
of their Implementation.

7. Assign the task of implementing this Resolution to the Ministry
of the Economy and the Ministry of Finance.

Prime-Minister of Ukraine E.Marchuk
Minister of the Cabinet of Ministers of Ukraine
V.Pustovoitenko



Appendix
 to the Resolution of the Cabinet of Ministers of Ukraine
 No. 266 of February 29, 1996

Procedures for the Formulation and Placing
 of State Orders for the Supply of Production for State Purposes
 and Review of their Implementation 


This Procedures establishes the mechanism for the cooperation of
state customers, the Ministry of the Economy, the Ministry of
Finance, the Ministry of Statistics and executors of state
procurement during formulation, placing and implementing of state
orders for goods, works and services (hereinafter production) for
state purposes.

I. Formulation of state orders

1. State orders are formulated on the basis of state needs for
production, determined by the Programmes of economic and social
development for Ukraine.

2. Ministries, other national executive authorities, the Government
of the Autonomous Republic of Crimea, Kyiv and Sevastopol city
administrations, state organizations and agencies responsible for
the implementation of national and international specialized
programmes are potential state consumers, and may submit  their
applications to be included in state procurement projects to the
Ministry of the Economy by July 15 of the given year . The
applications shall be submitted with proposals for projects to the
Programme for the economic and social development of Ukraine and
the State budget of Ukraine.

3. The Ministry of the Economy of Ukraine:

- shall analyze and generalize the applications submitted by
potential state customers and shall determine the amount of
production required for state purposes in the following year and
the general amount of financing, necessary for its purchase, and by
August 15 of the given year shall submit this information to the
Ministry of Finance for a preliminary estimate and to determine the
amounts of possible financing from the State budget of Ukraine;

- shall analyze proposals to attract non-budgetary sources of
financing of state procurement and shall submit its proposals, if
necessary, to the Cabinet of Ministers of Ukraine in accordance
with the existing procedures.

4. By September 15 of the given year, the Ministry of Finance of
Ukraine shall inform the Ministry of the Economy of the draft State
budget of Ukraine for the next fiscal year in order to balance the
amounts of state procurement with the financing necessary for their
purchase. The financing of state procurement shall appear in the
State budget as a separate category.

5. The Ministry of the Economy:

- in cooperation with potential state consumers, shall balance the
amounts of state 
procurement in their applications with projected amounts of budget
financing and non-budgetary sources of financing determined by the
Cabinet of Ministers;

- shall develop a draft for state procurement and shall submit it
for approval according to the established procedures to the Cabinet
of Ministers of Ukraine together with the draft Programme for the
economic and social development of Ukraine;

- after the Cabinet of Ministers of Ukraine has considered and
approved the draft of state procurement, it shall inform potential
state consumers in order to begin preliminary work on the placing
of state orders;

- after the Supreme Rada of Ukraine has approved the State Budget
of Ukraine, according to the figures provided in the State Budget,
it may make the necessary changes and modifications to the project
of state procurement in order to finally balance the amounts of
procurement with the financing provided to each particular state
customer, and shall submit it for approval according to the
established procedure to the Cabinet of Ministers of Ukraine
together with the list of proposed state customers;

- after the Cabinet of Ministers of Ukraine has approved the
volumes of state procurement and the list of state customers, it
shall inform state customers about them within a week and shall
coordinate activities to place of state orders and negotiate of
state contracts.


II. Placing of State Orders and Negotiating of State Contracts.

6. State customers, depending on the approved volumes of state
orders and financing allocated to them, shall independently place
orders for supplies of goods for state purposes amongst potential
suppliers on a competitive basis in accordance with the procedures
developed by the Ministry of the Economy, excluding cases provided
for in Item 8 Article 2 of the Law of Ukraine "On State
Procurement".

7. The placing of state orders for the supply of production shall
be registered as a state contract between the state customer and
the agent fulfilling the order.

8. In cases where state customers partially delegate their
authorisation to place state orders and to negotiate state
contracts, they:

- shall specify the enterprises, the institutions, or the
organizations to which this authority are delegated;

- shall make contracts with certain enterprises, institutions, or
organizations where the authorisation, commitments and
responsibilities of the parties are clearly determined;

- shall review the implementation of these contracts by
enterprises, institutions, organizations and take responsibility
before the state for the fulfillment of state orders. 

9. After negotiating the contract for the supply of production for
state needs, state customers shall inform the Ministry of the
Economy and the Ministry of Statistics about it within a ten day
period according to the established procedure.

10. In cases where it is necessary to change or modify state orders
for the supply of production during the process of their placing,
the negotiation of contracts or the fulfillment of state orders:

- state customers shall file an application and provide reasons for
the necessity of making changes and modifications; 

- the Ministry of the Economy shall process the documents filed by
state consumers, develop a draft Government resolution, shall
coordinate it with the Ministry of Finance if necessary, to change
budgetary financing, and according to the established procedure,
shall submit it to the Cabinet of Ministers of Ukraine within a
period of two weeks;

- after the Cabinet of Ministers has approved the resolution to
make changes and modifications for the supply for production for
state needs, the state customers shall make the appropriate changes
in state contracts according to the legislation of Ukraine.

11. The state may reserve material resources if necessary through
providing the state suppliers the right to realize quotas for the
obligatory sale to them, by the enterprises and organizations, who
are Ukrainian suppliers, of certain types of materials and
sub-products in volumes and according to the list approved by the
Cabinet of Ministers of Ukraine after it has been submitted to the
Ministry of the Economy.

III. Control of Implementation of State PProcurement
12. The authorisation to review state pprocurementshall be provided
to state customers and the Ministry of Economy of Ukraine. The
Ministry of Finance shall review the utilization of financing
allocated for state procurement.

13. State customers shall supply the Ministry of Statistics a
monthly report, to be submitted by the 10th of the following month,
on the performance of state pprocurementin terms of financing and
on the financing of state contractors, and shall submit a report
quarterly on the implementation of state procurement in terms of
production to the Ministry of the Economy.

14. The Ministry of Statistics shall generalize the reports of
state customers and shall submit the total information to Ministry
of the Economy and the Ministry of Finance by the 20th of the month
following the reported month. 

15. The Ministry of the Economy quarterly shall inform the Cabinet
of Ministers of Ukraine on the implementation of state orders by
the thirtieth of the month following the reported month, and if
necessary, shall develop a proposal for additional measures in
order to ensure implementation.

Minister of the Cabinet of Ministers of Ukraine
V.Pustovoitenko

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