On September 8, the O.O. Bohomolets National Medical University commissioned LLC "Green Trading" to renovate a dormitory building in the capital for UAH 66.73 million following a tender. Journalists from the "Nashi Hroshi" publication drew attention to a possible overstatement of material costs. UNN found out that this was neither the first nor the largest tender the university had awarded to "Green Trading," and that the total value of the services purchased exceeds UAH 420 million.
By the end of the year, the five-story dormitory at 14b Hrushetska Street in Kyiv is to be renovated. The work includes partial thermal modernization of the façades and attic-floor ceiling, replacement of 269 windows, installation of new paving, restoration of damaged reinforced-concrete structures and brick walls, the basement entrance, and porches. Parapets, cornices, downspouts, waterproofing, and the paint coating of metal window grilles are also to be restored.
The work is financed from the state budget. The contract price is dynamic and includes UAH 813,000 to cover risks and UAH 2.39 million for inflation (here and below, the amounts and prices include VAT). As the "Nashi Hroshi" publication notes, under Guideline No. 281 on determining the cost of construction, funds to cover risks are not included when the contract price is dynamic.
In the information on the prices of material resources, metal-plastic windows with double-glazed units measuring 2100x1400 mm and a Steko Ideal 7000 profile were priced at UAH 27,695 per unit, or UAH 9,420 per sq. m. "Market Vikna" and "Market Dveri" sell such windows at the same price of UAH 3,724 per sq. m., which is 2.5 times cheaper.
A similar situation applies to Izovat mineral wool with a density of 135 kg/cu. m and a thickness of 100 mm, which was ordered at UAH 731 per sq. m. Similar wool can be purchased at prices starting from UAH 580 per sq. m., which is 21% cheaper. Izovat mineral wool with a density of 135 kg/cu. m and a thickness of 150 mm was priced at UAH 1,096 per sq. m. "Kub" sells it for UAH 639 per sq. m.
Ceresit CT 190 Pro adhesive mixture was ordered at UAH 29 per kg. "Venbud" sells it for UAH 22 per kg, while "Bud Platforma" charges UAH 25 per kg, which is 14–24% cheaper.
The possible overpayment on the specified items amounts to more than UAH 5 million.
It is noteworthy that the company received the contract without competition, as no one else submitted a bid for the open tender.
In parallel with the tender mentioned above, the company won a procurement contract for dormitory renovation at 14v Hrushetska Street. This contract is practically similar in value.
Both of these procurements have already been subject to an audit by the State Audit Service due to possible violations.
Million-hryvnia renovations in question: what auditors found earlier
The rector of the O.O. Bohomolets National Medical University is Yurii Kuchyn, and it was during his tenure that "Green Trading" began receiving orders from the university.
In September 2022, the company received a contract to renovate the premises of the library in the university's Physics and Chemistry Building. The work was to be completed by November 21 of that year, but the following year—in February and May—additional agreements were concluded to extend the deadline for completion due to air-raid alerts and interruptions in energy supplies.
The estimated cost was UAH 6.79 million including VAT, while the contract amount was almost UAH 6.74 million including VAT; the actual savings amounted to less than one percent. This small difference was probably due to the fact that "Green Trading" was the only bidder.
In mid-2023, the company received another order—a current emergency repair of the entrance area of the Physics and Chemistry Building worth UAH 149,500 including VAT. But after this modest tender, in 2024 "Green Trading" took part in a tender worth slightly more than UAH 14 million including VAT. It competed with LLC "Tsentr-BUD," which offered a lower price for the work—UAH 11.35 million. However, this bid was rejected, in particular because the bidder allegedly failed to provide all the required documents.
The company "Tsentr-Bud" filed a complaint with the Antimonopoly Committee of Ukraine, claiming that the university had applied grounds for rejection that were not provided for by the legislation or the tender documentation. It demanded that NMU's decision be canceled and its bid returned for evaluation. However, the complaint was ultimately rejected, and "Green Trades" was declared the winner with a bid of over UAH 12.9 million. However, the competing firm decided not to give up and filed another complaint – it pointed to the lack of justification for the prices of window units and other resources, problems with confirming equipment and experience, and also drew attention to the complete match between the position codes in NMU's resource statement and "Green Trading's" estimate. The complainant suggested possible collusion, but this was the complainant's assertion, not an established fact of collusion. In addition, "Tsentr-Bud" pointed out that in "Green Trading's" estimate documents, the work was scheduled for a longer period, whereas the tender required it to be completed by December 31, 2024. At the same time, "Green Trading" confirmed in a separate guarantee letter its readiness to complete the work by that date. The company managed to convince the AMCU that the complaint was unsubstantiated, and it was rejected. However, despite "Green Trades'" guarantees that the work would be completed within the established deadlines, the completion period was extended twice – most recently until the end of 2025.
The most grandiose victory for "Green Trading" came in a tender worth over UAH 278 million. Interestingly, it concerned the same site as the previous tender, but while the earlier tender involved replacing windows, this one concerned a major overhaul.
A tender involving such a large sum did not go without competition. The competitor was the company "Fasad-Servis-Bud". However, the company's bid, which was economically more advantageous, albeit only slightly, was rejected because it did not comply with the tender documentation requirements.
And this process was not without complaints either. Even before the bidding began, "Fasad-Servis-Bud" stated that certain requirements could restrict competition. The university required experience in major repairs/reconstruction over a limited period and confirmation of 18 specific types of work in the established minimum quantities. The university agreed to partially satisfy this complaint and softened, in particular, the requirements concerning the period during which similar work had to be carried out. The company also appealed to the AMCU, but its complaint was rejected there.
But that was not the end of the matter. The State Audit Service took up the procurement for review. It had questions—many of them. These included, in particular, the discrepancy between the payment deadlines specified in the tender notice and the contract, the reduction of the warranty period from 10 to 5 years, and the absence of a financing plan and a work schedule. Most of the questions were addressed to the university under the leadership of Rector Kuchyn.
There were also questions for "Green Trading" – "Green Trading's" contract price included UAH 2,915,849 "funds to cover risks." At the same time, the SAS established that NMU's tender documentation specified neither a specific amount nor a risk percentage, while the draft contract did not contain a procedure for using these funds. Separately, the auditors found another UAH 7,791,521 to cover additional costs associated with inflationary processes. Again, they pointed out that the draft contract did not establish a procedure for using this money. Ultimately, the university rectified most of the violations, and a contract was concluded with "Green Trading." The company is to complete the work by the end of the current year.
However, among the information on material prices, as in the procurement of dormitory repair services, one can find items whose cost justification raises doubts. For example, the installation of ceiling LED panels, Armstrong 60×60 LED FLF-87 36W NW, is planned, in a quantity of 230 units. The cost of one panel, excluding transportation and storage expenses, as stated by the contractor, is UAH 9,384, or more than UAH 2.1 million for all the panels.
On the retail market, such a panel can be purchased for UAH 1,010.
At a total cost of 230 panels, the overpayment could amount to approximately UAH 1.93 million. The only possible explanation for this could be that the unit of goods in this case is 10 panels. However, is that really the case, or has the contractor included a significantly inflated price?
Inflated expected cost
This is the most common manipulation scheme. It occurs in almost all areas of procurement of goods and services, but perhaps most often in the construction sector. As DOZORRO analysts noted back in 2024, in fact, every thirteenth hryvnia in the contracts they monitored was an overpayment. They indicate that the overpricing usually occurs in the cost of construction materials.
The prices of construction materials are inflated by tender participants — construction companies. However, they inflate them because they can do so — because the expected procurement cost allows it. Ultimately, businesses look for opportunities to make a profit, so they offer their price within the expected cost. After all, the expected cost determined by the contracting authority is the maximum amount it is willing to pay
The overpricing of construction materials specifically occurs because the cost of works, labor, and equipment use is tightly regulated. However, the situation with the cost of materials is somewhat different, and price adjustments are possible here.
Suppliers also sometimes inflate the scope of work; for example, they indicate more person-hours than are actually required to complete the assigned task.