Public procurement reforms to cut direct deals and expand local participation

President Shavkat Mirziyoyev signed the decree on December 26. The document has been published on Lex.uz.

Under the decree, Uzbekistan plans to raise the share of competitive procurement methods to 80 percent of total public purchases by 2030 and achieve budget savings of UZS 25 trillion. The government also aims to double business participation in public procurement and increase the share of domestically produced goods to 98 percent.

Authorities have been tasked with building a “convenient, modern, and service-oriented” public procurement ecosystem that reflects the needs of contracting entities and incorporates artificial intelligence tools.

Direct contracts to be curtailed

Starting January 1, 2026, the existing list of goods, works, and services eligible for procurement through direct contracts will be abolished. Future purchases of these items must be conducted using competitive methods, except in cases explicitly envisaged by the Law on Public Procurement.

When drafting regulations that allow procurement through direct contracts, a specific contractor must be named. Such draft regulations will be subject to regulatory impact assessment by the Ministry of Justice and the Ministry of Economy and Finance, must receive an opinion from the Committee on Competition, and undergo anti-corruption review.

Before issuing such regulations, contracting authorities will be required to publish a notice on the public procurement portal announcing the intended direct contract. The notice must remain publicly available for at least three working days.

New rules for e-procurement and local suppliers

Offers posted in the public procurement electronic marketplace will be displayed for 60 days, up from the current 15, while the minimum delivery period for goods will be set at five days.

The decree also introduces local reverse auctions between budget-funded customers and domestic manufacturers. These auctions will be considered valid even if only one entrepreneur participates.

Companies that achieve a localization level of 30 percent or higher will be eligible for advance payments for supplied goods. The amount of the advance will depend on the degree of localization but may not exceed the supplier’s total asset value.

Public oversight and AI-based price control

All draft procurement documents will be published on the procurement portal for public discussion for at least two working days. The Committee on Competition will monitor comments and feedback and issue binding instructions to government bodies in case of identified violations.

Results of all public procurements will also be subject to mandatory disclosure on the portal, except in cases involving state secrets or commercial confidentiality.

From March 1, 2026, the procurement portal will launch an AI-based module to calculate average market prices for procured items. Contracting authorities will be required to determine the average price using this module before initiating procurement procedures.

If the difference between the starting price or contract price and the calculated average market price exceeds 10 percent or falls below 20 percent, the procurement will be classified as high risk. Such contracts will automatically trigger unscheduled inspections by state oversight bodies.

Procurements conducted through direct contracts must not exceed the average market price, except in cases allowed by law.