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Government procurement contract system briefing held by Deputy Minister E.I. Elin

03.09.13

September 3, 2013, the Ministry of Economic Development of the Russian Federation held the briefing of E.I. Elin, Deputy Minister, devoted to burning issues of government orders and shaping the contract system of procurement of goods, work and services to meet federal and municipal needs.

For the reference:

1. Current situation in procurement

To the extent of GDP of the Russian Federation (2012), federal, municipal procurement and that of entities of the state sector of economy and natural monopolies equals to 24.4%, including procurement for federal needs – 11.2%, procurement for municipal needs – 2%, procurement for certain kinds of legal entities – 11.2%.

According to Rosstat, in 2012:

    total 25,588,145 contracts were concluded, including:

        for federal needs – 11,853,114

        for municipal needs – 13,735,031

    total value of concluded contracts, thousand rubles – 8,339,935,471, including:

        for federal needs – 7,168,262,822

        for municipal needs – 1,171,672,649

    total value of sole source awards, thousand rubles – 3,140,024,476 (38 % of the total value of concluded contracts).

The biggest amount of funds (41.6 %) spent on federal and municipal needs are allocated on construction, reconstruction, major repair of infrastructure facilities, highway construction.

Procurement amount of entities of the state sector of economy (state-owned companies, state-owned corporations, business entities with federal or municipal participation interest exceeding 50%), as well as natural monopoly entities is assessed as equal to 7 trillion rubles.

Number of customers than procure for federal and municipal needs exceeds 215 thousand. Entities of the state sector and other business entities, whose procurement operations are regulated by 223-FZ are over 21 thousand.

2. Changes of powers of federal procurement executive authorities

Unlike the existing procurement legislation of the Russian Federation, the scope of regulation of a new Federal Law No 44-FZ covers a considerably wider range of relations, including procurement planning, contract performance, termination and amendments, procurement  monitoring, control and audit.

Therefore, the scope of powers exercised by federal executive authorities provided for by Federal Law No 44-FZ is also considerably extended, as provided for, inter alia, by Resolution of the Government of the Russian Federation dated August 26, 2013 No 728.

a) Extending powers of the Ministry of Economic Development of the Russian Federation

Resolution No 728 defines the Ministry of Economic Development of the Russian Federation as the federal executive authority in charge of procurement contracting regulation.

This power implies coordinating role of the Ministry while developing and exercising state procurement policy.

Thus, the Ministry of Economic Development of the Russian Federation will develop federal policy of procurement planning, rating and substantiation, run procurement monitoring, approve methods of determining starting (maximum) contract value, form and maintain directory of goods, work, services for federal and municipal needs, approve typical regulations (procedure) of customer’s contract service, establish consistent requirements to operation of electronic trading platforms selected for electronic bids, and exercise other powers.

b) Powers of control agencies, new control agencies

Powers of the Federal Antimonopoly Service are extended; it will control the entire procurement sphere, starting from planning, except for issues referred to the competence of other control agencies (currently, FAS Russia controls only procedures of determining suppliers).

Similar control powers are vested to the Federal Service for Defense Contracts in what refers to government defense orders.

It is for the first time that Federal Law No 44-FZ defines procurement control powers of internal financial control bodies (the Federal Financial and Budgetary Supervisory Service and similar bodies of constituent entities of the Russian Federation and municipalities).

These bodies will control, inter alia, compliance with requirements to procurement rationale, rating, planning; determining starting (maximum) contract value, price of sole source contract.

Since January 1, 2016, the control agency will be the Treasury of Russia that will control information published in the procurement unified information system.

3. Exercising Federal Law No 44-FZ

The law provides for stepwise introduction of certain law provisions to enable adaptation of federal and municipal procurement system to the innovations.

Thus, it will take three years to introduce Federal Law No 44-FZ in what refers to development and adoption of subordinate acts in compliance with the action plan approved by the Chairman of the Government of the Russian Federation.

To launch the contract system since January 1, 2014, it is necessary to adopt 37 acts of the Government of the Russian Federation, and 6 departmental regulatory acts this year.

Within the next two months, the Ministry of Economic Development of the Russian Federation will develop a number of conceptually important drafts of legal acts to be submitted to the Government of the Russian Federation:

    of establishing the procedure of bid evaluation, including that of limit values of significance of each criterion;

    of establishing requirements to the procedure of developing, approving and maintaining procurement plans to meet the needs of the entities of the Russian Federation and municipal needs, as well as requirements to the procurement plan form;

    of establishing requirements to the procedure of developing, approving and maintaining procurement schedules to meet the needs of the entities of the Russian Federation and municipal needs, as well as requirements to the procurement schedule form;

    of establishing the list of goods, work, services that are to be procured through electronic auctions.

Besides, the order of the Ministry of Economic Development of the Russian Federation is supposed to approve guidelines of applying methods of calculating starting (maximum) contract value, price of sole source contract.

One of the most important factors of shaping the contracting system will be deploying the procurement unified information system.

The unified information system is designed to automate customers’ operations of planning and procurement, to ensure automated control over all procurement stages, procurement monitoring as broken by all aspects (customers, constituent entities of the Russian Federation, range of purchased goods, work, services, contract values, applicable preferences, etc.), as well as to maintain electronic document flow between the customer and the supplier.

It is offered to commission this system in Q4 2015.

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