Public Procurement

 

On 20 June 2012 the State Duma of the Russian Federation adopted in the first reading Draft law No. 68702-6 “On the Federal Contract System in the Sphere of Public Procurement.”

The Draft law is aimed to replace the current legislation on public procurement, and in particular, Federal Law No. 94-FZ “On Placement of Orders for Delivery of Goods, Performance of Works and Rendering Services for State and Municipal Needs” of 21 July 2005.

The Draft law provides for the definition of the federal contract system and sets out methods to determine the supplier of the goods (works, services). In particular, the public procurement may be conducted by means of (i) a bid, (ii) an electronic auction (the Government establishes the list of the goods which may be procured in such form), (iii) from the single source, i.e. from the particular supplier without a tender (this method of public procurement may be used in exceptional cases envisaged by the Draft law).

The Draft law also envisages:

  1. the placement on the official web-site of, among other things, the register of the model contracts and the register of bank guarantees;
  2. institution of public control of public procurement;
  3. methods which a contractor may use to calculate the ceiling contract price;
  4. the requirements for the performance of the contract and circumstances when the parties may change or terminate the contract;
  5. the procedure for the appeal and pre-trial dispute resolution;
  6. the obligation of the bidder to justify his offered contract price if this price is 25 per cent or more lower than the ceiling contract price.

The provisions of the Draft law do not apply to the rendering of the services by the international financial institutions.

The provisions of the Draft Law will apply if adopted by the State Duma in three readings, approved by the Federation Council, signed by the President, and officially published.

For further information please contact Igor Ostapets or Irina Dmitrieva in the Moscow office of White & Case, tel + 7 495 787 3000 .

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