Act "On placement of orders on delivery of goods, completion of works, provision of services for the public and municipal needs"

In contrast to the previously existing system its major advantages are:
- spreading of a direct legislative regulation of procedures of placement of orders throughout all the levels of the budgetary system;
- limiting corruption risks by narrowing the sphere of application of non-competitive procedures (closed tenders, placement of an order with a sole supplier);
- introducing new transparent ways of placing the order (auction, procurement at a commodity exchange) and enhancing transparency of earlier applied methods (limiting the specific weight of subjective estimated criteria at tenders, transition towards placement of information on placement of orders in the Internet, among others).

Meanwhile, there still is room for improvement of the legislation in this area along the following avenues:

• One should consider appropriateness of introduction of special ways of placement of the order (two-stage competitions) on completion of complex R&D or technological works that enable the customer to specify the subject of the contract with account of alternative technological solutions put forward by participants in the competition.
  
• Transition to the three-year budget planning requires design of transparent procedures of adjustment of prices of long-term contracts with account to inflation.
  
• One should improve mechanisms of encouragement of customers to the thrift of budget funds in the course of procurements, including granting them the right to use all the amount saved while placing an order for specific goods or a fraction of that to procure not only an extra amount of these goods, but on other needs.
  
• One should by means of legislation regulate effects from recognition of the placement of an order null and void due to the government customer’s breaching the law, including provision of the possibility for a decent supplier to receive compensation for the costs in conjunction with execution of the contract he had incurred until the moment the placement of the order was recognized invalid.
  
• To avoid an ungrounded centralization of the order which may evoke breaks in supplying public institutions with products necessary for their operations or ignoring specific customers’ quality requirements, it should be further specified in the Act the assortment of goods, works and services under placement of an order on which the functions on the placement of the order may be mandated to duly authorized agencies of executive power (local self-governance).
  
• In order to reduce time costs on holding the procurement procedures it is appropriate to increase the upper marginal amount of the order, the placement of which is allowed by means of request of quotations..
  
• To avoid offences on the part of participants in placement of an order on completion of large-scale technologically sophisticated works, one should introduce, by means of legislation, minimum qualification requirements to entities that will complete them and provide for the need for presentation in the composition of application of the price structure of the public contract. While placing an order on construction, reconstruction, capital refurbishment of an object of capital construction, one should make it mandatory to request for participants record of completion of similar works. .
  
• To optimize ways of placement of an order with account of sectoral or regional peculiarities, it appears expedient to permit public and municipal customers, as long as items of the stock-list of the order, wherein the holding of an auction currently is mandatory, are concerned, to replace it with a tender with a sole criterion of assessment, that is, price.
  
• To avoid offences by participants of placement of the order tougher measures against unscrupulous suppliers should be developed.
  
• In order to ensure an efficient spending of public funds, one should extend the list of goods, works and services, placement of orders on delivery of which may be carried out by price per unit of a good, work, service.
  
• One should grant the customer with the right to scale back on the amount of collateral under the application of participation in an auction, should its size may substantially restrict competition in the course of the auction.
  
• In order to facilitate access to participation in tenders and competitions and reducing excessive paperwork one should provide for the possibility for accrediting suppliers (contractors, executors) under the public customer for the period of effect of an excerpt from the public register of legal entities (individual entrepreneurs). This would save them from the need to produce, over and over, the same documents that prove the participant’s conformity with requirements as per the law.
  

A. Zolotareva, Head of Legal Research