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Shadow purchases of state and municipal companies

Artur Kurbanov talks about the situation with procurement of state and municipal companies in Russia and gives advice to entrepreneurs on how to overcome difficulties on the way to effective participation in procurement
Unlike other developed countries, where public procurement is already a centuries-old tradition with established rules and regulations, modern Russia is still in the process of developing state and corporate procurement. And, like everything new, we inevitably go through various difficulties: from shortcomings in the legislation-to customers ‘ distrust of their viability, and participants-to the fact that the tender can be honestly won.

There are different levels of customers — municipal, regional, and state. And for each of these levels, there are specific problems that cannot be overcome, including due to the peculiarities of the national mentality and the system of resource allocation that has become familiar for decades in the planned economy.

First of all, the largest number of violations in the field of procurement occurs among corporate and regulated customers who conduct procurement activities in accordance with the requirements of Federal law No. 223-FZ “on purchases of goods, works, and services by certain types of legal entities”, since the level of control over such purchases today is not comparable to the control over compliance with the law on the contract system. But for some reason, many people forget, do not know or prefer not to know that the amount of money passing through corporate purchases is several times higher than the volume of purchases under law No. 44-FZ.

We are often engaged as auditors to check the procurement activities of an organization for compliance with the provisions of the law, and in 99% of cases, we detect violations of varying degrees of severity in terms of both possible consequences for the customer himself, and restrictions on access to procurement for potential participants.

In some cases, and this is the most harmless and easily solved, errors are due to insufficient qualification of employees or the fact that the functions of a procurement specialist have to be combined by a lawyer or accountant working in the organization.

But often the detected violations hide completely different, more serious, prerequisites.

Regarding, for example, customers at the municipal level, it is possible to identify a stable trend in the form of an elementary reluctance to advertise their purchases. And at the same time, these customers are almost nothing to frighten. They would rather pay fines than present their purchases to the public. What can explain this position of the heads of many organizations that are obliged to publish full information about their procurement activities in the public domain?

We think that the answer to this question is not so difficult. For non-compliance with the law in this case, there is a completely understandable and logical desire not to give their “blood” to some unknown suppliers, when they have” their ” firms, through which the finances flow safely into the pockets of both the customers themselves and their close contractors. At the same time, these customers do not care that the money spent in this way is either earned on the use of state or municipal property, or on tariffs paid by ordinary citizens. And many of these customers seriously believe that if their organization exists in the form of an LLC or a joint-stock company, the money they receive is only their property, which means that they have every right not to report to anyone.

The situation for such organizations is easily tracked in a Single information system: some customers do not update the procurement Regulations for several years, do not post any purchase plans or reports under the pretext that they do not buy almost anything, except for any small items in the form of stationery or gasoline.

And even for us, as specialists in this field, it can be very difficult to convince them that without an up – to-date provision on procurement, they should work under the law on the contract system, and if they do not work, then this is a completely different consequence than violations of law 223-FZ. In addition, even after the placement of the procurement Regulations for all customers, regardless of the volume of purchases, there are General rules and responsibilities that should be performed.

And penny purchases, as it turns out after a detailed analysis of the situation, are nothing more than a figment of the imagination of the customers themselves: with revenue of hundreds of millions of rubles and not very large expenditures on wages and taxes, purchases can not be penny.

And there is a fair question: where is the money in this case?

And money is safely spent directly, bypassing all laws and a Single information system. Some even openly say: let’s just pay the fines for a few years in advance, and no one will touch us anymore. Indeed, for an organization with multi-million revenue, it is not worth paying a fine of 30 thousand rubles.

But, of course, not all customers can afford the luxury of not conducting anything and not placing it in the public domain. Basically, such liberties are available to customers of the municipal level, where there is no excessive control by the same Executive committees, and for the FAS they are just small fish: fined once and forgotten.

Larger customers, who are under the watchful eye of regional authorities, have to be more conscientious about their responsibilities for the open distribution of their financial resources.

But being open doesn’t always mean being honest. Oddly enough, this is allowed by the law itself, which is currently drawn up in such a way that gives a huge number of opportunities for maneuver. And many customers are happy to use the loopholes provided to them. As you know, what is not prohibited is allowed.

And almost everything is allowed. As a result, so-called “shivs” appear in the procurement documentation, that is, conditions that are designed for a specific supplier and prevent other companies from winning the tender. When conducting such purchases, technical specifications and contracts are prepared directly by the contractor with whom it is planned to conclude a contract based on the results of the purchase. After the documentation is prepared, the customer first agrees with the “own” supplier before placing it in the public domain.

To ensure a guaranteed result in the documentation there are such conditions, as the term of payment of work within a year from the moment of their execution the period of execution of works that require at least a month, two days, a staff from the contractor the most common legal services in the five doctors. The instructions for filling out the application are as cumbersome and confusing as possible, so that in any case mistakes are made that will allow you to reject the “extra” application.

If there are such tricks in the documentation, then almost always the price of such a purchase is not comparable with market prices. What can actually be done for 50 thousand is purchased at a price ten times more expensive. Of course, what decent organization that understands perfectly well that it is simply unrealistic to perform services properly in such a short period of time, and then wait for payment for a year, will risk participating in such a purchase?

And it is purchased at such fabulous prices, as a rule, air: consulting, marketing, legal services, development of various programs. That is, something that does not have a real material base, and no one will ever check what was actually done (or not done?) for such money.

This happens because the law does not set any limits or obligations to conduct purchases at average market prices. For example, basic legal services can’t really cost a hundred million rubles. And this is despite the fact that they are purchased not through a competitive procedure, but from a single supplier.

Limits on purchases from a single supplier are also not set for today.

In our practice, there was a case when the Republic of Mordovia conducted a purchase in paper form. We sent a request, when it was received, the customer immediately canceled the purchase, and then a couple of weeks later posted it again with the same documents. Apparently, with the expectation that this time no one from the outside will show up.

Or more recently, we have monitored purchases in one of the cities of the Republic of Sakha (Yakutia), sent information to the management that most customers have violations of the law. But we received a response that the city administration is carefully monitoring and they do not have any violations of procurement activities and can not be. We have provided a list of all organizations that have violations. But there was no official response.

So it turns out that freedom of competition exists today both de jure and de facto only on paper.

For example, what kind of competition can we talk about if the purchase is carried out after the fact, that is, after the delivery of the goods or performance of works? And because this is absurd at first glance, the case is not uncommon.

Unfortunately, the modern procurement system in our country works in this way. Of course, there are exceptions: there are purchases that do not have any pitfalls. But this applies to situations where the customer does not have a “personal” performer. This is rare, but it still happens.

As a result of all the above, the age-old Russian question arises: what to do?

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