"Recurring" procurement participants good and bad practices

1 august 2019

Are “recurring" procurement participants a sign of an unfair procedure? Should this practice be prevented? What can be done to reduce conspiracy at procurement procedures? The answers to these questions were sought by the participants of the round table "Mechanisms for Identifying "Recurring" Procurement Participants under 223-FZ, 44-FZ", which was held in the Analytical Center.

Opening the round table meeting Pavel Tikhomirov, Head of the Corporate Reform and Procurement Division, Analytical Center, noted that there is no such a definition as a "recurring" procurement participant. This concept is used by control and law enforcement authorities when accusing customers of unfair behavior when concluding contracts with the same supplier. “It is believed that this practice leads to corruption risks and reduces savings during procurements,” he explained.

However, experts noted that in some cases participation of the same supplier in several procurement procedures may have reasonable grounds. Often they are related to the monopolistic character of the market, peculiarities of supply and territorial features. Health care, road construction and real estate sectors were recognized by the discussion participants as the most "risky". Serious funding is allocated to these sectors, including within the framework of national projects, but it is there that the presence of a “recurring” supplier can be justified. For example, when it comes to medicines or unique R&D results. In addition, the customer may be interested in working with a trusted supplier who provides the optimal conditions.

Therefore, in the opinion of the expert community, it is necessary to consider the problem comprehensively and pay attention to how the procurement was organized and how the contract terms were implemented. "Conspiracy at procurement procedures often implies the customer", said Denis Stukanov, Head of the Juridical Department in State Defence Procurement at the Federal Antimonopoly Service of the Russian Federation. - "Especially if it is a typical product and a highly competitive market. It is necessary to estimate the number of rejected bids. If 22 bids were rejected and 2 bids were accepted, perhaps, this was unlawful.”

Pavel Tikhomirov added that at the moment the Analytical Center is developing a rating in order to identify a "recurring" participant. “This mechanism is necessary for the customer to evaluate its risks and prevent situations when it can become subject to inspection,” Tikhomirov explained. “As a result, the customer will be able to save money and prevent violations.”