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13 February 2018 Amendments to Procurement Legislation Signed

Legal Update No. 631

Goltsblat BLP advises that, on 31 December 2017, President Putin signed a number of laws changing substantially Federal Law No. 44-FZ on Contractual Systems  and Federal Law No. 223-FZ on Procurement by Certain Types of Legal Entities.

Key Amendments to the Contractual Systems Law:

The list of tenders to be processed in electronic form has been extended. In addition to electronic auctions, other types of tenders may now be processed in electronic form: competitions (including public, limited and two-phased), requests for quotations and requests for proposals. More detailed regulation has also been introduced for closed mechanisms for selecting suppliers.

The amendments identify specific features of electronic tender processes, such as electronic submission, including of applications consisting of several parts. Such documents must be signed with a qualified electronic signature.

The tender security rules have also been revised. The procuring entity is now obliged to set a tender security requirement only if the maximum starting price of the contract exceeds RUB 5 m. According to the new rules, the money for tender security is not to be transferred to the account of an electronic trading platform operator but to a special account of a participant. The list of approved banks in which participants may open such special accounts or receive bank guarantees is to be issued by the Russian Government. Operators of electronic trading platforms are to enter into cooperation agreements with such banks.

Key Amendments to the Law on Procurement:

There have also been changes to the relevant procurement procedures according to the Law on Procurement. Procurement policies must now provide for competitive and non-competitive procedures. Electronic forms of procurement now prevail. Purchasing from small and medium-sized businesses is now to be processed in electronic form only, as must all competitive procurements, unless the procurement policy allows otherwise. Cases when closed procurement is permitted are listed. In addition, the amendments establish requirements on purchasing from a single supplier.

The rules for filing complaints against actions by procuring entities, procurement commissions and electronic trading platform operators have been substantially changed. First, the list of grounds for filing complaints has been dramatically revised. It now includes not only formal shortcomings in informational support for a procurement but also the following legal infringements:

  • the procurement does not meet the requirements of Federal Law 223-FZ or the procurement policy; and
  • the procuring entity applies criteria not set in the competitive procurement documents to the participants.

Second, the amendments specify that complaints against procurement documents must be made before the last application date, so the competition authority may only consider complaints filed by non-participants if they are filed by this deadline and, third, it may do so only within the scope of the subject of a complaint.

The above amendments come into effect in stages. While some of them are already effective, the vast majority will come into force on 1 July 2018. Furthermore, some of the amendments to the Contractual Systems Law will only become effective next year.

Given how extensive the changes are, we have highlighted only the most crucial. Should you have any questions concerning these amendments, please do not hesitate to contact us.

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