The State Duma will be taking up the law on the Federal Contract System this fall. No wonder—all the energy has gone into such “vital” laws for the country as cracking down on rallies, cracking down on NGOs, cracking down on libel, and so on.
But in any case, RosPil has done the promised work of “fine-tuning” the law on the Federal Contract System, which, generally speaking, we do not like in principle.
Let me remind you that at the end of June, the State Duma of the Russian Federation passed the bill in its first reading. The bill’s page on the State Duma website: http://asozd2.duma.gov.ru/main.nsf/%28SpravkaNew%29?OpenAgent&RN=68702-6&02
Our amendments, which we submitted back in the fall of last year (http://navalny.livejournal.com/651642.html), were partially taken into account. For example, as a result of our proposals, the calculation and justification of the initial (maximum) contract price were clarified; the customer’s ability to arbitrarily choose procurement methods and set supplier selection criteria was limited; and amendments were made to the provisions on contract performance security, among other things.
We have prepared an analysis of all RosPil amendments that were accepted and rejected in the form of a clear table with comments:
Full version of the table: https://docs.google.com/open?id=0B24DjQ62ulmsWE9QZGt6NjA0NWM
Compared with its original version, the text of the Federal Contract System bill was substantially revised, but not all of the changes improved it.
For example, the first version of the draft law provided for an advisory body—the Federal Contract System Council, which its authors heavily promoted as an effective tool of public oversight. When the Ministry of Economic Development, and Elvira Nabiullina personally, launched their hellish lobbying campaign in support of the Federal Contract System, the issue of public councils was presented as almost central. This, they said, was how they would establish anti-corruption measures and public oversight.
“Incidentally, the Ministry of Economic Development is placing its bets precisely on public oversight in its system. To that end, Deputy Minister of Economic Development Alexei Likhachev explained to journalists, ‘public councils will be created, with more than half of their members drawn from public organizations and vested with certain rights.’ The official said that the councils would have the right not only to request tender documents and issue recommendations, but also to send their representatives to tender commissions, so to speak, for oversight ‘on the ground.’” (Rossiyskaya Gazeta (official Russian government newspaper), http://www.rg.ru/2011/09/01/zakupki-site.html)
Now the provisions on the Federal Contract System Council have SUDDENLY evaporated from the text. RosPil has always said that all these public councils are rubbish, and as an alternative we proposed, for example, an institution of public inspectors—but they were not included in the bill submitted to the State Duma either.
The State Duma Committee on Economic Policy, Innovative Development, and Entrepreneurship is now accepting amendments to the draft law. And we have prepared them. Finalized them. Submitted them. We hope the deputies will introduce them. At the very least, Ilya Ponomaryov has promised to do so.
Briefly, the substance of the amendments:
the powers of public associations have been clarified and brought into line with existing law;
the range of customer organizations whose procurement of goods, works, and services must be conducted under the Federal Contract System law has been clarified and aligned with both the law and actual practice;
provisions have been introduced on the transparency of the justification for the procurement object, the price of the goods (works, services), and the procurement method, as well as the possibility of challenging them;
an obligation to declare the presence or absence of a conflict of interest has been established for the customer, its officials, and the person submitting the application;
provisions have been introduced on the mandatory disclosure of information about subcontractors engaged by organizations that win procurement procedures for contracts worth more than 20 million rubles, as well as on the disclosure of the ultimate owners (beneficiaries) of winning organizations in procurement procedures for contracts worth more than 30 million rubles;
- the provision requiring the customer to automatically reject a bid in the field of R&D if the proposed price is 25% or more below the initial price has been removed;
a different procedure for expedited unilateral contract termination has been proposed: an administrative procedure for terminating the contract by an authorized body;
the procedure and rules for scheduled and unscheduled inspections by control and supervisory bodies have been clarified: the powers of those bodies, requirements for disclosing information about inspections carried out, orders issued and their enforcement, and the imposition of administrative liability;
the provision allowing complaints about unlawful actions or inaction by the customer and its officials has been expanded, thereby removing the “filter” that had blocked the filing of well-founded complaints.
That is not the full list; you can review all of our amendments at the following link (13 pages): https://docs.google.com/open?id=0B24DjQ62ulmsbkZOSVZnQ1lZZ1U
I have written about this many times, but I will repeat it once again: the current Public Procurement Law No. 94-FZ needs to be changed—and changed substantially—so that officials and businesses can actually work under it, and society can exercise at least some degree of oversight.
But based on our analysis of the Federal Contract System bill, we can say that if it is passed in the form in which it currently sits in the State Duma, corruption in public procurement will definitely not decrease.
How this bill would work in its current form is not fully clear to anyone, because for it to function properly, a whole host of additional regulations and provisions still need to be drafted and adopted, and a body of practice for applying and interpreting its articles needs to be developed. People have been working under Public Procurement Law No. 94-FZ since 2005, and even so, a huge number of disputed issues still arise. The new law, by contrast, will create complete confusion and, in the fullest sense, give those applying it—officials—a free hand for total arbitrariness and theft.
In this situation, our amendments are the bare minimum that must be adopted to ensure that the annual spending of 5 trillion rubles in budget funds on public procurement is effective and at least somewhat subject to oversight.
Acknowledgments: Many thanks to everyone at RosPil who worked on these amendments, and especially to Lyubov Sobol, who did most of the work.