Let me answer all the questions everyone keeps asking about the Federal Contract System, now that the law on it has been finally adopted. What else is there to write about on April 1, if not public procurement? A reminder: FCS stands for the "Federal Contract System," and the law governing it will now regulate all government procurement—that is, those same 5 trillion rubles a year. Those who follow RosPil probably remember how we made a huge fuss opposing this very FCS. Back then, even the Higher School of Economics and the Ministry of Economic Development took offense and challenged me to a debate. The debate took place and was quite interesting and useful:
http://youtu.be/5Mvq9jIBfL0 After that, we called for broad public discussion of the FCS and a major campaign against its adoption. And when it became clear that the Russian government would "ram" the FCS through the State Duma (the lower house of parliament) no matter what, RosPil decided not to step aside, but instead prepared amendments to the bill aimed at greater transparency and fighting corruption. What followed were many months of fairly tedious wrangling in the State Duma over our amendments. It ate up a lot of the RosPil team’s time (and we remember that it’s you who pay for that time, and we appreciate it), but in the end that time was not wasted. Here is a brief overview of the most important things we managed to achieve, even if at times we had to fight tooth and nail for them: We got rid of the provision under which only those who had submitted a bid could file a complaint with oversight bodies. Officials loved this rule. In practice, it meant the near-total elimination of any public oversight and public anti-corruption campaigns. You spot an obviously corrupt procurement, but you cannot file a complaint about it, because you are not participating in the bidding. So the only people allowed to complain about fraud were those who were themselves part of the fraudulent scheme. Somebody is skimming money off the supply of children’s shoes to an orphanage, but only those interested in maintaining good "relations" with the orphanage management are allowed to file complaints. We managed to remove that restriction. Our proposal to allow public associations to go to court in defense of an indefinite group of persons was accepted. This is a major breakthrough. Previously, you could only file complaints with the Federal Antimonopoly Service (FAS); now you can go to court as well. Unfortunately, the people at the Ministry of Economic Development, whether out of malice or stupidity, botched the wording: they wrote "public associations" instead of "public organizations" (for example, a nonprofit foundation is not formally a "public association," and most anti-corruption groups are set up precisely as foundations), and "group of persons" instead of "an indefinite group of persons." The профильная commission in the State Duma didn’t understand any of this at all and simply repeated whatever the government said, so they did not support us. This will lead courts to interpret the provision differently. We’ll see what happens, but in any case the amendment looks fairly revolutionary. For large contracts, general contractors will be required to disclose information about subcontractors they bring in, if more than 10% of the order is subcontracted. This was our idea, it was accepted, and we consider it very important. For large contracts, contractors will be required to disclose their owners and management. This was also our idea, and there were huge arguments over it. It is obvious why: officials let their own companies "win" tenders, while their wives and children, who own those companies, hide behind offshore structures. Now the ultimate beneficial owners will have to be disclosed. We demanded that this data be made publicly available, but here the bureaucracy dug in its heels (they understand perfectly well how hard this would hit them) and agreed only to a rule requiring that such information be provided to the contracting authority. Still, better than nothing. The time frame for electronic auctions has been extended: 7 days used to be the standard period, but now 7 days applies only to procurements worth less than 3 million rubles, while the general period is 15 days. This will increase competition in bidding and make it easier to challenge unlawful procurement procedures. Conflict-of-interest provisions were included: if officials of the contracting authority are close relatives of the supplier’s owners or managers, the contract may be declared invalid by a court. We also proposed mandatory public disclosure of any conflict of interest, but unfortunately that did not pass. As usual, there was no shortage of outright deception and bait-and-switch. Whenever Minister Elvira Nabiullina, while lobbying for the FCS and responding to our criticism, spoke in public, she kept telling stories about how wonderfully the public would be able to oversee everything through the so-called "FCS Council." It was supposed to unite government bodies, business, and civil society in one grand anti-corruption and constructive effort. The idea was: no need to write angry posts—just come to the "FCS Council" and sort everything out there. "O*ur bill gives real powers to institutions of public oversight," Nabiullina said. * A big hello to Elvira Sakhipzadovna at the Central Bank, where she now works. There is, of course, no "FCS Council," just as we said all along. It was all a con, meant to calm down everyone shouting that "they’ll steal even more." As an alternative to that body, RosPil proposed the introduction of "contract inspectors"—individuals with specific powers to suspend unlawful procurements, the right to be present during the review of bids, and so on—but that idea was not supported either (what a surprise to all of us). To sum up: the FCS law came out crooked and clumsy, with built-in room for double interpretation and contradictory court practice, but through a joint effort we still managed to steer it away from the initial hell of a "presumption of officials’ good faith" and other such nonsense. Many thanks to everyone who helped us make noise, shout, and stop the government from quietly "sorting things out" with the FCS behind closed doors. Special thanks to the RosPil people who drafted the amendments and defended them, and to the few reasonable officials capable of switching off their usual "NOT ALLOWED" mode for a while and listening to sensible proposals. PS As I write this, I’m thinking: and yet all this Kremlin riffraff still has the nerve to screech that we have no "constructive ideas, positive agenda, or concrete proposals." We’re rewriting draft laws for them.