Diagnostic Report PRINT E-mail
The Diagnostic Report has been prepared under the EBRD UNCITRAL Initiative started in 2011 for the purpose of promoting public procurement reform in CIS countries and Mongolia. Essentially, the Report presents findings and recommendations based of the legal analysis of the national public procurement legal and institutional framework in Azerbaijan, completed on the basis of the legislation in force in May 2012

The Diagnostic Report followed up on the 2010 evaluation by examining in more detail the availability of procurement methods and communication and notification standards. All in all, the Report assesses the current public procurement regulatory framework in Azerbaijan against a benchmark of key standards and best practices as expressed in the recently adopted 2011 UNCITRAL Model Law on Public Procurement and its background material.

There is in the following an outline of findings and conclusions concerning some of the key areas covered by the Model Law:

  • As regards the fundamental requirements of the Model Law regarding accessibility of legislation and case-law, there is regular publication of legislation whereas accessibility of case-law is lacking, even when it comes to cases of principal importance. Furthermore, the PPL is only in a fairly general manner dealing with conflict of interest and no concrete preventive measures are prescribed.

  • As regards the Model Law requirements to tender/solicitation documents the PPL requires the various technical specifications and qualification/evaluation criteria to be available at the launch of the tender. However, the PPL is unlike the Model Law not fulfilling more specific requirements of the Model Law aimed at promoting competition. These are requirements concerning relevance of technical specifications and the requirement that evaluation criteria should be objective and that it should be made clear in advance in case of application of any preferential arrangements.

  • The Model Law requires that the launch as well as other phases of the procurement process, not least the award of the contract, should be publicised using a specific official location, be it in a daily gazette or a web portal. The PPL does not establish any such official location and a comprehensive overview of the procurement market is therefore made difficult. This is especially the case when in addition the PPL does not guarantee that tender awards are not publicised in the same media as the notice concerning the launch of the tender and that the PPL does not include the option of publishing notices on planned tenders.

  • As regards procurement methods the PPL has become reasonably in line with the Model Law making it possible to use different procurement methods with or without negotiation and under certain conditions even single-source procurement. However, the PPL lacks for example the clarity as regards the scope for using negotiations and other dialogue that is required for ensuring transparent procedures. In addition, the PPL does not include the possibility for using framework agreements or reverse electronic auctions and the report recommends that it be examined whether there is sufficient environment in terms of technology and organisational structures for reforms on these fronts.

  • When it comes to the detailed procedures for each procurement method concerning for example time limits, opening and evaluation of tenders for the purpose of ensuring equal treatment, the PPL should be improved on several points along the lines of the Model Law. Notable points in this respect are the need for more detailed requirements concerning documentation and proportionality to ensure proper evaluation of qualifications of tenderers, protection of the confidentiality of tenders as well as precise requirements concerning objectivity and verifiability of evaluation criteria. One important basic shortcoming is the quite wide possibility in PPL for setting fees to be charged for tender documents with the risk of actual limitation of access to tender procedures that this entails.

  • The Model Law requires that not just the launch of the tender procedure but also other decisions taken during the process, including amendments of tender documents are publicised or otherwise communicated. There are in addition requirements to protect transparency and integrity of communication. On these points, the PPL was considered insufficient, for example because it does not require advance publication of intention to use non-open procedures and because no concrete requirements have been established to safeguard integrity and confidentiality of information from tenderers. In this respect the reports also recommends that the possibilities for allowing electronic communication means be examined.

  • When it comes to review procedures the Model Law puts emphasis on allowing complaints concerning any decision of contracting entities and on ensuring essential procedural rights for those wishing to challenge such decisions. The PPL falls short of these requirements by limiting complaints to certain decisions and rules ensuring procedural rights are not sufficiently specific to have any effect. Furthermore, the PPL does not go as far as the Model Law in creating effective possibility for challenge by means of a so-called standstill period between the identification of the winning tender and the entering into force of the contract. Finally, the assessment recommends that it be considered to establish a dedicated and independent review body. The Model Law requires no specific institutional setups to ensure independence but the approach has frequently been used in international practice.

  • The Model Law is finally setting up fairly detailed requirements to the recording of decisions and actions continuously throughout the procurement process. Such records will need to be available to the parties involved in the procurement in question and certain parts of the information recorded will also need to be made publicly available. The obligation to record thus essentially provides a basis for effective monitoring of procurement and ensures the position of parties in review procedures. Ultimately, this also increases accountability of procuring entities. The PPL falls short of the essential requirement to keep up-to-date records as well as the obligation as regards public access.

The Report made following recommendations:

  • Provide unrestricted and effective public access to review decisions and procurement court cases and establish an official location for publication of all information on public procurement.

  • Examine the various impacts on competition and local markets of introducing framework agreements, modern e-procurement tools and limiting the use of preferential arrangements.

  • Review of procedural rules, covering especially requirements to technical descriptions, qualification and evaluation criteria and the extent of dialogue allowed.

  • Introduce more detailed requirements for protection of integrity and confidentiality of information during the procurement process

  • Reform of review procedures, including for example fundamental procedural rights for the challenging party and specific requirements concerning reasoning and other content of review decisions.

  • Require procuring entities to keep an up-to-date record of key procurement decisions and ensure public access to basic information about procurement procedures and selected suppliers and contractors.

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