Summary of the Diagnostic Report on Russia
This legal and institutional framework is in the Report assessed against a benchmark of key standards and best practices as they are expressed in the recently adopted 2011 UNCITRAL Model Law on Public Procurement and its background material.
The Model Law is aimed at providing guidance globally and a main objective is to promote transparency in public procurement activities. It includes the procurement process as such and makes available a number of different tender procedures suitable for various deliverables. It includes in this respect the basic principles of equal treatment and transparency and sets on this basis a sufficient level of operational detail for each procedure. It is otherwise prescribing quite detailed requirements concerning means of communication, including electronic communication as well as for the recording of procurement procedures especially for the purpose of facilitating review of such procedures.
The assessment was done in co-operation between local Russian experts and international experts and was based on a common diagnostic tool which covers each phase of the procurement process starting with the determination of scope and terms of procurement and ending with requirements concerning recording of procurement decisions, which in fact apply throughout the process.
This approach – combining legal diagnostic and a review conducted locally and regionally - has been adopted in order to validate locally collected data and ensure the comparability and consistency of the scoring exercise across the region covered by the Initiative.
There is in the following an outline of findings and conclusions concerning some of the key areas covered by the Model Law:
The Report did on the basis of these various findings make a number of recommendations summarized in a Reform Agenda including not merely various legislative initiatives but also institutional and e-procurement reform. The main points were identified as especially the following:
- As regards the fundamental requirements of the Model Law regarding accessibility of legislation and case-law, it is envisaged to consolidate further existing e-based information systems to include all procurement relevant information, including legislation and case-law, under the Uniform Information System, which is an official web portal with public free access. The draft law proposes an institutional structure that does appear overly complex and the distribution of review and supervisory functions is unclear and overlapping.
- As regards the Model Law requirements to tender/solicitation documents, the draft law requires the various technical specifications and qualification/evaluation criteria to be available at the launch of the tender. However, the draft law is compared to the Model Law only requiring relatively limited publication of procurement notices and is only in limited cases envisaging foreign language versions of tender documents.
- 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. On this front, the draft law covers quite amply the various required publications, which will be made on the official web portal.
- As regards procurement methods the draft law includes in accordance with the Model Law a selection of procurement methods with and without negotiation and establishes sufficiently detailed procedural rules and conditions for applying the various procedures, including thresholds. On these points, the draft law has a number of shortcomings, such as lack of any ban on artificial splitting of contracts , the possibility for limiting tenders to bidders included as prequalified on closed lists and too wide a scope for using single source procurement. Last but not least, the draft law includes rules on reverse electronic auctions which differ significantly from the Model Law notably by prescribing such auctions as mandatory for certain procurements.
- 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 draft law should be improved on various points along the lines of the Model Law. Notable points in this respect are the need for ensuring protection of confidential, defining more precisely prequalification requirements concerning business reputation and introducing explicit objectivity requirements for evaluation criteria. It is in addition a practical problem that the reverse electronic auction procedures have been made excessively complicated.
- 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 draft law is broadly in line, although the publication on the official web portal cannot always replace direct notification of the bidder, for example in cases of rejection of bids. Furthermore, there is a need to establish coherence between the draft law and existing rules on for example e-signatures in order for electronic communication to be accessible for everyone.
- 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 draft law gives broad access to challenge all decisions and allows such access for all participants in the procurement as well as certain public organisations. There is in addition various basic procedural rights established and the decisions of the review body can be appealed to the courts. However, the draft law includes no requirements to the content of the decisions of the review body, including notably the justification for such decisions. Furthermore, the draft law requires considerable amounts of information on bidders to be publicly accessible in connection with review decisions. Such broad access conflicts with the justifiable interests of bidders having confidential information protected and may deter from using the review procedures.
- 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 draft law complies with many of these requirements and the web-portal includes facilities for efficient recording and for access to such records. As it is also pointed out in connection with review procedures, it is however a significant shortcoming that there is no protection of confidentiality of information from bidders, including notably commercial secrets.
- Adopt institutional structures that specifies particular entities responsible for audit, supervision and complaints handling, and clearly distinguishes their functions
- Revision of mainly procedural rules concerning for example electronic communication, direct notification of bidders and the objectivity of qualification and evaluation criteria.
- Revise and simplify the procedure for electronic reverse auction
- Establish precise requirements concerning the contents of complaint review decisions, including the reasons for such decision.
- Revise the degree of access to procurement information to ensure a balance in relation to the need for protection of the confidentiality of notably commercial secrets. Ensure reasonable access to the information concerning complaints and review outcomes.
On this basis the Report formulated an Action Plan to facilitate the planning of the implementation of the Reform Agenda. For each of the recommendations, an outline of specific steps required is provided. With the objectives and orientation set in this manner, it will be possible on this basis and as part of the detailed planning of individual projects to elaborate more detailed descriptions of the required actions, divided into phases and included in a comprehensive time plan for the reform process.