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Home / Issues / № 3, 2017

Economics

GUARANTEE MECHANISMS FOR CONCLUDING PUBLIC PROCUREMENT CONTRACTS IN THE CONTEXT OF INTEGRATION OF THE EEU COUNTRIES
Iskakova Z.D., Kurmanalina A.K.
Public procurement in its influence on the economy are complex. Through its functions, the public procurement system not only solves the task of providing public needs, but also stands as one of the fundamental institutions of state regulation, as a crucial instrument of economic policy of the state and especially this mechanism is important in terms of integration of the EEU countries.

In this connection, directions of improving the regulatory system, reducing administrative barriers to more effective development of the economies of the Union, the development of a common legal framework on key issues of the public procurement system and creation of conditions for the start of the harmonization of national legislations of member States on the activities handed down from the national to the supranational level, determine the main purpose of the study and put forward the tasks in improvement of mechanisms of guarantees when entering into public procurement contracts.

Focusing on the relevance of the problem in General it can be noted that the agreement on government procurement concluded in the framework of the Single economic space between Kazakhstan, Belarus and the Russian Federation, ratified by the Law of the Republic of Kazakhstan from July 8, 2011 overall, today is one of the main external factors influencing the development of the public procurement system.

The agreement provided for the introduction of national treatment for all States Parties before 1 January 2014. In order to harmonize legislation within the framework of the common Economic Space Law of the Republic of Kazakhstan dated July 8, 2011 №457 ratified the Agreement between the governments of the Republic of Kazakhstan, the Republic of Belarus and the Russian Federation on public procurement. According to article 17 of the Agreement, the second stage for the Republic of Kazakhstan was the modification of the legislation of the Republic of Kazakhstan, aimed at bringing legislation in compliance with the Agreement and implementation of information systems ensuring the process of procurement in electronic format.

In this regard, from July 1, 2012 was enacted the norm about obligatory carrying out of tenders and auctions through electronic public procurement, with the exception of contests in a special and special procedure according to article 41, 42 of the Law of the Republic of Kazakhstan "On public procurement". Nevertheless, despite significant achievements in the field of electronic public procurement has specific weaknesses that are identified in the publications.

From 1 January 2014, Kazakhstan businessmen had an opportunity on a par with businessmen of the countries of an Agreement to participate in the procurement of Russia and Belarus. And this is an important factor to promote competition in our country. At the same time the corresponding procurement and the formation of reliable results could not be influenced by such factors as: the lack of users knowledge of web portal; ignorance of norms of the legislation of the Republic of Kazakhstan on public procurement; guidelines on conducting procurement in an electronic format placed on the portal of public procurement.  Accordingly, these factors lead to violations of the legislation of the Republic of Kazakhstan in the field of public procurement, the distortion generated on the portal of public procurement reporting, as well as the expression of dissatisfaction of users towards the portal of public procurement.

From 1 January 2015, the number of sectors defined by the States of the Eurasian economic Union began to operate a single services market, in which providers are given the maximum level of freedom.

Briefly highlighting the events of note that in the past few years Kazakhstan has implemented reforms in the area of improving the public procurement system, which opens up significant prospects for the country in terms of compliance with international standards and EU standards, especially in e-procurement. The EU project "Improvement of competitiveness and system of public procurement in Kazakhstan" aimed at support of these efforts, in the long run will also contribute to the growth of industrial competitiveness and economic development.

Events of this intent focus on three main components:

- Modernization of the regulatory framework and secondary legislation governing state procurement in line with EU norms and international standard;

- Enhancing the role and capacity of institutions in the system of public procurement, including monitoring, complaints, the use of technology and advanced training;

- The improved practical implementation of legal norms and increased awareness of the importance of public procurement as a tool for economic growth.

2014 potential suppliers of the three countries participants of the Customs Union had the opportunity to participate in public procurements of the Russian Federation, Belarus and Kazakhstan.

Public procurement in Kazakhstan in 2013 translated into a format of electronic trading. Electronic system of state procurement in Kazakhstan would be willing to work in the Customs Union, to work in cross-country mode, what spoke positively engage foreign consultants.

In addition, the need for the development of the bill due to the alignment of national legislation with the Treaty on the Eurasian economic Union, signed on 29 may 2014 by the Heads of the Republic of Kazakhstan, the Russian Federation and the Republic of Belarus. You can select a block of questions and problems the solution of which will enable the development of public procurement system in cross-country relations in the sphere of trade and supply.

- the complexity of search on the Web portal of public procurement by the users of the published announcements of public procurement and problems when working with the portal, which paralyzes the work of both the private sector and public bodies due to the overload of the database due to the large number of concurrent users.  As a recommendation we can say about the improvement and acceleration of the retrieval system with the ability to sort by specified criteria, as well as the extension of the search engine.

-  the lack of qualified personnel in the sphere of public procurement, lack of basic skills with computers. The recommendation is directed to conduct training seminars on the organization and conduct of public procurement, the introduction of a separate specialty for training of professionals in public procurement.

- still not fully resolved the issues of corruption, lack of transparency of the organizers of public procurement, the "immorality" of government officials, despite the existing achievements in this direction. It is therefore recommended that further strengthening of anti-corruption legislation, control over the actual availability of purchased goods, services, works. 

-   the lack of control over the preparation of the technical specifications that served as the wide dissemination of facts "snapping" of the technical specifications for a particular vendor. Requires improving the legislative framework and the strengthening of controls over the preparation of the technical specification to tender documentation.

In the organization of public procurement, along with the indicated observations, particular attention should be drawn to the quality of public procurement. Quality issue caused by the fact that the Contracting authority constantly faces a choice that is better to buy a high - quality, cost-efficient thing, but more expensive, or buy something cheaper. Economical and cheap are two different things. Government buyers need to understand the difference between simple and complex procurement, when it is necessary to involve experts. To be able to assess whether a particular provider has the necessary qualifications, capacity and quota the trust of the consumer or not.

You can also talk about the institutional level of public procurement in Kazakhstan. Today there is no specialized body of public procurement regulation. Key functions of state regulation in the public procurement sector is distributed between the Government, the Department of public procurement methodology Ministry of Finance (the authorized body), and bodies performing control functions (Committee on financial control under the Ministry of Finance, now - "state revenue" and the accounts Committee for control over execution of the Republican budget).

The government of Kazakhstan implements the General feature of public policy in the public procurement sector. His powers include the determination of the General principles of the state policy in this sector, adoption of the rules of public procurement and electronic procurement as well as rules of training of specialists in public procurement.

The Department of public procurement methodology Ministry of Finance (DMGS) is the competent authority in the public procurement sector. It includes two departments - the Department of methodology and procurement Department of coordination of public procurement.

The main functions are DMGS:

  • development of strategic political documents in the public procurement sector, including in the sphere of international cooperation - the function of determining policy;
  • ensure coordination - operating function;
  • providing of methodological recommendations in the public procurement sector - regulatory function;
  • development and adoption of legal acts for the application of PPL - regulatory function;
  • maintenance of various registers (including "black list" of vendors/contractors) in accordance with PPL - operating function;
  • conduct analytical work in the sector of public procurement - operating function;
  • exercise of certain powers in the field of control and monitoring and control functions.

PPL stipulates the exceptions to the national procurement rules for projects financed by international organizations, is a member of Kazakhstan as well as projects funded by grant funds of international organizations.

Pre-bid stage: ZGZ Kazakhstan contains some provisions regarding the procedures for pre-bid stage of the procurement process.

In public procurement to goods originating from foreign States, works, services, respectively, performed, provided by foreign potential suppliers, national treatment applied in the cases and on the conditions stipulated by the international treaties ratified by the Republic of Kazakhstan.

The government of the Republic of Kazakhstan may establish, in exceptional cases, exemptions from the national regime for a period of not more than two years. The procedure for establishing exemptions from the national regime is determined by the Government of the Republic of Kazakhstan.

Control over observance of the legislation of the Republic of Kazakhstan on public procurement is carried out by the authorized body. The public audit and financial control shall exercise control over observance of the legislation of the Republic of Kazakhstan on public procurement within the powers established by the Law of the Republic of Kazakhstan "On state audit and financial control».

 The control facilities are:

1) customer, organizer, a single organizer of public procurement, a tender Committee (the tender Committee), the expert Commission, the expert;

2) potential vendor, supplier, and persons they employ as subcontractors to perform work or subcontractors for the provision of services within the subject of ongoing public procurement;

3) persons participating in public procurement through commodity exchanges;

4) the single operator in the field of public procurement.

If you look at the experience of information support of public procurement in the European Union, the analysis of the experience of information support of public procurement in the European Union shows that the EU has created a system of supranational law are formed and resources are provided to ensure the procurement process.

The main objectives of the system are:

- optimization of public procurement while minimizing costs;

- ensuring equal conditions of competition at the conclusion of the contract, including ensuring equal competition in national markets and in General on the EU market;

- ensuring the requirements of "publicity ";

- facilitating the implementation of an open and honest business;

- assisting SMEs in securing government contracts.

Considering problems of public procurement within the country, and at the level of the Eurasian Union, it is important to go to the creation of a single market of public procurement of the Eurasian economic Union, eliminating barriers, to seek new opportunities. What prevents the creation of a single market of public procurement, and when the obstacles will be overcome?

In this regard, an attempt is made to organize the individual questions and problem points that attract the attention of all participants in international trade relations and the organization of public procurement. Authorities can produce the most acute side, in front of the Federal States there are many problems, the solution of which will depend on the final terms of the formation of a common market for public procurement. Recognized that the barriers between the two countries in the field of procurement of goods for state and municipal needs to be eliminated, began to be discussed almost immediately after the entry into force of the Treaty on the establishment of the Union.

You can highlight the views and proposals of the countries - participants in questions of improvement of the public procurement market:

-  the need to define the term "goods of the Eurasian economic Union".(Belarus);

-  to give entrepreneurs the EEU countries the opportunity to participate in a unified system of public procurement using electronic trading. The system is designed to ensure that "living, for example, in Minsk or Vitebsk, an entrepreneur could participate in the electronic auctions in Russia or Kazakhstan, had the opportunity without having to travel, to participate in the bidding and contract"(Kazakhstan);

-  In the framework of the EEU it is necessary to solve a number of organizational and technical issues, including obtaining an electronic digital signature (EDS). As a result, state structures and businesses will be able to take full advantage of electronic bidding, including the possibility of remote access to their realization, reducing material costs, reducing soil for corruption and the possibility of fair price competition;

-  To address this question directly linked to the largest in the EAEU Russian market of public procurement, it was decided to connect the heads of the Antimonopoly authorities of the countries of the Eurasian Union;

-  In 2016, was to make a "limited option" integration requires consolidation of e-marketplaces. Moreover, as the database integration was planned to use a Russian electronic trading platform as the most advanced. In addition, for the launch of the single market of public procurement needs to address the issue of mutual recognition of digital signatures. This provision was included in the Treaty establishing the EAEC, but is still only between Russia and Belarus.  Noted that the tripartite agreement on state (municipal) procurement, was signed by Russia, Kazakhstan and Belarus in December 2010 during the formation of the Customs Union. In practice, however, it has not been applied. The regulation on mutual recognition of digital signatures and unhindered access to public procurement was included in the Treaty establishing the Eurasian economic Union, signed in may 2014 In November last year, the economy of the Russian Federation sent to economic departments of other States of the EAEU note that in fact these provisions are not fulfilled in full. However, the issue was not fully resolved until now.

-  At the November meeting 2015 of the heads of Antimonopoly authorities of the EEU was proposed at the Federal level, the catalogue of goods and services, which could be used in public procurement, as well as the unified register of suppliers, which will include companies that received a single qualified electronic signature;

-  Kazakhstan introduced restrictions on the procurement of dual-use goods, as well as the "open" part of the defense order. In December 2015, the Republic adopted a new law "On public procurement", which restricted the purchase of goods and services of military and dual-use goods from foreign suppliers, among which were the countries of the Eurasian Union. Restrictions introduced by the new Kazakh law are of unlimited duration. And they were introduced like a closed, secret and open part of the state defense order, which includes, for example, supplying troops with food, uniforms. These issues do not find support for the countries.

One of the ways to solve the problem of creating a common market for public procurement would be the creation of a unified portal of the Eurasian economic Union, designed for e-tendering(Kyrgyzstan). But the single portal will require a full or partial waiver of the existing trading platforms, which in Russia there are 5, Belarus - 2, Kazakhstan - 1. Besides, he's not going to eliminate the problems with unification of electronic digital signatures and the creation of registries of suppliers and products, which could participate in public procurement. Therefore, countries of the EAEU will have to go the way of mutual recognition of digital signature and generation of corresponding registers, which looks longer, but much more realistic.

The authors in summary form focus on the main points, purpose, relevance of the problem, the work carried out and the expected results of the theme - safeguarding Mechanisms at the conclusion of public procurement contracts in terms of integration of the EEU countries.



References:
1. ISKAKOVA Z. D. DOLHANOV J. D. BINAMIRA B. A. principles of ORGANIZATION of PUBLIC PROCUREMENT IN the REPUBLIC of KAZAKHSTAN. Uchebno - practical allowance. Astana 2016

2. Theory and organization of public procurement Electronic textbook under the editorship of Iskakova Z. D., Binamira B., K. M. Sagimbekova Astana 2013.

3. The law of the Republic of Kazakhstan On public procurement (with amendments and additions as 28.04.2016)

4. Strategic plan of the Ministry of Finance of the Republic of Kazakhstan for 2014 – 2018

5. EURASIAN ECONOMIC INTEGRATION: FACTS AND FIGURES A LIBRARY OF EURASIAN INTEGRATION http://www.eurasiancommission.org/



Bibliographic reference

Iskakova Z.D., Kurmanalina A.K. GUARANTEE MECHANISMS FOR CONCLUDING PUBLIC PROCUREMENT CONTRACTS IN THE CONTEXT OF INTEGRATION OF THE EEU COUNTRIES. International Journal Of Applied And Fundamental Research. – 2017. – № 3 –
URL: www.science-sd.com/471-25350 (30.10.2020).