FAS heard market complaints about excessive protection of government orders and procurement of state-owned companies from sanctions

The measures taken by the government to protect government customers and their suppliers from sanctions ultimately interfere with everyone – buyers, their counterparties and plans for import substitution and technological development, the participants of the All-Russian procurement conference concluded. In particular, the opportunity for sanctioned customers to conduct procurement behind closed doors and not disclose data about them has led to a decrease in the level of competition, loss of efficiency and an increase in the number of failed procedures. Suppliers themselves are not ready to switch to sites for closed procurement due to high requirements and costs – the work requires special equipment, software and specialists. The FAS plans to find a balance between economic efficiency and ensuring safety.

As anti-sanction relaxations take effect, the contradictions between the goals of economic development and the policy of closing data to protect state interests are intensifying, as shown by discussions at the All-Russian Procurement Conference in Sochi. At the plenary session, the head of the FAS, Maxim Shaskolsky, spoke about the abuse by regional government customers of the ability to purchase from single suppliers under the counter-sanction 46-FZ of March 8, 2022 – this was previously discussed in the Federal Treasury (see Kommersant of October 2). “Testing the strength of a competitive environment, regions risk facing negative economic effects in the long term – a decrease in business activity, employment and the number of suppliers,” the official warned. According to him, the FAS has prepared a rating of regions by level of competition, established approximate causes of problems (logistical difficulties, supply chain breaks, abuse of counter-sanction measures by government customers) and is already working on a “road map” to eliminate them.

Similar relaxations for government customers also pose risks for competitive markets: for example, the opportunity for state corporations and state-owned companies not to disclose data on their purchases to protect against the risks of secondary sanctions in practice turned out to be unnecessary for both customers and suppliers. The problem of the discrepancy between the results and the goal was described yesterday by the deputy head of the FAS, Pyotr Ivanov: “We wanted the best.” So, they wanted to create innovative products under offset contracts, but everything is purchased under them; the relaxations were supposed to help the regions quickly purchase equipment after the departure of foreign suppliers – but their beneficiary was construction. The closure of procurement data under 223-FZ led to losses for customers: the procedure for admission to special sites for closed procurement is so complicated that product suppliers may not be there. According to the director of Rosatom’s procurement department, Inna Melchenko, in the first months of the new order, the number of failed purchases increased to 65%.

Closed procurement is now carried out on three electronic trading platforms out of eight that serve procurement of state-owned companies (last year – on one): if it was difficult for customers to switch to the sites due to the high level of integration with the usual ones, then many suppliers did not do this at all. The Chamber of Commerce and Industry explains that working at special sites requires accreditation, expensive equipment and software (incompatible with others), and a separate specialist is needed. For small businesses, these are unaffordable expenses, so there are only a few of them in such purchases.

Customers are asking for more flexibility in closed procurement decisions. For example, clearly separate purchases that pose risks of secondary sanctions and are associated with state defense orders, state secrets, strategic objectives, as well as purchases within the framework of economic activities. The latter are proposed to be carried out in the usual way, but with reservations: only suppliers registered in the unified register of procurement participants will see the purchase; the bidders themselves will be classified (participant one, two, and so on). According to the head of the Moscow Department of Competition Policy, Ivan Shcherbakov, if all customers are driven to special sites in the context of expanding sanctions, the circle of procurement participants will be limited and they will have to be supported by subsidies.

The Ministry of Finance is not enthusiastic about the market proposals. Deputy head of the department, Alexey Lavrov, who oversees procurement, recalled that the customers themselves asked for such relaxations, and recommended that they decide on a common position on the issue (it may turn out that some of them do not agree with their colleagues) and submit initiatives to the Ministry of Finance in the format of amendments. The FAS is ready to work on bringing together positions and resolving disagreements on the issues of disclosure of purchases.

Diana Galieva