Orthopedic shoes were appointed to public procurement

Until the end of 2023, the Moscow Prosthetic and Orthopedic Enterprise, under the jurisdiction of the Ministry of Labor, will be the only supplier of sophisticated orthopedic shoes, absorbent underwear, diapers and products for patients with stoma. According to the department, this approach will help to keep prices in the industry market in public procurement. On the contrary, the beneficiaries of the services – the Opora association and the association of ostomy patients ASTOM – stated that this would lead to an increase in the cost and a drop in the quality of goods provided to the disabled.

The government has appointed the Moscow Prosthetic and Orthopedic Enterprise (PrOP, administered by the Ministry of Labor) as the sole supplier of sophisticated orthopedic shoes until the end of 2023. In addition, the powers of PrOP as the sole supplier of absorbent underwear, diapers, and urinals and colostomy bags for the provision of disabled people were extended for another year under the purchases of the Federal Pension and Social Insurance Fund (Social Fund). The corresponding government decree No. 402-r was published on February 20.

Recall that PrOP became the only supplier of these funds in September 2022 – this became possible thanks to government decree No. 339 dated March 10, 2022, which simplified the implementation of this mechanism for all sectors of public procurement against the backdrop of sanctions imposed against the Russian Federation and the inability to predict an increase in prices for supplied goods (for more details, see “Kommersant” dated April 4, 2022). The customer received the right to apply to a single supplier if there was no tender for the purchase, or the winning contractor refused his obligations, or the prices of alternative suppliers on the market are higher than those of a single supplier. The main difference between purchasing from a single supplier and standard state auctions is that the price in this case is determined by the customer himself, and not at an auction, where the one who offers the minimum contract value wins.

As the Ministry of Labor explained to Kommersant, in April 2022, the average price for single-component drainable colostomy bags with a built-in flat plate was 89% higher than the January price. In addition, in the first half of 2022, 78 suppliers in 41 regions waived obligations under already concluded government contracts or demanded to change their terms. Only in June-August 2022, 163 purchases of special equipment necessary for patients with impaired excretion functions did not take place, which is 37% of the volume that was planned to be purchased in these months, the Ministry of Labor indicates. The PrOP was able to fulfill orders instead of the refused suppliers, the very fact that the Social Fund had the opportunity to purchase from a single supplier “served as a factor in stabilizing prices for products.” Against this background, it was decided to extend and expand the use of this mechanism in 2023, the department noted. At the same time, the Ministry of Labor does not plan to make PrOP a monopolist: for example, in 2022, a single supplier accounted for 28% of the supply of feces and urinals and 0.6% of the supply of absorbent underwear. In 2023, its share, the ministry explained, cannot exceed 70%, and 15% of the order being executed will be transferred to small and medium-sized businesses. In absolute terms, the maximum supply from PrOP is 199.7 million units of absorbent underwear, 32.5 million special means for violation of excretion functions (urinary and feces) and 198.2 thousand pairs of complex orthopedic shoes. Why other products for ostomy patients (stoma care products, catheters for nephrostomy, colostomy bags for retracted stomas) were not included in the lists of PrOP and are provided by the Social Fund “as part of standard procedures”, the Ministry of Labor did not explain.

As Kommersant found out, the recipients of the services – the All-Russian Society of Disabled Persons with Amputation of Limbs and Other Violations of the Functions of the Musculoskeletal System “Opora” and the Regional Public Organization of Disabled Persons with Stomatous Patients ASTOM (also act as suppliers of a number of goods for the disabled in public procurement) – are critical of the decision about a single supplier. According to the chairman of Opora, Elena Volokhova, the number of complaints about the quality of the provision of orthopedic shoes by the Moscow PrEP in 2022 “was high.” According to her, “prices were significantly inflated, and in a number of regions, disabled people received products that did not meet the conditions of state contracts.” Ms. Volokhova states that “under the guise of complex orthopedic shoes” in a number of cases “ordinary serial shoes were produced, without taking into account the individual characteristics of each person in need.” Kommersant also has a letter of claim written on December 14, 2022 by the customer – the Orenburg branch of the FSS (since 2023 the FSS is part of the Social Fund) – to the Moscow PrOP. According to the customer, according to the results of the inspection, it turned out that the supplied shoes (33 pairs) did not meet state quality standards. In addition, PrOP failed to comply with the contact conditions for the manufacture of 877 pairs of shoes, information on the reasons for 168 of these cases was not available at the time of writing. The Orenburg Social Insurance Fund requested PrOP to pay a fine in the amount of more than 1.8 million rubles within the time frame established by the contract. According to the head of ASTOM Vyacheslav Sukhanov, the situation with the provision of ostomy patients with the appearance of a single supplier worsened, in a number of regions the goods did not meet the technical specifications of the state contract, and the price during competitive procedures turned out to be lower than the prices of contracts concluded with a single supplier.

At the request of public organizations, Alexander Remezkov, First Deputy Chairman of the State Duma Committee on Budget and Taxes, made a request to the Prosecutor General’s Office. The response letter states that in the course of inspections, in a number of cases, violations were revealed during the conclusion and execution of contracts for the supply of absorbent underwear, diapers and special equipment in case of violations of the excretion functions; cases of untimely delivery and payment of goods, non-application of penalties to the enterprise were also established. In total, following the results of supervisory activities, 24 submissions were made, 13 cases of administrative offenses were initiated, and two procedural checks were organized. At the same time, a source familiar with the situation notes that “in none of the cases did the prosecutor’s office demand the termination of the contract with a single supplier, and the submissions concerned procedural issues or compliance with internal deadlines.”

Ivan Biryukov, director of the National Association of Participants in the Market of Assistive Technologies AURA-Tech, Ivan Biryukov, notes that Russian enterprises producing absorbent underwear “are fully functioning, have no problems with raw materials and can produce the full volume of products.” According to AURA-Tech, they produce 375 million diapers for adults, 1 billion 100 million diapers for children, about 500 million absorbent diapers per year. Mr. Biryukov notes that these volumes completely cover the needs of the customer. Products for stoma patients are only partially produced in Russia, but, according to Ivan Biryukov, even those goods that are not manufactured in the country are not in short supply now. Orthopedic shoes, Mr. Biryukov believes, are also capable of being produced by small and medium-sized Russian enterprises. Entrepreneurs, he said, are “categorically negative” about the decision to have a single supplier, fearing the emergence of a non-competitive market and abuses of local officials. The chairman of the All-Russian Society of the Disabled, Mikhail Terentyev, considers the decision to have a single supplier controversial: “This gives more precise control by the state, including over the quality and execution of contracts, but at the same time the competitive environment is decreasing. If the measure is temporary and the only supplier is focused on 20-30% of the market, this will contribute to an increase in the quality of products that enter competitions. But it is dangerous to determine a single supplier for the entire market: in two or three years, in this case, we will observe a decrease in the quality and effectiveness of state control.”

The Ministry of Labor told Kommersant that the number of appeals to the department related to the provision of technical means of rehabilitation for 11 months of 2022 decreased to 3.9 thousand (compared to 4.6 thousand in 2021 and 5.9 thousand in 2019). The department stressed that the only supplier supplied products from “various manufacturers, not limited to any one brand.”

Note that in September 2022, the head of the Federal Antimonopoly Service, Maxim Shaskolsky, stated that competition in public procurement is falling and this could worsen the execution of contracts (see Kommersant dated September 23, 2022). According to the Ministry of Finance, the volume of contracts with single suppliers for the eight months of 2022 increased to 23% against 17% in 2021.

Natalia Kostarnova, Anastasia Manuylova