Regions will find it more difficult to purchase from single suppliers due to abuses

The White House plans to abolish in 2024 the unlimited powers of regions and municipalities to purchase from single suppliers – counter-sanction exemptions for the sake of economic stability in the face of the departure of foreign suppliers have led to customer abuses and risks to competition. For the state, the relaxations resulted in a loss of efficiency – an increase in costs and terms of contract execution. However, the government is not ready to completely give up flexibility in the procurement process – regions will be able to make non-competitive purchases from single suppliers according to a list of products determined by the White House, and an exception will be made for federal cities.

Deputy Minister of Finance Alexey Lavrov, responsible for regulating government procurement, announced at the conference “State and Municipal Procurement 2023” that the government proposes to limit non-competitive procurement from a single supplier based on decisions of regions and municipalities. We are talking about sanctions relief: it was thought that in the context of the departure of foreign suppliers, breaks in chains and rising costs of supplies, purchasing from a single supplier would reduce the risks of contract failure and ensure uninterrupted work of departments. Thus, in 2022, with anti-sanction amendments to the legislation (46-FZ), the government allowed federal departments and regions to independently determine cases of purchases from food suppliers.

However, already in 2022 it became clear that the regions were abusing their newfound right: entrepreneurs reported that many counterparties could not access procurement due to the non-competitive policies of customers. The risks of market redistribution and risks to competition were reported to the FAS, but the rules on a single supplier were extended until 2023. Back in September 2023, there were still risks of extending anti-competitive regulations into 2024, as follows from the Ministry of Economy’s bill on the government’s anti-crisis powers (see Kommersant of September 19).

In October, the Ministry of Finance recognized the anti-market nature of purchases from a single supplier and proposed abandoning the relaxations: an analysis showed that often such contracts are not associated with sanctions, cost the budget more and take longer to complete. By September, such purchases accounted for 0.8% of the number of all contracts and 7.3% in money – often involving fairly large purchases of construction work. At the same time, the Ministry of Industry and Trade called for maintaining the practice of non-competitive procurement, but strengthening control over their justification.

As Alexey Lavrov explained yesterday, without changes, the procurement norm will remain only for cities of federal significance (Moscow, St. Petersburg and Sevastopol) – due to the peculiarities of their internal organization and interaction with municipalities. In the case of purchases from other regional customers, the decision on purchases from a single supplier will be made by the government of the constituent entity of the Russian Federation. However, the right to such purchases will remain only for a limited list of products – it will be determined by the White House. In this way, the government will eliminate the practice of mass contracting with a single supplier in competitive markets.

Changes to the procurement regime are already included in the Ministry of Economy’s bill on the government’s counter-sanction powers. The FAS told Kommersant that they took part in the discussion of the bill at the government site; the draft itself was submitted to the State Duma in an edition agreed upon with the antimonopoly service. “To solve the problem in regions where the FAS saw abuse of the right to conclude contracts without competitive procedures, the proposed solutions are sufficient,” the antimonopoly service notes. Despite the partial rejection of the idea of ​​free procurement from single suppliers, the document retains a special regime for working with them – in particular, the right to make changes to previously concluded contracts, Mr. Lavrov said. The bill was supposed to pass the first reading yesterday, but the plenary meeting of the State Duma was postponed.

Diana Galieva