Armenian Ministry of Finance sets new rules in procurement field

ArmInfo. Initiating the process  of reforms in the sphere of state purchases, the Ministry of Finance  of Armenia intends to establish equal competitive conditions for all  participants in the process. Armenian Minister of Finance Vardan  Aramyan stated this when answering the question of ArmInfo,  commenting on the government's decision of February 8, according to  which changes will be made in the order of organization of the public  procurement process aimed at simplification of procedures and rules  for holding tenders.

Vardan Aramyan recalled that starting in April 2017 a new order in  the sphere of procurement was launched in Armenia. Implementing the  new system, the Ministry of Finance adhered to 4 basic principles.   First of all, the new order should stimulate healthy competition in  the field of public procurement. As a result, it is expected to  achieve an optimal price-quality ratio. First, it became clear that  as a security for the application, unilateral application of fines  against companies that violated the rules of tenders with the amount  of state purchases up to 70 million AMD does not serve the stated  purpose. Often, due to technical problems, this bidder withdraws from  the process. Anyway, as the minister noted, the legislation provides  for sanctions against the violating party to the rules of the contest  - it is included in the black list for purchases. Following the  results of active discussions with public organizations, in  particular, with the Armenian Association of Lawyers and the  anti-corruption center Transparency International, it was decided to  abandon this toolkit.

In addition, as noted by the head of the financial department,  sometimes there was a situation when the customer set very short  delivery times - from 3 to 5 days. However, the logic suggests that  order delivery, especially imported production, requires a much  longer period. In this context, the Ministry of Finance decided to  set a minimum period of 20 days, in order to avoid the situation when  the customer establishes the obviously unrealizable terms of the  contract. At the same time, the supplier is granted the right to  execute the contract in a shorter time.

The Ministry of Finance also drew attention to the fact that there  are no clearly regulated terms for the review and evaluation of  applications. Often, the evaluation commission delayed the process  for months, which caused an objective dissatisfaction with the  suppliers, who suffered losses because of this.  Henceforth, a time  limit of 5 days from the receipt of the application and an additional  7 days are provided for the evaluation of all necessary documentation  submitted by the tender consumer.

The new law "On Procurement" came into force on April 25, 2017. The  law is primarily aimed at increasing the efficiency of the use of  public funds and leveling corruption risks by ensuring transparency  of procedures throughout the chain, creating equal competitive  conditions for all participants in the process, accountability of  persons participating in it and the availability of all information  on the electronic platform armeps.am. As a result of the full entry  into force of the new law "On Procurement", the Finance Ministry  expects not only to increase the transparency of the entire system,  but also to expand the range of participants in the process. 

Within the framework of the measures outlined by the government  program for the purpose of public procurement reform, the formal  requirements creating corruption risks were eliminated, the Armenian  government simplified the procedures. Instead of 7 types of public  procurement in accordance with the new bill, this amount will be  limited to four - e-tender, tender, quotation and purchases from one  person. The procedure for conducting centralized purchases and  involving the procurement process of state-owned CJSC, SNCO and Funds  on an electronic platform was also approved. In order to exclude  anticompetitive conditions and clash of interests, the new Law "On  Public Procurements" provides for provisions to identify the  affiliation of the company participating in the tender with  officials, since it obliges contestants to indicate in the  applications information about the real owner of the company, as well  as information about affiliated companies, which had not previously  been prescribed by law. If the company wins the tender, but later it  turns out that she hid affiliation with a certain state official, or  violated her contractual obligations, she threatens to be on the  "black list" and lose the right to take part in state partners for 2  years.  At the same time, this does not mean that disclosure of  affiliation will lead to the company's suspension from participation  in the tender. This is just a link that allows to ensure transparency  of the entire system, to identify clashes of interests, as well as to  eliminate possible corruption risks. In addition, affiliated persons  will not be included in the composition of the competitive commission  formed by the customer. In case of occurrence of a similar situation,  a commission member will have to declare a rejection. In addition,  the list of potential participants will be kept secret until the end  from the members of the competitive commission.  At the same time,  all information, both for the planned tenders, and its participants,  and the proposed applications will be publicly available. The law  also presupposes an arbitration system.