February 23, 2024

Public procurement. Part I.

Normative legal acts:

1. Law of the Republic of Uzbekistan No. ZRU-684 “On Public Procurement” dated 22.04.2021 (hereinafter referred to as the “Law”);

2. Resolution of the President of the Republic of Uzbekistan No.PP-3953 On measures to implement the Law of the Republic of Uzbekistan “On Public Procurement” dated 27.09.2018 (the “Resolution-3953”);

3. Resolution of the Director of the National Agency for Project Management under the President of the Republic of Uzbekistan No. 3013 dated 15.05.2018 (the “Resolution”);

4. Resolution of the Cabinet of Ministers No. PKM-276 “On Approval of the Regulations on the Procedure for Organizing and Conducting Procedures related to Public Procurement” dated 20.05.2022 (the “Resolution-276”).

Chapter 1. The concept of public procurement.

In his book “The State (municipal) order of Russia”, the Russian legal scholar Kuzma Kichik gives such a definition: “The state order represents the specified needs of public legal education in goods, works and services, fixed in a legal act (normative legal act or act of application of law), satisfied by placing an order in accordance with the procedure established by law (as a general rule, among an indefinite circle of persons – potential suppliers) with the conclusion of a state contract, a civil contract of a budgetary institution or another civil contract containing the necessary requirements for these goods, works and services, as well as conditions for the sale of goods, performance of works and provision of services in order to meet state (municipal) needs.”

However, this definition of Kichik does not quite fit our public procurement system, especially in terms of the concept of a state customer Kichik uses the concept of “public legal education” in his definition, on the basis of which we can conclude that the customer, according to Kichik’s definition, can only be an education that is endowed with public authority.

According to Article 4 of the Law, public procurement is the process of ensuring the needs of government customers for goods (works, services) on a paid basis. In turn, unlike the Russian Federation, state customers in the Republic of Uzbekistan can also be organizations that are not endowed with public authority and are not state corporations or publicly legal companies.

Based on all this, public procurement is a system defined by the legislator that regulates the processes related to the purchase of goods, receipt of services, as well as the performance of other work for the needs of government customers.

Chapter 2. Subjects of public procurement.

2.1. Government customers.

By virtue of Article 19 of the Law, government customers are divided into budgetary and corporate ones.

Budget customers are:

  • government agencies and institutions;
  • budget organizations;
  • recipients of budget funds allocated for the implementation of procurement procedures;
  • state trust funds.

Corporate customers are:

  • state-owned enterprises;
  • legal entities with a share of the state in their charter fund;
  • legal entities in whose charter fund the aggregate share of the organizations referred to in items 1 and 2 is 50% or more;
  • legal entities in whose charter funds the aggregate share of the organizations referred to in paragraph 3 is 50% or more.

The list of corporate customers is maintained by the Agency for Management of State Assets of the Republic of Uzbekistan.

2.2. The Purchase commission.

In accordance with Article 20 of the Law, the procurement commission is a collegial body formed by the state customer when organizing and conducting procurement procedures, the procedure for which requires the formation of such a body. The main tasks of the procurement commission are to objectively evaluate and streamline the proposals of participants in procurement procedures according to the degree of compliance with the order and to select the winner or winners in competitive public procurement methods.

The Procurement commission is an active body under the state customer, formed and disbanded by the relevant decisions of the state customer. The Commission consists of an odd number of members, the composition and number of which depend on the type of procurement procedure and may change in accordance with the law and taking into account the specifics of the purchased goods (works, services). The members of the procurement commission must be objective and not personally interested in choosing the winner of the procurement procedure.

The work of the procurement commission is led by the chairman, who convenes and conducts meetings, announces votes and decisions taken, and signs minutes of meetings of the procurement commission. In the absence of the Chairman, his functions are performed by a deputy.

Meetings of the procurement commission are held in person in the presence of members of the procurement commission. Face-to-face meetings can be held in the format of videoconferences (teleconferences, etc.).

The Procurement commission, when selecting the best proposals and tenders in electronic form, has the right to vote remotely using information and communication technologies.

It is not allowed to include a representative of the authorized body in the composition of the procurement commission of another state customer. The state customer is responsible for the correct formation of the procurement commission.

A majority vote of the total number of members of the procurement commission makes the decision of the procurement commission. In case of equality of votes, the vote of the chairman of the procurement commission is decisive.

2.3. Specialized organization.

In accordance with Article 21 of the Law, a specialized organization is a legal entity that has the right to provide, on behalf of a state customer, services for organizing public procurement of goods (works, services) on the basis of a contract on a fee basis.

A specialized organization is involved in organizing procurement procedures, its involvement is carried out in compliance with the requirements of the Law on Public Procurement.  The state customer carries out the determination of the essential terms of the contract and the signing of the contract.

Requirements for a specialized organization:

  • to have the status of a legal entity;
  • the absence of other subjects of public procurement among the founders of a specialized organization;
  • the presence of at least one employee with practical experience in providing services related to the organization of public procurement;
  • availability of software and hardware that provide access to a special information portal (http://xarid.uz /).

2.4. Expert, expert organization.

According to Article 22 of the Law, in the process of organizing and conducting procurement procedures, experts and expert organizations may be involved on the basis of a relevant contract, including free of charge, to obtain advice and (or) an opinion on the consideration, evaluation and comparison of proposals.

An expert is an individual with special knowledge in the field related to the subject of public procurement, and an expert organization is a legal entity whose employees have special knowledge in the field related to the subject of public procurement.

2.5. Participant in the procurement procedures.

In accordance with Article 23 of the Law, a participant is a natural or legal person who is a resident or non-resident of the Republic of Uzbekistan, who participates in the procurement procedure as a bidder for the execution of public procurement.

The participant and its affiliate are not allowed to participate in the same lot of the electronic store, auction, selection of the best offers and tender.

The participant has the right to:

  • access to information on public procurement to the extent provided for by law;
  • submit requests to the state customer or a specialized organization attracted by him and receive clarifications on the procedures, requirements and conditions for conducting specific public procurement;
  • participate in the opening of proposals by the procurement commission in accordance with the established procedure;
  • to appeal the results of procurement procedures to the Public Procurement Complaints Commission;
  • make changes to offers or withdraw them in accordance with the law.

The participant is obliged to:

  • comply with the requirements of the legislation on public procurement;
  • submit proposals and documents that meet the requirements of the procurement documentation, and be responsible for the accuracy of the information provided;
  • disclose information about the main beneficial owner;
  • to conclude, if recognized as the winner, an agreement with the state customer in the manner and within the time limits provided for by law.

2.6. The contractor of public procurement.

According to Article 24 of the Law, the Executor of public procurement is a participant determined by the winner based on the results of the procurement procedure, with whom a public procurement contract has been concluded.

The contractor has the right to:

  • to contact the state customer for clarification in the process of fulfilling the contract with him;
  • receive payment for the delivered goods (work, service);
  • terminate the agreement in accordance with the terms of the agreement and (or) in cases provided for by law.

The contractor is obliged to:

  • comply with the requirements of the legislation;
  • to execute the contract in accordance with its terms;
  • disclose information about the main beneficial owner;
  • to provide explanations and information to the state customer or an authorized state body at his request during the execution of the contract.

2.7. The operator of the electronic public procurement system.

Article 25 of the Law establishes that the operator of the electronic public procurement system is a specially authorized legal entity providing public procurement entities with services related to conducting procurement procedures in electronic public procurement systems, determined by the authorized body.

In accordance with the regulation “On the procedure for the operator of a special information portal in relation to the organization and conduct of public procurement”, approved by the order of the Director of the National Agency for Project Management under the President of the Republic of Uzbekistan, there are the following requirements for operators of the electronic system of public services:

  • the availability of an information system that provides the placement of information on public procurement and access to this information, the processing of statistical data on public procurement, the use of a classifier of goods (works, services) in public procurement, conducting electronic public procurement, concluding contracts based on the results of electronic procurement procedures and providing guarantees for the fulfillment of obligations through the clearing house;
  • availability of qualified personnel in the field of e-commerce and information technology;
  • the absence of bankruptcy proceedings initiated against him.

Chapter 3. General requirements for the public procurement process.

3.1. The process of public procurement.

By virtue of Article 26 of the Law, there are the following stages of public procurement:

  • public procurement planning;
  • implementation of procurement procedures;
  • conclusion and execution of the contract;
  • monitoring of public procurement.

Public procurement planning is carried out by the state customer and represents the systematization of procurement, ensuring the relationship between public procurement planning and planning in budgetary and investment processes, as well as business planning.

The annual schedule of public procurement is posted by budget customers until March 25, in the case of corporate customers until December 25 of the current year on a special information portal.

Article 30 of the Law establishes the following types of procurement procedures:

  • electronic store;
  • auction to lower the starting price;
  • selection of the best offers;
  • tender;
  • public procurement carried out under direct contracts;
  • other competitive types of procurement permitted by decrees and resolutions of the President of the Republic of Uzbekistan, and resolutions of the Cabinet of Ministers of the Republic of Uzbekistan.

After planning public procurement and implementation of procurement procedures, the stage of concluding an agreement with the contractor begins. The authorized body, that is, the Ministry of Economy and Finance of the Republic of Uzbekistan, maintains a unified register of contracts through the exchange of information between databases of electronic public procurement systems and a special information portal.

The authorized body also maintains a unified register of unscrupulous contractors. Such a register may include:

  • winners of procurement procedures who refused or evaded the conclusion of an agreement with a government customer after the winner was declared;
  • performers found guilty in accordance with the established procedure of non-fulfillment or improper fulfillment of obligations;
  • participants who provided false or forged documents did not disclose information about affiliated persons who participated in the same lot, or a conflict of interest in the public procurement process;
  • performers found guilty by a court decision of committing crimes related to fraud, falsification, and corruption.

Persons included in the Unified Register of Unscrupulous Contractors cannot participate in public procurement for 2 years after the expiration of which is considered excluded from the Unified Register of Unscrupulous Contractors.