II. Contracting Procedures

　　The ways of announcing and offering government contracts are specified by law.  They include:
　　Calls for bids
　　Auctions, including electronic;
　　Requests for proposals;
　　Offering a contract to a single contractor; and,
　　Placing orders on mercantile exchanges if the contract price exceeds the amount of RUB 5 million (approximately US$170,000).

　　In order to achieve budgetary savings, orders placed on similar goods or services by the same government customer are to be conducted simultaneously.  Calls for bids and auctions must be open most of the time.  Closed auctions are allowed when the contract requires the supply of goods or the performance of works or services, information on which is classified as secret.

　　The difference between a call for bids and an auction is that when a call for bids is announced, a contract will be awarded to the contractor who offers the best conditions for performing the contract.[5]  At auctions, a contract is awarded to an anonymous contractor who offers the lowest price for the contract.[6]  Since January 1, 2010, the qualification of a contractor is considered to be an important factor in the awarding a contract, in addition to the requirement that the contract be awarded to the lowest priced bidder.  Special requirements were established for contractor’s qualifications in construction work.  In order to participate in an auction, a contractor must have at least five years experience in performing similar works and prove that in his previous projects he did at least 30% of the contracted work on a specific jobsite.[7]  

　　Requests for proposals are announced on the website of the agency which intends to offer a contract, and the winner is the contractor who proposed the lowest price.  This type of announcement has restrictions due to the length of contract and its amount (not to exceed US$10,000 per quarter) and is usually used to provide services to government organizations located in foreign countries.

　　A contract can be offered to a single contractor in cases when:
　　The contract relates to the activities of natural monopolies;
　　The government acquires cultural valuables;
　　The contractor has exclusive rights to offer the requested goods, works, or services; and,
　　The contract requires the performance of works related to military mobilization activities.

　　In some cases, a government contract can be awarded without competition.  Circumventing the prescribed rules is allowed when time-consuming procedures would be counterproductive in force majeure circumstances and in need of urgent medical intervention.

　　In November 2009, the Russian Federation approved a list of goods, services, and works, which since January 1, 2010, must be acquired by federal customers through open online auctions only.  Presently, this list includes construction contracts, contracts related to the supply of medicines, food, and office equipment.  As of July 1, 2010, all traditional auctions will be prohibited and all auctions will be conducted exclusively online.  For provincial and municipal customers, this requirement will enter into force as of January 1, 2011.[8]  It is expected that up to 70% of all government contracts will be distributed through online auctions.  The remaining 30% of contracts (primarily those for research work, engineering, architectural drafting, and medical services) will be awarded through calls for bids.[9]

　　III. Access to Government Procurement Information

　　Originally, the Law required that announcements of government contracts be published on the website of the customer organization and in the official publication, which is a special newspaper designated by the federal Ministry of Economic Development.  Announcements are to be published no later than 30 days before the sealed envelopes with the proposals/bids were to be opened.  The government was supposed to synchronize the newspaper and online publication of the announcement concerning the contract.  The requirement to publish information about government contracts in federal mass media has been cancelled since January 1, 2008, and since January 1, 2010, the only official source of information available on all government contracts is the federal online portal administered by the Russian Federation Ministry for Economic Development.  This portal publishes information on all contracts offered by federal, provincial, and municipal authorities.  The publication of government procurement information in mass media in constituent components of the Russian Federation will cease as of January 1, 2011.[10]  It is expected that this will simplify legal control over ensuring that all contract awards are in compliance with legal requirements, increase transparency and eliminate possible further correction of contract information, and enhance opportunities for contractors who will no longer be required to review multiple sources of information.

　　Information on this government website is to be published in the Russian language, to be free from advertisement, and accessible by anyone at any time, free of charge and free of any restrictions.  The only contracts exempted from this publication are those which include information classified as state secrets.  It is required that no special equipment, computer programs or skills be needed to access this information.  For security reasons, the use of electronic signatures, electronic registration of operations, and daily preservation of backup information is required.