PUBLIC PROCUREMENT

Armenia 24-25 April 2014

Paris

Session 2:

Public Procurement policy

Public procurement was introduced in Armenia in 2000.

Goal:

► create single rules for procurement,

► have competitive, transparent, open procurement free of discrimination,

► expand the range of participants,

► promote competition among participants.

ORGANIZATIONAL STRUCTURE POLICY DEVELOPMENT

Government of Armenia Ministry of Finance

(Department of Internal Financial Control and Public Procurement Methodology)

Management

IMPLEMENTATION

Non-profit government organization «Center for Procurement Support and Administration ARMEPS ; training, statistics, and analysis

- Free training - Support

-Administration Training

- Training (paid)

PURCHASERS

- Government - Local government -Businesses with over 50% of government-owned shares - Utility monopolies

BIDDERS

local and international PROCUREMENT

- In paper format (prior to 2012)

- E-procurement (since 2012)

MONITORING AND ANALYSIS - Control Chamber

- State Commission for Economic Competition Protection - Civil society organizations

- Council for Procurement Complaints

Public procurement compatibility with management of public finance, trade and industry development

25 % of budget allocations are spent

in PP

Some 5000 business entities took part in PP in 2013

► Public procurement has a large share of government spendings in the Republic of Armenia.

► Armenia has a single contract payment system supported by the Treasury e-system.

► The Government’s goal and policy is to expand the range of participants and promote SMEs

Session 4:

Public Procurement reform

The Parliament of Armenia has adopted three laws to regulate public procurement

The third law of 22 December

2010 introduced a number of amendments.

The new law and Government

regulation comply with UNCITRAL, WTO GPA, and EU Public Procurement Directive. Armenia has other auxiliary legal acts, i.e. Law on Electronic Documents and Electronic Signature, Law on Electronic Communications, and others)

► The first law was completely centralized

► The second law

(2005 – 2010) introduced elements of decentralization

In 2005-2010, the <<Procurement

Agency>> ran only competitive

procurements on behalf of CAs.

New Law took effect on 1 January 2011

Key legislative changes

► Procurement decentralization,

► Introduction of e-procurement,

► <<Procurement Agency>> was renamed Non-Profit Government Organization “Center for Procurement Support”,

► Concessions,

► Appellate Council

After legislation was changed

► 4000 CAs that organize procurement procedures independently,

► Open procedures since 1 January 2012,framework contracts since 1 January 2014, central executive agencies, local governments and public entities conduct electronic procurement.

<<Procurement Agency>> was renamed Non-Profit Government Organization “Center for

Procurement Support”

Before reform

► Procurement Agency organized centralized procurement procedures,

► signed contracts on

behalf of purchasers.

After reform

► Provides procurement support

Accession to WTO GPA

►Armenia applied for GPA membership in September 2009.

► Six negotiation rounds were conducted in Geneva

in 2010. On 7 December 2010, Armenia

became GPA 42nd member.

►Other GPA members are Canada, 27 EU Member-

States, Hong Kong (China), Island, Israel, Japan,

Korea, Lichtenstein, Netherlands, Norway,

Singapore, Switzerland, Taipei, and USA.

Accession to GPA

►GPA membership provides real benefits in terms of access to other markets to purchase goods, works, and services, and to increase competition and transparency in the GPA Member-States’ internal markets.

► Political and legal commitment of good governance

Session 6: Key functions of public procurement Key PP functions are distributed

between Ministry of Finance (the Authorized Agency) and Center for Procurement Support

Control Chamber of Armenia, State

Commission for Economic competition Protection, civil society organizations, Council for Procurement Complaints (appellate council)

Main functions Authorized Agency

►coordination and legislation development,

►methodological guidance for procurement procedures and support to the parties,

►coordination of cooperation with procurement systems of international organizations, foreign nations, public agencies and municipalities of Armenia,

►permanent training and evaluation of procurement coordinators qualifications.

Функции <<Центр по содействию закупкам>> полномочия и функции определяются договором заключеным с уполномоченным органом

государственная некоммерческая организация «центр по содействию закупкам»; обслуживание и

содержание ARMEPS ; обучение, статистика и Анализ

- Бесплатное Обучение

- Поддержка

-Содержание - Обучение

- Обучение (Платное)

ЗАКАЗЧИК / ПОКУПАТЕЛЬ - Государственные органы - Местные органы власти - Предприятия с более, чем 50% долей государственной собственности - Монополия на предприятия коммунального хозяйства

УЧАСТНИКИ ТОРГОВ Местные и иностранные

ЗАКУПКИ - В бумажной форме (до

2012 года) - Электронные Закупки

(с 2012 года)

МОНИТОРИНГ-АНАЛИЗ - Контрольная Палата Армении

- Государственная Комиссия по Защите Экономической Конкуренции - Организации Гражданского Общества

- Совет по Рассмотрению Жалоб по вопросам Закупок

FUNCTIONS: Center for Procurement Support Its competences and functions are established in the Agreement with the Authorized Agency

POLICY DEVELOPMENT

Government of Armenia Ministry of Finance

(Department of Internal Financial Control and Public Procurement Methodology)

Management

IMPLEMENTATION

Non-profit government organization «Center for Procurement Support and Administration ARMEPS ; training, statistics, and analysis

- Free training - Support

-Administration Training

- Training (paid)

PURCHASERS

- Government - Local government -Businesses with over 50% of government-owned shares - Utility monopolies

BIDDERS

local and international PROCUREMENT

- In paper format (prior to 2012)

- E-procurement (since 2012)

MONITORING AND ANALYSIS - Control Chamber

- State Commission for Economic Competition Protection - Civil society organizations

- Council for Procurement Complaints

Session 7:

Remedies, who can launch complaints

Center for Procurement Support is the Appellate Commission Secretariat

Center for Procurement Support

► Hot Line receives any calls from participants

► complaints are studies meticulously

► anonymous calls are accepted and acted upon properly

► earlier a participants could withdraw a complaint and the case was considered closed, while now every complaint is processed until a decision is made

Decision to award contract (inaction period)

►Before signing a contract, Customer announces the decision to award contract

►Announcement offers an inaction period when complaints can be filed

►The parties may appeal the Customer’s decision with the appellate commission

The inaction period is 10 days for procurements above 50 million drams and 5 days for procurements below 50 million drams A contract signed before the inaction period expires is considered void Inaction period is not applied if only one bidder is present

20112012

2013

0

10

20

30

40

50

Ax

is T

itle

Chart Title

нерассмотренные

жалобы

6 10 10

неудовлетворенные

жалобы

5 11 20

удовлетворенные

жалобы

15 17 19

2011 2012 2013Complaints

dismissed

not supported

supported

Session 8:

Current practice to process compaints

► New law established an appellate commission

► Every public customer may only have one commission member

► 73 commission members have been registered.

1. government agencies,

2. local authorities,

3. Central Bank representative,

4. NGOs:

2 commission members represent NGOs. Ways to engage more NGOs are studied.

Legal testing

►Appellate commission members are tested for knowledge of legislation before member lists are published.

►Commission members are elected for 5 years with a possible extension by another 5 years.

Black list

► Organizations cannot participate in PP procedures if they have been entered into the list of entities that have no right to participate in PP procedures, the so-called black list.

► The black list is published by the Authorized Agency.

► The Authorized Agency uses its information to launch a relevant formal procedure at the appellate commission.

► An organization may stay on the black list between six months and three years, depending on the gravity of the violations.

Session 9:

Plans and priorities for public procurement development in the coming years

► transition to e-procurement is planned,

► consistent improvement and enhancement of the appellate council’s role,

► steps to increase the number of submitted complaints,

► legislative amendments are planned to comply with the reviewed GPA,

► improve qualifications and professional skills of procurement experts,

► introduce procurement curricula and guides in university courses,

► increase awareness of procurement participants to better understand their rights.

Changes for the better